Foreclosures are causing damage to the health and grades of children. Nearly 80,000 kids in Ohio have seen their houses swallowed up by foreclosure while innumerable others are facing this risk as per a recent study. Foreclosures cause the family stress levels to increase. It results in households moving to poorer localities having higher crime rates and weak neighbourhood bonds as per the findings of First Focus of Washington D.C.

The affected children do not perform well in school and begin to slide back; health issues too are connected with foreclosures. Bruce Lesley of First Focus (president) said, “It is a huge, traumatic issue for families. The implications for kids’  long-term well-being are really poor”.

In Ohio nearly 98,000 children are at risk of being thrown out of their homes as the mortgage dues are over 60 days pending as per this recent report. Across America millions of children have been evicted with their families and millions more are facing the same fate. They double with relations and friends but this leaves an emotional and psychological scar that tells on family bonds.

Senior research fellow at Urban Institute Julia Isaacs said, “The financial pressure on parents tends to affect interactions with each other and with their children, and a less supportive parenting style caused by stress can have negative consequences on children’s behaviour and their overall development”. She has authored this report.

The children suffer from changing schools and such move causes them to fall behind by as much as a month. The families postpone medical visits and avoid buying essential medicines.

The foreclosure is not a single isolated event. It takes sometimes 600 days to run its course said assistant professor Cyleste Collins of Center on Urban Poverty and Community Development (Case Western Reserve University in Cleveland). She explained that many of the households hang on in a kind of limbo state for prolonged number of months. It is agonizing to live with the sword of Damocles hanging over one’s head.

The families try their best to keep the families in the same schools while clinging on to their homes at least till the school year comes to an end. But the task is challenging to shield the kids from the harsh reality of survival.

First Focus suggests that the government policies should be shaped bearing in mind the plight of the children. Loans should be modified and more projects should be launched so that the households are easily able to avail of affordable homes.

Photo by Renjith Krishnan.

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William Quintana, a plumber, attempting to avail of a scheme of the federal government to modify his mortgage loan never thought that this move would cause him to end up in bankruptcy and poised to lose his home to foreclosure.

Quintana and his wife, residents of Antioch submitted an application to modify their housing loan through HAMP. He had surmised that the process would be straight. He urgently needed the lowering of the mortgage since he became disabled following an accident while working. But the application led to an unexplained maze of payments lost, repeated pressure for unjustified late fees and inordinate delay in processing the application.

PNC Mortgage did acknowledge in their letters sent to Quintana that the letter was eligible for modification of loan but even then to save his house from being sold at a foreclosure auction he sought bankruptcy protection.

A “No Solicitors” notice was hung before the door to discourage realtors and potential buyers. Quintana said, “They say owning a home is the American dream, but it’s become the American nightmare. I’m not a failure or a loser. I’m a complete victim”.

Many housing advocates have shown interest in this case together with Rep. John Garamendi (Democrat/Walnut Grove). Garamendi said that this is indicative of the general malaise in the mortgage world and with HAMP. Although about 950,000 have sought assistance through this programme, critics contend that it is failing to help the victims substantially.

Cinna Green of Center for Responsible Lending said, “The banking industry had a machine that could crank out these bad loans, but it doesn’t have anything that can fix them”.

Dennis Wilhite-Thomas of REACH based in San Ramon said this case is nothing new – one among innumerable ones that she handles where the homeowners are hapless victims facing bullying banks. Quintana is a simple person who knows how to labour with his two hands but this is beyond his understanding. How to handle it? They neither enjoy costly holidays nor foray into expensive improvements on their ordinary home.

Initially Quintana failed to qualify for the modification even after being disabled because he had not lagged behind in his monthly payments. On the advice of National City Mortgage, his lender he decided to skip payments for two months. This trick made the road clear for the bank to foreclose while duping him with expectations of modifications.

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A former unite of Morgan Stanley has been ordered by Federal Reserve to review foreclosures numbering thousands that it had operated; it has been threatened with fines.

The unit, Saxon Mortgage Services was sold this current year. The order mandates Morgan Stanley to engage a review by a third party of foreclosures that had been handled by Saxon Mortgage Services from 2009 to 2010.

The regulators have asked other mortgage servicers to revamp their operations and compensate those who have been harmed. In October Morgan Stanley arranged to sell to Ocwen Financial Corp. its unit of Saxon bringing down shutters on its operations in servicing sub-prime mortgages. The deal was finalized recently on 2nd April.

Saxon collected payments from over 225,000 residential loans – it ranked 34th among the mega loan servicers. During the two years it has dealt with over 60,000 foreclosures. Morgan Stanley did not make any comments on this.

According to the Federal Reserve the employees of Saxon submitted innumerable foreclosure papers sans any personal verification of the contents; the documents were not notarized properly and enough efforts were not made to respond positively to the requests of homeowners to resolve foreclosure problems.

The Federal Reserve stated that the review by Morgan Stanley is aiming to “provide remediation to borrowers who suffered financial injury as a result of wrongful foreclosures or other deficiencies identified in a review of the foreclosure process”. However Morgan Stanley has stated that it is willing to pay for any penalties relating to violation of civil laws by its Saxon unit. The Feds has not said how much that penalty will amount to.

A similar agreement had been reached by the Federal Reserve with Goldman Sachs Group. The latter had sold one of its units, Litton Loan Servicing to Ocwen.

In April last year the Federal Reserve together with Comptroller of the Currency had mandated fourteen companies dealing with mortgage-servicing to engage consultants for reviewing foreclosures; they were also asked to revamp their foreclosure processing methods. The homeowners who were wronged could be getting compensation after completion of the reviewing.

Since the time of the surfacing of the robo-signing scandal the firms dealing with mortgage servicing have come under the scrutiny of the state and federal governments. Earlier in February an agreement was reached with five mega banks to the tune of $25 billion for their foreclosure abuses.

Photo by Renjith Krishnan.

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This is the first term for Bobbie Beavers, State Rep of Maine (House District 148 – inclusive of Eliot Town and a portion of South Berwick). She is serving on the Legislature’s Committee of Energy, Utilities and Technology Committee.

Beavers claims to have gathered experience through the shepherding of a bill that aims to protect the residents of Maine from foreclosures. She has noted that during the processing and enactment of deserving consumer bills that are widely supported it can be pushed to the sidetracks by the lending lobbies from the national level.

She reiterated that the legislators of Maine should bear in mind that their first and the foremost priority are the people of the state who vote them to power.

Recently the Senate passed LD145 and it is now waiting for the signature of the governor to be enforceable law.

The bill will place hurdles before the mega mortgage firms in their endeavours to foreclose on residences if they lack the legal standing to do so. The bill mandates that the banks would have to submit the original note before foreclosure proceedings start; failing it, the case would be dismissed.

According to current civil law of Maine the plaintiff foreclosing has to certify when the case starts regarding ownership proof and produce the necessary papers; but at the time when the courts were overwhelmed by tidal wave of foreclosures the plaintiffs had ignored this important step that led to the abuse of the process; they even flatly refused to submit required note.

It resulted in the homeowner wasting time and money in trying to find out who is legally holding the mortgage. The bill mandates that the mortgage note would have to be produced within a certain time or the house owner would have the right to have the case dismissed.

This type of trickery in foreclosure cases has been rampant across the country and has resulted in the unlawful seizure of property – nothing short of outright theft. This in turn has led to mushrooming of sham firms preying on the downtrodden homeowners pretending to offer help but in reality pushing them further downhill and robbing them of whatever little they have left in their pockets.

Fortunately in Maine there are credit unions, mortgage firms and community banks who are decidedly more consumer friendly than their national counterparts as they observe the letter and the spirit of the law.

Photo by Homesbythomas.

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In Cook County about 1,900 foreclosure victims are due dollars. There is $16 million kept in limbo with the clerk of the count. If disbursed it would be of great help to some – badly affected by the crisis.

These dollars are extra money created after the house owners suffered foreclosure and the house was sold off. If the sale amount is more than the due amount then the money rightly should go back to the previous owner. Dorothy Brown, the county clerk said, “We have an individual that’s due 13 cents. We have someone that’s due $400.00.”

As per the laws of Illinois this surplus amount has to be kept deposited with the court clerk where it goes into hibernation with interest piling up till the rightful owner puts in a claim.

But the problem is tracing and finding these people. Many do not know or have any inkling that money is due to them; a good number having passed through the jaws of foreclosure have never thought any purpose in leaving behind a forwarding address.

Brown said, “It’s hard to find them because many times when people lose their properties to mortgage foreclosure they have also have a lot of credit card debt and a lot other kinds of debts, and they’re probably actually running from those creditors. As a result when they leave their property, they don’t leave a forwarding address”.

To address the problem and reduce the long name list as well as the bag of money the office of Brown has set up a website with a search section to help trace the owners of the fund. Those who want to know if anything is due to them can click on to www.CookCountyClerkofCourt.org and then fill in the necessary details – first initial, last name and their phone numbers. Brown took this step thinking that something should be done for these people.

For those who are currently going through the foreclosure trauma the clerk has sent out a message telling them to keep in touch with the related office. The office of the clerk can chip in to oversee the sale of the property and alert the previous owner if any extra money is due to them.

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The bond between Cheryl Rosimos, a resident of Oakdale, and her pet llamas is so strong that she made them her bridesmaids at her outdoor wedding. Today, she is desperately trying to keep herself and her brood under one roof.

The llamas play catch-me-if-you-can with Rosimos in the fenced-in backyard behind her 1,500 square feet house on East Lake Road, where she also lives with her husband Gary Koczera. She has plans to use these animals for pet therapy in nursing homes and other similar facilities in the local area. She has found the llamas to be quite intelligent and curious about everything.

But Rosimos is afraid that her all-male brood of six llamas could soon be split up if foreclosure becomes a reality. She can no longer afford her monthly mortgage of $2,200 for her ranch-style house. All she wants right now is not to have to separate the brood of llamas; they have been together since birth.

For three years, Rosimos has been sporadically employed; she recently found a steady job working in a legal office. She is now trying to negotiate with Chase about restructuring her mortgage. She has been having trouble with her payments since 2008. Till now, her efforts have not met with success.

She has also sought help from a firm that helps in mortgage modification and tried to apply for aid from  HAMP scheme but, so far, relief has remained a distant dream. She previously sent a letter to Obama, contacted the offices of Rep. Joe Courtney and Senator Richard Blumenthal, talked with the Office of Consumer Counsel of the state; all of whom did not respond.

Ten times Chase has told her that they had lost her papers; Chase did not respond to queries wanting to know the bank’s version of the story. After Chase told her this,  Rosimos bemoaned the fact that she was extremely nervous and wanted someone to help her get an affordable mortgage.

At one stage, it seemed that the modification had been approved and there was a hope that the monthly payment would go down to $1,500 per month. But later she was notified by the bank, sans any explanation, that the modification would increase her monthly payment to $2,400 – it being $500 more than what she was charged hitherto. It nearly gave her a heart attack.

Desperate she made the mistake of inking a contract that was not of much significant relief.

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The African Methodist Episcopal Church is threatened with foreclosure initiated by the One United bank of Hub. This church is one of the oldest in Boston and was greatly venerated while the bank, owned by a man named Black, is shrouded in scandal. The bank tucked in millions from the bailout funds given to them by the federal government. The AME Church was founded way back in 1818 and had played a key part in various anti-slavery movements.
The church is threatened with a foreclosure auction that is to be held on March 22nd in order to realize loans that are due adding up to $1.1
The lawyer representing the church, Ross Martin, said he was at a loss as to why a bank should foreclose upon a church. It did not make any sense to him. Martin added that the church had not missed out on a single payment during the last five years since the start of the mortgage.
However, the bank did not respond to calls asking for comments. Martin opined that the threat was a ploy for holding talks since the there was a long standing dispute between the church and the bank.
The Charles Street AME Church contracted a loan of $3.6 million in 2006 for the purpose of building next to it a community center. After three years, the bank stopped providing funds and began initiating legal proceedings to get back its money.
It became impossible for the church to refinance a mortgage that involved the church building and some storefronts nearby. Martin informed that the church was agreeable to continue making payments on its current loan till refinancing was available but One United refused to accept the offered deal.
Martin said that, despite the impasse there are “various legal options” the church could use in order to avoid foreclosure. He said, “Our view is that they’re not going to be able to kick us out”.
The pastor of the church Reverend Gregory Groover Sr. is the chairperson of Boston School Committee. He did not make any comments. But other leaders among the African Americans in Boston are fuming. Reverend Jeffrey Brown of the Ten Point Coalition (activist group) said, “I think it’s absolutely outrageous for a bank – especially a bank that’s supposed to be a minority bank – to move on an institution like the Charles Street. If there’s anything that’s a cardinal sin, this would be it”.

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Las Vegas is not only the Sin City; it is also known as the Foreclosure Capital of America. But something has recently gone amiss with this famous city. It appears tha,t while attention was focused elsewhere, the many foreclosures have vanished. Could it be that the market has absorbed it all? This answer does not seem likely and the question requires some further thought.

The reason for this new development could be because of a new Nevada state law. The law could have caused all the foreclosures to have vanished.

During the latest session of the Legislature, a bill (AB 284) was passed and, in October 2011, it became the law. Once the law was passed, foreclosure numbers began plummeting. According to the new law’s provisions, lien holders have to take radical steps before they start off with foreclosure proceedings; they have to prove that they have a legal standing in order to initiate foreclosure action.

The law states that lenders will now have to “produce the note” prior to getting the approval to proceed with foreclosure upon a property. The principle seems simple but, in reality, it is not considering that mortgages were packaged, sliced into pieces and then sold across the globe. The document trail of a mortgage can meander through a maze before becoming suitable enough to be produced in court.

Foreclosure acticity may actually be able to be stopped once the lenders began to adjust to the new rules. It has now been six months since the law came into force and the numbers are still low.

In the beginning, the problem was too great because many REO units were available. But, recently, there are not enough properties to meet the demands of Nevada’s real estate market; they seemed to have erased the myth of the “shadow inventory”. If the banks really were sitting on such an inventory, they would have pushed these into the market by now.

The most desirable properties are much sought after by cash buyers because they are all trying to outbid each other. But, as of yet, this has not led to an increase in prices. The word on the street lately has been that demand for properties has gone up while their supplies have gone down. Once the summer season passes, perhaps a real change will be noticed. Many homeowners have been pretty reluctant to sell because of the low prices. However, more and more will begin to sell once housing prices go up.

Bank nowadays are now much more agreeable to providing the option of short sale to homeowners that are in trouble. The new law has made it so foreclosures are not being given precedence over short-sales anymore. The hope is that other states will now follow the model of Nevada so that they too can solve their foreclosure related problems.

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Blanca Cardenas, an undocumented immigrant, was deported after protesting against illegal foreclosure. She has two children who were born in USA and her husband is an American citizen; America has been her home for the last fifteen years.

Eight years previously, she contracted a mortgage in order to purchase a house in North Hollywood. Since last year, she has been protesting against Bank of America; other activists had joined her against what they deemed to be illegal foreclosure action.

The mortgage documents were forged, unfortunately. Cardenas tried filing for bankruptcy to avoid the eviction process. But the house went up for auction and Mehrdad Farahmand of A to Z Development bought the unit; Cardenas was then faced with eviction.

Recently, Cardenas,together with some activists of Occupy Los Angeles, protested against her eviction and resorted to demonstrating in the lawn of her house. Farahmand is said to have instigated the arrest move that led to Cardenas being taken into custody by the Los Angeles Police Department. Occupy Los Angeles contends that LAPD does not have the authority to take this sort of action. It is under the jurisdiction of the Sheriff’s Department of Los Angeles County whether not someone can be taken into custody.

Faced with this allegation, the immigration status of Cardenas was traced and she was handed over to Immigration and Customs Enforcement. There is a law in California that states that no undocumented immigrant can be deported if he or she does not have a criminal record. However, Cardenas was deported to Mexico causing her to be separated from her two kids – one being just a toddler.

Gerardo Quinones, the husband of Cardenas, said that the family has been devastated. She was sent off without even a second set of clothes; needless to add she had no money on her. Quinones asserted, “She had every right to fight for her home and believed the authorities would protect her”.

The ICE is known to have transgressed its own rules previously and resorted to other such deportations previously. CNN, before this case, reported the deportation of Daniela Pelaez, an undocumented student.

When the Congress’s Republicans recently raised hurdles to try to hinder the passing of the Dream Act, Obama reacted by instructing ICE to make adjustments to its criteria regarding undocumented students’ deportation; ICE has become desperate in their attempts to get these students deported out of America. ICE responded by agreeing to delay the deportation of Pelaez till the finalization of her appeal.

But Cardenas was deported within one week without any review, even though she had no criminal record. Occupy is planning to take up the matter –  a combination of deportation blues with foreclosure pains driving them.

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Foreclosure settlements are just the beginning to opening the doors to the whole kingdom of bank illegalities. Senior attorney Roy Oppenheim has lauded the recent foreclosure settlement deal as a creditable achievement of President Obama and for the people of America. Oppenheim has long been telling homeowners to confront the banks in courts (South FloridaLaw Blog) ; he started doing this long before the word ‘robo-signing’ had entered the dictionary.

When he saw an increase in clients seeking help, Oppenheim was stunned to find banks using backhanded methods, which means ignoring the laws of the Constitution foreclosing on houses whether or not they had the legal right to do so. They did it also without any compliance from the courts.

The most foreclosure abuse settlement is just a slap in the face for banks – no amount of dollars can compensate for the amount of damage done to individuals and to America. However, Oppenheim has warned that this is just the beginning of the banks’ punishment – there are worse days ahead for the banks.

Oppenheim now refers to Obama as a re-engaged head of the country. It is to be lauded, said Oppenheim, that Obama has appointed Attorney General of New York Eric Schneiderman to head the Residential Mortgage Backed Security Working Group. This recent appointment indicates that Washington is at last working in the interests of American home owners.

Oppenheim has words of praise for Schneiderman and other attorneys general for putting up a fight to retain their rights to penalize banks for packaging mortgages into securities named REMIC.

All throughout the settlement talks, the banks have tried to achieve blanket immunity for their misdeeds relating to securitization and taxes. Fortunately, they have failed in this attempt. Oppenheim charges them for committing other rampant wrongs besides this.

These issues have been detailed by Oppenheim together with his team mate Jacquelyn Trask in an article – ‘Deconstructing the Black Magic of Securitized Trusts’. This article will be available  in the 2012 spring edition of the Stetson Law Review.

Oppenheim thinks that robo-signing is only the result; the root cause of the collapse of the real estate market was the banks selling off of huge numbers of mortgages to reap their maximum profits. He said, “The strange thing is, by engaging in robo-signing, the banks gave Schneiderman and his investigators the proof to begin to look into REMIC. It was just a tiny key, but it opened the door to an entire illegal kingdom”.

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