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Wells Fargo to amend 55,000 foreclosures | Reuters

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Wells Fargo to amend 55,000 foreclosures

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Wells Fargo to amend 55,000 foreclosures | Reuters

CHARLOTTE, N.C./SAN FRANCISCO | Thu Oct 28, 2010 4:04pm EDT

Wed, Oct 27 2010

(Reuters) - Wells Fargo & Co. said on Wednesday it will re-file documents on 55,000 foreclosures, drawing immediate fire from one of the state attorneys general most critical of banks in the continuing home foreclosure crisis.
the San Francisco-based bank repossesses homes. Wells Fargo -- the second largest U.S. home mortgage servicer -- has continued to foreclose on delinquent borrowers in recent weeks, even as its rivals instituted moratoriums amid a public furor over whether banks cut corners in the foreclosure process with so-called "robo-signers" of legal documents used to justify taking homes. Ohio Attorney General Richard Cordray -- who filed a lawsuit against Ally Financial Inc earlier this month over affidavit problems -- said he was "pretty unhappy" about the Wells Fargo announcement. "We had talked to them and they assured us they didn't have any of these
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problems," said Cordray in an interview with Reuters. He added that the Wells Fargo admission "makes it hard to believe any of the big financial firms in terms of what their process has been." Attorneys general in all 50 U.S. states are investigating whether lenders rushed through foreclosures and evicted borrowers from their homes without properly checking documents. Lawsuits have already begun to trickle in and banks may also face fines or be forced to repurchase faulty

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review or the notarization of the documents did not meet company standards. The bank plans to re-file the affidavits by mid-November.
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Wells Fargo to amend 55,000 foreclosures | Reuters

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In cases where the foreclosure is imminent, the bank will ask for an extension from the local courts. "We found human errors, and we are fixing those errors," said Teri Schrettenbrunner, Wells Fargo spokeswoman, who declined to discuss the nature of the errors the bank found. NO SYSTEMIC U.S. PROBLEM

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Despite problems, the bank had no plans to institute its own moratorium because it believes the filing mistakes did not lead to borrowers being unjustly evicted from their homes. On average, borrowers are 16 months behind on payments at the time of their foreclosure, according to Wells Fargo data released on Wednesday. One analyst said Wells Fargo's announcement was a minor surprise, given its prior statements

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that a foreclosure moratorium was unnecessary. "Do I regard this as devastating? No, but the bank should have known this before they spoke about it beforehand," said Nancy Bush, bank analyst with NAB Research. Bank of America Corp., the largest U.S. mortgage servicer, instituted a 50-state foreclosure moratorium earlier this month that has since been partially lifted. JPMorgan Chase & Co. and GMAC Mortgage, a division of Ally Financial Inc., both imposed 23-state halts.

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Wells Fargo also said the affidavits will have no impact on its mortgage repurchase obligations. The bank has reserved $1.3 billion to repurchase bad mortgages from investors. The foreclosure crisis in recent weeks has sparked fears of a shoddy paper trail for mortgages held by third-party investors totaling billions of U.S. dollars, which banks could be forced to repurchase. On Wednesday, the chief of the U.S. Treasury's homeowner preservation office told a Congressional panel she did not see a systemic threat posed by banks rebuying mortgages, and regulators were monitoring the situation closely.

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Wells Fargo to amend 55,000 foreclosures | Reuters

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Barts wrote: If it was just about redoing the affidavits, there would be no problem. The following is taken from a Brooklyn case (OneWest v.Drayton) which was dismissed without prejudice last week. The judge is outlining the requirements that must be met before he will allow OneWest to refile: First, the Court requires proof of the grant of authority from the original mortgagee, CAMBRIDGE HOME CAPITAL, LLC (CAMBRIDGE), to its nominee, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. (MERS), to assign the subject mortgage and note on March 16, 2009 to INDYMAC FEDERAL BANK, FSB (INDYMAC). INDYMAC subsequently assigned the subject mortgage and note to its successor, ONEWEST, on May 14, 2009. Second, the Court requires an affidavit from Erica A. Johnson-Seck, a conflicted robo-signer, explaining her employment status. A robo-signer is a person who quickly signs hundreds or thousands of foreclosure documents in a month, despite swearing that he or she has personally reviewed the mortgage documents and has not done so. Ms. Johnson-Seck, in a July 9, 2010 deposition taken in a Palm Beach County, Florida foreclosure case, admitted that she: is a robo-signer who executes about 750 mortgage documents a week, without a notary public present; does not spend more than 30 seconds signing each document; does not read the documents before signing them; and, did not provide me with affidavits about her employment in two prior cases. (See Stephanie Armour, Mistakes Widespread on Foreclosures, Lawyers Say, USA Today, Sept. 27, 2010; Ariana Eunjung Cha, OneWest Bank Employee: Not More Than 30 Seconds to Sign Each Foreclosure Document, Washington Post, Sept. 30, 2010). In the instant action, Ms. Johnson-Seck claims to be: a Vice President of MERS in the March 16, 2009 MERS to INDYMAC assignment; a Vice President of INDYMAC in the May 14, 2009 INDYMAC to ONEWEST assignment; and, a Vice President of ONEWEST in her June 30, 2009-affidavit of merit. Ms. Johnson-Seck must explain to the Court, in her affidavit: her employment history for the past three years; and, why a conflict of interest does not exist in the instant action with her acting as a Vice President of assignor MERS, a Vice President of assignee/assignor INDYMAC, and a Vice President of assignee/plaintiff ONEWEST. Further, Ms. Johnson-Seck must explain: why she was a Vice President of both assignor MERS and assignee DEUTSCHE BANK in a second case before me, Deutsche Bank v Maraj, 18 Misc 3d 1123 (A) (Sup Ct, Kings County 2008); why she was a Vice President of both assignor MERS and assignee INDYMAC in a third case before me, Indymac Bank, FSB, v Bethley, 22 Misc 3d 1119 (A) (Sup Ct, Kings County 2009); and, why she executed an affidavit of merit as a Vice President of DEUTSCHE BANK in a fourth case before me, Deutsche Bank v Harris (Sup Ct, Kings County, Feb. 5, 2008, Index No. 35549/07). Third, plaintiffs counsel must comply with the new Court filing requirement, announced yesterday by Chief Judge Jonathan Lippman, which was promulgated to preserve the integrity of the foreclosure process. Plaintiffs counsel must submit an affirmation, using the new standard Court form, that he has personally reviewed plaintiffs documents and records in the instant action and has confirmed the factual accuracy of the court filings and the notarizations in these documents. Counsel is reminded that the new standard Court affirmation form states that [t]he wrongful filing and prosecution of foreclosure proceedings which are
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discovered to suffer from these defects may be cause for disciplinary and other sanctions upon participating counsel. As you can see, its the Assignments and MERS that are at the heart of the foreclosure fraud fiasco. Anyone want to venture a guess as to whether or not OneWest will ever be able to refile this foreclosure action? Keep in mind that IndyMac went under on July 11, 2008. This is just the first of many thousands of more cases that will end the same way. Good luck submitting those additional affidavits Wells.

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Oct 28, 2010 12:06pm EDT -- Report as abuse

minipaws wrote: In America, you go to jail for robbing a bank of $10k but you can borrow and not pay back $500k with no negative consequences. Bankruptcy laws are the root of this problem, not the banks.
Oct 29, 2010 5:05am EDT -- Report as abuse

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