U.S. close to subprime adjustable rate freeze deal with major lenders

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Wall Street Journal Online today:

U.S., Banks Near A Plan to Freeze Subprime Rates

WASHINGTON — The Bush administration and major financial institutions are close to agreeing on a plan that would temporarily freeze interest rates on certain troubled subprime home loans, according to people familiar with the negotiations.

An accord could reassure investors and strapped homeowners, both of whom are anxious as interest rates on more than two million adjustable mortgages are scheduled to jump over the next two years. It could also give a boost to the Bush administration, which is facing criticism for inaction amid the recent housing turmoil.

The plan is being negotiated between regulators including the Treasury Department and a coalition of mortgage-related companies including Citigroup Inc., Wells Fargo & Co., Washington Mutual Inc. and Countrywide Financial Corp. People familiar with the talks say the individual members have agreed to follow any agreement reached by the coalition, which is called the Hope Now Alliance.

Details of the plan, which could be announced as early as next week, are still being worked out. In general, the government and the coalition have largely agreed to extend the lower introductory rate on home loans for certain borrowers who will have trouble making payments once their mortgages increase…

Exactly which borrowers will qualify for the freeze and how long the freeze would last are yet to be determined. Under one scenario, the freeze could run as long as seven years. The parties are developing standard criteria that would determine eligibility. The criteria should be finalized by the end of year.

Read the whole thing, it’s very educational.

Wall St. Challenged to donate holiday bonuses to stop foreclosures

From ESOP:

On Wednesday November 28th 2007, the National Training and Information Center, Empowering & Strengthening Ohio’s People (ESOP) and homeowners and community groups from around the country, joined by the NAACP, will ask the biggest U.S. investment banks to take part in the effort to prevent a catastrophic wave of foreclosures across America by donating their holiday bonuses to a foreclosure prevention fund. A report released today by the National Training and Information Center reveals how the top U.S. investment banks wielded extraordinary power in the subprime mortgage market, pushed it to unsustainable levels and reaped tremendous revenues and bonuses as a result.

While cities around the country are experiencing record-high foreclosure rates, investment banks are looking to reap another round of huge bonuses this year. In 2006, the top five investment banks in the U.S. gave out a record 36 billion dollars in holiday bonuses. “The trail of money and greed leads straight to Wall Street. The big investment firms plan to cash in on big holiday bonuses while our neighborhoods are destroyed by foreclosures. Wall Street must do the right thing and forego their lavish bonuses to help families stay in their homes. It’s time they clean up their mess.” states Inez Killingsworth, ESOP President and NTIC board member.

As part of the Save the American Dream campaign, ESOP and other groups from around the country are demanding that the major investment banks pledge this year’s bonuses to a national foreclosure prevention fund that will provide immediate relief to homeowners in danger of foreclosure.

ESOP press release.

NTIC Report:Wall Street and the Making of the Subprime Disaster.

Foreclosure deeds recorded last week

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114 sheriff’s deeds were filed with the Cuyahoga County Recorder’s Office in the three days leading up to Thanksgiving (November 19 through November 21). The Recorder’s Office was closed Friday.

Here’s who filed five or more of them:

Department of HUD (18)
Bank of New York (15)
Deutsche Bank (12)
US Bank (12)
Wells Fargo (9)
Federal Home Loan Mortgage Corp (6)
Federal National Mortgage Assn (6)
Lasalle Bank (6)

(Previous week.)

What’s this Boyko / Deutsche Bank thing all about, anyway?

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Here’s 4111 Archwood, a vacant foreclosed house four blocks down the street from me. (Click on it to get a closer look.)

The County Auditor’s database says the owner of this house is Deutsche Bank National Trust Company. It says Deutsche Bank NTC paid $50,000 for the house in a sheriff’s sale in March 2007. The sheriff’s sale was the outcome of Case CV-05-554639, an action for foreclosure against the previous owners, filed in Common Pleas Court in February 2005 by Deutsche Bank NTC “as Trustee”.

But Deutsche Bank never held a mortgage on 4111 Archwood. And Deutsche Bank doesn’t really own 4111 Archwood now.

The week(s) that was

In the the last two weeks:

Federal judge accuses mortgage lenders of hijacking foreclosure system for profits

Judge Demands Documentation in Foreclosures

Subprime mess is a crime story

Fixing foreclosure’s ground zero

Consumer, Poverty Groups Oppose Predatory Mortgage Bill

House OKs bill to get tough on mortgage lenders

Ohio’s anti-foreclosure plan is reasonable, restrained; lenders must be more flexible

NE Ohio in Top 10 in recent foreclosures

Foreclosures Hit a Snag for Lenders

Cleveland Federal Judge: Dismisses 32 Foreclosures For Lack Of Proof

Where Cleveland went wrong

Upscale Shaker Heights fighting foreclosure pockets

Mortgage-fraud task force opens command center in Cleveland

Need Housing Advice?

Mortgage lenders reject Strickland plan on foreclosure crisis

State to get tough on lenders that foreclose

And here’s one we missed, from the Dayton Daily News:

Our View: Treat mortgage lenders like polluters

Foreclosures recorded in the last week

190 sheriff’s deeds were filed with the Cuyahoga County Recorder’s Office in the past week (November 12 through November 16).

Here’s who filed five or more of them:

Deutsche Bank (27)
Wells Fargo (26)
US Bank (22)
Bank of New York (17)
Dept of HUD (14)
Federal National Mortgage Assn (9)
HSBC Bank (8)
Citibank (5)
Dept of Veterans Affairs (5)

(Previous week.)

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Undocumented foreclosers: Another Federal District heard from

The Daily Bellwether again:

A federal judge in Dayton says 26 of the 27 mortgage foreclosure cases pending before him lack proof the claims are valid. U.S. District Judge Thomas M. Rose said the same lawyer filed the 26 incomplete cases and is warning of sanctions that include dismissal for lack of good faith. Rose said he has been assured records supporting the foreclosure filings exist, but said he will toss the cases out by mid-December if the records are not produced. He said he has had “extensive discussions and argument” over the records, and is concerned that banks and the lawyer may be trying to game the legal system….

Rose said he has been waiting for the records to appear at the Dayton U.S. Courthouse. He said he agreed with U.S. District Judge Christopher A. Boyko of Cleveland, who late last month dismissed foreclosure without proof. Rose said Boyko correctly noted at the time that the integrity of the federal court system was on trial, and there could not be any shortcuts taken in foreclosure actions.

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Boyko: “A condescending mindset and quasi-monopolistic system”

Here’s a copy of Judge Christopher Boyko’s October 31 decision to throw fourteen Deutsche Bank foreclosures out of Federal District Court in Cleveland.

From Footnote 3:

Plaintiff’s, “Judge, you just don’t understand how things work,” argument reveals a condescending mindset and quasi-monopolistic system where financial institutions have traditionally controlled, and still control, the foreclosure process.

Typically, the homeowner who finds himself/herself in financial straits, fails to make the required mortgage payments and faces a foreclosure suit, is not interested in testing state or federal jurisdictional requirements, either pro se or through counsel. Their focus is either, “how do I save my home,” or “if I have to give it up, I’ll simply leave and find somewhere else to live.”

In the meantime, the financial institutions or successors/assignees rush to foreclose, obtain a default judgment and then sit on the deed, avoiding responsibility for maintaining the property while reaping the financial benefits of interest running on a judgment. The financial institutions know the law charges the one with title (still the homeowner) with maintaining the property…

Counsel for the institutions are not without legal argument to support their position, but their arguments fall woefully short of justifying their premature filings, and utterly fail to satisfy their standing and jurisdictional burdens. The institutions seem to adopt the attitude that since they have been doing this for so long, unchallenged, this practice equates with legal compliance. Finally put to the test, their weak legal arguments compel the Court to stop them at the gate.

Deutsche Bank has filed over 500 foreclosure complaints in U.S. District Court for Northern Ohio, Eastern Division, since the beginning of 2007. A large proportion of these cases undoubtedly had the same defects as the the thirty-eight just dismissed by Judge Boyko and Judge Kathleen O’Malley. Will the Court’s other judges follow suit? Will Deutsche Bank appeal? Stay tuned.

Federal judges toss foreclosures, say “Prove you own the mortgage”

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Courtesy of The Daily Bellwether:

A federal judge in Cleveland tossed out 32 foreclosure cases in a mass dismissal today because banks and other lenders failed to file a complete set of documents showing their claims were legitimate. U.S. District Judge Kathleen M. O’Malley said the cases could be refiled if the proper paperwork was filed with each lawsuit. Her ruling means the courts are going to give foreclosures increased scrutiny…

O’Malley said she was enforcing a specific requirement of the federal court rules that demand detailed information about the identities of lenders — and the history of a loan — involved in foreclosure actions. She said a review of cases pending before her showed that some of the plaintiffs seeking foreclosure have not been directly named in the loan documents that are at the heart of the cases filed in Cleveland. O’Malley said she wanted to see the complete history of a loan.

TDB doesn’t say what bank or banks were thrown out of court. I can hardly wait for the rest of the story.

CNN Money: “Where Cleveland went wrong”

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Another long foreclosure crisis article. No new insights, but here’s some neglected recent history:

Cleveland tried to enact local anti-predatory lending ordinances in 2002, but national lenders then abandoned the market, according to Mark Wiseman, who heads the Cuyahoga County Foreclosure Prevention Program, which is part of the county treasurer’s office.

One bank representative, speaking under condition of anonymity, said the ordinances would have put local lending criteria well above and beyond the national standards. The lenders wanted no part of that.

Wiseman said banking lobbyists got the state legislature to nullify the local ordinances. Until this year, Ohio was one of only two states that did not include mortgage borrowers in their consumer protection statutes. And when the state passed anti-predatory lending laws in 2006, the punitive damages part of the law was gutted during the lame duck legislative session at the end the year.

“Under condition of anonymity.” I’ll bet. This is not a good moment for a banker to admit he thinks the “national standards” for mortgage lending in 2002 were just fine.