bullet train but how long will this last we've previously reported this week that the foreclosure pipeline has been stalled thanks to new guidance from the fed and overseas and today we'll talk to matthew o'brien about some creative legal our turn it is for homeowners facing foreclosure also prime interest producer adjusting underhill covers the recent housing protest here in d.c. and expose of several heart wrenching stories about predatory lending and just days after the shareholder referendum on jamie diamond let him keep his top spot on the board of j.p. morgan is going on the office and they are already up for enforcement action against the bank but human resulting from alleged money laundering violations and risk management issues from the one did well debacle now in response to j.p. morgan is diverting hundreds of people to its oversight and control group and cutting costs from several new programs that were just wondering and mark your calendar on the day that this happens exactly when it dave you were hired top shadow regulator problem for

a financial group to rubber stamp its initiatives and finally according to the wall street journal the world is running out of u.s. treasury bonds. you might think that's an extraordinary claim considering the trillion dollar deficit but the forty five billion dollars per month of purchases by the fed are removing a key source of quadrille for the shadow banking system hedge funds are banks. using hedge funds and being traded treasury securities for cash and the process continues thanks to rehab propagation now love it or hate it as well agrees of the way all the wheels of our modern financial system and the fed is siphoning the greatest time for unintended consequences. all right here's what's in your prime interest.

this week hundreds of activists and homeowners gathered outside the department of justice demanding accountability for the wrongful foreclosure that have occurred since the financial crisis of two thousand and eight now in a recent settlement between the federal reserve and the office of the comptroller of the currency and the major financial institutions homeowners receive just a penny on the dollars for the a legal foreclosure activity or baking errors prime interest producer adjusting underhill has done a full report and here is what she had. in two thousand and twelve and names mother of three lost her home to foreclosure this is not just it's like oh it's where we my kids grew up this isn't just

a property this is our home this is where i raise my children they told me to get to become default on the loan and then i could do a modification but five days after the modification was submitted based to the sheriff's sale and the foreclosure process has begun her mortgage lender u.s. bank had stopped the loan modification process because they sent the wrong application and went ahead with foreclosure. and haynes is not alone this week hundreds of activists and victims of wrongful for closure rallied outside the department of justice but he was a banker and he was the first feeling are all right. they say and are bad because. there's not been single criminal action against those responsible for the predatory lending and wrongful addictions ok. and protesters stood ready to risk arrest to gain the attention of the department of justice i mean do everything you can i can use that. lutes going to going to jail i'm fine

with over two dozen people went to jail. in two thousand and nine and two thousand and ten eleven leading financial institutions foreclosed on almost one point two million borrowers many of whom were not in default or were in mortgage modification programs in two thousand and eleven the government ordered banks to hire independent consultants to determine how many foreclosures were illegal however according to the government accountability office the methodology was flawed and their independence has come into question in one case consultants were reportedly given gift cards of up to five hundred dollars for completing a certain number of files quickly last january rather than continue the costly review process they agreed upon a settlement of three point six billion dollars to be distributed to the nearly four million homeowners the consultants were paid over two billion dollars or over twenty thousand dollars per file well the average homeowner only received three hundred dollars in the deal my mother who who almost lost her home to

a fraudulent foreclosure she got a settlement check of three hundred dollars after six months of excruciating stress and anxiety about whether we would lose the home that i grew up in and the regulators may not provide homeowners who may want to sue the banks the evidence of misconduct they discovered during the reviews will you be giving them the information that's in your possession about how the banks illegally foreclosed against them mr ashton i think that's a decision that we're still considering we haven't made a final decision yet so you have made a decision to protect the banks but not a decision to tell the families who were illegally foreclosed against people like and haynes and her family have been devastated by the wrongful foreclosure process at the hands of the very same banks that were bailed out by taxpayer funds. but there are neither bailouts nor justice for these families the acts of disobedience outside the department of justice speaks volumes but will it be loud enough to be heard by those who can make changes behind closed doors. in washington just archie

. thanks justin now in response to closed doors i now to talk about revolving doors so many judd gregg he was just named c.e.o. of the securities industry and financial markets association or systema which is a lot of wall street lobbying powerhouse so it might represent over six hundred fifty securities firms banks and asset managers and they pay their executives multimillion dollar salaries they've been described as a very important jury trade group for a lot of very wealthy firms so explain how we got here let's take a step back and look at his path through the robot. judd gregg has a strong background in politics and he started his career in the u.s.

house of representatives where he served from one thousand nine hundred eighty eight to one nine hundred eighty seven he then ran for governor of new hampshire and held that seat for two terms in one thousand nine hundred three he ran on the republican ticket and served for three terms in the united states senate now while in the senate judd gregg played some key roles and implementing policies supported by the largest financial institutions during the two thousand and eight financial crisis senator gregg was the leading the go shader and harp which was the controversial bill with originally authorized seven hundred billion dollars of taxpayer funds to bail out the financial system he was also an outspoken critic of efforts to rein in and regulate the financial institutions when he first came to the senate he claimed to be a fiscal hawk but he stood by his position to funnel money to the banking system and defended his work and helping pass tarp. to the owners. actually

doing tarp was the most significant thing that's happened in the last five to ten years we were on the verge of a cataclysmic event and if we had deployed as a government and done it in a bipartisan way very aggressively in a very short timeframe the trauma of which this country and the world would have been put through as our banking system melted down and their main street meltdown would have been extraordinary now what he didn't mention is that he had a multibillion dollar stake and bank of america at the same time as chairman of the budget committee he spearheaded efforts to confirm ben bernanke second term as chairman of the federal reserve he released a statement saying that bernanke he is the right leader to guide the federal reserve and the recovering economy he also came close to entering the executive branch and two thousand and nine when president obama nominated this republican to be a member of his cabinet as the secretary of commerce he ended up not accepting the position that i mean left the senate soon after for something much more lucrative

now in two thousand and eleven and he cashed out and became a goldman sachs international advisor the bank's c.e.o. said greg's experience and insight will contribute significantly to our firm and from there judd gregg made a leap in his career and he's now the c.e.o. of their goal is overcoming the stigma of the financial industry stranglehold over america and they spent over five million dollars on lobbying efforts last year alone where sure mr gregg have plenty of insight to share with as he's been through the valving door and made out quite well. well stay tuned because i've next we're going to discuss the end of an hour of how a train wreck foreclosure process with matthew o'bryant them crime and just producer bob inglis and i will do all over the fee at two feet that's right a gary gensler we're coming for you i'll be right back.

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doesn't give a darn about anything mission to teach relational why you should care about humans . this is why you should care only. if you think of growth signing debacle was a scandal and you'll be very interested and what my next guest has to say about the o'brien as an expert real estate attorney who left freddie mac. to be a foreclosure defense attorney he says the real scandal is behind the foreclosure firms that shoddy work for the g.s.a. of and wrongfully foreclosed on many homeowners having work on both sides mr o'brien has a lot of insight into the park closure process wise what with him earlier i asked

about there's any circumstances in which you would not have to pay your mortgage. still responsible to pay their mortgage unless they decide to you know fight it now in many times i might recommend the homeowner stop paying their mortgage under under many scenarios for example if the homeowner wants to get a modification especially under the hamp program which is the home affordable modification program that was created to refinance these loans they need to be missing a few payments before they're even eligible now it's interesting that you bring up the chain of title because that's actually a really relevant issue today in the four foreclosure process a sensually you know these banks are buying and selling the notes in the more. it is so many times they're securitizing them into bundles and you know now they're trying to foreclose on them all every time one of these mortgages has been bought

and sold a document called an assignment a mortgage is supposed to be generated signed and recorded by the. buying and selling entities if if there's a break in one of those documents and any of the previous buyers or settles sellers you're going to have an incomplete chain of title and that could give rise you know to an action to potentially try to wipe out the mortgage with a good attorney so if you're a well known if not one that qualifies for wiping out the mortgage which you stated are there any other benefits the hiring of foreclosure defense attorney factors are found. there are you know one of the other main benefits of hiring a foreclosure attorney and unfortunately the bar rules don't allow attorneys to advertise this but i know many that still do still do which is you know if you have no attorney the uncontested process meaning a process without an attorney right now can be done as quickly as ninety to one

hundred twenty days and then you're out of the house just by virtue of having an attorney even if it's not a good attorney and he files you know one document that that foreclosure automatically goes to the bottom of the pile and in my experience just by having a foreclosure attorney file some of these documents it could delay the foreclosure process substantially i've seen ones go as long as three four even five years and you know you're paying this attorney maybe seven thousand and ninety thousand one thousand a year but in the meantime you're not paying your mortgage you're not paying your property taxes you don't have to move out you don't have to rent a new home or buy a new home all of those activities are more expensive than just paying the defense attorney to really stall the process and in the meantime you know the homeowner i've seen homeowners have been able to save money. to where when they're finally evicted from the home of save so much the able to buy a new one or abusively made a hole in the same position they were prior to the foreclosure so does hiring an

attorney you can stall the process by being put at the bottom of the pile to get through the courts but if we do find that the documents are faulty then what is the process that the homeowner has to go through to wipe out their mortgage. so one of the new the new developments in foreclosure defense law. has to do with something called quiet title motions quiet tile motions are essentially motions made by a defense attorney to wipe out the mortgage it's a very aggressive strategy whereas normally foreclosure defense is a defensive strategy and is very reactive verses the quiet title motions which are proactive in a quiet title action if it's successful the homeowner can end up with the mortgage wiped out which leaves the note but the note without a mortgage securing the land is basically unsecured debt it's almost like a credit card debt where you could settle it for pennies on the dollar or just

charge in bankruptcy all together so you know if you can get the mortgage discharged through a quiet title motion and just have a no it's. a lot better position is going to keep that home no matter what at that point and are we finding that the banks are quicker to fado and if situation. recently over the past year we have so one defense attorneys have been filing these quiet title motions the first step the bank takes is a motion to dismiss that action. if they lose that action the motion gets set for trial i really haven't seen many or even any of all and yet all of those cases go to trial because the banks you know first of all don't have a very strong legal argument the statutes in the laws go against them there are only argument as public policy and public interest that is it's in the best public

it's in the public interest or public policy to allow the banks to take back the houses and it would be against the public interest for them not now on the chain from strongs weak legal arguments strong arguments in statutes. and case law the bank's argument of public policy and public interest is one of the weakest legal arguments you can have and since they know that argument is weak you know they would prefer to settle rather than lose and one of the big reasons they'd rather settled and lose just one individual case is losing a case can set major court precedent precedent which could be used in laser later cases you know furthermore such a judgment you know. would be would go to the media who would then advertise the fact that the banks you know could be in a lot of trouble that all these mortgages can be attacked and they want to keep that little secret you know they want the only people to know about the fact that you can potentially wipe the mortgage out or the foreclosure defense attorneys that's why they settle in so many instances because they just don't want to court

precedent and they don't want you know negative media coverage of such an event well let's try to expose that right now is very interesting that the banks don't want to set a president and they don't want people to know about their mortgages can be wiped out if they made a mistake so how many faulty mortgages are how we bought the foreclosures do you think are out there and could potentially be in this category you know it's interesting that you asked that i saw a report by the office of the assessor or recorder in san francisco. he said that ninety nine percent of all foreclosures have at least one year regularity and eighty four percent of those are faulty or illegal now i personally believe that number to be a little inflated in my personal opinion i would say somewhere between twenty and thirty five percent of the loans written between two thousand and two and two thousand and eight you know are going to contain

a lot of these faulty documents especially ones where the homeowner's loan has been transferred to the mers mortgage large trunk registration system if you see a transfer demurs it's a big red flag that there's going to be potentially mistakes in the foreclosure i think we give you a whole other side just on earth but real quickly i wanted to get to one more question are there any other negative consequences that homeowners should be on the lookout for if their home is being foreclosed on or if it's going to be sold in a short sale besides the fact that they're you know taking credit and losing their home. well you identified two of the big issues you know there are going to lose their home and a lot of times you know that credit his negative although you know many times they don't have much credit to begin with so it's not a big issue for them the real big issue that they need to understand especially in a short sale because you can prevent this in a short sale by requesting you know those clauses being the be removed from the

short sale contracts is you've got to look for the deficiency judgment and what many people don't know whether they're being foreclosed on because they can't afford the home or they're being foreclosed on because their home is underwater and they don't think it's financially responsible to continue paying it they still could be responsible at a future date for deficiency judgment and know what a deficiency judgment is is you have a mortgage has a price associated with it's the price of the mortgage out at let's say you take a home for four hundred thousand dollars mortgage the bank takes back the home and the bank is only able to sell the home for two hundred thousand dollars or the fair market value is only two hundred thousand dollars at that time technically the homeowner is still liable and on the hook for the difference of the two on two thousand dollars it's not wildly advertise it's not widely known and it's not wildly enforced right now but if we get into a situation where the economy starts getting better people are getting jobs

unemployment goes down and people start acquiring assets and having money you're going to see a lot of debt collectors are going to see the banks selling these deficiency judgment to debt collectors for pennies on the dollar and people are going to try to collect the deficiency which mean you know what the mortgage was originally bought for and what the house was sold for by the bank and that could be a substantial amount of money and while you might not be able to prevent that in a completed foreclosure if you do have a short sale of the home you want to try to get your attorney to remove any deficiency judgment language or include. language that will remove any deficiency judgments to protect you in the future if the homeowner later has more money or more assets. remember to have your deficiency it doesn't waived in a short sale i was real state attorney matthew over and.

it's time for the day we do all this is. ready yes i'm ready now you remember m.f. global right i remember better than the alamo of course i do but maybe the viewers don't so all right so just over a year and a half ago medium sized future brokers and a story. headed by former new jersey senator and governor john oregon announced that it was missing a one point six billion dollars in customers money and then filed for bankruptcy and here is a travesty of the bankruptcy and liquidation process and there are actually two concurrent events the parent holding company went through chapter eleven bankruptcy and the broker unit where the customer funds or went through a securities liquidation a liquidation for securities firm the c.r.t.c.

was kind of an absentee landlord in this whole bit which was unfortunate and i guess some senators were asking questions in the c.r.t.c. is no responded right will soon or shall we ask for an explanation of why the c. f.t.c. had gary gensler recused himself and the early days following the bankruptcy now here is what we gathered from the c f d c's office of inspector general they said that the general counsel and designated agency ethics officer instructed that there was no need to recuse given the fact that there was neither a financial conflict nor an appearance problem yes and the important point to stress here while. would gary gensler be ques themselves well he used to work at goldman sachs along with john corazon john corazon was his boss when he was c.e.o. of the firm in the late ninety's and poor gary gensler he just didn't want to do the job apparently to protect the futures industry's customers so according to this report he didn't actually have to recuse himself but there is another line here that we have talked about the revolving door. so he way the chairman's

decision to issue a nonparticipation statement ran counter to specific advice on the matter and this regards the same thing that we're talking about basically gary gensler did not have to recuse himself which is unfortunate because like i said the customers were thrown into disarray people had positions on in the futures markets and they did not know what to do with themselves and there were a couple other things that we found to have their heroes out but then this is the also required m.f. global center go i reviewed by an independent consulting firm in two thousand and nine that all meant guess who this is going to give you one guess because we only we only cover one shadow regulator on the show and i'm the only one person and could be a prominent financial of course and she was instrumental in overseeing an overhaul of global's risk control policies they signed off of it the whole day overstepped in march two thousand and ten only a year and

a half later guess what john corazon blew up m.f. global good job and tory one point six billion dollars in missing customer funds because they were keeping their ledgers on an excel spreadsheet and how much how much of a debacle. well we'll have to get to that in another show so that's an edge for a member of the global thanks bob. it was the best of times and the worst of times on prime interest today matthew o'brien had some wisdom to share with those being wrongfully foreclosed on and our very own justin underhill wasn't hasn't had to explore the foolishness of predatory lending nor was it hard to believe how judd gregg revolve from senator to goldman

to sephora we were just slightly incredulous when we learned of the world was running out of treasury debt and we felt the need to shine a light on gary gensler and the m.f. global saga lest our viewers fall into the wonder of despair finally j.p. morgan is apparently still in the spring of hope and attempts to get ahead of regulatory purgatory and the noisy authority on the street well it's time to sign off a superlative tale thanks for watching and come back tomorrow and be sure to follow us on facebook at facebook dot com i'm interested from all of us that prime interest i'm sorry and boring a great night. wealthy

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