Foreclosure and The Great Depression

The Original Foreclosure Protest
(Iowa, circa 1930's)

I always wondered why farmers where viewed as being 'poor' when I was growing up. I did not live through the Great Depression. I found this pic in government archives. Fascinating. The farmers refused to bid against each other. The police were brought in to supervise the farm foreclosures and keep the peace. Look closely and you will see Sheriffs, wearing uniforms with hats, near the auctioneer and at the sides. At that time, it was a public sale. Cash on receipt. 

Today, the banks use credit bids (via inflated debt accounting on the property) and take what they want. They even 'pick and choose' which ones to keep. Ironic. After so many foreclosure-style "evictions," the Banks and Wall Street now control the rental market too. 

Co-authors discuss amendments to farm bill with Alabama senator. Washington, D.C., Nov. 30. Co-authors of the Senate Farm Bill, Senators George McGill of Kansas, (left) and Senator James P. Pope of Idaho, (right) discuss amendments to the bill now being written by Senator John B. Bankhead (center) of Alabama. Senator Bankhead has appealed to the Senate for enactment of the strongly compulsory cotton section of the bill to prevent "disastrous fluctuations" in the price of cotton which he said were 'threatening foreclosures all over the South". 11/30/37  Harris & Ewing, photographer

The Farm Security Administration (FSA) was created in the Department of Agriculture in 1937. The FSA and its predecessor, the Resettlement Administration (RA), created in 1935, were New Deal programs designed to assist poor farmers during the Dust Bowl and the Great Depression.

When the government created jobs, they sought to preserve history too. The photo assignments were rather stoic. Rarely was the word foreclosure used. Some of the people photographed had never seen a camera before.

https://francessmithdocumentary.wordpress.com/2013/05/02/research-the-farm-security-association-photographers/

The works and images created became social documentary photographs and were used as a social catalyst for the provision of humane living conditions for the rural farmers. Many of these images appeared in newspapers and magazines, pictures of tenant cotton farmers and migrant farm laborers were published in an endeavor to influence social reform. Homelessness was not just for migrants during the Great Depression. Many families lived in tents or out of the cars. Others walked, sometimes several states, looking for potential work and opportunity elsewhere.

 

            

• Farm Debt Adjustment Committee meeting with farmer who has appealed for assistance. He has been threatened with foreclosure and loss of farm. Ozark Mountain town of Harrison, Arkansas. Allison, Jack, photographer

 

FDR and The New Deal

When the Great Depression came, West Virginia was one of the states hardest hit. In 1932, West Virginia Democrats, inspired by Franklin D. Roosevelt’s call for a “New Deal” and led by gubernatorial candidate Herman Guy Kump, won political control of the state for the first time in 35 years. Though Governor Kump and his successor, Homer Holt, sometimes resisted the initiatives from Washington, the New Deal helped West Virginians deal with one of the highest unemployment rates of the Depression era.

Federal work relief agencies such as the Works Progress Administration organized public projects to provide income to the unemployed. The Civilian Conservation Corps and the National Youth Administration addressed the lack of opportunities for youth. The Public Works Administration provided work as well as needed public facilities through more capital-intensive projects, including the construction of several West Virginia courthouses. Thousands of West Virginians worked for these relief agencies, and almost everyone was affected by the Social Security law of 1935. Social Security enabled the state to move away from its antiquated and piecemeal system of poorhouses and local care of indigents, the elderly, and the disabled and to establish a modern system of unemployment relief and welfare. New Deal agencies also sponsored experimental cooperative communities atTygart Valley (Dailey), Arthurdale, and Red House (Eleanor).

Though some work relief projects amounted to little more than leaf raking, others left an enduring legacy. At the beginning of the 21st century, many roads, bridges, parks, airports, government buildings, and public housing facilities built under New Deal programs continue in service. They include Kanawha Boulevard in Charleston and Richwood Avenue in Morgantown; Boreman Hall at West Virginia University; flood-control walls in Huntington; and state parks, including Babcock, Cacapon, Holly River, Lost River, and Watoga.

The New Deal brought about a friendlier legal atmosphere for organized labor, enabling the United Mine Workers of America finally to organize West Virginia coal miners in 1933–34 and increasing the political power of the labor movement in the state. The unionization of coal and other basic industries and the popularity of Social Security and other social legislation associated with Roosevelt’s New Deal assured that West Virginia would be solidly Democratic for decades to come. As U.S. senator, Matthew M. Neely championed the Roosevelt reforms that the more conservative “statehouse” Democrats led by Kump and Holt were sometimes reluctant to embrace. As governor after 1941, however, Neely found that a conservative legislature frustrated his efforts to make the state more liberal.

Though the New Deal helped make the Depression more tolerable and brought needed reforms to West Virginia, it failed to find a path toward enduring solutions to the state’s basic economic dilemmas. The New Deal ended with the coming ofWorld War II.

This Contributing Article, New Deal, was written by Jerry Bruce Thomas

Is HUD acting in the interests of distressed homeowners?

Someone recently brought to my attention a seasoning investigation, led by Senators from Ohio and Maryland, fueled by homeowners and advocates, in pursuit of accountability. By now, it is no surprise that modification and foreclosure prevention strategies have had little effect from resolving the growing debt balance and collection abuses attached to these properties.

Many homeowners have since given up on a fair deal modification. If one exists, it will be backdated and voided for a myriad of reasons, then processed into foreclosure under a bare minimum of "compliance."

The practices of trickery revolve around creating legal and illegal maneuvers which thwart a homeowners opportunity to fair consideration and negotiation of the distressed loan. Multiple incentives have been given to servicers for participation and performance. This had little effect on reducing predatory servicing practices.

There were temporary delays and moratoriums. Bailouts and Tarp programs were created along with homeowner retention and modification programs. These were designed to make payments affordable and sustainable. HAMP was created. Through investigations and National Settlements, servicors and investors were put on notice and it was anticipated they would work towards revising predatory loans with affordable payments.  It was determined through the NPV test that an investor would make more money on a performing loan than on a foreclosure. It was commonly claimed that loan holders 'don't want your home' and benefited most from an affordable modification.

This is a misnomer. This is not a (formerly) "common" loan transaction with an originating lender that held and serviced the loan. The market was glutted with salesman and the securitized "demand for product" and willingness to 'create and fund' loans (through shady table funding of warehouse lines). The resultant loans creation was soley in order to resell the product. This covert manner of controlling ownership was riddled with predatory terms and hidden conditions, adversary to performance.

On the back end, the assignments to others, effectively transfers liability 'without recourse,' as if knowingly acknowledging the defective products.

Material terms have been altered or misrepresented. Discovery and legal arguments have been slowed deceptively. Relief is rare. Negotiations are one-sided and misleading of intent. Modifications are essentially collection tactics.

The loan will fail with increasing payments at a pre-determined point or event. These things are already calculated. Undefined 'trigger events' initiate the transfer into foreclosure processing. The servicing agents must follow a script and will not, can not, or are unable to disclose pertinent information.

QWRs (Qualified Written Requests) by homeowners are ignored or met with benign statements or 'answers' given to questions not asked in order. Communications are designed to confuse and even conflict. The dual tracking still exists and homeowners receive misleading communications promising relief. The winner in the "delay game" appears to be anyone interested in running out the SOLs for fraud.

Upon obtaining information through an FOI (Freedom of Information) request, legal advocacy groups are accusing fowl play, calling HUD's process  a means of "redistributing wealth."

Instigated by Congress in 2010 urging fiscal improvements to resolve fast failing FHA guarantees and insurance liability, the 'sell-off to third party scheme' was born. Even the sell-offs were securitized. Yet the were too costly for homeowner organizations and non-profits, those concerned with housing displacements and homelessness. Responsibility for reductions, recovery of property to market value, and foreclosure prevention assistance to homeowner were 'transferred' into funds sold at a discount.

What exactly in these securitized sales requires these 'purchasers' to perform any 'negotiation with homeowners?"

Nothing.

HUD avoids the question, stating they encouraged such activity. Their encouragement and discounted sale should be what is necessary for someone else to fix the problem given the fire sale and good deals. Right?

What HUD hasn't considered is how these transfers affect the markets unnaturally. They do not reduce property to real value. The 'securitized properties' are frequently bought back at auction by credit bid. No money passes hands. The formerly clouded title becomes 'perfected' in the court ordered sale and acceleration processing the note.

The acceleration is already anticipated. It is only delayed by the time required to give 'lip service accountability' and remain in compliance with new standards. This disposal method is designed to release x amount of foreclosed property in an orderly manner. Spacing them out a bit and timing the actions to a pre-planned default scheme culminating in seizures of property. Liquify and repackage. Property seized can then be "re-securitized" to take advantage of the "increased demand for rental property" created by these foreclosures.

Yes, it IS a transfer of wealth.

This new debt collector, under new ownership, uses modifications (notably HAMP or promises of HAMP) as a collections means . There is no foreclosure avoidance negotiation. Any portended foreclosure "assistance" programs involve steadily increasing balances, procured from the delays which commit borrowers to accumulating additional debt which destroy their positions to refinance or sell.

With the collapse of the markets (caused by banks investing schemes in these funds), customer service centers were reduced and off-shored. Servicers are over-whelmed with volume and customers trying to resolve 'errors.'  For the Servicer, profit involves reducing information and resolution calls, taking 'payments only' without requirement of accuracy and timely posting , and/or increasing balances of loans held in portfolio for increased income. Reducing staff and destroying effective customer service is the norm of predatory service. There is no ability to perform even if there was the desire to perform.

The servicer does not intend to maintain servicing of the account, there are too many. It is only incentivised with increased balances. Past due, increased by delays in modification processing, is rolled into principal.  Simultaneously, the servicer (or investor) prevents choices by controlling default status and resultant credit reporting.

It's a win, win. The servicor creates higher earnings from the trust as payment contracts are based on the principal balance of the loans in the portfolio. (among other things but this x percent of PLB (Principal Loan Balance) value is the primary pay arrangement) The balance "owed" increases. This typcially is incurred from servicing delays, default terms, ongoing late fee generation, improper escrow, forced insurance charges, and other predatory schemes.

This inflation of the final and 'ending debt balance' enables the "investor" to secure the winning bid at foreclosure via "credit" bid.  Few auction participants will bid above the over-valuation of the 'credit bid' effectively inflating value by excluding the average market of buyers willing to purchase distressed properties.

There is no competition. The investor controls the default AND the foreclosure "purchase" of the property. Small investors, contractors, and potential homeowners are not given the opportunity to bid at auction and re-set value according to local markets . They will not overbid the investor who has "credit' that exceed or trump independent cash purchase bidding. This debt-inflated 'credit bid' exceeds the true auction value and effectively holds a market unto itself for obtaining control of real property.

Securitized investment fund owners and trusts should be banned from using credit bids as these are manipulating markets and preventing free enterprise. If this is not an abuse of free trade laws, I don't know what is.

HUD merely muses that these distressed loans should be reorganized and traunched into smaller "pools" to allow or "encourage" small non-profit housing and neighborhood organizations to invest in the new securities. Then muses again, about the problem of needing even smaller traunches and poolings targeted for low-level homeowner investment purchases, as no non-profit or neighborhood organizations can afford to purchase a billion dollar fund or provide enough funds to meet minimum bids.

Here's a better idea.

Why not allow the properties that DO foreclose go back to the public?

The means of the parties who plan to commit fraud in perpetuity would be stopped in it's tracks if these foreclosed properties were bought by small investors and home buyers willing to put in sweat equity. Parties willing to do ACTUAL work versus paper pushing number methodology designed to profit from hardships. The "paper equity" should be banned from control of their disposal into free markets. This current market is not a free one, it "excludes" those without credit slips.

In the old days, a foreclosed homeowner had the choice to (attempt to) repurchase the property at auction. This auction mechanism effectively 'refinanced' the loan to market value. The homeowner could determine what was affordable, refusing to bid higher than what was affordable. Undesirable properties had less competition, leaving room for some homeowners to salvage their situation. It wasn't common, but motivated homeowners at least had a chance at attempting to buy their own house back at a public auction. That right, the right to bid, was taken away. Not only does the homeowner lose the opportunity to bid but also local 'neighborhood' organizations or small business and contractors.  Organizations and individuals, those investing far less than required or approved by the securitizers (who sell discounts for bulk purchases), can not compete.

HUD is actually dictating bulk purchases as a means to salvage home ownership. The option of obtaining a small portfolio of rehabs or a single property purchase is effectively denied.

The foreclosure auction is a sham process. The forced sale is necessary to correct the resultant securitized effects of clouded titles.

In a round about way, the securitized controller, has seized and profited from origination to final sale, with losses covered by insurance.(insurers who failed were bailed out) Meanwhile, the homeowner has lost ALL of their investment, ALL of their sweat equity, ALL of the retirement security, and becomes homeless.

POKING THE BEAST

POKING THE BEAST

David and Goliath will meet again in a case scheduled for oral arguments on Wednesday morning, Jan 27, 2016, in the Supreme Court of Ohio. This battle is 'live' feed for those so inclined and can be watched here:  http://www.sconet.state.oh.us/videostream/flash.asp


DEUTSCHE BANK NATIONAL TRUST
COMPANY, AS TRUSTEE FOR
SOUNDVIEW HOME LOAN TRUST 2005-
4, ASSET-BACKED CERTIFICATES,
SERIES 2005-4,
Plaintiff-Appellant,
v.
GLENN E. HOLDEN, et al.,
Defendants-Appellees.

COURT ROOM ANTICS

After being poked in the eye, the beast gestures a classic thumb to nose response....

Deutsche Bank seeks redress on an issue they wish to put to bed on behalf of Trustees everywhere. Ohio is a state where Deutsche Bank has freely put it's foot in it's mouth by ignoring playground rules, cheating to win, and bullying those who stand their ground. With brazen attitude, Deutsche Bank argues to reclaim it's losses against Holden, and appeals to the Supreme Court of Ohio.

From the case file submissions, found on this link...
http://www.supremecourt.ohio.gov/Clerk/ecms/#/caseinfo/2014/0791

Deutsche Bank resumes their arguments of standing and note holder rights. Is it mortgage, note, or both? Obviously, Deutsche Bank is going to prefer an 'either-or' situation versus a 'yes or no' condition. The judges of Ohio now reviews these standing issues on a case by case basis without any definitive answer (or one satisfactory to DBNT). Deutsche Bank's legal twisting adds or removes commas seeking meaning not necessarily intended, asking questions unrelated to cause for dismissal while expanding their rights, so here we go again...

 "While the facts of this case present the question of whether a mortgagee has standing to
enforce a mortgage, there is ample support for the more general proposition that standing to
enforce the note or mortgage provides standing to enforce the other. As discussed in pages 17-21
of DBNTC’s Brief, the Restatement of Property 3d § 5.4 provides that the party entitled to
enforce either the note or mortgage also has the right to enforce the other. Expressly applicable
to this case, the Restatement states: “[e]xcept as otherwise required by the Uniform Commercial
Code, a transfer of a mortgage also transfers the obligation the mortgage secures unless the
parties to the transfer agree otherwise.” Restatement § 5.4(b). This is the “note follows
mortgage” rule. "

Deutsche Bank also contends "There is no potential harm" and truly wishes to keep the legal status quo of "the note follows the mortgage" strategy as it works well for them. Adding, "The Holdens’ contrary proposition of law is a hyper-technical attempt to impose unnecessary requirements on a plaintiff seeking foreclosure."

Certainly, DB would like to keep the simpler and less technical requirement of standing currently required to seize and sell certain pool related assets that just happen to be someone's home. 

Additional requirements would require an adjustment to processing and it would take way too much time to develop the NextGen version of RS document protocol. (NewGRS sys2016) Who wants that? Can we patent it? Can it be located overseas? OH! The robosigners hands are now cramped enough! Worse yet, we don't want to open document doors on any pre, post, or active foreclosure processing requirements for such irrelevant note sales and swaps that may be taking place during these protracted foreclosure cases! Nor do we want to involve the covert records of MERS and their "subscription only" note transfer system.  So, absolutely, on behalf of DB, judge PLEASE keep it simple!!!

-----------------

In Holden's response to this appeal to the Supreme Court of Ohio, Attorney Marc Dan argues against Deutsche Banks' haughty desire for special privilege and opportune work around for fast tracking legislation via court opinions.

Marc Dan is no stranger to poking the beast and does not scare easily. It appears he has fashioned a strong and long spear and is poising it's launch, aiming for the right eye. Again. It's only a matter of time before the proper launch takes off and lands SQUARELY BETWEEN THE EYES that makes the beast fall and kills the zombie of bad paper debts created by "securitized foreclosure rights" of the "alleged" note holders. Mind you, small investors and pension funds have been settled or sued for their losses. The real or "alleged" noteholders have evolved into bottom feeding 3rd party debt collectors acting under Trustee cover. Insurance policies have been collected and additional sales, swaps, side bets, and seizures are pure profit.

The US government propped them all back up hoping for a soft landing. Gave them food when they were starving. Yet, the beast is still bold and brazen, devouring homes and quashing families, in spite of being fed to stay calm, and wholly ignoring the DOJ mandate to chew with your mouth closed!

http://supremecourt.ohio.gov/pdf_viewer/pdf_viewer.aspx?pdf=747909.pdf

"This case does not present an issue of great general interest because the issues presented
in this appeal were resolved by this Court's decision in Fed. Home Loan Mtge. Corp. v.
Schwartzwald, 134 Ohio St.3d 13, 2012-Ohio-5017. It is uncontroverted that Appellant Deutsche
BanK National Trust Company, as Trustee for Soundview Home Loan Trust 2005-4, AssetBacked
Certificates, Series 2005-4 (hereinafter "Deutsche Bank as Trustee") was not the original
lender and filed a complaint for foreclosure attempting to enforce a note payable to Novastar
Mortgage, Inc. The Ninth District Court of Appeals correctly reversed the judgment of
foreclosure because a material issue of fact remained for trial when the affidavit filed in support
of Appellant's motion for summary judgment contained a note with an indorsernent inconsistent
with the note attached to the complaint.

Due to the inconsistencies between the copies of the note and the lack of an
explanation based on personal knowledge as to how Deutsche Bank came to offer two
different copies of the note into the record, this Court concludes that there is a genuine
issue of material fact as to whether Deutsche Bank was the holder of the note at the time
the complaint was filed. Accordingly, the trial court erred in granting Deutsche Bank's
motion for summary judgment on its foreclosure complaint.

Deutsche Bank Natl. Trust Co. v. HoZden, 2014-Ohio-1333, ¶15.

Appellant Deutsche Bank as Trustee did not have a valid interest in the note and
mortgage when the complaint in foreclosure was filed and lacked standing to file a foreclosure
complaint. This Court held in Schwartzwald:

"It is fundamental that a. party cornmencing litigation must have standing to sue in order
to present a justiciable controversy and invoke the jurisdiction of the common pleas court. Civ.R.
17(A) does not change this principle, and a lack of standing at the outset of litigation cannot be
cured by receipt of an assignment of the claim or by substitution of the real party in interest. Fed.
Honae Loan Mtge. Corp. v. Schwartzwald, 134 Ohio St.3d 13, 2012-Ohio-5017,^, 41.
Appellant Deutsche Bank as 'Trustee mentions the certified conflict case SRMOF 2009-1
Trust v Lewis, Case No 2014-0485 recently accepted by this Court on the issue of what needs to
be attached to a complaint to demonstrate standing, but the issue in a summary judgment
decision is not about standing to file a complaint - it's about whether a factual issue remains for
trial on whether or not the plaintiff is entitled to enforce the note and mortgage. The case
SRMOF 2009-1 Trust v Lewis, 2014-0hio-71 involved an appeal from a motion to vacate a
judgment and is not of a similar procedural posture to Appellees Glenn and Ann Holden's case.
In the conflict case B.4C Home Loan Servicing v. McFerren, 2013-Ohio-322$ the gth District
Court of Appeals correctly determined that being a mortgagee without having possession of the
note would not permit foreclosure because the mortgage is merely security for the note
obligation.

Appellees Glenn and Ann Holden's case involved a summary judgment decision and the
Ninth District Court of Appeals correctly held that a material issue of fact remained for trial.
This appeal is not of great general interest, it is just another case where Appellee Deutsche Bank as Trustee filed for foreclosure without the legal right to do so."

------

"Based on the standard that applies for a summary judgment motion the Ninth District
Court of Appeals correctly reversed the judgment of foreclosure on the basis that factual
 issues remained for trial."

"Appellants Glenn and Ann Holden respectfully request that the Supreme Court of Ohio
decline jurisdiction over this case."

-------

I do not know the answer here, but feel the chances of these Ohio Supreme Court Judges picking up on related or pertinent matters, such as the fraud involved in these exchanges of "notes" and their allegedly illicit presentations in court, may better direct us all. Deutsche Bank is definitely taking a risk. I certainly would like to know how many times a bank can present different versions of "true and correct" notes, debts, accounting, assignments, and signatures, before they (Trustees) are dismissed in full. Deutsche Bank just doesn't understand how to NOT cheat and like a classic bully seeks to redirect attention and shout louder than others once they lose their anticipated prize.

Die Deutsche Bank verlassen Taube poop auf vor der Haustür und Bürgersteige überall!
Don't step in it.

JUDGE SLAMS BANK w CONTEMPT - 100k to Homeowner!

OneWest gets CONTEMPT OF COURT

             Sanctioned 100K !!!

OneWest v Jarvis

Court of Appeals of Indiana 

06-23-15  ---------------------------------------------------------------------

The homeowners essentially obtained penalties due to the harassing nature of OneWest and their refusal to correct credit reporting during modification and foreclosure attempts. Sending realtors knocking for short sales was a point of contention.,The foreclosure case was also 'dismissed w prejudice' but OneWest got that reversed on appeal, arguing that it would prevent them from asserting rights on potential future defaults as the loan was modified. Appeals court upheld 100,000 sanction for contempt.

http://www.in.gov/judiciary/opinions/pdf/06231501lmb.pdf