Tag Archives: Federal Housing Finance Agency

COVID, COURTS, CIVIL UNREST, PANIC, FEAR AND FORECLOSURES = A COMBINATION FOR DELAY

(BREAKING NEWS – OP-ED) — The author of this post brings you this not-so-humble opinion without the slightest intent of giving you legal advice.  The system has it all set up to favor the attorneys for that purpose, so that’s where you get legal advice.  On this blog, you get news, opinions and suggestive commentary and education, which is perfectly legal because freedom of speech … as I believe we still have freedom of speech … exists in a forum of expression as we know it. 

FEDERAL GOVERNMENT EXTENDS MORATORIUMS DUE TO COVID

The Federal Housing Finance Agency (FHFA) has extended moratoriums on foreclosures and evictions until at least August 31, 2020.  If you have a mortgage that is backed by Fannie Mae and Freddie Mac, rest assured that single-family homeowners got a reprieve, at least temporarily. Roughly 2-million homeowners are affected by this extended moratorium. You can go do a loan look-up on the Fannie Mae or Freddie Mac websites to see whether this applies to you.  I would think by now, you’d know that, especially because you read this blog. You can anticipate that the moratoriums on the federal level will probably continue to be extended as long as we’re in the middle of a perceived pandemic.

STATE GOVERNMENT MORATORIUMS … NOW THAT’S ANOTHER STORY ALTOGETHER

Virginia’s moratoriums ended in May and eviction hearings have resumed. Some 3,000 people are facing being kicked to the curb, mostly for nonpayment of rent. Landlords are reportedly filing lawsuits to overturn the states’ moratoriums, all the while sending tenants threatening letters and text messages demanding rent in lieu of locking the tenants out of their homes. The Low-Income Housing Coalition published a partial list below:

In the following states, the courts have suspended evictions: California (indefinite on evictions), Connecticut, Delaware, Kentucky, Minnesota and Pennsylvania.

In the following states, the governors have suspended evictions and foreclosures: Florida, Indiana, Maryland, New York, New Jersey and Washington State.

In the following states, the legislatures enacted (or are enacting) laws to suspend evictions and foreclosures: Massachusetts and New Jersey (for an indefinite period of time in New Jersey, due to the COVID pandemic).

You should probably check with your individual state’s websites (I’m not going to do all the work for you) to see what moratoriums are in effect and for what purpose and for how long, especially if you’re delinquent in paying either your mortgage or your rent.

In non-judicial states, the banks don’t need the court’s permission to conduct a non-judicial foreclosure; however, where the governors have imposed moratoriums, the banks simply cannot act outside of that mandate.

All of this is because of COVID-19, stay at home orders, lockdowns and loss of income.

Many foreclosure courts have suspended or limited (to Zoom conferences) foreclosure and eviction proceedings because of COVID. Check with your local court to see whether it’s open for business or is conducting emergency petitions as needed.

There are certain states that are definitely NOT homeowner/borrower friendly, where it will be extremely difficult (if not impossible) to get a case fairly decided upon in  the lower court systems without having to resort to the appeals process … my picks are (1) Maryland; (2) Minnesota; (3) Michigan; (4) California; and (5) Washington State.  These are the worst in my opinion, given current case law.  The states that actually have judges who can get past their biases and get to the truth of the matter, or in the alternative, make getting an appellate reversal possible include (my picks): (1) New Mexico; (2) Maine; (3) Tennessee; (4) Florida; and (5) New York (especially in the boroughs). Most of my picks are based on how the courts treat the MERS System® and securitization.  Moreso, it’s about how one approaches the courts and how much attention is paid to their Rules of Civil Procedure and Rules of Evidence. When the judicial prejudices creep in … and you’re not smart enough to object to these prejudices as they apply to civil procedure or evidence, you end up getting screwed with no chance of appeal (all the legal doors are closed) … at least, that’s what the courts want you to think.

In my book, the States that have the MOST corrupt judges are (my picks): (1) Alabama; (2) Georgia; (3) New Jersey; (4) Colorado; and (5) California.  I ranked Alabama first because of its staunch prejudices. Georgia was ranked second because of its history (debtors’ prisons).  New Jersey was ranked third because of several cases I’ve been involved with that should have gone in favor of the homeowner but even in light of the Kemp decision, judges there are all pro-bank … and there’s no getting around that stigma. In Colorado, judges there can get you killed without any remorse from them or political blowback on them.  I base that on the several cases, including the death of Martin Wirth, which seemingly never got justice because the homeowners got boo-f00ed in the Rule 120 courts.

Add COVID-19 to the mix … given the fact that 99% of all government-paid employees … and that includes judges … believe everything their government tells them, even if it has no scientific basis in fact.

NOW THAT WE’VE COVERED COVID AND THE COURTS … LET’S TALK ABOUT CIVIL UNREST

The Mayor of Atlanta (who is of African-American descent … shit … you mean if I’m not politically correct, I’m screwed?) has urged her city’s residents to stop the violence.  21 people were shot overnight, including an 8-year-old girl who was a passenger in a car.  None of the shootings involved police officers, but rather what appears to be black-on-black crime.  How can you even think the BLM movement can sustain its credibility when shit like this is perpetuated?  I see her point.  BLM made their point.  Everything else past that is nothing more than hate crimes against society.  If the anarchists want Civil War (even on a limited basis), those cities run by Democrat mayors are breeding grounds for it because police response has been limited and no one is calling for federal help to stop the violent behavior.  Those in the major cities are probably stocking up on whatever guns and ammunition they can get their hands on and frankly, I don’t blame them.  They see what I see as a potential for spread of the violent behaviors to the suburbs and even the urban and rural areas as anarchists unite to spread their agenda, which rests on NO law and order.

The real problem with BLM is they’ve allowed (collectively) the anarchist movement to infiltrate their ranks and change their “direction”, which had … and is still having … a diametrically opposed negative effect.  It’s driving prejudices deeper underground and making people more “aware”.  It’s enough to be scared of getting COVID, which most have little understanding of it.  But then compounding that with unrest extrapolates that fear mongering into perceived action (uptick in gun and ammo sales).

For every action, there is an equal and opposite reaction.  If the sheriffs can’t grow a pair, the citizens will do it for them by taking matters into their own hands, vigilantism or not.

I was shocked to learn (earlier last month) that the Austin Police Department Headquarters (at I-35 and 8th Street, Downtown Austin), which I visited a time or two as a news reporter-news anchor for KLBJ (the station Pres. Lyndon Johnson used to own), was destroyed by rioters.  Knowing what I know about APD, I’m still in shock and surprised that this was allowed to happen.  It’s no wonder Governor Greg Abbott (who rules the Executive Branch from a wheelchair) is under fire for not doing enough in some areas while doing too much in other areas.  He didn’t do more to stop the violence in his own state capitol.  But then again, Austin’s “Keep Austin Weird” slogan speaks volumes when it comes to indifference.

Civil unrest can be predicated on civil disobedience.  Civil disobedience basically means ignoring government mandates in protest.  The right to assemble is protected by the U.S. Constitution. The right to riot, burn down buildings and shoot people is not protected.  Folks are still blaming President Trump for not doing enough; however, the 10th Amendment clearly reserves those powers not vested with the federal government to be reserved solely for the states themselves. If you’re going to blame anyone, look at your own town Mayor and commission first, then your state reps, then your Governor.  This is where the blame lies on the state level … first.  Not with the President.  Mr. Trump is doing exactly what he’s supposed to be doing … running the executive branch of the United States Government as promulgated under Article 1 of the U. S. Constitution.  You may not like the way he does things.  He’s a CEO remember?  He’s not a politician.  But like politicians, he plays favorites. What politician hasn’t, especially if there’s under-the-table sex involved?

Civil unrest is further precipitated because Americans (a majority of them, you decide if you’re one of them) are quick to place blame on everyone but themselves.  Given what is going on in Atlanta and the fact that 1,000 National Guard troops have been called out there, the BLM movement’s credibility is tanking.  Not only that, the systemic violence has further driven prejudice deeper into the souls of most of the citizenry.  The way I’m starting to see things (and you can disagree if you like), anyone who talks about their rights being infringed upon or oppressed because of their race … is espousing racism.  Anyone who feels as if they’re entitled to free shit because of their race (they got a bad break) espouses racism.  Anyone who thinks they’re more “privileged” than their fellow man because of skin color espouses racism.  Civil unrest and the propensity for it is exacerbated by racist behavior.  Racist behavior begats violence.  Racist behaviors are learned.  They do not occur in the natural state of things. They are taught.  White supremacists teach their kids to love the “white race” and that they are the only race that matters.  Kind of like Hitler.  That’s where the anti-fascist movement came in because every action brings an equal and opposite reaction.  With Congress polarizing America with its inept behaviors, it’s no wonder the “trickle down effect” has brought with it a different, diametrically opposed outcome.

We all have to sit back and examine where we learned these behaviors and why we were taught these behaviors.  I remember my own father taking offense to an activist who was invited into his church in order to survey the congregation to see how many “white folk” would sit down to dinner with a black person.  THIS is how these types of behaviors are engrained into society (and this was back in the late 60’s).  My dad worked with black people in his office (corporate America) and he respected them for what they stood for and knew they had the same opportunities as everyone else to succeed.

But NO!  We’d rather have a pity party and rant about how we were (and are) being oppressed.  Yet, admittedly, certain public figures of African-American descent have outspokenly told their kids how to react when stopped by the police. Now why on earth would they do that?  What precipitated the thought process that cops weren’t human?  Could it be that society gave a gun and a badge to citizens who didn’t (and shouldn’t) deserve one?  One of the most dangerous precepts of a civilized society is to let someone with severely-repressed racial attitudes play God in a squad car with someone else’s life.  We know that behaviors are learned.  Now we have to restructure what we’ve created, take out all the “bad apples” and move forward.

AS TO THE PANIC AND FEAR … 

These two processes drive stupidity.  Panic is what happens when you are not comfortable with the situation you’re in and if something went wrong, you couldn’t cope.  Fear is what it is … False Evidence Appearing Real.  Panic is the precursor to fear because the person displaying the mindset overcome with panic will allow fear to creep in based on the perception of what he sees and hears around him.  Assumptions can get you killed … as much as they can make you a perpetrator.  False beliefs not corrected will jeopardize a civilized society because people aren’t thinking rationally because they’re being “programmed” by what they see and hear on TV (mostly).  This is why cop shows and violence-filled sitcoms are more popular because people are being “conditioned” and “desensitized” to what is really happening in the real world. This is how governments take advantage of their citizens.

FORECLOSURES … SAVING THE BEST FOR LAST … 

While foreclosures are no laughing matter, being in denial that they could occur in one’s life is fundamentally bad for society, especially in communities where they are randomly prevalent.  Knowing your financial position in life should be your first priority because it is how you are able to develop a Plan B.  As much encouragement as I can muster here, nothing can compensate the loss of a home, especially if it has a lot of equity in it.  This offers you (if you’re in that position) a unique opportunity to get yourself upright and mortgage free!

A reader of my blog called me one day to ask about fighting a foreclosure on her rental property.  I asked her to weigh the possibilities based on the facts.  She had $150,000 in equity in the home and it was rented.  It’s just that with COVID, her renters weren’t making the payments, so the renters decided to vacate at the end of the month.  I asked her to evaluate the stress that would be added to the equation if she were to compare the monthly rent versus the amount spent in litigation trying to save that monthly rent. We both came to the conclusion that while the market was short of inventory, NOW would be the time to sell the property, pay off the note (and stop arguing whether the lender screwed you or not), save the stress, take the equity … and find a place in the country where you can park that equity and live within your means or at best, mortgage free.

People get frustrated examining situations like this because there are options to litigation but they won’t entertain them, even if it means simply staying put in your home (that’s going to be foreclosed on) while trying to make a Plan B work. Nope. That’s their home and they’re staying put until the sheriff kicks them to the curb.  That’s the opposite of why I started this blog in the first place.  If you had 10 rental properties that were all going to be foreclosed on, but they could bring you a net equity of $25,000 each … sell them, take the $250,000 out of the deal and restructure your life with it.  The Chapter 11 case in Tampa that I wrote about on this blog in earlier posts, where 52 properties were put into the BK and a fourth of them had their liens disallowed by the court and they did cram downs on the rest of them and got an angel to buy the paper on the remaining properties and refinance them all at a lower rate cost $160,000 to complete.  You can only do this if you have the reserves.  It’s a great Plan B and the judge loved it!  It was the chief judge too!

But seriously, how many people have 52 houses to put into a Chapter 11?   You have to scale down those factors and figure your litigation costs, whether you’re going to answer pleadings pro se … plan on how much time you need to “re-group” … and execute on your plans.  The bank doesn’t have to win the way they think they should. You can win by flushing your equity out ahead of time, scaling down … and restructuring your life.

With COVID-19 and the courts being stymied, you do have time to act.  However, this “pandemic” isn’t going to last forever and at some point, you will have to face the music.  How you deal with it is what makes you a winner or a loser.

As a parting thought … DON’T TAKE A VACCINE THAT YOU DON”T KNOW WHAT’S IN IT!  They’re looking for “test subjects” now and I’m not sure they’re paying. Not a good plan if you intend on enjoying any plausible future, eh?

Leave a comment

Filed under BREAKING NEWS, OP-ED

THE FHFA IS A CONSERVATOR … NOT A RECEIVER, COURT RULES!

(BREAKING NEWS, OP-ED) —

For those of you who might have missed this Memorandum and Order out of Rhode Island (whose courts typically favor the banks and their servicers), you may wish to read this 19-page ruling:

Sisti v FHFA et al, US D. R.I. No 17-005 (Aug 2, 2018)

The FHFA attempted to get a judgment on the pleadings, which the court denied!   While this isn’t much of a setback, it does make clear a few potential misconceptions about Fannie Mae, Freddie Mac, the FHFA, the FDIC and the mortgage loan servicers who deal with these entities:

THE BUCK STOPS WHERE?

(1) Following the subprime mortgage crisis, Congress passed the Housing and Economic Recovery Act, which created the FHFA (Federal Housing Finance Agency), giving it the power to supervise and regulate Fannie Mae and Freddie Mac (the government-sponsored entities, or GSEs). The FHFA pretty much has complete control over the activities of both GSEs, including their reorganization or rehabilitation.  In the fall of 2008, the director of the FHFA placed both GSEs into a CONSERVATORSHIP, NOT A RECEIVERSHIP!  The Director of the FHFA had a choice … he chose Conservatorship!

(2) There is no date set for when this conservatorship will end.  In the meantime, both GSEs are prohibited from paying any dividends to their common shareholders.

(3) The U.S. Government owns ALL of the senior preferred stock of BOTH GSEs. As a result, the U.S. Government gets perks that common stockholders don’t get.

(4) Both GSEs have received over $187-billion from the U.S. Treasury to maintain liquidity and have paid more than $249-billion in dividends back into the Treasury; however, the U.S. Government’s interest in the GSEs has not been diminished as a result.

HOMEOWNERS GOT SCREWED … AND SUED!

(1) Judith Sisti was foreclosed on by Nationstar Mortgage LLC, acting as an agent for Freddie Mac, where Freddie Mac was the high bidder and Nationstar signed and recorded a foreclosure deed, all non-judicially, and then attempted to evict Ms. Sisti.

(2) Cynthia Boss was foreclosed on by Santander Bank, acting as an agent for Fannie Mae, where Fannie Mae was the high bidder and Santander signed and recorded a foreclosure deed, all non-judicially, and then attempted to evict Ms. Boss.

(3) Neither homeowner had the opportunity to have an evidentiary hearing, to confront or cross examine witnesses, to present arguments and evidence, to be represented by counsel, or to have a neutral hearing officer adjudicate the matter, all allegedly in violation of their 5th Amendment, Constitutionally-protected rights to due process of law.  They filed suit against the Defendants and the cases, bearing many similarities, were consolidated into one case by the Court.  The FHFA, Fannie Mae and Freddie Mac all filed motions for judgment on the pleadings, claiming they were within their rights to screw both homeowners. DENIED!

THE COURT HELD THAT THE FHFA AND THE GSE ARE GOVERNMENT “ACTORS”, CONTRARY TO OTHER PREVIOUS RULINGS! 

(1) Despite all of the other case citations claimed by the Defendants in this case, THIS JUDGE held that none of the other citations were binding on this Circuit!  (We didn’t see that one coming!)

(2) The Court held under Lebron v. National Railroad Passenger Corp., 513 U.S. 374 (1995), that the Government created a corporation by special law; for the furtherance of governmental objectives; and retained for itself permanent authority to appoint a majority of the directors of that corporation, then the corporation is “part of the Government” for constitutional claims.  The rest of the citation contained further historical analysis.

(3) The government gave complete control of the GSEs to the FHFA, rendering said control effectively permanent, despite FHFA’s claims to the contrary (that this was only supposed to be temporary).  Well, we don’t see any “temporary”, do we?  It’s amazing how the FHFA (and its lawyers) can argue whatever suits them, whether it’s legitimate or not, huh?

(4) The Court stated that it “cannot defer to a congressional delegation that serves to disclaim the constitutional obligations of a government-created entity.”  So now there is a conflict over whether there is permanent control or temporary control.  The Court then continued to stick to its guns on the facts at hand … that the “unchecked control the government has over the duration of tis total takeover of the GSEs” is up to the discretion of the government, “in perpetuity, even though Congress authorized a facially temporary conservatorship.”

THE BEAUTY OF BEYOND END GAME STRATEGIES … 

Once you understand the elements of what the Court indicated on Page 14 of its ruling, you can see the differences between the FHFA as conservator and the FDIC as a receiver:

(1) The FHFA has complete power over the GSEs.

(2) The FDIC steps into the shoes of the failed financial institution, “as a private entity for state law tort claims”.   “Beyond End Game Strategies”, the new piece we recently put out, nailed that plan of attack.

(3) This would appear to indicate that going after the FHFA and the GSEs (in their present condition) would be more difficult than going after the FDIC (as the receiver for your failed banking entity that filed Chapter 11 bankruptcy).  Maybe not entirely (according to this court)!

(4) The most damning statement in the ruling is on Page 16: “Because only federal entities can waive sovereign immunity, it logically follows that FHFA-as-conservator is a government actor.”  For further research, see Brian Taylor Goldman, The Indefinite Conservatorship of Fannie Mae and Freddie Mac is State-Action, 17 J. Bus. & Sec. L. 11, 23 (2016).  Okay, whatever … I pulled it down for you … read it here:

The Indefinite Conservatorship of Fannie Mae and Freddie Mac is State-Action

(5) Conservators, unlike receivers, have a fiduciary duty running to the corporation itself (Goldman, p. 26).

And this ruling was from a federal judge that is typically NOT homeowner friendly! 

This case tells me that as a “beyond end game” plan of attack, once you learn the key differences between what a conservatorship is and what a receivership is, you’re at “Square One”!

I would recommend to all who attended BOTH Atlanta and Orlando workshops recently add the foregoing white paper to your arsenal of research involving a “plan of attack” under state tort claims laws, as described in the foregoing illustrated INSERT. Those of you who didn’t attend … darn.  You really missed out, given the holding in this case!  This is why what we’re teaching is so vital to your survival … and now I have case law to back it up!

 

4 Comments

Filed under BREAKING NEWS, INVESTOR END-GAME STRATEGIES, OP-ED, workshop

FIFTH U.S. CIRCUIT RULES FHFA UNCONSTITUTIONAL!

BREAKING NEWS — OP-ED — This just received out of New Orleans … 

Collins et al v Mnuchin et al, 5th App Cir No 17-20364 (Jul 16, 2018)

The 5th Circuit Court of Appeals denied damage awards to three investors who claim they lost money as shareholders in Fannie Mae and Freddie Mac due to the toxicity of the 2008 mortgage markets and challenged the constitutionality of the Federal Housing Finance Agency.  The Fifth Circuit failed to award damages (as expected) to the investors but ruled that the FHFA, by its very structure was unconstitutional due to the way it was structured to act as a conservator for the two GSE’s and thus violating the Separation of Powers Clause.  You can bet that the FHFA will appeal this ruling to save its own ass.

As you recall, the CFPB met similar fate in a ruling issued by a federal judge in New York.  The ruling is here:

CFPB et al v RD Legal Funding et al, U.S. S.D. NY No 17-Civ-890 (Jun 21, 2018) 00890-Order

Why doesn’t any of this surprise me?  This is why we need public banking.  The U.S. Government has set up legislation to protect the banks under 12 U.S.C. but it shows a poor example of financial leadership when its own GSE’s operate without transparency, hiding behind a wall of assignments and secrecy in the land records.  Most people recognize that when you put money into an investment vehicle, you risk losing it, which is exactly what happened to the three investors who sued Fannie and Freddie through the FHFA.

Tough toodles on the investors, huh?  Why do people keep trusting that the U.S. Government is managed by sound financial policy when its own Congress is self-serving and bipolar in its very nature.  This is why we need public banking and to hell with the federal reserve.  We have one public bank (The Bank of North Dakota) that IS properly managed and is financially sound (which represents the interests of business and consumers in that State).   However, that being said, fiat currency is fiat currency and as long as we have Congress writing checks its body can’t cash, further driving us as a nation into debt, taxing its citizens into oblivion, using “Federal Reserve Notes” (promises to pay) as legal tender, this country is in trouble, because there’s nothing backing that debt.  We went off the Gold Standard in 1975 (thanks to Nixon).

Most people also do NOT recognize that Fannie Mae and Freddie Mac are administrators for their own REMIC trusts, despite the fact that when properties are converted by assignment and “alleged transfer” to a given GSE that it is likely that the actual REMIC it manages it never mentioned.  Thus, it raises suspicions that the quasi-government entities created to back the mortgage and housing markets are swindlers on paper!

MORE BREAKING NEWS — 

Tonight at 6:00 p.m. EDT, hear Dave Krieger and co-host R.J. Malloy on WKDW-FM Radio (listen live at kdwradio.com; click the LISTEN LIVE button and wait for the show to start) to discuss news of the day as well as what attendees are going to learn at this weekend’s Foreclosure Defense Workshop in Orlando, Florida.  What we’re teaching may shock you, but we’re talking “risk aversion” and this means something to state and local governments whose judges are ruling for banks using phony documents and making false misrepresentations through their legal counsel to steal property across America!  This is NOT for the pro se litigant, so don’t even try.  We have a “game plan” set into motion involving attorneys and specialized witnesses to do the “takedown” in open court!  This show is a MUST LISTEN!

7 Comments

Filed under BREAKING NEWS, OP-ED, Securitization Issues, workshop