I am merely an attorney who like so many others is overwhelmed by the onslaught of millions of defaults, modifications, foreclosures, trustees sales, notices to vacate ,unlawful detainers and sheriff’s lockouts.
Our legal system is a rigged game favoring the capital of a capitalist system. In California a nonjudicial state a foreclosure can occur on the mere word of a lender without the original note or assignment of the original deed of trust. A then former homeowner can then be evicted by giving notice to vacate constructively (without notice) have a summons “Posted and Mailed” (again no actual notice) a default judgment taken (no trial) and a writ issued and the Sheriff’s instruction to evict issued and enforced.
I am about fighting this process, by 1. providing as much information as possible to allow homeowners to fight this process and 2. by litigation to protect those rights allegedly guaranteed by our constitution.
While I am an attorney the sheer number of cases no individual firm that I know of is capable handling competently. Most all non-profit foreclosure and legal aid service can provide only limited services. We have much to talk about this year as we push forward. By all accounts, the economy, the dollar, the foreclosures, the job situation etc are all getting worse by the minute.
Even if Obama is a magician it will be 2 years before there is a glimmer of hope. The homeowner aid programs are window dressing. Even the Sheila Bair one from FDIC/Indy Mac while well-intentioned does little for most homeowners. The ONLY hope for homeowners and the only hope for our economy is if we face the music and take the free market enthusiasts at their word, to wit: everyone agrees they artificially inflated real estate values and those values are still too high for the market to support. The only reason the “values” are stated so high is that the sellers are still deluding themselves in their asking prices. There is at least another 20% to go. As the Niel Garfield Continuum says, we are only in about the 2nd or 3rd inning of a 9 inning game that might go into overtime.
Loan Mod’s that leave homeowners under water simply will not work. People are not that stupid. It is easier to walk from the house and rent or buy another at real (lower) values.
Thus Litigation against the lender plan is the only viable option — get rid of the note, obligation and mortgage altogether or at least force a modification that will bring the obligation to around 80% of true fair market value. Only a credible threat to the financial services sector pushing foreclosures will result in this relief. The threat comes from understanding and enforcing the basic law applicable to these mortgages — they screwed up and now they want borrowers to sign new paper that clears up their screw up and leaves the borrower in a horrible position. http://www.thestopforeclosureplan.com/Contact.html
CALIFORNIA LEGISLATURE FINDINGS
1. Recently, the California Legislature found and declared the following in enacting California Civil Code 2923.6 on July 8, 2008:
(a) California is facing an unprecedented threat to its state economy because of skyrocketing residential property foreclosure rates in California. Residential property foreclosures increased sevenfold from 2006 to 2007, in 2007, more than 84,375 properties were lost to foreclosure in California, and 254,824 loans went into default, the first step in the foreclosure process.
(b) High foreclosure rates have adversely affected property values in California, and will have even greater adverse consequences as foreclosure rates continue to rise. According to statistics released by the HOPE NOW Alliance the number of completed California foreclosure sales in 20′07 increased almost threefold from 2002 in the first quarter to 5574 in the fourth quarter of that year. Those same statistics report that 10,556 foreclosure sales, almost double the number for the prior quarter, were completed just in the month of January 2008. More foreclosures means less money for schools, public safety, and other key services.
(c) Under specified circumstances, mortgage lenders and servicers are authorized under their pooling and servicing agreements to modify mortgage loans when the modification is in the best interest of investors. Generally, that modification may be deemed to be in the best interest of investors when the net present value of the income stream of the modified loan is greater than the amount that would be recovered through the disposition of the real property security through a foreclosure sale.
(d) It is essential to the economic health of California for the state to ameliorate the deleterious effects on the state economy and local economies and the California housing market that will result from the continued foreclosures of residential properties in unprecedented numbers by modifying the foreclosure process to require mortgagees, beneficiaries, or authorized agents to contact borrowers and explore options that could avoid foreclosure. These Changes in accessing the state’s foreclosure process are essential to ensure that the process does not exacerbate the current crisis by adding more foreclosures to the glut of foreclosed properties already on the market when a foreclosure could have been avoided. Those additional foreclosures will further destabilize the housing market with significant, corresponding deleterious effects on the local and state economy.
(e) According to a survey released by the Federal Home Loan Mortgage Corporation (Freddie Mac) on January 31, 2008, 57 percent of the nation’s late-paying borrowers do not know their lenders may offer alternative to help them avoid foreclosure.
(f) As reflected in recent government and industry-led efforts to help troubled borrowers, the mortgage foreclosure crisis impacts borrowers not only in nontraditional loans, but also many borrowers in conventional loans.
(g) This act is necessary to avoid unnecessary foreclosures of residential properties and thereby provide stability to California’s statewide and regional economies and housing market by requiring early contact and communications between mortgagees, beneficiaries, or authorized agents and specified borrowers to explore options that could avoid foreclosure and by facilitating the modification or restructuring of loans in appropriate circumstances.
2. “Operation Malicious Mortgage’ is a nationwide operation coordinated by the U.S. Department of Justice and the FBI to identify, arrest, and prosecute mortgage fraud violators.” San Diego Union Tribune, June 19, 2008.
3. “Home ownership is the foundation of the American Dream. Dangerous mortgages have put millions of families in jeopardy of losing their homes.” CNN Money, December 24, 2007.
4. “Finding ways to avoid preventable foreclosures is a legitimate and important concern of public policy. High rates of delinquency and foreclosure can have substantial spillover effects on the housing market, the financial markets and the broader economy. Therefore, doing what we, can to avoid preventable foreclosures is not just in the interest of the lenders and borrowers. It’s in everybody’s best interest.” Ben Bernanke, Federal Reserve Chairman, May 9, 2008.
5. “Most of these homeowners could avoid foreclosure if present loan holders would modify the existing loans by lowering the interest rate and making it fixed, capitalizing the arrearages, and forgiving a portion of the loan. The result would benefit lenders, homeowners, and their communities.” CNN Money, id.
6. On behalf of President Bush, Secretary Paulson has encouraged lenders to voluntarily freeze interest rates on adjustable-rate mortgages. Mark Zandl, chief economist for Mood’s commented, “There is no stick in the plan. There are a significant number of investors who would rather see homeowners default and go into foreclosure.” San Diego Union Tribune, id.
7. “Fewer than l%• of homeowners have experienced any help “from the Bush-Paulson plan.” San Diego Union Tribune, id.
8. The loss belongs where it was created — on Wall Street and Main Street Banks that rented their charter to Wall Street operatives who caused an unprecedented collapse of loan underwriting standards and crossing the line into fraud, forgery, and creation of false documentation. Companies SHOULD fail. Banks SHOULD fail. Borrowers CANNOT fail — because they are the backbone of the country and the economy.
9. There are plenty of lenders, investment bankers and money managers who did not play the game and are perfectly healthy. Bailout money should go to the players who played by the rules and are healthy. They are the ONLY ones who can and will lend, thus freeing up, somewhat, the tightening death grip of no credit and thus no commerce.
Lastly I am devoted to fighting this process by 1. Providing as much information, pleadings, discovery, publication of relevant cases as possible to allow homeowners to fight this process 2. Through the judicial process attempt to protect those rights allegedly guaranteed by our Constitution.