posted by admin on Apr 20

By PAULA LAVIGNE
REGISTER STAFF WRITER

Figuring out which company to deal with during a foreclosure can be daunting. Even if the original mortgage was with a company recognized by the borrower, that company may not be the one acting against the borrower in court.

For example: Wells Fargo filed more than 3,600 foreclosure lawsuits in Iowa from January 2005 to February 2008, more than any other company identified in Iowa court data. But the company could be taking legal action because it processed payments for another mortgage company or acted as a trustee for investors - not because it’s the original lender.

Two company names that often appear on Iowa foreclosures - Deutsche Bank and Mortgage Electronic Registration System, or MERS - can be even more puzzling to borrowers.

Deutsche Bank, a global financial services firm with headquarters in Germany, may be listed as a loan’s owner of record, but it likely doesn’t have an actual stake in foreclosure proceedings. The firm acts as a trustee for investors holding mortgage-backed securities.

A loan winds up in a mortgage- backed security after it is sold by the company that originated the note. An investment bank pools that loan with others. It then sells securities, which represent a portion of the total principal and interest payments on the loans, to investors such as mutual funds, pension funds and insurance companies.

MERS, meanwhile, is neither the servicer nor the lender. Companies pay the firm to represent them and track loans as they change hands.

So while MERS should be able to point borrowers to the appropriate contact in a foreclosure proceeding, Deutsche Bank urges borrowers to contact loan servicers instead.

A tip for borrowers facing a foreclosure action: Make sure the company bringing the foreclosure action has the legal right to do so.

University of Iowa law professor Katherine Porter led a national study of 1,733 foreclosures and found that 40 percent of the creditors filing the lawsuits did not show proof of ownership. The study will be published later this year.

Companies, she said, have been “putting the burden on the consumer - who is bankrupt - to try to decide whether it’s worth it to press the issue.”

Max Gardner III, a bankruptcy attorney in North Carolina and a national foreclosure expert, said the trend is spreading to other states. “You have to prove in North Carolina that you have the original note,” he said. “Judges have not (asked for) that very often, until the last five or six months.”

MERS and Deutsche Bank faced court challenges last year over whether they had legal standing to bring a foreclosure action, with mixed results.

A federal judge in Florida ruled in favor of MERS, dismissing a class-action lawsuit that claimed the company did not have the right to initiate foreclosures. But a federal judge in Ohio ruled against Deutsche Bank, dismissing 14 foreclosure lawsuits after Deutsche Bank couldn’t provide proof of ownership. The Ohio attorney general has not been successful in getting state judges to follow suit.

In Iowa, attorneys and lending experts say they haven’t seen similar rulings against Deutsche Bank

posted by admin on Apr 1

By Ted Barrett  

WASHINGTON (CNN) — Senate leaders have agreed to move forward on stalled legislation aimed at easing the impact of the falling housing market, the chamber’s top Republican and Democrat announced Tuesday.

A homeowner relief bill is stalled in the Senate. A key vote is planned Tuesday.

“The time has come for us to legislate, not continue our bickering,” Senate Majority Leader Harry Reid, D-Nevada, told reporters.

Despite the increasing pressure to find solutions to the deepening mortgage crisis, Senate leaders had been locked in a procedural stalemate over how to take up the Democratic-authored bill.

“Every day Congress and the president do nothing is another day closer to another American family losing their home,” Reid had warned on the Senate floor.

The bill would, for the first time, allow bankruptcy judges to reset mortgages on primary residences. It would also provide $4 billion for local communities to buy and refurbish foreclosed properties; provide $200 million for counseling to help homeowners avoid foreclosure; give tax breaks for the homebuilding industry; and improve loan disclosure and transparency.

Republicans threatened to block the bill, as they did before the recess, unless Democrats gave in to their demands to allow votes on certain GOP amendments.

Most Republicans back a proposal by Republican Sens. Kit Bond of Missouri and Johnny Isakson of Georgia. Its key feature is a $15,000 tax credit for people who buy and occupy a home that is in or near foreclosure.

The bill shares other aspects of the Democratic proposal — but not the controversial bankruptcy provision, which Republicans vehemently oppose. They argue it will force banks to increase mortgage rates across the board.

Democrats “propose an ill-conceived plan that will substantially increase monthly mortgage payments on everyone who buys a new home or refinances,” Republican Leader Mitch McConnell said. “There is no way this proposal is going to fly. If Democrats want to help homeowners, they need to work with Republicans on proposals that will draw substantial bipartisan support.”

But Democrats complained Monday that Republicans also want votes on amendments related to nonhousing issues, such as extending President Bush’s 2001 and 2003 tax cuts. A GOP leadership aide doubted such amendments would be offered by his party.

A Democratic leadership aide predicted political pressure during the break might pry loose enough Republican votes to get over the 60-vote hurdle needed Tuesday to begin the debate.

The aide pointed to Republican Sen. Mel Martinez of Florida, who told CNN he “would hope” Republicans and Democrats would “come together with a package of solutions that are realistic about those things which can be done.”

Martinez, a former secretary of housing and urban development, is frustrated by the lack of action and wants to find a way to move the bill, an aide said.

Even Republican Leader McConnell said Congress must act to prevent the crisis from worsening: “I think it’s safe to say there is interest on both sides in moving forward,” he told Reid on the