June 29, 2010 – 4:40 pm

Steve Dibert MFI-Miami

I don’t usually blog about pending investigations involving my clients because it could jeopardize any potential litigation that they may file against the servicer or trustee.  However, with this client I’m making an exception because she has been diagnosed with Small Cell Carcinoma and has only been given a 25% chance of surviving the next 18-24 months.

This article however, is not just about my client’s cancer but about her experience with Bank of America.  It’s about how Bank of America treats its customers and how contrary to their claims, Bank of America has absolutely no interest in giving loan modifications to homeowners.   It is an article about a bank founded by a loan shark who took advantage of the victims of the 1906 San Francisco earthquake is being allowed to return to its roots, thanks to elected officials blinded by power and overzealous ideology.  While members of congress sit high aloft in their ivory towers, millions of Americans are losing their homes due to illegal foreclosures, mortgage activists are being told by members of Capitol Hill, “Homeowners aren’t shouting loud enough for reform.

This is a story of one of those millions of people who are fighting not to just save their home from an illegal foreclosure but for her life.  I hope this story is loud enough to penetrate the sounds of the popping champagne corks delivered from the lobbyists on K Street to the politicians atop their mighty Ivory Babylonian Towers because at the end of the day, there are human lives involved.

Lynne Lucas and her partner or as I call him, her hetero life-mate, Patrick approached Bank of America early last year about doing a loan modification because Pat being a car salesman and Lynne working at a local casino saw their paychecks drop due to the recession.  They contacted Bank of America to see if there was anything that could be done and Bank of America referred them to one of their approved non-profit housing agencies.  After nearly a year of sending copies of income documentation to Bank of America with what seemed to be endless repetition, out surviving Bank of America’s preferred non-profit housing agency which closed because it lost its funding (presumably from Bank of America), and with a scheduled foreclosure for July of 2009 which was later canceled, Pat and Lynne were approved for a loan modification in January of 2010.

When they opened the letter from Bank of America they discovered that the bank was lowering their interest rate from 6.5% to 4.75% which sounded great until they read Bank of America’s terms.  Their Principal and Interest payment which was $1,153.09 decreased only $10.18 per month to $1,142.91.  The two of them said, “huh?”

Bank of America had increased the balance of the loan to $201,164 from $188,043.77; from the original foreclosure affidavit six months earlier in June of 2009.  Using the number from the June 2009 foreclosure notice, I calculated the balance to be roughly $194,962.31.  Bank of America offers no explanation of what the additional $6202 is for.  Bank of America then shortened the amortization schedule from 30 years to 25 years.   Bank of America demanded that tax and insurance escrows of $580.74 paid despite their homeowners insurance being current and their taxes were current through July of 2009.  This is a 250% increase from the $231.17 Countrywide underwriting used for the cost of taxes and insurance when they approved the loan in 2005.  All of this increased their payment by $570 per month to $1,723.65.

Working through their second housing non-profit, Lynne and Pat again tried to negotiate a modification.  On March 29, 2009, Bank of America denied the modification claiming “investor denied” and without warning a foreclosure sale took place the next day.

MFI-Miami was soon hired to commence an investigation and the results were quite disturbing.  First, there was no investor.  BAC Home Loan Servicing (Bank of America’s servicing arm) had filed an affidavit on July 2, 2009 in Benzie County, MI affirming that they acquired the note from their acquisition of Countrywide Home Loans.  This date incidentally is 17 days after Lynne and Pat were served with the initial foreclosure notice on June 15, 2009.  Had this foreclosure gone through it would have violated Michigan law which requires a 28 day advertising period.  These factors may explain why Bank of America withdrew the July 2009 foreclosure.

On March 30, 2010 and again without notice, Bank of America’s attorneys, Orlans and Associates sold the property at Sheriff’s Sale less than 24 hours after being denied a loan modification.  However, Bank of America’s servicing company BAC Loan Servicing didn’t sell the property.  Fannie Mae sold it and they sold it to themselves.  This is like an auto insurance company repossessing your car because you’re having a dispute with your finance company.  According to representatives in Barbara DeSoer’s office and the Office of the Benzie County Register of Deeds, BAC Home Loan Servicing owns this note not Fannie Mae.  Fannie Mae also has no record of owning this note.  Michigan law only allows for the owner or the owner’s servicer to bring a foreclosure action.   So now after being essentially jerked around by Bank of America, Lynne and Pat are now victims of an illegal foreclosure that was done without advertisement and by a non involved third party.  Within weeks of this foreclosure, Lynne was diagnosed with Small Cell Carcinoma, a potentially fatal form of lung cancer.  So now they are forced to fight Bank of America, Fannie Mae and a ravaging disease.

Unfortunately, Lynne and Pat’s battle with Bank of America is not uncommon with homeowners who have loans with Bank of America.  I hear similar stories from homeowners from across the country going through the same thing.  I know what Bank of America tell people on the phone because MFI-Miami staff members hear the same excuses and double talk every day when they call asking questions.  For example, my assistant Cheryl, called Bank of America on four different occasions to find out who the Trust and Trustee were on a particular loan we were investigating.  She was told “Fannie Mae” on the first call, “Freddie Mac” on the second call, “FHA” on the third call and then finally she was told, “BNA Countrywide CIG” on the fourth call which is an old Countrywide investment group Bank of America acquired when they purchased Countrywide.

This wasn’t some $1 a day call center in India, Cheryl called which if it was I could understand.  It was someone at Barbara DeSoer’s office.   Yes, the same Barbara DeSoer, who is the President of Bank of America Home Loans.

On the surface this might appear to simply be corporate bureaucracy gone amok but here’s the issue it’s not.  It happens too often to be a coincidence.  It is purposely set up that way to aggravate, annoy, and confuse the homeowner into finally throwing their arms up in the air and saying, “Fine, take the friggin’ house!”

Many homeowners ask me, “why would they want my house, I’m upside down?”  Well, it’s because of greed.   Chances are the loan has already been paid off due to Bank of America filing an insurance claim against the policy on the mortgage pool the loan is in and anything they get by selling the house after they foreclose is instant profit.  So in essence they are double dipping.

How does this apply to Lynne and Pat’s issue since Fannie Mae foreclosed?  Well, for that we all need to stay tuned.


  1. Anonymous says

    Who really is the creditor and who is the debtor? Who lent what to whom?
    A Promissory Note was signed and sold to B.O.A, then B.O.A altered the Promissory Note by stamping said Promissory Note:
    " PAY TO THE ORDER OF *** "third party name" *** WITHOUT RECOURSE,"
    B.O.A. knowingly, intelligently and willful act of altering the Promissory Note caused said Promissory Note to become a check. (Conversion)

    See: Black's Law Sixth Edition:
    The Federal Reserve Board defines a check as "a draft or order upon a bank or banking house purporting to be drawn upon a deposit of funds for the payment of all events of a certain sum of money to a certain person therein named or to him or his order or to bearer and payable instantly on demand."
    It must contain the phrase "PAY TO THE ORDER OF." (Emphasis added)
    The Promissory Note was then sold to FNMA for cash, and yet B.O.A. failed to give the proceeds from said sale to the individual who signed the note in the first place! Instead the money received from the check Promissory Note was used to fraudulently encumber defendant's real property by claiming said money paid to the third party(s) was B.O.A. money.

  2. Robin says

    You can't negate the legality of the loan repayment contract by obfuscating and diluting the facts. Any party with legal right to an asset (aka "Note") can legally assign some or all of their ownership rights to said asset (aka "Note"). Mortgage assignments are a daily occurrence, and by that I mean in the tens if not hundreds of thousands or even millions nationwide as "Notes" and the rights to service and collect on them are transferred among a myriad network of secondary market participants. Can it confuse the ownership of a Note and the right to Foreclose? Certainly. Is that the Norm? Yes. If Intervening Assignments are properly recorded no question exists. But on a county-by-county-by-state basis, the length of time required to affect that recording varies. It's one big, complicated cluster, and none of it is designed to favor borrower or lender, but rather the tax-collection machine of local/county/state/federal government. Have fun disputing that bunch.

  3. Anonymous says

    This information is very difficult to comprehend and understand. You miss the point entirely, yes assignments are common, and no the facts are not obfuscated, look up Black's Law Sixth Edition: The Promissory Note is turned into a check, its money as simple as that! Show me a Promissory Note that is not stamped " PAY TO THE ORDER OF *** third party name*** WITHOUT RECOURSE." So ask yourself who is the real lender in fact (creditor) and who is the (debtor) or real borrower in fact? We have been conditioned to think as debtor's.

    " Just look at us. Everything is backwards; Everything is upside down. Doctors destroy health, Lawyers destroy justice, Universities destroy knowledge, Governments destroy freedom, Major media destroy information, and Religions destroy Spirituality."
    Michael Ellner

  4. Robin says

    As for your initial argument of "who lent what to whom," we could explore the depths of the Fed Reserve and banks' borrowing there to "create" capital" to subsequently lend elsewhere... is it a shadow system? Yes. No argument. But for the here and now, for the purpose of collecting against mortgage loan contracts secured by single-family residential real estate, that simple endorsement on the original Note, if accompanied by a corresponding assignment of the mortgage and properly executed by authorized persons of the company, is more than enough to verify the Note's owner's right to enforce the terms of the contract. It comes down to the legal entities involved, and how they transfer their rights with regard to the Note and Mortgage. Can you nit-pick and find termite-holes here and there to exploit? Yes. Will it help the homeowner in the long run? Probably not.

    It is, in the long run, no different than if you endorse a check payable to yourself and pass that to a third party. If it bounces, you're liable and it becomes your responsibility to collect from the original issuer. Succeed or fail, you still pay for the mistake. It's the middle-man's curse.

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