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1/7/2011

Banks lose key foreclosure ruling in top Massachusetts court

By Jonathan Stempel and Dena Aubin Jonathan Stempel And Dena Aubin Fri Jan 7, 4:58 pm ET

NEW YORK (Reuters) – In a decision that may slow foreclosures nationwide, Massachusetts’ highest court voided the seizure of two homes by Wells Fargo & Co and US Bancorp after the banks failed to show they held the mortgages at the time they foreclosed.

Bank shares fell, weighing on broader stock indexes, on fears the decision could threaten lenders’ ability to work through hundreds of thousands of pending foreclosures.

The Supreme Judicial Court of Massachusetts’ unanimous decision on Friday upheld a lower court ruling. It is among the earliest cases to address the validity of foreclosures done without proper documentation.

That issue, including the use of “robo-signers” who approved foreclosure documents without reviewing them, last year prompted an uproar that led lenders such as Bank of America Corp, JPMorgan Chase & Co and Ally Financial Inc to temporarily stop seizing homes.

“A ruling like this will slow down the foreclosure process” for lenders, said Marty Mosby, an analyst at Guggenheim Securities in Memphis, Tennessee. “They’re going to have to be really precise and get everything in order. It doesn’t leave a lot of wiggle room.”

Wells Fargo and U.S. Bancorp lacked authority to foreclose after having “failed to make the required showing that they were the holders of the mortgages at the time of foreclosure,” Justice Ralph Gants wrote for the Massachusetts court.

In a concurring opinion, Justice Robert Cordy lambasted “the utter carelessness” that the banks demonstrated in documenting their right to own the properties.

Courts in other U.S. states are considering similar cases, and all 50 state attorneys general are examining whether lenders are forcing people out of their homes improperly.

Friday’s decision applies in Massachusetts, and need not be followed by federal judges or by courts in other states.

Nonetheless, “it will be certainly cited as persuasive authority by anybody in a similar scenario who’s trying to hold onto his home,” said Robert Nislick, a real estate lawyer at Marcus, Errico, Emmer & Brooks PC in Braintree, Massachusetts.

LEAVING PAPERWORK BEHIND

Analysts said the decision may also raise the specter that loans transferred improperly will need to be bought back.

“What they were doing was peddling these mortgages and leaving the paperwork behind,” said Michael Pill, a real estate partner at Green, Miles, Lipton & Fitz-Gibbon LLP in Northampton, Massachusetts who is not involved in the case.

The Massachusetts court rejected a request by the banks to apply the decision only in future cases, leaving homeowners already foreclosed upon without a remedy. Gants chided the banks for ignoring settled rules in their “rush” to sell mortgage-backed securities.

A spokeswoman for San Francisco-based Wells Fargo, Teri Schrettenbrunner, had no immediate comment on the decision.

U.S. Bancorp spokesman Steve Dale said the decision has no financial impact on the Minneapolis-based bank, which has “no responsibility” for the terms or means of transfer of mortgages used in the securitization trusts it oversees as trustee.

Martha Coakley, Massachusetts’ attorney general, praised Friday’s decision. “In their careless and hasty stampede to securitize loans, the banks moved at their own peril,” she said. “They should bear the brunt and the cost of the remedy.”

In Friday trading, Wells Fargo shares closed down 65 cents, or 2 percent lower, at $31.50, while U.S. Bancorp shares fell 20 cents, or 0.8 percent, at $26.09.

Bank of America stock fell 1.3 percent and JPMorgan fell 1.9 percent, and the KBW Bank Index fell 0.9 percent. Broader share indexes declined about 0.2 percent.

Bank shares recovered some losses after it was revealed that Maine’s highest court on Thursday allowed JPMorgan to conduct a foreclosure proceeding despite not having possessed the underlying mortgage until after that process began.

NOT IMMUNE

In the Massachusetts case, U.S. Bancorp and Wells Fargo had said they controlled through different trusts the respective mortgages of Antonio Ibanez and the married couple Mark and Tammy LaRace, who lost their homes to foreclosure in 2007.

The banks bought the Springfield, Massachusetts, homes in foreclosure, and sought court orders confirming they had title. A lower court judge ruled against them in March 2009.

“It is the first time the supreme court of a state has looked straight at securitization practices and told the industry, you are not immune from state statutes and homeowner protections,” Paul Collier, a lawyer for Ibanez, said in an interview.

Massachusetts is one of 27 U.S. states that do not require court approval to foreclose.

“I’m ecstatic,” Glenn Russell, a lawyer for the LaRaces, said in an interview. “The fact the decision applies retroactively could mean thousands of homeowners can seek recovery for homes wrongfully foreclosed upon.”

Russell said the LaRaces moved back to their home after the 2009 ruling, while Collier said Ibanez has not. “U.S. Bancorp will have to compensate him in exchange for the deed, or will have to walk away,” Collier said.

Analysts said the decision could make it harder to sell homes, and perhaps weigh on the nation’s economic recovery.

“The inventory on foreclosures will keep a lid on housing prices for some time,” said Blake Howells, head of equity research at Becker Capital Management in Portland, Oregon.

Gants did suggest in his opinion how banks might properly transfer mortgages via securitization trusts.

“The executed agreement that assigns the pool of mortgages, with a schedule of the pooled mortgage loans that clearly and specifically identifies the mortgage at issue as among those assigned, may suffice to establish the trustee as the mortgage holder,” Gants wrote. “However, there must be proof that the assignment was made by a party that itself held the mortgage.”

The American Securitization Forum, a trade group, in a statement said it “is confident securitization transfers are valid and fully enforceable.”

The cases are U.S. Bank N.A. v. Ibanez and Wells Fargo Bank NA v. LaRace et al, Supreme Judicial Court of Massachusetts, No. SJC-10694.

(Reporting by Jonathan Stempel and Dena Aubin; Additional reporting by Joe Rauch and Dan Wilchins; Editing by Matthew Lewis, Dave Zimmerman and Tim Dobbyn)

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Court puts property seizure plan on ice
By Tara-Nicholle Nelson Wed, May 12 2010

Law of the Land

Tara-Nicholle Nelson
Inman News

In the case United States v. Queri, the federal government indicted Joseph Queri on charges of mail fraud, wire fraud, securities fraud and money laundering, among other things. The indictment included a forfeiture allegation, seeking to have Queri turn over to the government any property that could be traced to the alleged crimes.

If property directly linked to the crimes was unavailable, the indictment specifies that an apartment complex owned by an LLC in which Queri was an 80 percent member would be forfeited as a substitute.

The United States recorded a lis pendens — a notice of pending action — against the apartment complex, The Bradford, the day after the indictment came down. The lis pendens prevented the LLC from refinancing or renegotiating a mortgage loan secured by The Bradford, causing the mortgage to become past due.

Queri filed a motion for the U.S. District Court for the Northern District of New York to order the U.S. government to remove or cancel the lis pendens, so that the mortgage on the Bradford could be renegotiated.

Queri’s motion was granted, and the court ordered the government to remove the lis pendens.

In argument on the motion, the government acknowledged “that federal law does not expressly authorize the filing of a notice of lis pendens on potential substitute property.” Citing United States v. Gotti, 155 F.3d 144, 149 (2d Cir. 1998), the court explained that the law authorizes the government to place a pretrial restraint to ensure that property directly connected to the charged offenses is preserved, but may not place pretrial restraints on substitute property.

In Gotti, the pretrial restraint the government was not allowed to place on substitute property was a restraining order prohibiting the sale of the property; in this case, the restraint the government sought was a lis pendens.

Following the rationale of a similar opinion issued by the Southern District of New York Court, the court ruled that there was virtually no difference between a lis pendens and a restraining order against the sale of the property in this case, because a lis pendens recorded by the U.S. government would in effect prevent the property from being transferred, realistically speaking.

The court rejected the government’s argument that the lis pendens on Queri’s substitute property was authorized by sections 6501 and 1343 of the New York Civil Practice Law and Rules, both of which “provide that such notices may only be filed in any action ‘in which the judgment demanded would affect the title to, or the possession, use or enjoyment of real property …’ ” The judgment sought by the indictment against Queri, explained the court, is Queri’s conviction — which affects only the title and possession of property connected to that offense, not substitute property.

Additionally, the government neither alleged nor provided evidence that Queri’s interest in The Bradford was acquired using assets he obtained by committing the crimes with which he was charged, as required for The Bradford to be forfeited as substitute property.

Accordingly, the court ruled, until the government satisfies the elements required to establish its right to forfeit Queri’s substitute property, the government is prohibited from recording a lis pendens against The Bradford. Queri’s motion was granted and the lis pendens was ordered to be lifted.

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• Roofs, gutters and downspouts
• HVAC systems (heating, venting and air conditioning)
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• Interior and exterior painting
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• Stabilizing or removing lead-based paint
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1. A copy of any collection letters, foreclosure filings, etc.
2. Lender name, contact name/s, and phone numbers for lender
3. Information/contact info on any outstanding leins on the home.
4. Recent mortgage statement or coupon showing balances
5. Property Survey (if available)
6. Copy of previous Appraisal
7. Hardship letter
8. W-2’s (needed for each person on the deed)
9. Bank statements- for last 2 months all 4 pages of each (needed for each person on the deed)
10. Financial package completed from lender/s (will be provided by each lender)
11. last 2 Pay stubs from employer (needed for each person on the deed)

^{Feel free to contact myself for more information at (704) 840-4137 or Rod Potter at rpotter@carolina.rr.com.}

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Are you in foreclosure and looking to save your credit?

I can sell your home and as the seller, you may not have to pay any COMMISSIONS!!!  I will negotiate with your mortgage company to have ALL CLOSING FEE’S  (including the commissions) paid by them, or by the buyer of your home if a shortsale is needed.

A shortsale is a process where I will negotiate with your lender/s towards getting them to accept a reduced payoff amount on your loan/s. On many occasions, a shortsale is required because the amount owed (including the loan/s, agent commissions, closing costs, taxes, etc.) on the home is more than what the home is worth.

Contact me today to setup a no hassle, no obligation private consultation specific to yourforeclosure needs. I am a licensed North Carolina and South Carolina Realtor® who has been in real estate industry for years and that specializes in this type of real estate transaction.

Let me take all of the guess work out of the process. Even if you have tax liens, second & third mortgages, etc…. I can help.

You won’t know if I can help or not unless you call me today. Please call my cell phone at (704) 840-4137 and I will personally take your call…. no answering service and no receptionists.

If you are going to sell your home, use a Realtor that……

A) Has a clientel of investors that can buy your home quickly.
B) Is experienced with foreclosures and shortsales.
C) Knows how to deal with frustrating lenders.
D) Specializes in foreclosure listings.
E) Understands the importance of getting a quick sale and closing.

Please give me a call today at (704) 840-4137 and let’s see how I can help.

In these difficult times, it can feel like there are nothing but bad choices.   However, some are not as bad as others.   If you are finding yourself having difficulty with keeping up with your payments you do have some choices.

Short Sale: Even if you are behind on your payments or don’t think you can sell your home for as much as you owe, we may still be able to help you sell our home and get out from under your loans.   A short sale is when you sell your home for less than the total amount you owe the lender(s).    The process can be arduous but you avoid a foreclosure and generally will face less negative consequences on your credit score.   We have successfully negotiated over 30 short sales and usually gotten the lenders to forgive the shortfall on the payoffs.

We will help you through every step of the process.  The lenders generally require a couple years of tax returns, bank statements, and a letter explaining why the loan cannot be paid in full (a hardship letter).

Foreclosure: Foreclosure is when the bank actually goes through the process with the public trustee to sell a property at auction.   The process starts when the Public Trustee sends a Notice of Election and Demand.   From that point it can be as little as 120 days before the property is sold at auction.  Frequently the bank ends up with the property.    Even if the process has started, you may still be able to sell your home – if we can get an offer, most lenders will pause (forestall) the foreclosure proceedings, giving more time to complete the sale.

Foreclosure can a have significant effect on your credit score, ability to obtain loans, possible employment (if potential employers check it) and even security clearances.

Contact me today for more information!  Email: rpotter@carolina.rr.com / Phone: (704)840-4137 / Website:  www.rodpotter.com

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Bargain hunters and first-time home buyers alike almost always have questions about the value of buying foreclosed homes. Realtors have access to listings of foreclosed homes being sold at prices that are extremely competitive in today´s housing market.

When realtors show potential buyers foreclosed properties, they should make every effort to convey the difficulties that a new home owner may experience once the sale is complete.  If you are considering the purchase of a foreclosure property that may be too large of a commitment for your lifestyle, a good realtor will be honest and share his or her concerns with you.  This is because good realtors want their clients to be happy with their purchase, and therefore try to ensure that each client is making the best decision for his or her particular circumstances.

Logistically, the process of searching for a foreclosed home is very similar to that for any other home.  Specific listing services provide information to potential buyers, and realtors receive additional information that they can shared with potential buyers.

Potential buyers usually want more information about foreclosed homes than what is available. Understand that when you seek information about a home being sold through a foreclosure sale service, your realtor will probably need additional time to find the answers you need.

A foreclosure is almost always a home that was purchased by a buyer with a federally insured mortgage.  The buyer then defaulted on the loan and the home went into foreclosure.  Because the borrower´s mortgage was federally insured, the insuring agency was required to satisfy the remaining balance of the loan, in essence buying the home from the lender.

Obviously, the government does not want or need this surplus property.  Therefore, the government usually sells the property to a company which specializes in the sale of foreclosed properties.  These agencies are located across the country and list thousands of homes for sale.

Some of the higher-quality homes in affluent areas are sold immediately, perhaps even before they are officially listed for sale.  This leaves average home buyers with opportunities to save a significant amount of money if and when they find a home that works well for their current situation.

Many foreclosed homes have been vacant for a long time before the listing agency places them on the market for sale.  The risk of problems arising from that vacancy may leave buyers disillusioned when they finally have a chance to visit the homes they are considering.

Also, in some foreclosure situation, the previous borrower may not have maintained the home adequately and there may be missing or damaged items throughout the home.  Sometimes foreclosure homes are referred to as buyer beware, because these homes are almost always sold as-is.

Here are the three most questions that realtors are asked about foreclosed properties:

How Can I Find a List of Foreclosures?
Stay away from companies that promise to provide you with a list of homes that you can purchase for pennies on the dollar.  These companies have been known to provide sellers with lists of homes that have already sold, or lists of homes that are already available for free through realtors.

The Internet is a good place to begin your search.  Most of the reputable agencies place their listings of foreclosed properties online.

If you want to know whether additional foreclosed homes are for sale in your area, contact your realtor.  His or her office probably maintains a list of foreclosed properties, and your realtor would be more than happy to meet with you to discuss the possibilities.

So, Do I get pre-approved for a regular mortgage?  Or Am I Required to Pay Cash?
A common misunderstanding among potential buyers is that unless they are prepared to pay cash on the spot, they cannot purchase a foreclosed home.  This is simply not true.  Some lenders offer special loan programs aimed at borrowers who intend to buy a foreclosed home.

Lender appraisals and inspections may sometimes make it difficult to obtain a mortgage for a foreclosed home that has been damaged or is in need of significant repair.  Consequently, the same federal agencies that put the homes up for sale may be willing to extend financing to potential buyers.  These agencies will sometimes give the buyer grant money or a low-cost second mortgage loan to be used for the repair of the home.

In sum, you do not need to pay cash. However, you may need to borrow a specific type of mortgage loan, depending on the home´s condition and price.

Will I Save a Lot by Buying a Foreclosed Home?
Another common misconception is that foreclosed homes are priced at pennies on the dollar.  Well, if you consider this phrase to mean 99 pennies on the dollar, then you may be correct.  Generally, foreclosed homes are listed for sale at their approximate market value, according to the home´s location and condition.

Some foreclosed homes sell for very low prices, but in most of those cases the homes were razed in order to make room for new construction.  More commonly, high-priced homes in affluent areas sell for a few percentage points less than their current market value.  If this is the type of deal that you are looking for, then definitely consider purchasing a foreclosed home.

A good realtor will warn you up-front that the costs associated with buying a foreclosed home can be significant.  The buyer may be required to perform very costly repairs before occupying the property. Also, these buyers may be unable to take advantage of low interest-rate specials offered by lenders.

If you are considering the purchase of a foreclosure, be realistic in your expectations and prepare to expect the unexpected.  Many buyers are thrilled with their home after purchase, but others are forced to complete months of costly repair work before they can move in. As long as you investigate the possible options, including the available mortgage and assistance programs, you will be an educated consumer prepared to make an educated purchase.  Buying a home is often the largest investment that you will ever make, so you need to feel secure in the knowledge that you have invested wisely.

If you are interested in purchasing a foreclosure property, many realtors will offer you the benefit of their experience and expertise.  Realtors normally do not work with these types of sales every day, but they do have access to information and property listings that can help you decide whether buying a foreclosed property is the right option for you.

Contact me today for more information!  Rod Potter/ Email: rpotter@carolina.rr.com / Phone: (704)840-4137

When searching for a new home, there are certain things that are important to do including….

1) Before you start

Before you start shopping, you should Pre-qualify for a Loan. Being pre-approved for a loan determines how much house you can afford. It also allows you to move more swiftly when you find the right house, especially when you aren’t the only interested buyer. Call me, I have some GREAT contacts for this.

2) Shop for Mortgage Rates and terms

A difference of even half a percentage point can make a huge difference in how much you pay over the life of a loan. For example, the difference in the monthly payment on a $100,000 mortgage at 8 percent vs. 7.5 percent is about $35 per month. Over 30 years, that’s $12,600.

3) Using a buyer agent

As your licensed NC buyer broker, I am legally responsible for representing your best interest in the real estate transaction. In doing this, I will be doing my best to make sure that you are treated fairly and get the best price on a new home as possible.

As the buyer agent, I am usually compensated by the seller at the closing table. Therefore, no money will be coming out of your pocket for my services.

4) Distance to your place of employment or family

If there is a destination that you need to go to frequently like a job or a family member, I recommend that you try to find a home that isn’t to far from that location. Needless to say, it can be quite burdensome to drive back and forth.

5) Crucial items of importance

Make a list of items that your new home “MUST HAVE”. For instance, you must have a large backyard, a basement, or a pool. In any event, those items are important to know BEFORE buying a house. There is nothing worse than buying a home and not having something that is extremely important to you  being missed.

6) Features that help or hurt resale value

In some areas, a swimming pool actually detracts from a home’s value and makes the home harder to sell. In neighborhoods with two-car, attached garages, a single-car or detached garage may impact the home sale and future value. As your Realtor, I will point out features that hurt, as well as those that help, resale value.

^{Feel free to contact myself for more information at (704) 840-4137 or Rod Potter at rpotter@carolina.rr.com.}