2
1
1
Wealth of Blacks/Hispanics devastated by decreased home ownership
By Adeeba Folami
The foreclosure crisis currently sweeping America is a prime example of how banks and mortgage lenders have profited off the backs of millions of homeowners whose houses have been foreclosed upon, in many cases illegally.
Last fall, several major banks were found utilizing the illegal practice of "robo-signing" which involves falsifying signatures on documents in order to keep pace with the massive amount of foreclosure filings taking place. The fraudulent practice is one the banks made use of for several years. The scandal brought to light that many lenders and banks resorted to fraud because they lacked legal ownership of the homes they sought to repossess. This a result of years of securitization in which investment bankers pooled mortgages together and then sold them to profit-seeking investors as "mortgage backed securities" on Wall Street.
According to foreclosure defense advocate Sherron L. Lewis, one of the first acts a homeowner should consider once a lender files for foreclosure is to research and find out if there is evidence their loan was sold. "If a loan is securitized and sold, that loan doesn't exist anymore as it existed before because it's bundled with other loans and sold as certificates to investors," he explained. "You can't undo that. It's like making apple juice. You can make apple juice out of an apple but you can't make an apple out of apple juice."
As investigation of banking practices continues, it is becoming clearer that thousands of investors, who cannot be identified or tracked individually, became rightful owners of multiple mortgages yet the proper and legal transfer of ownership to them never took place. Neither they nor the foreclosing banks have the ability to prove in court their "standing," or legal right to foreclose. Yet courts all over the country continue approving these same lending institutions' foreclosure filings.
"You never have the right party in interest in front of the court attempting to foreclose which is why these judges never make the lender prove who they are, because the judges know they can't," Mr. Lewis said. "As a result, foreclosures are being rubber stamped in unprecedented numbers."
AGs seek to settle with banks but some crack down on housing advocates
Advocate Lewis had many years success
in assisting homeowners with self-help guidance offered on his
IllegalForeclosures.com website which in 2010 was shut down by
Colorado Attorney General John Suthers who secured a court injunction
against him alleging fraudulent foreclosure relief practices and
taking advantage of homeowners. The injunction detailed two cases as
evidence of Mr. Lewis' wrongdoing, one involving a homeowner in
Illinois which is outside of Colorado jurisdiction, and the other a
disabled man, Luis Castro, and his brother George who still live in
the home initially foreclosed upon in 2008.
Advocate Sherron Lewis (r), George (l) and Luis Castro (c) by Lens of Ansar
The battle to keep their house continues and they now say the AG's office coerced them and used them to build their case. Mr. Lewis maintains his innocence and filed a federal claim in Illinois' U.S. District Court, 7th Circuit, accusing Suthers and his assistants of discrimination, violation of first amendment rights, misuse of public office and a host of other grievances. Mr. Lewis said a judge dismissed the case "without basis," therefore he refiled to the higher Court of Appeals where his claim remains under review.
Suthers, is one of 50 Attorneys General working on a settlement with five major banks guilty of using robo-signing or other unethical foreclosure practices. The banks include JP Morgan Chase, Wells Fargo, Citigroup, Bank of America and Ally Financial (formerly General Motors Acceptance Corporation).
Members of Congress seek action from regulators
Congresswoman Maxine Waters (D-CA) has
carefully followed the investigations of the banks and has
consistently called for accountability on their part in rectifying
the mess the housing market is in. Rep. Waters and 11 other House of
Representatives members signed off on a July 20 letter addressed to
John Walsh, Acting Comptroller of the Currency; Ben Bernanke,
Chairman of the Federal Reserve System and Martin Gruenberg, Acting
Chairman of the Federal Deposit Insurance Corporation (FDIC), urging
them to "make public critical information related to enforcement
actions taken against mortgage servicers regarding their improper
foreclosure practices."
Congresswoman Maxine Waters by Maxine Waters.gov
The call for such transparency came after the elected officials learned that major news outlets uncovered evidence that lenders persist in use of robo-signing. This despite "your assurances these illegal actions would not continue," the letter says to Regulators Walsh, Bernanke and Gruenberg. Senator Robert Menendez (D-NJ) also submitted a separate letter containing the same text which was signed by himself and nine other senators.
