Judge Dismissed $292,500 in Debt Due to Shady Lender Practices -- Wall St. Freaks Out

[marmar]

Judge Dismissed $292,500 in Debt Due to Shady Lender Practices -- Wall St. Freaks Out


As if the foreclosure crisis wasn't distressing enough, it's come to light that some homeowners have been victim to sloppy and even fraudulent paperwork filed by mortgage companies. Luckily, judges are starting to recognize these instances and rule in favor of the homeowners––a move that has big banks shaking.

Last year, Long Island judge Jeffrey Spinner dismissed a foreclosure case––and $292,500 in debt––because the paperwork was so haphazard, reports the Washington Post. He called the lender's behavior "repugnant" and gave homeowner Diane Yano-Horoski's her house back. The ruling is being appealed by lender OneWest Bank, but if it sets a legal precedent it could have strong implications on the future of foreclosure cases. According to OneWest Bank, "We believe the Yano-Horoski ruling, if allowed to stand, has sweeping and dangerous implications for the entire mortgage lending industry."

The judge and his colleagues estimate they've thrown out as many as half of foreclosure cases in New York based on similar bad paperwork. Brooklyn and Long Island account for some of the state's highest rates of foreclosure, but the rulings could influence lower court judges across the country, as similar cases are dismissed and big bank appeals pile up. "I think we're going to see more decisions like this,” according to foreclosure defense attorney Craig D. Robins. "Many judges are finding their court calendars clogged with cases that have all these flaws in them that never should have been brought in the first place or should never have been brought without more due diligence."

In the Yano-Horoski ruling, Judge Spinner wrote that OneWest operated with an "opprobrious demeanor and condescending attitude," in addition to acting with "duplicity" in contradictory paperwork, presented past deadline, that said the Yano-Horoskis owed different amounts. In 2005, the family attempted to modify their loan after Greg Horoski became sick and their income suffered. According to Horoski, "People thought people who didn't pay their mortgages were automatically deadbeats. People are educated now. They are realizing all of a sudden how many hundreds of thousands of these homes that were foreclosed may have been done so with fraudulent documents."

Read more at the Washington Post.


By Julianne Escobedo Shepherd


http://www.alternet.org/newsandviews/article/325710/judge_dismissed_%24292%2C500_in_debt_due_to_shady_lender_practices_--_wall_st._freaks_out/

[TygrBright]

1. "Sweeping and Dangerous Implications for the Entire Mortgage Lending Industry"...

Yes, yes, YES!!!

From your slimily writhing lips, straight to the ear of Divine Providence, OneWest Bank.

hopefully,
Bright

[Scuba]

11. +1

[Kalyke]

12. We can only hope, One West Bank. We can only hope!

[NBachers]

41. "for the entire Mortgage Mugging Industry"

[Kablooie]

64. Sweeping and dangerous implications to the God given right to cheat and steal.

[Q3JR4]

74. Only if many banks engaged in duplicitous activities...

oh, wait. Right....

Q3JR4.

[mdmc]

77. 1

"Sweeping and Dangerous Implications for the Entire Mortgage Lending Industry"...

[Vincardog]

2. OH NOES what will the Banksters do to get their MEGA MILLION $$$$$ Bonuses NOW?

[ChairmanAgnostic]

3. MERS fraud is even worse.

There are frauds, upon frauds, upon frauds in this mess, and the worst part is that our DOJ is DOING NOTHING to fix it. Then again, our D controlled congress and senate did nothing either.

[truedelphi]

70. Just thinking the very same. n/t

[ChairmanAgnostic]

73. scary, isn't it? I mean not even a hint of

supervisory approaches, no investigations, no indictments, no nothing.

or in the case of this congress, Know Knothing.

[Oceansaway]

4. K&R...n/t

[rocktivity]

5. CUE THE VONAGE THEME!

And may there be many more!

:woohoo:
rocktivity

[SemperEadem]

58. this is going to be like "Showdown at the House of Blue Leaves" on Kill Bill Vol. 1

The 5, 6, 7 8's do that song.

http://killbill.wikia.com/wiki/House_of_Blue_Leaves#The_5.2C6.2C7.2C8.27s

"Songs sung by the performing Female Band present at the Crazy 88 Massacre at the House of Blue Leaves during the concluding chapter Showdown at House of Blue Leaves.

* I Walk Like Jayne Mansfield
* I;m Blue
* OO-oo "

[zipplewrath]

6. The sad reality is

All this tends to do is delay the inevitable. The banks need to be forced to follow the laws, if for no other reason than to give them an incentive to actually work with the home owners. But in the end, all these actions do is to force them to go back and get the proper paperwork, file it properly, and ultimately get the home. I'd hope it would incentivize them to renegotiate some of these loans. But in the long run I'd bet many home owners are just going to want out.

[avaistheone1]

14. If the paperwork itself is fraudulent

I imagine the homeowners will not sign it.

[rox63]

19. Have you seen the huge stack of paperwork involved in getting a mortgage? n/t

[aquart]

53. How would they know?

Most of the fraud took place after the initial mortgage paper work. It's the transfers that are wonky. The homeowner is far far removed from this criminal enterprise.

[jeff47]

18. You're assuming they can go back and get the proper paperwork

During the boom years, the banks weren't the best at maintaining the paperwork. And without the wet copy of the note, they're kinda up a creek. And a lot of those wet copies have been lost.

[zipplewrath]

20. They are probably not lost

They are somewhere, and they can probably be re-established by various means. The problem would be the expense. It's why they may decide it is more advantageous to negotiate.

[aquart]

54. Well, the problem with that is WHO HAS THE LEGAL PAPER?

Because after all that fun negotiating, with the homeowner still getting socked by an illegal enterprise utterly unentitled to anything, the REAL HOLDER OF THE PAPER can come forward and demand to be paid. THEN WHAT?

Nobody who cannot produce the paper is entitled to squat. I don't give a damn who those crooks bought it from. Sue THEM. The homeowner had nothing to do with those transfers.

[zipplewrath]

71. And that is the challenge

If one can't find the paper, the next step is to determine what happened to it. Then it has to be established what that paper said. Then new paperwork has to be created. And even at the end of all that, insurance has to be purchased to cover the problem of when (if) the original paperwork turns up and it isn't consistent with what the courts determined. As I say, holding the banks feet to the fire encourages them to work out payment with the homeowners to avoid much of this. But one way or another these issues will be worked out, and predominately in the favor of banks.

[jeff47]

75. Doesn't quite work that way

If one can't find the paper, legally it never existed. So there's no "establishing what the paper said".

Result? The bank "works out the payment with the homeowners" in that the homeowner doesn't owe the bank any money.

[sendero]

30. That's fine..

... we are ALL supposed to be subject to the rule of law. If they can GET the paperwork they are legally required to then good for them. If not, tough tittie - laws are for EVERYONE.

[RaleighNCDUer]

37. If the paperwork actually exists, that is.

It seems there are a LOT of mortgages out there that have been bundled, sold, re-sold, traded, bundled again, etc etc, that NOBODY knows where the original paperwork is. If I was a homeowner (that'll be the day) and I was being foreclosed on the first thing I'd do is demand to see the actual paperwork.

Right now I'm writing a SF story about the collapse of civilization due to a gamma ray burst that not only altered the environment but, more importantly, fried electronics worldwide - every bit of info that was not on hardcopy just vanished, including 99% of the world's financial records. The western world falls apart because nobody could prove who owned what.

I got the idea from the mortgage crisis - where millions of homeowners don't know WHO actually owns the note on their homes.

[zipplewrath]

46. It exists some where

And there will be one heck of a "reward" for folks to produce it.

As you suggest, the ultimate issue here is determining who owns what. The banks won't quickly give up on that effort and they have the resources to "win".

[RaleighNCDUer]

48. Not necessarily. On a report I heard on NPR a couple weeks ago

they were talking about how, once the bundling of mortgages was completed and sold, done electronically, the actual paperwork - the forms filled out by the home buyers - were considered to be no more than 'stuff' filling up filing cabinets. The bundlers no longer owned the asset, so they treated the paperwork as trash - it was shredded. All the remained was on-line, digital records of the transfer. When that sort of transfer is repeated several times, it turns into a game of 'telephone', with the person on the far end having no idea what the originator said.

It is a REAL problem.

[zipplewrath]

55. Yes, it's a real problem

And because of that, there is a good reason to be pedantic about demanding this paperwork. But there are probably electronic copies of this stuff and in the absence of the original, can be used to re-establish ownership. As I say, the complexity of doing this would be enough to encourage banks to renegotiate many of these loans (possibly on the condition of getting new paperwork signed). But in the end, the ownership of these properties will be established and the banks are odds on favorites to be the ones that end up owning them.

[jeff47]

76. Doesn't work that way either

"But there are probably electronic copies of this stuff and in the absence of the original, can be used to re-establish ownership"

Nope. Those electronic copies are not legally binding. So they can not be replacements for the lost documents.

"But in the end, the ownership of these properties will be established"

The ownership of these properties is already established. It's on the deed filed with the county. It says the homeowner owns the property. A mortgage doesn't mean the bank owns the property, it means the property is collateral for the loan.

[zipplewrath]

79. Electronic copies can be used

It is tricky, because they aren't the original. But if it can be demonstrated that the originals no longer exist, electronic copies can be presented as part of making a case for their replacement.
It's not anything anyone wants to have to do, which makes it useful for encouraging the banks to negotiate with the home owner.

It is also very risky for everyone because if the originals do show up, it's a real mess.

[SemperEadem]

59. but what they produce cannot be authentic because it was fraudulently

processed to begin with.

it exists somewhere is really meaningless because it exists in a fraudulent state.

If the courts rule against the banks, they're just going to have to suck it. Plain and simple. Too bad for them. That's what they get for being sloppy and negligent.

[aquart]

62. No. They looked at the law and ignored it. That's CRIMINAL.

We're so lax about white collar crime but the damage is so much greater. An economy isn't destroyed by a convenience store hold up, even if everyone in the store is murdered. But this "sloppiness" which is actually deliberate policy is killing our country, driving hardworking people to suicide and murder, blighting communities.

This isn't "sloppiness." This is depraved indifference to human life.

[Enthusiast]

38. But there is no 'proper paperwork'.

The proper paperwork doesn't exist. That's the point.

[aquart]

56. But the homeowner is blameless in this.

The banks violated clear law that stated that paper must be held and produced.

I have sat in a courtroom and seen a banker look at a law reproduced poster size so all could read it and state that the clear words did not mean what they said. These people are CRIMINALS.

If ten million people get free houses because of these criminals it will be better for this country than letting them get away with it. What is destroying us is their unchecked rampaging greed.

[Enthusiast]

63. I agree 100%.

Just make them eat the mortgage like they deserve.

[northernlights]

42. if they "misplaced" the note, how are they going to go back and get it?

Ask the homeowner they're trying to foreclose on to sign another note?

No do-overs in this scenario. They banksters thought they bought everybody important. Turns out they missed a few judges. Cry me a river :nopity:

And this won't delay the inevitable. This will drive a confrontation between the banksters and elitists...and the rest of us. Bring it on.

[zipplewrath]

45. There are procedures

If original documents are destroyed, or lost, they can be replaced by copies or other forms of reproductions. It makes it easier to challenge their authenticity, and can be a real hassle for the bank. Remember, if the original deed is lost, NO ONE owns the property. Everyone has an interest in establishing ownership.

Yes, it will drive a confrontation, but I know which side, ultimately, I'm betting will "win". The vast majority of foreclosures are on property that the owners were willing to "walk away" from.

[aquart]

60. "Willing"?

Every home in my sister's neighborhood is as underwater as hers is. The other day there was a farewell party for neighbors who could no longer stay. They are moving to a rented apartment. Yeah, they're "willing." These are their HOMES. These are their FRIENDS. This is their life ripped out by the roots.

The empty houses are a blight and danger to the entire area, a FIRE area.

It is safer for everyone if people keep their homes. Safer for whole neighborhoods. Whole communities.

Right now, those foreclosed homes are unsellable because nobody knows who owns them.

[zipplewrath]

69. Huge portions are second mortgages

The amount of "second homes" and various forms of investment property that are caught up in all of this is staggering. Many of those properties are so devalued that the current home owners don't really want them. They just want to cut their losses. It has been one of the problems that various assistance programs are fighting. They try to write rules to exclude these people and it ends up excluding a huge portion of the owners.

This will get cleared up and the banks ultimately will get control of most of the properties, one way or another. By holding their feet to the fire, it gives them some incentive to work with the home owners to try to work out these mortgages in manners that are favorable to some extent or another to both parties.

[SemperEadem]

61. if there are no authentic copies, then they cannot be replaced.

the banks are just s.o.l. this time and rightfully so.

If the original deed was signed in good faith and from that point on, it was the victim of criminal bundling and destruction of records, then the homeowner, who is blameless in this whole thing, should be appointed the sole owner of the property.

[zipplewrath]

68. "should be"

Yeah, that's how it's going to work out.

[SemperEadem]

81. as it should

[jeff47]

78. Notes aren't deeds

Deeds are filed with the county. They list the homeowner as the owner of the property.

"The vast majority of foreclosures are on property that the owners were willing to "walk away" from."

Only because they don't think they can 'win'. Instead, if the bank can't produce the note, they get the property for free.

[leftstreet]

7. K&R

[DJ13]

8. "If we cant lie, cheat, and forge documents we'll be ruined!"

:nopity:

[aquart]

57. Yeah. I'm so not buying it either.

[fascisthunter]

9. Good.... I hope more of this Happens

[JuniperLea]

10. Cheaters never prosper...

This was something drilled into my head when I was a kid. I like seeing the things my folks told me come to fruition!

Listen up, Banksters! You've refused to deal with homeowners, and Karma just bit you in the ass!

[TBF]

13. K&R nt

[BanzaiBonnie]

15. I love the one way street they want to travel...

According to OneWest Bank, "We believe the Yano-Horoski ruling, if allowed to stand, has sweeping and dangerous implications for the entire mortgage lending industry."

And if allowed to stand it may actually have implications for truth and justice and a blow to dirty tricks dealings..

[laughingliberal]

49. Same thing happened to One West in a case in CA last year. Judge awarded couple their house.

Wiped out $500,000 debt. His ruling was, essentially, that One West acted like assholes (in more acceptable legal language, of course).

[butterfly77]

16. Kick,kick,kick &recommended!

[howaboutme]

17. Do these NY banksters and loansharks deserve some compassion?

So these poor shylocks who made gobs of money were expected to competently, conscientiously and ethically do their job too?

The legal system should place every bit of burden of paperwork and financial errors on backs of the banksters, not the people who were doing the borrowing (unless they lied) . It was the bank's job to verify that all the paperwork was done appropriately and they were paid very well often by borrowers to do it.

If every bank involved in this fiasco suffers some serious financial distress, that requires the CEOs and shareholders to take a major bath, I won't lie awake fretting over it.

[bluedigger]

22. Well there you go.

"...they were paid very well often by borrowers to do it."

Everyone that is foreclosed on, and paid the forecloser fees to handle their paperwork, should countersue for double indemnity for breach of contract and failure to provide the service for which they charged. OK, I'm not a lawyer and don't know what I'm talking about, but I like the sound of it...

[howaboutme]

23. I like the sound of it too...bravo - nt

[katty]

21. good, keep it coming!

[Lugnut]

24. Bummer.

Nah. Tough shit! :nopity:

[defendandprotect]

25. K&R

[laundry_queen]

26. The banks don't have to worry

When this gets to the SC, all their buddies will just overturn all the lower court rulings.

[lostnfound]

28. Exactly. It's so cute how some continue to believe that justice will EVER trump corporate power.

Old rule: cheaters never prosper.
New rule: too big to be held accountable.

[Enthusiast]

39. I'm not so fond of this

country now that we operate under the new rules.

[Hannah Bell]

27. hooray for judge spinner.

[sendero]

29. I believe that fraud is fraud..

... and at least SOME of the bankster fraud should be punished.

[sendero]

31. The reason this scares the banks might not..

.. be obvious to everyone here. The FACT is that much of this paperwork is LOST FOREVER and CANNOT BE LEGALLY RECREATED. And the banks know it, and it is their own damn "securitization mania: fault.

[WillyT]

32. K & R !!!

:kick:

[CoffeeCat]

33. This is terrific news, with a big BUT...

I am glad to see these banksters put in their place. They've
operated like criminals for so many years. These banks lobbied
for deregulation and loose loan guidelines, and used their newfound
freedom to turn the American financial system into a Wild West
of banking.

First, they gave out mortgages--and too much mortgage--to untold
numbers of homeowners. Second, they marketed voo-doo financing,
which fooled many homeowners into believing they could afford
more house. Banks were mortgage factories operating at full
tilt--making billions. Then they rolled these mortgages--
many of which they damn well knew were junk--into securities
and made more money.

Then, the whole thing toppled--and we all know who paid to pick
up the pieces. THE BANKS made billions. WE THE PEOPLE picked up
the tab after the crash.

Now, we discover that they've screwed up the paperwork, lost paperwork,
broke contract law and operated like thugs.

I am glad to see these rulings--but the sad news is that this could
crash the banking industry. I imagine that a large portion mortgages
were haphazardly handled. The big banks were drinking from the same
poison cup.

Will this won't usher in a new crisis and a new bailout? The
problem is that we will probably pay. AGAIN. We will have to live in the
decimated economy created by these finance bastards.

Also, I have no faith in our Supreme Court. If the banks appeal these
cases and fight them to the SC--we can all expect a bank-friendly
ruling. So, where does that leave homeowners? If judges cancel
the debt and return the house to the owner--does the appeals process
prevent the homeowner from returning to the house until the case is
settled and all appeals are exhausted? If so, that is years!

This is a huge mess and it is an abomination. Our banking system is
a colossal failure. If we bail them out, we'll only be checking the
crack addict out of rehab and allowing him to wreck havoc on society
again. Rehabilitation and regulation of our entire system needs to
happen.

However, it is great news to hear that many judges are ruling this way.
Our only hope of reform is massive rejection of the thug behavior
committed by banks against the American people.

(Sorry for the long post. I'm just pissed and so at the end of my rope
with epidemic corporate corruption).

[Enthusiast]

40. Banks - "The dog ate my homework."

I think you are right. This might usher in a new round of bailouts. This time I think the entire thing will come tumbling down.

[CoffeeCat]

43. That's exactly what it feels like...

The whole thing blew up because of the mortgage-backed
securities that were rendered worthless.

Ok, but now it's come to light that an untold number of
mortgages may now be rendered non-binding in the legal
sense.

How does the entire thing NOT come crumbling down?

And the scary thing--is that all of the failures, bailouts,
crises, etc--extend from ONE scheme. Getting as many people
to buy mortgages, as possible. They needed all of those mortgages
to roll them into mortgage-backed securities, and sell them
to other institutions.

How in the world do the brightest, highly educated financial
experts in the world NOT KNOW that what they were doing would
come crashing down?

[bigdaddycoles66]

72. I hope they fall hard! No bailoutout for Wall Street ever again.

This should be a lesson learned for us and generations to come.

[indimuse]

KNR! n/t

[indimuse]

34. KNR! n/t

[scentopine]

35. You pay closing costs to make sure paperwork is processed correctly...

it is a contract. If the processing that you pay for in the closing costs is fraudulent, there are grounds for civil and/or criminal penalties.

[BlancheSplanchnik]

36. YEEEEAHHHHHH!

:woohoo:

:bounce:

[Gamey]

44. The double whammy is no one will be able to get a mortgage...

...already happened. It will kill housing and make matters even worse. Then those who own properties will jack up rental rates, tripling the whammy.

[aquart]

51. And you know what will happen?

The Savings and Loans will go back to doing what they started: giving mortgages to hardworking people with completely correct paper work.

Will the thieves stop giving mortgages? Gosh, we all hope so.

[perdita9]

47. Mother Jones Magazine broke this story in their last issue

God knows the MSM is too busy following Lindsay Lohan around to report on anything important.

[aquart]

50. EXCELLENT.

Nothing else will stop those thieves.

[Blue_Tires]

52. i hope more will follow this example

[DeSwiss]

65. K&R

According to OneWest Bank, "We believe the Yano-Horoski ruling, if allowed to stand, has sweeping and dangerous implications for the entire mortgage lending industry."

Of course you do you asshole. Because you and your morally-bankrupt lawyers believe that you should be allowed to enrich yourself from your shoddy work, non-existent morals and to totally disregard the rule of law. Not to mention disregarding the rights of actual human beings.

- Fuckers......

[AnArmyVeteran]

66. Home buying exposes people to a huge racket full of leeches.

The amount of money it cost to buy a house is outrageous. The system is mostly a scam with leeches throughout the transaction all taking as much as the can from the person buying a home. The purchase if a house shouldn't be much more complicated than buying a lawn mower. But the process is filled with parasitic middlemen all trying to get a piece of the action. For example, a person buying a house has to pay for an inspection, even if 20 precious inspections have already been performed. Then there are fees on top of fees mostly created just to legally steal from the house buyer.

And all of the above doesn't even include the shady lending practices used by conmen throughout the mortgage process. Refinaning a loan costs several thousands even though it's just a few keystrokes on a computer. And even after the sale is finalized the poor home buyer is faced with a 30, 40, or 50 year loan and is forced to pay a premium where almost all of it is interest at the start of the loan. So even if they have been paying faithfully toward the loan for 5 years and then are unable to make a couple of payments they can have the house taken away from them and they have no equity in the house. Almost everything they paid went to interest, and not the principal.

[bigdaddycoles66]

67. I have worked in the banking industry for many years including

mortgages. You would not believe what measures of fraud that mortgage brokers would do to get a loan bought. You would puke and start to riot if you only knew and the truth came out publicly. These loans were voodoo loans at the start but because many people did not qualify for these voodoo loans, the brokers made up fraudulent documents to push the loans through to be purchase by other lenders and investors. Documents such as fake paystubbs, W2's, personal bank statements, phony top dollar appraisals and even IRS forms to sell up loans to be sold to other lenders and investors. Some of these documents were shredded after the fact to wash away a paper trail of fraud. The bad part about this was our government looked the other way when flags were raised and the problem took on like wildfire know everyone can get away with the fraud. And the typical home owner had no idea that a fixed rate was available versus and ARM mortgage or an Interest only loan. The homeowners got slammed into a bad mortgage while the mortgage industry new a collapse was nearing. And here we are with the massive amounts of crap that has to be cleaned up by the tax payer while the mortgage brokers and lenders built wealth on behalf of the tax payers and then received bailout money to moved to offshore accounts. We the people got screwed royally and don't even know it.

[Blue_Tires]

80. kick