In Baltimore, Maryland, The Daily Record reports:

• The city of Baltimore has beefed up its groundbreaking racial discrimination lawsuit against Wells Fargo with sometimes shocking testimony from a pair of the megabank’s former subprime-loan officers. The two whistleblowers claim their co-workers targeted black ZIP codes and churches, used software to “translate” marketing materials into African-American vernacular, and referred to subprime loans in minority communities as “ghetto loans” and to borrowers as “mud people.”

• Their declarations were attached to an amended complaint filed Monday in U.S. District Court in Baltimore. The loan officers, who worked for Wells Fargo in the Baltimore-Washington area from the late 1990s until 2007, also alleged bank employees deceptively steered prime borrowers into subprime loans for their own financial benefit and joked that they were “riding the stagecoach to Hell.”

• The city also filed declarations from four city residents who live near Wells Fargo’s foreclosed properties. They complained of squatters, rats and burst pipes, all of which have required attention from some city department. It cites 10 studies, including one specific to Baltimore, which studied reverse-redlining in black neighborhoods; and updated the foreclosure data to include the first part of 2009.

For more, see Ex-workers allege race-based loan approach at Wells Fargo.

Go here, Go here, and Go here for other posts on alleged discrimination in real estate transactions.

The Associated Press reports:

• Buried in a housing law signed [last] week by President Barack Obama are protections that will help thousands of renters stay in their homes — at least for awhile — after their landlord has been foreclosed on.

• The law allows tenants to remain in their foreclosed rentals through the end of their lease and then 90 days after that before being forced to vacate by the lender. Renters without leases will have 90 days, a significant improvement over what most received before: almost no notice at all. “Until this law was enacted, there had been no national protections for any of these households,” said Linda Couch, deputy director at the National Low Income Housing Coalition. “This gives renters time to adjust their lives.”

For more, see Law protects renters from foreclosure evictions.

In Cleveland, Ohio, The Plain Dealer reports:

• Cleveland Housing Court Judge Raymond Pianka on Thursday ordered Wells Fargo Bank to temporarily stop selling any foreclosed homes it owns in the city. A housing-advocacy group sought the temporary restraining order, saying that Wells Fargo has expanded its practice of dumping vacant and deteriorated homes for paltry sums without first doing repairs. Wells Fargo and Cleveland Housing Renewal Project Inc., a subsidiary of Neighborhood Progress Inc., are to be in Pianka’s court [this] week for a hearing to consider whether Wells Fargo properties should be declared public nuisances and be repaired or demolished before they can be sold. The group estimates the order could cover as many as 183 properties.

For more, see Wells Fargo Bank blocked from selling foreclosed homes in Cleveland by Housing Court Judge Raymond Pianka (if link expires, try here).

In Sarasota, Florida, the Sarasota Herald Tribune reports:

• Starting Friday, hundreds of people could lose their property each month in foreclosure hearings scheduled to take less than two minutes. Often called a “rocket docket,” the streamlined foreclosure court can schedule up to 250 cases per day, sending properties to auction in cases where the owners never showed up to defend themselves.

• Speeding those cases through the court system will help unclog a glut of foreclosure cases, allowing civil judges to focus on cases where homeowners are fighting to save their property, as well as the other lawsuits they normally oversee. […] “I don’t want to have these undefended cases stacking up,” 12th Circuit Chief Judge Lee Haworth said. “It just seemed to be the right thing to do.”

***

• Foreclosure defense attorneys, who have seen case after case where lawyers representing banks are giving false statements in court, worry that some homeowners will slip through the cracks and lose property they should not. […] A retired attorney living in Sarasota, whose study of 180 Sarasota County cases found only one in four had complete paperwork, said the fast docket leaves less time to catch those kinds of mistakes. “There is no check, no screen, to make sure the most obvious, egregious errors are corrected,” Richard Kessler said. “It’s not a hearing, it’s a hanging.”

• Haworth said the system puts the burden on the person being foreclosed on to point out any flaws there may be in the case against them. “If they decide for whatever reason they choose not to defend it, then they are defaulted,” he said.

For more, see Two minutes, and home goes away.

For story update, see ‘Rocket docket’ for foreclosures begins.

For posts that reference the failure of mortgage lenders and their attorneys to file the proper paperwork when bringing foreclosure actions, Go Here, Go Here, Go Here, Go Here, Go Here, Go Here, and Go Here.

In Las Vegas, Nevada, Las Vegas Business Press reports:

• A Las Vegas bankruptcy judge has dealt a blow to an obscure but critical piece of the mortgage enforcement machinery that could slow foreclosures. After a rare hearing in front of three judges last year that initially encompassed 27 cases, U.S. Bankruptcy Court Judge Linda Riegle has ruled that the Mortgage Electronic Registration System (MERS) could not represent lenders seeking to foreclose on delinquent homeowners already in bankruptcy unless it could produce the actual loan note. This goes to the heart of how home lending has evolved over the past two decades, with a loan rarely staying on the books of the originator but often being sold several times to other institutions or investment groups. As a result, producing a loan document is far more complex than opening a drawer in a filing cabinet.

***

• Riegle’s ruling not only parsed federal and state law but at least implicitly rapped MERS on the knuckles for its practices. For example, she noted that MERS acted as the attorney on several loans in Las Vegas even after they were transferred to non-MERS members. She also rejected the argument that lenders who belong to MERS and designated it to be their legal representative should be good enough for the court. Without the loan papers, she concluded, MERS’ terms and conditions for its members do not give it any rights to foreclose under Nevada law.” To reverse an old adage,” she wrote, “if it doesn’t walk like a duck, talk like a duck and quack like a duck, then it’s not a duck.”

For more, see Judge’s ruling deals blow to national mortgage servicer.

For the judge’s ruling, see In re Mitchell.

For posts that reference the failure of mortgage lenders and their attorneys to file the proper paperwork when bringing foreclosure actions, Go Here, Go Here, Go Here, Go Here, Go Here, Go Here, and Go Here. E

U.S. Treasury Secretary Timothy F. Geithner, Attorney General Eric Holder, and Secretary of Housing and Urban Development Shaun Donovan issued a joint press release last week on combating foreclosure rescue and loan modification scams:

• [I]n a major step [last] week, the Department of the Treasury, the Department of Justice, the Department of Housing and Urban Development and the Federal Trade Commission announced a new joint effort that cuts across federal and state governments and the private sector to combat foreclosure rescue scams. Led by the Treasury’s Financial Crimes Enforcement Network, this effort creates an advanced targeting process to streamline investigations and prosecutions and provides financial institutions with a new advisory to spot and report questionable loan modification schemes.

• For American homeowners, this means that fraudulent companies will be shut down more quickly; companies that otherwise would have gone unnoticed will be identified and investigated; and the government’s ability to identify and prosecute anyone involved in mortgage rescue scams will be bolstered.

For more, see Crackdown on fraud.

See also, The Washington Post: ‘We Will Find You and We Will Punish You’:

• There was tough talk out of Washington [last week] aimed at loan-modification scammers. Attorney General Eric Holder had this message for people and companies ripping off homeowners on the verge of foreclosure: “If you prey on vulnerable homeowners with fraudulent mortgage schemes, or discriminate against borrowers, we will find you and we will punish you.”

Dateline NBC ran a story last night in which it:

• [G]ets to the bottom of how bad loans and greed wrecked the U.S. economy in this hour-long investigation. Hear from Countrywide insiders and whistleblowers who have never spoken publicly before.

For the story, see ‘If you had a pulse, we give you a loan’ (Inside the fiasco that led to the mortgage mess and Countrywide’s collapse) (read story) (watch video).

Go here for Dateline NBC home page.

From the Office of the California Attorney General:

• California Attorney General Edmund G. Brown Jr. [Thursday] warned that scam artists have “sunk to a new low” and have used the forged letterhead of major lenders to con worried Californians into paying thousands of dollars for non-existent loan modification services.

• “Scam artists have sunk to a new low and are using the forged letterhead of lenders to con worried Californians into handing over their hard-earned money,” Attorney General Brown said. “Californians should be deeply skeptical of anyone who demands money up front and makes extravagant promises that they can save their home.”

***

• [Thursday]’s warning comes on the heels of the arrest Wednesday of Anna Santos, 22, of North Hills – a key player in a loan modification scam using forged letterhead – on charges of money-laundering, conspiracy, and four-counts of grand theft. Ms. Santos joined with members of the defunct First Gov loan modification ring in a separate criminal enterprise with a disturbing twist. They used forged mail and envelopes that appeared to be from victims’ lenders.

• Ms. Santos obtained a fictitious business permit through the City of Los Angeles for “Payment Processing Department.” She opened several bank accounts and two post office boxes under that name. She and other members of the ring mailed flyers that appeared to be from victims’ lenders or a government entity. The flyer used a large, bold header that read “Final Notice” and advised homeowners that they qualified for a special program to save their home from foreclosure.

For more, see Brown Warns Homeowners that Scam Artists are Using Forged Letterhead of Lenders to Con Californians.

In Miami, Florida, The New York Times reports:

• [O]n Feb. 11, a circuit court judge in Miami-Dade County in Florida set aside a judgment against Ana L. Fernandez, a borrower whose home had been foreclosed and repurchased on Jan. 21 by Chevy Chase Bank, the institution claiming to hold the note. But the bank had been unable to produce evidence that the original lender had assigned the note, which was in the amount of $225,000, to Chevy Chase.

• With the sale set aside, Ms. Fernandez remains in the home. “We believe this loan was never assigned,” said Ray Garcia, the lawyer in Miami who represented the borrower. Now, he said, it is up to whoever can produce the underlying note to litigate the case. The statute of limitations on such a matter runs for five years, he said.(1)

***

• Mr. Garcia has another case in which a borrower tried to sell his home but could not because the note underlying a $60,000 second mortgage cannot be found. The statute of limitations on the matter will expire in October, he said, and if the note holder has not come forward by then, the borrower will be free of his obligation on the second mortgage.

For the story, see Fair Game: Guess What Got Lost in the Loan Pool?

Go here for the court order setting aside the foreclosure judgment.

For posts that reference the failure of mortgage lenders and their attorneys to file the proper paperwork when bringing foreclosure actions, Go Here, Go Here, Go Here, Go Here, Go Here, and Go Here.

(1) Sec. 95.11(2)(c), 95.281(1)(a), Florida Statutes.

Fannie Mae announces:

• Fannie Mae [Friday] announced it is extending the suspension of all eviction proceedings through March 31, 2009 as the company implements the Home Affordable Refinance and Home Affordable Modification initiatives as part of the Obama Administration’s Making Home Affordable program.

• The company has also issued special foreclosure sale requirements in response to the Making Home Affordable program. A foreclosure sale may not occur on any Fannie Mae loan until the loan servicer verifies that the borrower is ineligible for a Home Affordable Modification and all other foreclosure prevention alternatives have been exhausted.

Source: Fannie Mae Extends Eviction Suspension Through March 31.