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All hell breaking loose- foreclosures halted, protest resumes

Austin homeowner Jaime Furtado is nearing his 48th hour of his huger strike on the Texas Capitol steps in protest of how Wells Fargo has treated his case as well as thousands of others.

Furtado tells us that he hasn’t eaten anything and that traditional media has mostly brushed him off (although Univision is setting up a camera crew as we write). Furtado is a well dressed business man who is calmly handing out flyers about what he calls abusive practices by Wells Fargo, including “foreclosure acceleration” that Wells Fargo is imposing on him and other buyers all the while, most major banks are halting foreclosures.

Furtado has even crossed paths today and yesterday with several state Representatives and offering them one of his flyers he is”amazed to have some of our representatives refuse [them]. I hope I didn’t vote for them.”

So how is all hell breaking loose?

In Ohio, the Ohio Attorney General is suing Ally Financial for fraudulent practices and in Texas, the Attorney General has sent a demand letter (which is a lawsuit precursor) to 30 loan servicers to halt all foreclosure processes. So far, several have told the AG that they will not comply (I’m betting Wells Fargo is one of them).

UPDATE: as reported previously, Bank of America, JPMorgan Chase and Ally have already halted foreclosures voluntarily to clean up their books, but today it is rumored that PNC Mortgage has halted foreclosures in multiple states as well, according to Maryland Realtor Jonathan Benya.

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When the Texas AG calls for a halt on foreclosures, their documents call for a freeze of short sales, any closing pertaining to a foreclosure home, and the actual foreclosure process of homeowners going through the foreclosure process. Because of all of the pending charges nationally as hell breaks loose, banks will be forced to get their act together, but in the meantime, agents relying upon short sales or foreclosures will potentially have all income frozen during this process in Texas and likely other states to follow.

Yesterday, Nancy Pelosi called for a foreclosure moratorium with the AFL-CIO agreeing. In my opinion, if the Texas AG (who is a die hard Republican) and Pelosi (notoriously liberally leaning) can agree that the banks are likely behaving fraudulently, then this protest and these filings will not be the last, and all hell really is about to break loose whether traditional media wants to cover it and acknowledge it as such or not.

Ken Brand, Realtor in The Woodlands, Texas said, “I think the banks are fools for not being skin tight professional with their paperwork. In their quest for profits, they turned a blind when they made the loans, then when it all fell apart, I can only imagine to save money on staff, and protect their profits, turned turned their other eye blind as they tried to clean their mess up. In any event the Fit Has Hit The Shan, today we received a letter from one of the prominent title companies in the area, until all this is resolved they are suspending the issuance of title insurance on any foreclosure properties or short sales. I can’t imagine why they (title companies) all wouldn’t do the same. What’s the impact of that? Ugly stuff, stay tuned.”

Who got the demand letter?

It is no surprise that Ally (being sued by the Ohio AG mentioned above) and Wells Fargo (being protested by Furtado in real time) are on the list of those in Texas that got the demand letter:

  • American Home Mortgage Servicing, Inc.
  • American General Finance, Inc.
  • AmTrust Mortgage Corporation
  • Aurora Loan Service, Inc.
  • Bank of America
  • Carrington Mortgage Services, LLC
  • Cenlar, FSB
  • JP Morgan Chase & Co.
  • CitiMortgage, Inc.
  • EMC Mortgage Corporation
  • First Horizon National Corp.
  • Ally Financial, Inc./GMAC
  • Home Loan Services
  • HomeEq Servicing, Inc.
  • HSBC North America Holdings, Inc.
  • Litton Loan Servicing, Inc.
  • MGC Mortgage, Inc.
  • Midland Mortgage Company
  • MorEquity, Inc.
  • National City Mortgage
  • Nationstar Mortgage Company
  • Ocwen Loan Servicing, LLC
  • OneWest Bank Group, LLC
  • PHH Mortgage Services Corporation
  • Saxon Mortgage Services, Inc.
  • Select Portfolio Sevicing, Inc.
  • Vanderbilt Mortgage and Finance, Inc.
  • Washington Mutual
  • Wells Fargo & Company
  • Wilshire Credit Corporation

Sample demand letter from the Texas AG’s office:

This isn’t over, this is the beginning. The foreclosure scene is being shaken up and action will get more severe as we near election day. Fraudulent lending practices cannot be tolerated, but the unfortunate sacrifice is the Realtor who is on the ground whose business is devoted to short sales and foreclosures.

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Furtado still has not been acknowledged by Wells Fargo, and wish him luck as he stands up for his family and countless others. We will keep you updated as we receive reports from him directly.

As of publication, Wells Fargo and PNC Mortgage have not responded to interview requests. Wells Fargo corporate has promised to speak to Furtado directly but as of 4:00cst still has not.

Lani is the COO and News Director at The American Genius, has co-authored a book, co-founded BASHH, Austin Digital Jobs, Remote Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.

44 Comments

44 Comments

  1. Benn Rosales

    October 7, 2010 at 6:41 pm

    To hear that some lawmakers on the Texas Hill brushed by this guy ignoring his handout telling his story is appalling- It’s prompted me to reach out to a few lawmakers I know to make sure they understand that this issue is high on my radar in the upcoming election cycle. Ignoring him is like ignoring me.

    To those of you ignoring this story, let’s pray you’re not behind on your mortgage, this guys payment was refused and precedings filed. People had better wake up, this could your family.

  2. Al Lorenz

    October 7, 2010 at 7:50 pm

    This is just the type of stabilizing influence the market needs. At least it keeps real estate people in the business of reinventing themselves.

  3. Donna Yates

    October 8, 2010 at 3:22 am

    Well, here we go again !

  4. Ruthmarie Hicks

    October 8, 2010 at 7:36 am

    I can’t believe they simply ignored that poor man. Exactly who is it that they think they are representing anyway? Oh Wait!!! It’s the banks and lobbyists! Forget the normal guy on the street. It doesn’t surprise me that conservatives and liberals find common ground on the fact that this is total mess. What to do about it is the sticky wicket. I think Obamas pocket veto was a good start – but what next?

    If you are in the mood for liberal humor…Here is the link for Jon Stewart of the daily show on this issue last night…https://www.thedailyshow.com/watch/thu-october-7-2010/foreclosure-crisis

    If it weren’t so sad it would be absolutely hilarious. The irony of which is not lost on Stewart.

  5. Sheila Rasak

    October 8, 2010 at 9:07 am

    While nothing in any particular industry surprises me, it’s a tad early here in California to be reading the news of this man’s hunger strike. I tend to get slightly attached to my own seller hardship cases and often have trouble shaking off my first consultation with a distressed seller.

    These are people who thought and were taught that homeownership was the American dream and the terrible truth is, that for many, it’s become the American nightmare.

    I don’t claim to have a crystal ball, but I can tell you that I saw the meltdown coming…I never in my wildest dreams imagined it would be this bad. And here we’ve gone from bad to worse.

    The last piece of residential real estate I owned was sold in 2006. As my adjustable rate mortgage had started to climb, I decided it was time to downsize and a good time to get out of the housing market and rent until I could see stabilization (prices were sliding in my area). I sold my home to a young gentleman in his 20s. Purchase price? $858,000. He was a loan broker and was able to obtain 100% financing. Needless to say, I knew what I would uncover when I researched the records at the property address two months ago. I highly doubt this freeze will help him, more than likely it will hurt him if he were in the process of a short sale.

    While I believe the banking industry needs to be held accountable, this new turn of events will prolong the inevitable suffering of many homeowners. I’ve seen too many hardship cases that have had an impact on my client’s health. I trust the doctors will be very busy next year IF the patient can afford medical care.

    As a full time realtor, I don’t believe there’s a need to reinvent myself. I sell real estate and our selling season has just passed much like any other year. It’s time, like all years past, to gear up for whatever the new year brings; the good, bad and now the very ugly.

  6. Jonathan Benya

    October 8, 2010 at 10:15 am

    Well, the PNC rumor is indeed true, title companies across the country are getting notices stating a 30 day hold on PNC properties. Looks like homeowners who aren’t underwater and trying to sell just might be in luck!

  7. Jonathan Benya

    October 8, 2010 at 11:46 am

    BoA Just froze foreclosures nationwide as well. This is gonna be huge!

  8. Ruthmarie Hicks

    October 8, 2010 at 11:50 pm

    Got to hand it to you… you were right all hell is breaking loose. I don’t work this market because there are not enough of them in my area and a few agents have a tight hold on what that inventory. I feel awful for them now. The few that do this need what little volume is out there because these are brutal transactions without all of this. This really going to hurt a couple of really great agents in my office.

  9. Paula Henry

    October 9, 2010 at 9:25 am

    I have a client in contract on a VA owned home, due to close next week. The agent called me on Wednesday to say they were checking with BofA to see if they could still sell. The agent, who works for a company that only works with REO’s, told me they have homes on the market that are being put on hold.

    Homes that have already been to the Sheriff’s Sale now in limbo. With all the uncertainty of the judicial process, will banks be more willing to approve short sales?

    As for Wells Fargo – they are the worst right now; their negotiators are rude and uncaring, giving a 24 hour response time on everything or they threaten to close the file for short sale. It appears they want to own homes.

  10. Gwen Banta

    October 9, 2010 at 3:41 pm

    Thanks for expertly highlighting this problem, Lani. “Foreclosure acceleration” is a serious problem. My seller just had his property foreclosed upon when we were in the middle of an OPEN escrow, less than 2 weeks short of COE! OneWest’s short sale department supposedly did not relay the postponement of the original auction order to the auction arm of the bank. You be the judge of that!

  11. Paul Francis

    October 11, 2010 at 12:32 am

    Interesting… not sure how an agreement from a seller that wants to sell short and a Bank that agrees to it has to do with a notarized affidavit stating that loan documents were reviewed and the bank has the right to foreclose on a property where the owner is not making their payments in a judicial foreclosure state… but I guess that’s why we have more Attorneys per Capita then any country in the world.

  12. Donna

    October 11, 2010 at 5:55 pm

    Letter to Wells Fargo Chris Hammon,

    Dear Mr. Chris Hammond,

    In recent Wells Fargo’s press release, it declared that “We are working hard to do all that is possible to keep homeowners in their homes,”

    That’s a lie. I can say for a fact that Wells Fargo made mortgage loan and foreclosed my
    home based on hugely inflated and fraudulent appraisal,

    Wells Fargo and its army of attorneys knew it is Category C felony to make mortgage
    loan and foreclose home based on fraudulent appraisal. However they chose to defraud us by foreclosing our home.

    For almost a year, we pleaded with Wells Fargo to carry out its promises to us to rescind
    the loan contract and help us to recovery our finanical losses. Wells Fargo bluntly refused
    and challenged us to sue it for justice.

    Wells Fargo committed prosecutable crime against us. We lost our home. Something is
    wrong with this picture.

    1. it is illegal for Wells Fargo to make mortgage loan to us based on hugely inflated
    appraisal.

    Fact: – Wells Fargo’s fraudulent appraisal valued our home at $718,000

    – Wells Fargo’s own review appraisal valued our home at $475,000

    – Nevada Attorney General’s office suspended the appraiser’s license for committing
    appraisal fraud on our home.

    – Nevada Appraiser Licensing Board mandated the appraiser to complete appraisal fraud
    course before regaining his real estate appraiser license.

    – Nevada Revised Statue NRS 205.372 states that it’s category C felony to make
    mortgage loans based on fraudulent appraisal.

    – Cases of Attorney General’s indictments against attorneys, loan brokers for teaming up
    make fraudulent loans to defraud homeowners.

    2. it is illegal for Wells Fargo to wrongfully foreclose our home based on fraudulent
    appraisal and mortgage loan.

    You can find all the facts on our website. wellsfargomortgagefraud.com

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