Couldn't happen to a Nicer Bunch of Thugs

I happened to notice this news piece Friday:

Despite Settlement, BofA MBS Litigation Battles Go On "Although Bank of America Corp. has apparently moved past two legal actions it had been battling, plaintiffs are still lined up around the block trying to collect on losses from mortgage-backed securities investments.

The Charlotte, N.C.-based company last week reached a $10.3 billion settlement with Fannie Mae on $1.4 trillion in loans. BofA was also one of 10 servicers last week to settle consent order requirements for foreclosure reviews with the Office of the Comptroller of the Currency.

But the string of lawsuits pending against the banking behemoth is nowhere near the end."

I personally have done probably 75 separate mortgage Securitization Audits where the Servicer or the Lender (who allegedly sold its interest in the loan to a Trust to be Securitiized - and I absolutely cannot believe what I have seen ... I was a lender a short 4+ decades and always had enormous respect for this Bank - not any more) ....

Busy Lately

I have been doing a terrible job keeping this Blog going lately -  I thought of this little YouTube video (on the right) to describe how we've been doing at Cugno & Associates, busy but unlike Lucy & Ethel not overwhelmed, just lots of struggling homeowners to try and help their Lawyers beat back those that are trying wrongful foreclosures.

Contact us with questions, comments, and/or concerns.

Restarting our Newsletters

As many of you are aware, after I semi-retired from the Mortgage Banking business, I got a State teaching credential and stated up the on-line Secret! University Educational and Training facility, we published a popular monthly newsletter for a short 100 months in a row. During that period, I frankly enjoyed writing it;  I intend to begin an e-mail campaign sending them out again monthly, beginning this next week. The topic will be whatever engages me here in the Foreclosure/Fraud Investigator while providing Foreclosure Defense Mortgage Securitization Audits. I have found his niche a fascinating one, with startling activity we see on an almost daily basis. If you had a 40+ year career, as a Senior Executive and Owner of a Nationwide Mortgage Banking firm like I have, then you too would be shocked at what we uncover Major Lenders & Investors doing to Homeowners still.

Please be sure you get your e-mail addess in to us, so we can be sure to include you in our publication's distribution list.

Mortgage Securitizers! I Got Your Number !!

This is the latst version of the ending portion of our final Securitization Forensic Mortgage Loan Audit Reports lately (it seem to universially it them):

"Our Borrower and their Lawyer should be considering filing a Complaint against this wrongful foreclosing party, as their Mortgage Foreclosure lawsuit had no merit and has been rendered moot by the factual information we have uncovered. Plus of course, the Trust should be demanding a ‘buy-back’ from the Original Lender and/or its successor, since they apparently purchased this transaction with considerably faulty documentation.

It should be noted, during this period in the residential real estate mortgage lending industry, it looks like nearly everybody was playing 'fast and loose' with Borrower loans. What I think we have been able to piece together, is it appears the servicer ‘rings the bell’ when they notice they have a (securitized) Borrower loan that is delinquent and needs to get into the Foreclosure process. Next, somebody says “oops we need to get these Notes endorsed/sold and these Mortgage/DOT’s assigned to these various trusts immediately (which if course is far too late to be lawful), yet none of them seem to know, or care, what they’re doing is unethical, immoral and unlawful. Translated: 100% of these type audits we have done which were allegedly securitized, have significantly flawed documentation, just like this one."

Kinda amazing those 197 words seem to fit everyone of these kinds of audits!

Judicial Foreclosure States Have Worst Foreclosure Rates

An interesting news piece this afternoon:

"Foreclosures were completed on fewer properties in July than during the month-earlier and year-earlier periods. Even the biggest foreclosure state slowed its activity. Non-judicial foreclosure states were dominant among states with the greatest number of filings, but the worst rates of foreclosure were in judicial foreclosure states.
The volume of U.S. foreclosures completed last month by mortgage servicers fell 6 percent from June. Improvement was a more significant 16 percent compared to July of last year.
During the 12 months ended July 31, completed foreclosures totaled 794,744, inching up from the previous month's 12-month total of 793,663."

Foreclosure Defense Marketing

Sent out the Press Release with those positive success numbers I have shown you below, to a marketing list of Bankruptcy & Foreclosure Defense Lawyers across the Country. Like the last four monthly e-mails I have sent out (trying to get their attention), my 45% 'read rate' has continued to please me - however - converting those readers into looking deeper into our website, has pretty much escaped me so far; got OK numbers there but want better.

What I think I am learning is this simple fact: My target audience knows very little about my emerging industry (or may have had a bad experience or two themselves with other 'mortgage forensic auditors') and the real value our product can be for them, and by extension, their Client base of struggling homeowners.

Of course I recognize it's my job to explain what they can do with our report, and naturally, how we're different/better than Tom, Dick or Harry. When I explain to my college-aged Grand-daughter what Grandpa does, I tell her 'Grandpa is a Foreclosure Fraud Investigator Honey', her face then says HUH? - so I understand I need to explain this better.

FL Winding Down Foreclosure Law Firm Investigations

Even though no names were used in this industry news piece I saw this past Mondauy, I'm certain I have done Audits with clowns like these!

"Florida is winding down investigations into several law firms that were suspected of using forged and fraudulent documents in the foreclosure process. The lack of actions against these firms has raised the ire of some.

Florida Attorney General Bill McCollum announced in August 2010 that an investigation had been launched against three law firms that handled foreclosures for mortgage servicers. The firms were suspected of illegally speeding cases through the courts with botched foreclosure documents.
The number of investigated firms expanded, and only one of those firms has since agreed to a settlement with the state. In addition, the state is winding down investigations into the remaining firms."

PressRelease issued today - a 94% Success Rate !!

Wow, we're all excited here! My gut told me the math would look pretty good after the completion of the examination of our books and records.  But, after a review of more than 100 Audits we performed (it was actually 123 which were reviewed), only a small handful of them were not successful in getting Borrower foreclosures suspended. And that's our Goal; we battle for the consumer in their up-hill fight against certain foreclosure practices.

Obviously, not a perfect score - but that's damn close!

Behind the Numbers

My Company is in the midst of an independent audit of its internal records to determine the overall usefulness of our Audit reports. In other words, to what degree do they help suspend consumer residential foreclosures. After their review of just over 100 individual consumer/Borrower Audits so far, I have seen some preliminary figures; I’m pleased and I trust the final math will end up in the range of where the numbers are right now – to finish up maybe another 30 or so files to review.

However, I am mildly concerned because I see our Mortgage Securitization Forensic Audits as a ‘tool’ to help the struggling homeowner gain solid footing in their battle against sometimes unlawful and deceptive foreclosure tactics by Lenders and others. But a lot might not go as anticipated once we receive a submission request, (1). Maybe our examination will reveal the overall handling of the consumer/borrowers loan, it’s origination, servicing, transfers, assignments and foreclosure paperwork is all inline (therefore our works is thorough and concise but can’t help them in their battle today (not all examinations turn up defective or inaccurate actionable evidence – although almost all of them have to date), (2). It could be our report ends up with the Consumer’s lawyer, who is not aggressive enough to use its findings to defend this client’s foreclosure, or maybe, (3). Like so many of our reports, the evidence is a slam-dunk open and shut case where the Borrower/consumer should be victorious in stopping foreclosure and bring in the Loan’s owner to the negotiating table to work out a friendly settlement (MOD etc.), when all the while they’re exhausted from fighting, or have no more money to pay their attorney to pursue the foreclosing parties, so could a fair analysis suggest our Audit was less than valuable?

Tough to read in between the lines, a Press Release is being developed to announce the final numbers.

More Adventures of a Mortgage Fraud/Foreclosure Investigator

Having these conversations the last couple of days on the topic of Franchising my business, I have marveled at the sort of questions potenial distributors have asked me!  Some really bright, but most of them were clueless - on balance a good idea. Here's a couple of good ones:

On the positive side, it got me to add my resume to the http://www.cugno.net/ website, I guess that makes sense. I also plugged in a recent Sample Audit Report I did last week, so site visitors can see the end product, also another smart idea, so I guess I have benefited so far with these conversations :-)

I tell them with my unique knowledge and expericnce in the industry, in most cases I can easily examine 200 to 300 pages, or more, of a Customer's File and come up with a Game Plan to Avoid or Stop Home Foreclosures all together! It's really rather startling how sloppy most big lender & servicers are, and especially the mortgage securitization folks (they're clearly the worst) - I catch them trying something unlawful usually three or 4 times a week!

Franchise My Business?

The other day I sent out a blast e-mail solicitation piece to just over 10,000 Foreclosure & Bankruptcy Attorneys across the Nation; the response has been strong.

I was telling an old friend of mine who lives in Florida now (he has been a Business Opportunity & Franchise Promoter for most of his career) about what I'm up to these days and the results of my mailing. For about 10 years he was also a Hard Money private investor, then he evolved into being a small private mortgage lender (that's when we met). So, my friend John  says to me, "Peter I think we can Franchise your business, all you would need is about 20 outlets in the Nation ... so let me ask you some questions ..." (I mentioned to him that I can bring two senior-type business associates and some support staff in, if the business volume increase overwhelms me.) Here's what he asked and what I said:

Q: How many Securitization Forensic Mortgage audits have you personally done this past year?
A: I told him, John I think somewhere around 100.
Q: How many of them do you think resulted in you uncovering significant defects?
A: I said, probably 95%.
Q: He next asked me, what % of those do you believe your report assisted in either (1) further delay and/or (2) prevent outright the foreclosure of the property ?
A:  I explained that's something I haven't kept track of, I know I can find out (since I have copies of all my work) and whether or not a Foreclosure was effected would be public record, so I'm sure I can find out the actual statistics ... my guess is likely all of them.

John asked me to find out that percentage and told me once I know the number, he feels like he can expand my operation into having multiple distributorships. I've made an inquiry to the title company people I work with, and they're going to figure out an easy way (I already know a hard-way to get the data) to pull that info from their computers (since they know which borrowers I have gotten Property Reports on from them) to date.

Whether or not this notion comes to pass, a success percentage posted on my website http://www.cugno.net/ is going to be a good idea, probably take me about a week or so to do it :-) You have any thoughts?

Gains in Asking Prices Threatened by Foreclosures, Rent Up Again: Trulia

"After falling flat in May, asking prices went up in June, and rent prices continued to see significant increases, according to Trulia reports released Tuesday. Asking prices on listed homes made a 0.3 percent month-over-month and year-over-year increase in June, according to Trulia's price monitor. Phoenix and two Florida metros posted double digit gains, but Trulia warned that some of the top performing metros are facing another wave of foreclosures" in todays Industry News.

Securitization Audit and Foreclosure Analysis

Alright, so yesterdsay I'm talking with my college age Grand-Daughter Ashley about a conversation I had with her Dad (my 45 year old Son) last Friday where he asked me to explain to him what it is I 'do' these days. After we finished that talk, I decided it would be a good idea to create a new page on my website ... took me half the day Saturday: http://cugno.net/whatwedo.htm ... I asked her to show it to him :-)

Happy Father's Day !

To all you Dads out there, have a delightful day today with your Family today!

Drop in Non-Current Loans About 7Xs Higher in Non-Judicial States

"The percentage of loans not current, which includes 30-plus delinquencies and foreclosures, declined almost 7 times more in non-judicial states compared to judicial states, according to the LPS Mortgage Monitor report for April. Year-over-year, non-judicial states saw an 8.2 percent drop in non-current loans while in judicial states, the yearly decrease was only 1.2 percent. Foreclosure starts numbered 181,584 in April, down 2.6 percent from the previous of March and a 3.1 percent drop from a year ago. On the other hand, FHA foreclosure starts saw a 73 percent increase."

How about this news piece from early today, interesting huh? Tells me we better 'pump-up' our Marketing  efforts toward attorney's in Florida, and slow down in California!

Forensic Mortgage Securitization Audit Adventures

Since I have been sorta keeping you up to date throughout my travels as a Mortgage Fraud Investigator lately, I just gotta tell you this one.

The very last two Securitization Audits I did - (in both case they were in the Judicial Foreclosure State of Florida were the Plaintiff has to submit the Original live 'wet-ink' Note and the originally recorded Mortgage documents to the Court as part of the Foreclosure process)  - the Attorney for the Plaintiff's (the Lenders and/or the Securitizer) actually were clueless enough that when they showed these documents to the Judge, they were also tipping their hands to us! Ya know why that matters? I'll tell you why: Neither Lawyer apparently understands the rules about Bifurcation* - translated it means, they now have already demonstrated for the benefit of the Borrowers, that they cannot lawfully complete their foreclosure process.When they do my work or me, I just get kick out of it :-)

BTW, there's been some rather good news lately in industry press - take a peek here: http://cugno.net/latestnews.htm
 

*Bifurcated

In Carpenter v. Longan 16 Walls. 271, 83 U.S. 271, 274, 21 Led. 313 (1872), the United States Supreme Court stated, “The note and mortgage are inseparable; the former as essential, the latter as an incident. An assignment of the note carries the mortgage with it, while assignment of the latter alone is a nullity.”  The obligation can exist with or without security but a security interest cannot without the underlying existing obligation ... so if all you get is the mortgage and not the note, that's pretty much worthless, or you have a Note without collateral.

 

Forensic Mortgage Securitization Audits - Sloppy! ??

SERIOUSLY, can they All be this Sloppy? I’m now at 100% of every single Residential Mortgage Loan Securitization Forensic Audit I have done has missed the securitizations cut-off and closing date to lawfully PLOP the Note & Trust Seed/Mortgage in to it. Not by a day oer so, but many months! And in most cases YEARS Late!

Here’s why this confuses me: even though 100% of the borrower files we Audit are consumers who are upset with their Lender and/or Servicer and have told their Lawyer “… they’ve done me wrong … I need one of those Audits ….”

You see, that sort of negative selection could never explain to me, how it is that they ALL have behind the scenes negligent /sloppy paperwork, hell they couldn’t know that!

My question is this: Can They All Be That Sloppy?

4 Months of Improvement in Serious Delinquency

Spotted this deceptive short news piece in industry news yesterday:

"First-mortgage delinquency improved for the fourth month in a row and stands at its lowest level since before the financial crisis. It's a similar story for second liens.

The 90-day delinquency rate on first mortgages finished April 12 basis points lower than in March. It was the fourth consecutive month that 90-day delinquency improved and the lowest rate since July 2007.Compared to April 2011, the rate of late payments on first mortgages was down 28 BPS."

The Trick here? The math utilized does not include the most serious delinquency category ever, Those in Foreclosure! Hell, if you remove that growing gagging number, it's no wonder things don't all that bad - this sort of BS reporting has always troubled me over the years, who do these guys really think they are kidding?  Not me.

Expert Mortgage Securitization Forensic Audits - Part DUEX

I have spotted a trend with the securitization folks. The last four (4) files in a row contained these same characteristics. Here's what I see while performing Audits on Borrower files I examine.
1. They're all in foreclosure and say their Lender and/or the Servicer is a SOB.
2. Selling//Assigning the Note and Deed of Trust/Mortgage away from the Original Lender downstream to the securitization, seems to be a major hurdle for everybody in the chain.
3. The Loan's Note and other paperwork in the Borrowers file, is sold, sometimes to two or 3 Investor/Buyers before it makes it way to be PLOPED into a Securitization. Most of the time, the Sale/Assignment endorsements are missing - this means the Note is still owned by the Original Lender. Anyone that subsequently bought the loan, may very well have taken custody of the Note BUT its ownership is still with the Original Lender! This ends up being a "Smoking Gun" when later another party attempts a Foreclosure, and most likely causes a 'Bifurcation' situation as well.
4. Next, sometimes 4 or five years after the Securitization's Cut off and Close dates, the last party to hold the Security instrument (Deed of Trust/Mortgage) files/records an Assignment of Deed of Trust/Mortgage into the securitization (but it's too late). They've missed the last date to do that, their recording is Invalid.
5. 'Too Late' means both the Note & Security instrument (Deed of Trust/Mortgage) the Trustee of the particular security can't use to Foreclose, because they have No Standing! They cannot lawfully Foreclose. Yet they plow ahead and try - our Audits help stop that Unlawful process.

In these scenarios the last minute attempts to get the paperwork straight provides the Borrower with a sure-fire way to STOP the Foreclosure.

Children Who Lost Homes to Foreclosure: 2.3M, Report Reveals

"While the term foreclosure victim generally brings to mind images of struggling homeowners, one report released by First Focus addressed the impact of foreclosures on an overlooked segment: children. Julia B. Isaacs of the Brookings Institution authored the report, which revealed five years into the housing crises, 2.3 million children have lost their homes to foreclosure, and 3 million more are at serious risk of losing their homes in the future. In addition, approximately 3 million children were evicted, or may face eviction, from rental properties." ...Wow!!