MFI-Miami Investigates Illegal Foreclosures By Deutsche Bank

MIAMI–MFI-Miami, LLC announced today that it’s narrowing its multistate investigation into illegal foreclosures and is focusing exclusively on Deutsche Bank.

“Deutsche Bank is named as the trustee on nearly 50 percent of the fraud investigations we have done in the past six months,” says Stephen Dibert, President of MFI-Miami.

In the majority of these cases, Deutsche Bank or its servicer almost never produces or refuses to produce the original note and mortgage, or proof that the transfer of the note has been validated. They freely admit this in the actions filed in court. However, some minority homeowners don’t have the legal expertise to understand how important these documents are to their case. They assume they have no defense and don’t show up for the hearing.

In most of the cases MFI-Miami examines, Deutsche Bank has purchased these mortgages and notes on the secondary market as part of a pool with other mortgages. These mortgages have been traded by fund managers like baseball cards.

“The practices of Deutsche Bank underscore the disorganized process financial firms used in buying and selling mortgages on the secondary market, which is done secretly behind closed doors,” says Massachusetts Bankruptcy Attorney Glenn F. Russell Jr. “They are turning the foreclosure process into the Wild West, and many of these foreclosures are plainly illegal.”

Stephen Dibert says, “In many of these cases, it appears that Deutsche Bank management gave their approval to buy a lot of worthless paper on the secondary market.”

“Deutsche Bank retains law firms that aren’t interested in defending the legitimacy of their claim,” said Dibert. “Their purpose is to intimidate, obtain default judgments, and foreclose as fast as possible against homeowners who are uneducated about the legal foreclosure process. Joseph DeYounks of West Palm Beach, Florida, is a perfect example. Deutsche Bank purchased his note on the secondary market and is now attempting to foreclose on his home. The bank hasn’t provided proof that it’s the legal owner, and the originating lender violated Florida law by funding this loan without the proper lending license.”

“Deutsche Bank is displacing minority homeowners at a methodical rate,” says Stephen Dibert, President of MFI-Miami.
Banks in South Florida are bringing foreclosure actions at an unprecedented rate. Miami-Dade County averaged about 10,000 to 11,000 foreclosures in 2006. In 2008, according to the Miami-Dade County Clerk of Courts, foreclosures were in excess of 56,000.

Miami Foreclosure Defense Attorney Shaun Rice, of De Armas, Millich, & Rice, PL, says: “I strongly believe that minorities have suffered disproportionately as a result precisely from banks like Deutsche Bank who often never had a legitimate claim to bring a foreclosure action in the first place.”

About MFI-Miami
Headquartered in Boynton Beach, Florida, MFI-Miami, LLC and its sister companies conduct forensic mortgage audits and mortgage fraud investigations. MFI-Miami, LLC is one of a few firms that investigate the transfer of the securitization instruments of mortgages. For more information, visit www.mfi-miami.com, contact 561-317-9978, or email info@mfi-miami.com.

About Glenn F. Russell, Jr.
Glenn F. Russell, Jr. is located in Fall River, Massachusetts. He’s a member of the Massachusetts and Connecticut Bar Associations, where he specializes in foreclosure defense, bankruptcy, personal injury, and divorce law. For more information, visit www.foreclosuresinmass.com, call 508-324-4545, or email russ45esq@gmail.com.

About Shaun Rice
Shaun Rice is a foreclosure defense attorney located in Miami, Florida. He’s a partner in the firm of DeArmas, Millich, & Rice, PL. For more information, call 305-913-6250 or email srice@dmrlegal.com.

Miami Herald Covers Shady Loan Modification Companies

MFI-Miami Owner Steve Dibert was in a front page article in yesterday’s Miami Herald as part of an article about shady loan modification companies. You can see the article below:

http://www.miamiherald.com/news/front-page/story/918426.html

Talking Points: Obama Foreclosure Fix

By Glenn F. Russell, Jr.

In light of President Obama’s “Foreclosure Fix” initiative announced last week, I wanted to send out a memo briefly explaining what the program is supposed to do, who it will apply to, and what the objectives are for this plan.

This plan only applies to those with a mortgage on their principal residence and on mortgages that were taken out “over the past few years” (yet to be defined b the Obama administration), and subject to “caps” as to the amount of the mortgage.

The announcement last week is only the first shoe to drop. The official enactment of Obama’s plan will be announced and go into effect on March 4, 2009.

The second (and I feel the most important step) will be Congress’ taking up the bankruptcy cramdown provision. It’s vitally important that Congress pass this legislation, as this will provide much-needed additional leverage for lenders to “play ball” with borrowers who wish to modify their existing loans. Congress is scheduled to begin debate on the passage of the cramdown provision this week (week of 02/23 – 02/27/2009).

There are two components of the Obama plan: affordability and stability.

Affordability

This part of President Obama’s plan addresses borrowers in Fannie Mae and Freddie Mac- conforming loans who are looking to refinance and, due to current Fannie and Freddie LTV (Loan to Property Value limits), don’t qualify under federal guidelines. This initiative will (for qualified borrowers) have the effect of reducing their loan payments to correspond with a 31% debt-to- income ratio (31% of gross income).

Stability

This part of President Obama’s plan addresses approximately the 3 to 4 million “at-risk” borrowers with mortgages taken out from other (outside Fannie and Freddie) lenders.

Unfortunately, this is a voluntary plan on the part of the mortgage companies. However, in order to create incentives for the lenders, the plan will set aside $75 billion to be used toward incentives (Carrots) aimed at mortgage servicers and lenders to work with borrowers to modify their existing loans.

There are also incentives to borrowers (of up to $1,000.00 per year for up to 5 years) to be applied directly to the principal of the borrower’s loan. In order to qualify for this incentive, borrowers would have to remain in their homes and maintain mortgage payments under the modified payment terms.

Unfortunately, this part of the plan (stability) is only in effect for five years. Once this period of time expires, the lender can bring the interest/payment rates back to the original terms the borrower agreed upon.

President Obama’s Affordability and Stability Plan (Official Treasury Statement)

• Read the Homeowner Affordability and Stability Plan Fact Sheet HERE

• Read Three Example Cases of How Obama’s Plan Can Help Homeowners HERE

Proposed Bankruptcy Cramdown Legislation

The bankruptcy cramdown legislation would be the “stick” to be used on lenders who refuse to work with borrowers.

It’s vitally important that the cramdown legislation be passed by Congress, because I do not feel that the incentives provide enough leverage to get mortgage lenders to agree to a voluntary “write-down” of borrowers’ mortgages. However, if these lenders are faced with the prospect of having a bankruptcy judge bring the secured mortgage debt down to the current appraised value of the property, (the rest would be discharged as unsecured debt), then I believe Obama’s plan would be effective.

• Currently, bankruptcy judges are precluded from modifying mortgages on primary residences, a practice known as cramdown. Currently, this is allowed on investment properties and second mortgages. Prior to 1978, cramdowns were allowed on all mortgages.

• In a “cramdown,” the lender’s security interest is reduced to the value of the collateral securing the loan. For example, if you took out a mortgage for $300,000 to buy a home in 2005 and the current appraised value of that home is now only $200,000, a bankruptcy judge could reduce the secured interest of the lender to $200,000. The remaining $100,000 would then become unsecured debt, which is dischargeable in bankruptcy. This would then have the effect of permanently reducing your mortgage by 1/3 in this example.

• The House, where bankruptcy reform has already been approved in committee, could take up this measure as soon as this week. (Week of 02/23 – 02/27/2009).

• The administration has designed a program to lavish incentives on lenders that modify mortgages. The incentives are the carrots to encourage more modifications, and bankruptcy reform is seen by the administration as the stick lenders would face for failing to comply.

• Obama’s plan requires homeowners to certify that they have complied with requests for information from their lender. Industry officials say that this would help weed out homeowners who received their mortgages fraudulently.

• Obama’s initiative would cap the value of mortgages that could be revised in bankruptcy court. It would also pertain only to loans originated in the “past few years,” according to a summary of his proposal.

• How the administration chooses to define several parts of its plan (such as “past few years”), will impact whether tens of thousands of homeowners are excluded. It could affect a lot of people or very few people.

• Republicans and the financial services industry fiercely oppose the measure, complaining it could drive up mortgage rates and increase losses.

• Obama’s plan would cap the value of the loans eligible for bankruptcy modification to limits set by mortgage finance firms Fannie Mae and Freddie Mac, which could be difficult in parts of the country that saw the biggest run-up in prices. The conforming loan limit is currently $417,000 in most parts of the country and $729,750 in high-price areas.

At Peoples First Financial, People Don’t Come First, The Benjamins Do!

Several weeks ago, I received an email from Jon Angers, a homeowner in Holyoke, Massachusetts telling me about how he got ripped off by a shady mod company out of California. I told him there is nothing unusual about that because California seems to be a haven for illegally run loan mod companies but what he told me next made me angrier than Bill O’Reilly after a debate with Al Franken.

Jon told me he was being forced to move because he lost his house to foreclosure because Peoples First Financial didn’t negotiate a mod they promised him in writing they would do and now they keep jerking him around about giving him his $1295.00 upfront fee back.

Jon signed with Peoples First Financial in August of 2008 after their associate Kevin Wilcox claimed he could get him a 5% on a new modified loan and close it in 60 days. Kevin Wilcox also told Jon to forward any calls from Citimortgage directly to Peoples First Financial. After reviewing these emails, leaving countless messages and emails Anir Sani, I began to research Peoples First Financial.

I began my investigation and discovered some rather disturbing things:

• Peoples First Financial is in direct violation of California Department of Real Estate guidelines, which require all modification companies that charge an advance fee to be approved and have their fee agreements approved. Peoples First Financial hasn’t been approved.

http://www.dre.ca.gov/mlb_adv_fees.html

• Peoples First Financial is currently under a Desist and Refrain order by DRE. The order was filed on 1/7/2009.

http://www2.dre.ca.gov/PublicASP/pplinfo.asp?License_id=01768177

• California law bars any foreclosure rescue or loan modification company from charging an upfront fee if the client is in default.

http://www.dre.ca.gov/mlb_adv_fees.html

After discovering this, I asked Massachusetts Attorney Glenn F. Russell, Jr. to represent the Angers pro bono. Mr. Russell then sent several faxes and emails. On February 6, 2009, the Angers received a response from Peoples First Financial, which said that they must fill out a form explaining why they think they are owed a refund and indicating that if one is granted, it would arrive in 6-8 weeks.

“This is ridiculous,” says Glenn Russell. “I have never seen a company treat their clients this way. The Angers trusted this company to protect them from losing their home. Now not only are they going to lose their home because of Peoples First Financial, now this company wants to jerk the Angers around about their refund. This is appalling, and I plan on pursuing every legal option available to help the Angers keep their home!”

Peoples First Financial is still conducting business even with the Desist and Refrain Order issued by DRE. I would stay clear.

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