January 19, 2011

Foreclosure Moratorium Looms in NJ

Filed under: Land Reform — Russ @ 5:33 am


Update: Looks like my information was stale. The hearing has been postponed to February 14. (Though there was a “mandatory settlement hearing” today. I looked around but didn’t see anything about what came of it.)
Today’s the day in New Jersey. Six bank rackets – Wells, BofA, Citi, JPM, Ally/GMAC, and OneWest – have to appear in Superior Court and show cause why uncontested foreclosures shouldn’t be suspended in the state.
Twenty-four other lenders and service entities, including MERS and the NJ Housing and Mortgage Financing Agency (the NJ equivalent of Fannie and Freddie) will have to “demonstrate affirmatively” to a court-appointed special master* “that there are no irregularities in their handling of foreclosure proceedings”, as stated by the NJ judiciary’s press release.
In addition, plaintiff’s attorneys in foreclosure cases will have to certify that they received assurances from the foreclosing entity that all paperwork is fully in order and not forged.
These radical measures (imagine the lawyer having to certify his case contains no forgeries!) were ordered last month by NJ supreme court chief justice Stuart Rabner. He cited the apparently omnipresent documentation failures and forgeries in today’s foreclosures, as well as the fact that 95% of NJ foreclosures are uncontested because people can’t afford representation. Putting the two together, we have an unconscionable miscarriage of justice taking place every day, thousands and thousands of times. This assault is upon the most elemental level of civilization, the right to shelter. Without being able to prove any right even by their own rigged law, bank freebooters are lawlessly throwing families out of their homes. Often these families could afford to keep paying if they received equitable and rational mortgage modifications, and if they weren’t assaulted by fraudulent fees and illegal payment embezzlements on the part of the servicers. And where they truly cannot afford to pay, in most cases it’s because the banks themselves intentionally, systematically destroyed those people’s jobs. That’s the most basic way almost all mortgages were fraudulently induced in the first place.
The banks publicly responded as we’d expect. They tediously repeated their lies about the documentation and conveyances all being in order except for some sloppiness here and there. And with varying degrees of defiance they questioned or rejected the courts’ authority to order these measures. We can assume if the courts really go through with this, the banksters will sue.
I don’t know how serious the courts will be in following through on this. There’s no way the banks can demonstrate that their documents are in order to the satisfaction of law or equity. Nor will the likes of MERS be able to demonstrate anything. If the spirit of Rabner’s order is followed, NJ ought to become the first state to impose the much-sought foreclosure moratorium.
And at that point everyone should stop paying. Jubilate in Place, and pay only the property tax. Get local and state legislatures to rush through liberalized adverse possession laws to decriminalize it. (What’s good for the goose…) At one stroke we’d smash the banks and take a step toward liberating the land.
[*True democrats don’t believe in things like “supreme courts” and “special masters” in general. But in a world where big private banks still exist, we can support such counteractive structures in the rare cases where they actually do serve the people against corporate rackets. But of course we recognize that as a rule government’s role is not to counterbalance corporate power, but enhance it.]


  1. Thanks Russ,

    The ‘special master’ is a signal that the people are on to the scam and the scam needs to be re-clothed in a better brand of bullshit …


    “Kenneth Feinberg, President Obama’s Special Master for TARP Executive Compensation,” did not serve in that position as an unpaid government employee, but was paid a GS-15 annual salary of $120,830, according to documents uncovered by Judicial Watch.

    Feinberg, a former top aide to Sen. Ted Kennedy, D-MA, has made something of a career out of serving as an impartial manager of special funds, including his current gig overseeing that $25 billion BP compensation fund in the Gulf oil disaster. Previously, he headed the 9/11 Victims Compensation Fund.”

    Read more …


    Deception is the strongest political force on the planet.

    Comment by i on the ball patriot — January 19, 2011 @ 7:45 am

    • How’s it going, i ball? Yes, Feinberg’s a creature, all right.

      Comment by Russ — January 19, 2011 @ 9:32 am

      • Mr. Feinberg is currently Chairman of the Board of the RAND Institute of Civil Justice; so there’s no doubt which side he’s on and we know he’s trusted never to reveal information about the BP spill that could possibly help the common cause. Alex Abeilla Rand Institute interview on the work of the Rand Corporation here and a list found on the Internet (I’m unfamiliar with the source) here

        Here’s a little background and a few numbers:

        ‘Feinberg told the Washington Post – “that one case Agent Orange changed my entire professional career.” detail here

        In his book, Feinberg writes that “Fortune 500 companies suddenly wanted me to settle everything. My life changed overnight. . .I helped create a whole new area of practice. . .I became a settlement guru.”

        This new area of practice was the collusive class action tort settlements invented by Weinstein in Agent Orange in 1984.’

        …’Hager says we don’t know.

        “But I wouldn’t be surprised that there is no written agreement,” Hager said. “Feinberg is going to get some money. Both Obama and BP trust him. He’s done this so many times in the past. He’s covered everybody who needed to be covered. It is the service he provides.”

        Is there an agreement covering Feinberg’s fee?

        “We don’t know that either,” Hager said. “He might have said – we’ll work it out later. He’s already made a lot of money doing these things.”

        “In 9/11, he notionally waived his fee. But he got 1.2 percent of the total $7 billion for administrative costs. So, he was spending a lot of money during the whole three years or so that he was working on that case. He had his very substantial costs covered. Over $80 million in three years.”

        “So, he has the flexibility to make all kinds of different deals here.”’

        According to blogs.WSJ.com, Feinberg is paid $850,000 a month for BP work.

        “Attorneys have complained that Feinberg has been bad-mouthing them throughout the Gulf, telling residents litigation will take years to play out and that he’ll give them more money than they’d get through a lawsuit. The coup de grace: he recently announced he’d give them a lawyer for free.

        On Tuesday, attorneys took their complaints to the judge. In a filing before federal judge Carl Barbier in New Orleans, attorneys asked the judge to intervene and make sure Feinberg’s comments “are neither confusing nor misleading.” Click here for the motion, here for the memorandum in support of the motion.

        Among their complaints: Feinberg, who is being paid by BP $850,000 a month, isn’t independent though he claims to be and that he has flat-out told residents not to hire attorneys.”

        However, from Wikipedia on a $10 million arrangement with Feinberg’s law firm here:

        On December 6, 2010, the Center for Justice and Democracy (CJD) sent a letter[14] to Robert Dudley, the CEO of BP, concerning “serious new issues raised about the lack of transparency and potential conflicts of interest related to the administration of the Gulf Coast Claims Facility.” In the letter, CJD pointed out actions taken by Feinberg in the administration of the compensation fund that point to serious conflicts of interest:

        “Mr. Feinberg, employed by BP, has decided on his own authority that all claims recipients must release all companies who caused this disaster from any and all legal responsibility, no matter how grossly negligent they were. This sweeping release, which assigns victims’ claims to BP, benefits only one actor: BP – the company that happens to pay Mr. Feinberg’s salary.”

        The letter also criticized Feinberg’s lack of transparency around compensation:

        “Despite repeated calls for the release of documents establishing the formal relationship between BP and Feinberg Rozen, as well as its subcontractors who are reviewing and adjudicating claims, almost nothing has been publicly released. And now we learn, as reported by Reuters on November 22, 2010, that BP and Feinberg Rozen consider their arrangement “verbal,” i.e., they have not committed to writing the firm’s compensation arrangement so there can be no public examination of it. Is the public to believe that there is no paper evidence at all documenting a $10 million per year financial arrangement between BP and Feinberg Rozen? What about the contracts between BP, Feinberg Rozen and the subcontractors who are advising and adjudicating claims and also being paid directly by BP? Surely these contracts must be in writing and released…. This failure to release the terms of all these financial arrangements under circumstances of tremendous historic and public significance is simply unacceptable.

        Comment by LeeAnne — January 19, 2011 @ 2:51 pm

      • Thanks, LeeAnne. That’s disgusting. And the MSM still tries to lionize him as some kind of 9/11 hero. He’s a criminal.

        Comment by Russ — January 19, 2011 @ 3:16 pm

      • Going well Russ – thanks – really appreciate your efforts here!

        Lee Anne you rock!

        I nominate you for one of the Presidents (President of New England) of the new government we shall form after the revolution. You can appoint a special master to arrange public prison accommodations for Feinberg.

        Thanks for the info!

        Deception is the strongest political force on the planet.

        Comment by i on the ball patriot — January 19, 2011 @ 8:38 pm

      • I remember reading a (positive) New Yorker profile of this guy:

        “I love it when senators or congressmen come up to me and go, ‘Ken, what a sacrifice that you’re doing this for nothing, in the public interest, that’s fabulous,’ when of course the real reason I did it in the public interest— It is fabulous, if I do say so, it is a sacrifice. But, as a Machiavellian matter, can you imagine if these families knew I was getting paid for this, on the blood and bodies of the dead? ‘You’re only giving me three million, what did you make?’ As a Machiavellian matter, I just completely undercut that whole line of criticism by telling people, ‘I’m not getting paid for this, you know.’ ”

        Read more http://www.newyorker.com/archive/2002/11/25/021125fa_fact#ixzz1BdXYKEoF

        So, he got paid $80 million, while he’s telling victims and politicos that he’s doing for free??

        There are just no words for that kind of person.

        Comment by Lidia — January 20, 2011 @ 10:29 pm

      • I’m not sure he has the hang of using the “Machiavellian” reference, but it’s clear that he loves saying that word about himself. What a tool.

        Maybe that term’s supposed to be an inside joke for readers in the know. “Yeah, I didn’t get paid for this!” [Wink, nudge, haw haw!]

        Comment by Russ — January 21, 2011 @ 4:59 am

  2. I think this post needs to be


    The Hearing has been POSTPONED
    SEE: http://www.scribd.com/doc/46843747/Jacobson-Scheduling-Order-011211

    Comment by Deontos — January 19, 2011 @ 11:45 am

    • Thanks, Deontos. Updated above. I looked around this morning but didn’t see anything about a postponement so I figured the hearing was on.

      Comment by Russ — January 19, 2011 @ 3:13 pm

  3. I would like the following points regarding MERS to be clear to all:

    1) It’s not a PAPERWORK issue – it’s an OWNERSHIP issue. Whenever we see the word ‘paperwork’ describing the MERS scam, we should know that the correct word is ‘ownership’.

    ‘Paperwork’ is defined as: written or clerical work, as records or reports, forming a necessary but often a routine and secondary part of some work or job.

    That is not the issue with MERS. The issue is one of fundamental ownership – which is determined by signed and recorded paper.

    2) The most significant and basic nature of the MERS scam has not been discussed. It is, quite simply, that the obfuscatory nature of the MERS system allows the originating lender to sell the initial mortgage MORE THAN ONE TIME. I will demonstrate the implications with a simple example.

    Now, it may never be possible to prove that the same mortgages were sold repeatedly. In fact, because of the very nature of MERS, it is likely that it would not be possible to show clear evidence. The point is, however, that by flaunting the existing, centuries-old state property laws, MERS allows for this to happen. It does not guarantee that it happened but it allows for it to happen. It may well be the real reason the chain of titles were broken and the ‘paperwork’ has all gone missing.

    An example of the situation MERS allows and the financial implications:

    Consider a pre-MERS/pre-securitization scenario for a real estate loan. Bank A originates a $500,000 loan. The $500,000 is used to pay the seller of the house. In exchange, Bank A will receive monthly payments for the next 30 years at (for example) 6 percent. If Bank A decides that it does not want to collect small amounts each month, then it may sell the rights to the bank that will pay them the highest price, Bank B. For whatever reason (its own belief on what constitutes a ‘good interest rate’) – Bank B may pay $525,000 for this loan. The assignment of the loan is done based on the stable, ancient property laws of the state, and Bank A has then made $25,000 profit on this transaction. Bank B then owns the loan and there is no ambiguity.

    It would be hard to imagine Bank A being tempted to then sell the exact same loan to Bank C. The reason is that there is very clear evidence at the county recorder’s office that the loan was already sold to Bank B.

    Now consider the same situation with the MERS system in place.

    Bank A makes the same original loan for $500,000 which is used to pay the seller of the house. Now, when it is interested in selling this loan to the highest bidder, Bank A realizes that because the way things operate now (regardless of state laws), it will not be selling the loan directly to another bank (Bank B above). Instead, it has become customary for Bank A to ‘bundle’ hundreds of loans together and sell them all to ‘investors’ who are probably made up of entities such as mutual funds, city governments, foreign governments, etc. Each of these entities likely represents many people’s money – none of whom really have any idea of which individual loans they are purchasing.

    Well, after all the bundling and selling to entities and stuff, it may turn out that, on average, Bank A gets $525,000 for each loan – and so in that way it made the same profit.

    In this scenario it is not at all hard to imagine Bank A being tempted to sell this same loan again. Unlike before, when there was ‘Bank B’ and ‘Bank C’ and very clear records at the county recorder’s office, there is no ‘Bank B’ but only a mish-mash of bundled loans sold to investors/entities who do not know which loans they have bought — and by the way — the documents have been ‘lost’. In this scenario, it is all too tempting to sell this same loan to the securitized version of ‘Bank C’ – which is the same loan bundled with hundreds of other loans – sold to vague entities who do not know what they have really bought.

    Comparing the two scenarios, one might think that Bank A has just doubled its profit. It has just sold the loan twice after all. Wrong! In the second scenario, Bank A has made more than 20 times its profit. In the original scenario, Bank A’s profit is ($525,000 – $500,000) = $25,000. Of course, if the loan is fraudulently sold a second time, then all of the $525,000 from that sale would be (illegal) profit because there would be no transfer of $500,000 to the original seller of the house, as was done with the initial loan. Therefore, Bank A’s profit would be ($25,000 + $525,000) = $550,000.

    Bank A has increased its profit by 22 times simply by bundling/schmundling. Is that possible to prove? Probably not, given the destruction of so many documents and the entire system of banks/lawyers/politiicans/lobbyists, etc. But it is not necessary to prove any of this. It is only necessary to realize that the system allows for this, it encourages it, and it is likely the key driving dynamic to all we are seeing unfold. It is far more likely than the latest explanations in the media that banks “wanted to evade fees at the county recorders’ offices”.

    It explains why we are where we are. The remedy, of course, is to adhere strictly to the state property laws which have been the same for centuries. These laws require clear, recorded, signed documents which do not allow the above confusion to exist. The courts must simply enforce these laws and let the chips fall where they may. If past foreclosures need to be voided, then so be it.

    Fred Smith

    Comment by Fred Smith — January 21, 2011 @ 7:07 pm


    Friday, January 28, 2011
    Order To Show Cause hearing postponed again to March 1

    The NJ Supreme Court and its foreclosure unit’s “efforts” are beginning to look awfully lackluster…


    For the second time, the state has postponed a hearing for six of the country’s biggest mortgage lenders called to court to defend their foreclosure practices.

    Edward Dauber, the attorney appointed to represent the state in the case, requested the extension to allow more time for the two parties to negotiate a settlement.

    In December, Chief Justice Stuart Rabner ordered the six banks, including Citibank, JPMorgan Chase and Bank of America, to outline their past and present foreclosure processes. If the court finds any part unsatisfactory, all pending foreclosure matters will be suspended. The banks responded with hundreds of pages of documents, and earlier this month Dauber asked for an extension for his response.

    The banks must now appear in court March 1, instead of Feb. 14. At that hearing, Judge Mary Jacobson will decide whether the banks’ foreclosures should be suspended, unless the case is settled out of court earlier.

    Source: NJ.com

    Comment by DEONTOS — January 30, 2011 @ 1:16 pm

  5. Does anyone know if the foreclosures in NJ are frozen? I cannot find information about this. Thanks. (Posted June 3, 2011)

    Comment by fred — June 4, 2011 @ 9:40 pm


    Comment by KRISTY — June 7, 2011 @ 2:12 pm

    • Any guess how long it will last? I tried to do a short sale and the bank sabotaged it. I guess the have a CDS against my home.

      Comment by Fred — June 7, 2011 @ 3:13 pm

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