The Resolution Law Group: New California Appellate case published on August 8, 2013, “Glaski v. Bank of America”, holds that a homeowner can challenge his lender’s right to foreclose by showing that the Deed of Trust never made it into the securitized trust until after the trust’s closing date.

A new California Appellate case published on August 8, 2013, “Glaski v. Bank of America”, holds that a homeowner can challenge his lender’s right to foreclose by showing that the Deed of Trust never made it into the securitized trust until after the trust’s closing date. This is the case in most loans made in the last 12 years. If the bank foreclosed we should be able to get the homeowner money damages and/or the house back. Or a lawsuit could be filed and a court ruling obtained preventing the court from foreclosing.Recently enacted Sections 2924(a)(6) and 2924.19 of California Civil Code provide the same relief to homeowners.

It is highly suggested that homeowners take this window of opportunity to get relief before the banks get Congress to close this door with national legislation.  If you feel you are the victim of Mortgage Fraud, please do not hesitate to email or call the The Resolution Law Group (203) 542-7275 for a confidential, no obligation consultation.

 

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The Resolution Law Group: It has been a very good week for AIG in California litigation. AIG prevailed in the publicized Michael Jackson trial. Less publicized, but probably more valuable to AIG is the recent ruling by a Federal Judge in the central district of California.

It has been a very good week for AIG in California litigation. AIG prevailed in the publicized Michael Jackson trial. Less publicized, but probably more valuable to AIG is the recent ruling by a Federal Judge in the central district of California.

AIG previously sued Bank of America over fraudulent mortgage securities. Bank of America argued that AIG had no standing to sue because it had transferred that right when it sold the instruments to the federal Reserve Bank of New York in 2008.

Geoffrey Broderick, the senior partner of the Resolution Law Group, says “Judge Pfaelzer’s finding that AIG has standing to sue Bank of America may also be bad news for other banks that sold troubled mortgage securities to the insurer. AIG has not yet sued other institutions, but we know from public records that AIG suffered at least $11 Billion in losses involving other banks.”

Mr. Broderick adds that “The housing market will continue to suffer until it is fixed by the Courts or the Legislature. Somebody has to fix the problem. That is why The Resolution Law Group continues its fight for homeowners. Homeowners cannot expect the problem to fix itself.”

The Resolution Law Group continues to prosecute ground breaking litigation in Federal Court on behalf of homeowners suing lenders and servicers for, among other things, the illegal use of MERS, robo-signing, and intentionally ignoring underwriting standards and encouraging inflated appraisals.

The Resolution Law Group is currently enrolling clients into the pending lawsuit. For further information, visit its website at www.TheResolutionLawGroup.com

The Resolution Law Group: Is Mortgage Seizure Plan a Win-Win or Lose-Win?

Is using eminent domain to pare back underwater mortgage debt a win-win or a lose-win?

It’s a question at the heart of the battle of Richmond, the California city that’s emerged as the staging ground for a high-stakes legal experiment that could reshape the mortgage-backed securities market.

As The Wall Street Journal reports, banks representing some of the nation’s largest bond investors sued Richmond on Wednesday to stop the city from using the power of eminent domain to forcibly purchase loans on several hundred properties.

Under the U.S. Constitution’s “takings clause,” the government may confiscate private property for “public use” as long as the owner is justly compensated. It’s an amount that the U.S. Supreme Court has defined as the market value of the condemned property at the time it was seized.

Figuring out the market value of land is complex. Calculating it for securitized mortgage loans is even knottier.

Richmond is proposing to acquire underwater but performing loans at a price below the market value of the homes; say, for 80% of the home’s current value. The city argues that the price is fair value–high enough to pass constitutional muster. Such a discount is warranted, it says, because many of the borrowers would eventually stop making payments. And higher risk means lower value.

The investors suing aren’t buying that. They think the forfeiture discount is based on an exaggeration of foreclosure risk. They note that the city is targeting homeowners with good credit ratings who are paying their mortgages.

The whole plan, they say, would collapse if the city actually paid a fair price.

“The entire Program is premised on undercompensating the owners of the loans,” states the complaint filed by three mortgage-bond trustees. “It could not function in any other way, because the Program is profitable for its participants only because the loans are seized for heavily discounted prices and are then refinanced with a new loan purportedly worth more than the amount for which the homeowner’s existing loan was seized.”

Mortgage Resolution Partners, the private investment firm teaming up with Richmond leaders, rejects the claim that any investor group would be made worse off, a company spokesman told WSJ.

Cornell University law professor Robert Hockett, the legal brainchild of Richmond’s proposal, says lenders forced to surrender the loans would have the opportunity to scoop them up after they’re refinanced and more valuable. In other words: They have the chance to get in on both sides of the trade, so what’s there to complain about?

“That bondholders will effectively be ‘paying themselves’ less for their loans than face in so doing is just a roundabout way of saying that they will be writing down principal,” he wrote last year in a paper promoting the idea. He says these investors would like to write down the debt on their own, but are stymied by securities and pooling agreements that make it hard to modify individual loans within a trust.

Thanks but no thanks, say bond investors. It’s not that they doubt that the new lenders would make money. (Though some critics of the plan wonder if the litigation costs would chip away at profits.) They fear what happens next. If the eminent domain idea catches on, the risk of loan seizure would tighten credit and undermine confidence in the broader securities market, the lawsuit claims.

So it’s not just a legal question of what’s fair value. The bondholder lawsuit is challenging the constitutionality of the plan in another major respect. It claims the potential harm to securities investors would violate the part of the Commerce Clause that prohibits local governments from excessively burdening interstate commerce.

Mr. Hockett says the investors are the ones exaggerating here. “It’s not clear to me what sense that would burden interstate commerce,” he told WSJ. “It doesn’t prevent credit from flowing in any particular way. If anything it ought to assist with the flow of interstate credit by unclogging mortgage markets.” In his view, a win-win.

The Resolution Law Group is currently enrolling clients into the pending lawsuit. For further information, visit its website at www.TheResolutionLawGroup.com

Lender Litigation, Unlawful Foreclosure, Tarp Money, Mortgage Backed Securities, Derivitives Lawsuits, Insider Trading Lawsuit, SEC Settlements, Ponzi Scheme Lawsuits, Intentional Misrepresentation, Securitized Mortgage, Class Action Securities Lawsuit, Robo-Signing Lawsuit, Lost Equity Litigation, Mortgage Lender Fraud, FINRA Fraud Lawsuit, Suing Banks, Fraudulent Misrepresentation, Short Sale Fraud, Fraudulent Business Practices, Mortgage Litigation, Complex Tort Litigation, Injunctive Relief, MERS Fraud

The Resolution Law Group: Richmond is about to become the first city in the nation to try eminent domain as a way to stop foreclosures.

The power of eminent domain has traditionally worked against homeowners, who can be forced to sell their property to make way for a new highway or shopping mall. But now the working-class city of Richmond, Calif., hopes to use the same legal tool to help people stay right where they are.

Scarcely touched by the nation’s housing recovery and tired of waiting for federal help, Richmond is about to become the first city in the nation to try eminent domain as a way to stop foreclosures.

The results will be closely watched by both Wall Street banks, which have vigorously opposed the use of eminent domain to buy mortgages and reduce homeowner debt, and a host of cities across the country that are considering emulating Richmond.

Geoffrey Broderick, the senior partner of the Resolution Law Group, says “while the City of Richmond’s exercise of eminent domain is a step in the right direction, the banks and their lobbyists and politicians will not back down without a fight. “

We’re not willing to back down on this,” said Gayle McLaughlin, the former schoolteacher who is serving her second term as Richmond’s mayor. “They can put forward as much pressure as they would like, but I’m very committed to this program, and I’m very committed to the well-being of our neighborhoods.”

Many cities, particularly those where minority residents were steered into predatory loans, face a situation similar to that in Richmond, which is largely black and Hispanic. About two dozen other local and state governments, including Newark, Seattle, and a handful of cities in California, are looking at the eminent domain strategy, according to a count by Robert Hockett, a Cornell University law professor and one of the plan’s chief proponents. Irvington, N.J., passed a resolution supporting its use in July. North Las Vegas will consider an eminent domain proposal in August, and El Monte, Calif., is poised to act after hearing out the opposition this week.

The banks and the real estate industry have argued that such a move would be unprecedented and unconstitutional. But not all mortgage investors oppose the plan. Some have long argued that writing down homeowner debt makes sense in many cases. “This is not the first choice, but it’s rapidly becoming the only choice on how to fix this mess,” said William Frey, an investor advocate.

Mr. Frey said that the big banks were terrified that if eminent domain strategies became widespread, they would engulf not only primary mortgages but some $450 billion in second liens and home equity loans that are on the banks’ balance sheets. “It has nothing to do with morality or anything like that, it has to do with second liens.”

When asked, Mr. Broderick stated that “The housing market will continue to suffer until it is fixed by the Courts or the Legislature. Somebody has to fix the problem. That is why The Resolution Law Group continues its fight for homeowners. Homeowners cannot expect the problem to fix itself.”

The Resolution Law Group continues to prosecute ground breaking litigation in Federal Court on behalf of homeowners suing lenders and servicers for, among other things, the illegal use of MERS, robo-signing, and intentionally ignoring underwriting standards and encouraging inflated appraisals.

The Resolution Law Group is currently enrolling clients into the pending lawsuit. For further information, visit its website at www.TheResolutionLawGroup.com

Lender Litigation, Unlawful Foreclosure, Tarp Money, Mortgage Backed Securities, Derivitives Lawsuits, Insider Trading Lawsuit, SEC Settlements, Ponzi Scheme Lawsuits, Intentional Misrepresentation, Securitized Mortgage, Class Action Securities Lawsuit, Robo-Signing Lawsuit, Lost Equity Litigation, Mortgage Lender Fraud, FINRA Fraud Lawsuit, Suing Banks, Fraudulent Misrepresentation, Short Sale Fraud, Fraudulent Business Practices, Mortgage Litigation, Complex Tort Litigation, Injunctive Relief, MERS Fraud

The Resolution Law Group: District Judge Not Inclined to Toss $5B Securities Fraud Case Against Standard & Poor’s

A U.S. district judge in California has put out a tentative decision in the $5B fraud lawsuit against Standard & Poor’s indicating that he will likely reject a motion to dismiss the civil case against the credit rating agency. Judge David Carter said he needs more time to come up with his final ruling, which is expected on July 15, but for now, he is turning down S & P’s request to toss out the case outright.

Federal prosecutors sued S & P contending that the credit rater chose not to alert investors that the housing market was failing in ‘06 and inflated high-risk mortgage investments’ ratings. The Obama Administration said the ratings agency did not act fast enough to put downgrade a large number of subprime-backed securities despite realizing that home prices were dropping and borrowers were finding it hard to pay back loans. Instead, collateralized debt obligations and mortgage-backed securities continued to receive elevated ratings from the top credit rating agencies, allowing banks to sell trillions of these investments.

Contending that the credit rater committed fraud by making false claims that its ratings were objective, the US Department of Justice wants S & P to pay $5 billion in penalties, The government believes that between 9/04 and 10/07, S & P delayed updating both its ratings criteria and analytical models, which means the requirements were weaker than what analysts say should have been necessary to ensure their accuracy. During this time, S & P credit rated about $1.2 trillion in structured products related to $2.8 trillion worth of mortgage securities and charged up to $750 per rated deal. The government says that this means that S & P saw the investment banks that put out the securities as its primary customers.

Now, S & P wants the MBS case thrown out, contending that the lawsuit is too broad and doesn’t offer enough specific examples of the alleged fraud. The credit rating agency maintains that the statements federal prosecutors say are the allegedly fraudulent misrepresentations are ones that investors were not supposed to take at face value and, therefore, they cannot be grounds for the securities fraud case.

Also, S & P’s legal defense says that just like other market participants, including the US Treasury, the credit rating agency did not have the ability to predict how severe the ensuing “catastrophic meltdown” would be and, if anything, this showed a “lack of prescience” rather than fraud.

However, Judge Carter in his tentative ruling, did say that S & P’s statements in employee conduct codes and official policy statements about its standards and processes for ratings deals aren’t just “mere aspirational musings,” but instead are “specific assertions of policies… in stark contrast” to conduct that the government is alleging occurred.

If you feel you are the victim of Mortgage Fraud, please do not hesitate to email or call the The Resolution Law Group (203) 542-7275 for a confidential, no obligation consultation.

Lender Litigation, Unlawful Foreclosure, Tarp Money, Mortgage Backed Securities, Derivitives Lawsuits, Insider Trading Lawsuit, SEC Settlements, Ponzi Scheme Lawsuits, Intentional Misrepresentation, Securitized Mortgage, Class Action Securities Lawsuit, Robo-Signing Lawsuit, Lost Equity Litigation, Mortgage Lender Fraud, FINRA Fraud Lawsuit, Suing Banks, Fraudulent Misrepresentation, Short Sale Fraud, Fraudulent Business Practices, Mortgage Litigation, Complex Tort Litigation, Injunctive Relief, MERS Fraud

California AG Files Lawsuit Against JP Morgan Chase Alleging Debt Collection Abuse Over 100,000 Credit Card Cases

According to California Attorney General Kamala Harris, JP Morgan Chase (JPM) filed about 100,000 credit card debt collection lawsuits between 2008 and 2011 without conducting sufficient research to properly assess the cases’ merits. The bank reportedly submitted 200 lawsuits over 15 weeks in 2011, including 32 lawsuits on January 5, 2011. Now, Harris is suing the banking giant, accusing it of “debt collection abuse” while victimizing tens of thousands of state residents.

Per the complaint, Chase prioritized saving money and speed, even “robo-signing” legal documents without sufficiently evaluating the evidence and engaging in other “unlawful practices.” The state points to questionable documents and incomplete records that were purportedly used to back up the cases. Harris, who contends that JPMorgan’s “debt collection mill” abused the state’s judicial process, wants damages for borrowers.

Meantime, JPMorgan is cooperating regulators, including the Office of the Comptroller of the Currency, which is getting ready to file an enforcement action against it ,also over its handling of credit card debt collection. The firm reviewed its debt collection procedures in 2011 and it is no longer filing credit card lawsuits.

After spending the last few years focusing on the way lenders went after homeowners who couldn’t pay their mortgages on time—in 2012, five banks settled for $26 billion with 49 state attorneys general over the way homes were wrongfully seized—regulators are now focusing on the former’s handling of credit card debt.

If you, your family, friends, neighbors or associates have been subjected to Mortgage Fraud, please contact The Resolution Law Group at (203) 542-7275 for a confidential, no obligation consultation.

Lender Litigation, Unlawful Foreclosure, Tarp Money, Mortgage Backed Securities, Derivitives Lawsuits, Insider Trading Lawsuit, SEC Settlements, Ponzi Scheme Lawsuits, Intentional Misrepresentation, Securitized Mortgage, Class Action Securities Lawsuit, Robo-Signing Lawsuit, Lost Equity Litigation, Mortgage Lender Fraud, FINRA Fraud Lawsuit, Suing Banks, Fraudulent Misrepresentation, Short Sale Fraud, Fraudulent Business Practices, Mortgage Litigation, Complex Tort Litigation, Injunctive Relief, MERS Fraud

RealtyTrac recently released its 2012 year end report. RealtyTrac tracks real estate foreclosures and sales in the United States.

According to the year end report, there were almost one million homes (the report indicates 947,995, to be exact) that were sold in 2012 that were in some stage of foreclosure or already bank owned (REO)  at the time the property was sold. This accounted for 21% of all residential sales in the United States in 2012.

Additionally, the report indicates that properties that were not yet in foreclosure but were sold through a “short sale” procedure accounted for 22% of all residential sales in the United States in 2012.

Geoffrey Broderick, the senior partner of the Resolution Law Group, says “the RealtyTrac report confirms what those watching the market already know.  43% of all sales in the United States last year were by or on behalf of people upside down, or banks that already foreclosed on their homes.  The percentage of sales by distressed homeowners is even larger.”   Most people are unaware of how bad the housing market still is.  The short sale market is fueled by the fact that banks get a credit against the prior Attorneys General settlement by agreeing to sales that yield less money than that of the underlying note.  Mr. Broderick adds that “The housing market will continue to suffer until it is fixed by the Courts or the Legislature.   Somebody has to fix the problem. That is why The Resolution Law Group continues its fight for homeowners.  Homeowners cannot expect the problem to fix itself.”

The Resolution Law Group continues to prosecute ground breaking litigation in Federal Court on behalf of homeowners suing lenders and servicers for, among other things, the illegal use of MERS, robo-signing, and intentionally ignoring underwriting standards and encouraging inflated appraisals.

The Resolution Law Group is currently enrolling clients into the pending lawsuit.  For further information, visit its website at www.TheResolutionLawGroup.com

Lender Litigation, Unlawful Foreclosure, Tarp Money, Mortgage Backed Securities, Derivitives Lawsuits, Insider Trading Lawsuit, SEC Settlements, Ponzi Scheme Lawsuits, Intentional Misrepresentation, Securitized Mortgage, Class Action Securities Lawsuit, Robo-Signing Lawsuit, Lost Equity Litigation, Mortgage Lender Fraud, FINRA Fraud Lawsuit, Suing Banks, Fraudulent Misrepresentation, Short Sale Fraud, Fraudulent Business Practices, Mortgage Litigation, Complex Tort Litigation, Injunctive Relief, MERS Fraud