exposure we're starting something new tonight we are investigating the foreclosure crisis and it doesn't take much to know that there are some really difficult things that are happening out there where there are economy in fact it's so much all throughout the nation you see help foreclosure on the sides of houses just like this graphic that we're going to put up i'm standing where we have an attic guest tonight who is right in the middle of all of this in terms of helping debtors out but first there's something big on the federal horizon and that is that the u s the new york times september sixth the u s takes a hard line ensued so we're bad mortgages the united states government the federal housing finance agency has filed suit against seventeen great big huge massive banks you know almost all of them and we're going to be foreclosure situations i tend to do with the individual as opposed to the larger scale items so when a client comes in they're facing foreclosure i take a look where they are in the process make a legal strategy sometimes that involves bankruptcy sometimes you know sometimes just a court action to restrain the sale and it sounds like a really responsible type of practice that you have because you have to really get into the responsibility side that they have they being the debtors have to the responsibility is where you came from right we got some great pictures here of aig or when he was just a little bit younger maybe just a couple of a couple of months ago well maybe longer than that when he was in the united states air force and you were a sergeant and what was your job there i repaired medical qui meant so i was in the medical group and i did both active duty and reserves deployed after nine eleven then to ramstein air base and it's more there came back finished my tour and went to law school ok there's so much to get into on this let's let's get right into it we talked about the big lawsuit that the f a a of a filed and so this segment is how to communicate with your mortgage servicer interestingly enough in the case of this lawsuit in the let's go and get the complaint and that's also go ahead then and show some of the defendants because it's amazing to me that what is this basically with this lawsuit about this lawsuits about right now when you look at the foreclosure crisis you have so many houses default so many individual problems it's just killing the market this lawsuits a chance to try to bring stability to this and so you you sue for the fraud or whatever the problems are going on and then you bring closure to it and then that way they can help stabilize i have not read everything in the complaint i mean it's pretty complex and definitely outside of my scope i'm not a prosecutor however it i'm very excited to see what's going to happen with this just in the right direction for the fraud and when i hear that word fraud and then i look at these defendants i mean you know i see i see funny advertisements from many of these defendants every single day and these are household names ok so how do you communicate with the service or your mortgage  a lawyer is always the best method just because they tend to listen and see that letterhead or when they hear that esquire of the name of the person calling but there are some other ways that a homeowner can communicate one is through some legal process is already available such  always well the problem is through the learning act covers a lot of the initial disclosures when you purchase a property such as your hard won and some other issues but what it also allows you to do is look and see who's currently the holder or who's the service or some issues like that and so you can make  requests that are there and if they fail to answer you know there are some potential damages coming out now what's a q w r letter that's stands for qualified written response and what that means is if there's any issues as to who actually owns the note who actually has the service or if there's any issues with the escrow or accounting you can write a letter and have them answer those questions for you in the required to i mean i i don't just look at my payment book and you know that i write my check out oh i don't do that anymore though doing i kind of send it in another way i don't do it just do that why is it that i need a lawyer to talk to my bank well the problem is a lot of times when you send it in as what they call a pro se litigant meaning without an attorney there's a chance you could write the letter incorrectly there's a chance they may not take you seriously when they should but i'm sure there's mistakes that happen and likewise if you don't get the terms of art right in terms of any in the legal terms or if you don't state it with the right question if you make it overly broad or under you know under inclusive it can be problematic one thing that you in purpose of the show you talked about that people need to do it it's the net present value test what is that  bank do that i mean why would they you know why would they grant why would they grant a loan modification well if you pass the net present value test you show him that the new product the new loan that you'll be getting would actually net them more money in the end it's a chance to basically move arrears or anything to the into the loan and then you in return as the homeowner get maybe some reduced principal or interest and more fordable pain and so it's going to good for everybody i want to make sure to get up on the screen the fannie mae dot com website which talks about the net present value test at the same point in time and we have a minute left in this segment pro publica journalism in the public interest says the secret test that insurers lenders when on loan that's the net present value test the lenders went on loan lots i occasionally the occasional right as i understand them are and what we're doing is they are continuing series on the foreclosure crisis that exist in the united states in the puget sound in washington state all over the country today there are some opportunities for you to get some additional information it's actually on the washington state attorney general's website we're going to get that up on the screen and be sure to go there so we're going around the country let's go to the boston globe here is an article on august twenty sixth two thousand eleven faced with foreclosure for paying her mortgage early it is an amazing story of a woman who knew that she was going to be into some financial straits coming down the road and so she paid her mortgage early several months early and the bank didn't recognize it and then wouldn't even receive any payments at all and attorney who deals with debtors and banks and things like that my goodness a bank can refuse to accept payments there's times an escrow maybe tax maybe something else which would push that push the overall counting backwards it creates an accounting nightmare for the other systems are just not equipped to handle it and so because of an accounting nightmare this woman is facing being evicted from her home possibly  interesting we talk about mortgages and and this whole series and this right here is the behind the scenes maneuvering of long's the right to right here in this segment this whole series is about the foreclosure crisis it seemed that even when the country was founded there was a written piece of paper that was a million mortgage and i had my signature on it in the bank signatures and whoever's was supposed to be on it just kind of like that right there that's not the case anymore is it really why not well when  prior to were a group called merce mortgage like trying to purchase ration system coming on line the way it worked was like in the simpson of this country where each step of the way you had something being recorded so that any would go to the public record and say oh i know who owns this i know who to put myself in my offer to if i want to purchase it you know to tax it was a good system when merce came online it gets recorded wants and then it can be transferred many many times before it ever comes back out and so it's very difficult for homeowners county agents anyone not part of the murder system to know where it is you know interesting thing is that i heard of murders a few years ago and i thought it was being mispronounced i thought it was the murtha virus and it was a really really difficult virus and it  out that they did actually is kind of difficult we've got the mers website up and it actually is revealing on some things because this next slide is the owners of mers i mean there's chase there's citi mortgage  chance b c there's fannie mae keep going then the next one there's stuart in sun trust in nationwide wells fargo these are the owners of mergers and interestingly enough i got a bonus question for you how many of the owners of mergers systems it's a database that tracks who owns it and it allows for very fast transfer so if you're on the stock exchange you're trying to move something quickly this keeps up there are some benefits of mergers which i can understand but in terms of the common person in terms of main street it's a nightmare if you don't know where things are let's actually go to the graphic that we tried to create a graphic that might kind of peer is that like a black box and there's a fly on it it says insert home loans here and that happens to be mergers and then it goes up to a b c bank but before you know it it's gone up to all of these other banks but not involved are county records how come well that's just way more system a start up and bypass if i am i need to know if i am buying the home i need to know if i have clear title to it and if i don't know who actually is the holder of the security which is you know holder of the know which is secured by the house do i not have some questions about that title well that's the problem unless you actually shell out some money either to a title company that has access to the merged database or unless for some reason they've recorded it publicly it's come out of them or system a lot of times the homeowners are stuck and they left they do a q w r or some sort of legal request of the bank the real existing legal process there's no way for them to know so this is why a homeowner not just a homeowner but just about anybody if they're having anything to do with a real is a real estate transaction today because of murders they need they need to get a lawyer just to ask about anything well title company can and often do that in the purchase and sale so i don't know if you need always  before then every time that there was a transfer then then i mean even if it was a transfer of the security to some other bank then the county recorded it and they got a fee as not happening anymore not so much here is county news county recorder registered deeds were losing money in the murders and this is governments especially local governments that are hurting and this is from a register itself he says i have a sworn duty to record preserve and protect the chain of title for all documents in a fiduciary duty to collect recording fees and i feel m has undermined both of these duties right i absolutely agree you know what you were talking about fees are talking like twenty thirty dollars these are not extraordinary fees these are just enough to get the county clerk to take the paper out record in the database and move on i mean the very reasonable fees but they're also very necessary fees and oh i don't know anybody who took out a mortgage or maybe a refinance on their house and by the time their first payment was due they got a payment book from somebody else is that is that mergers not necessarily that's probably securitization of the individual loan meaning whoever you got the loan from they've already sold it to a much bigger organization well they've already sold a lot well with that we're going to be getting ready for our next segment  to public exposure in our continuing investigation of the foreclosure crisis we're very fortunate to have actor hall an attorney who deals with with debtors on a regular basis who are dealing with foreclosure also here in washington state go to the attorney general's website we're going to get that up on the screen i encourage you to get some information but first this segment is about robo signing and what it means to you and there was a fantastic fantastic piece done on sixty minutes on april the third two thousand and eleven everybody's got to see the entire p green but on thousands of other mortgages the style of green signature changed a lot and even more remarkable some money at found that linda green was a vice president of twenty banks all at the same time all within the same week i mean this is a very active person and where did all those documents come from we went searching for the linda green and we found her in rural georgia she told us she's never been a bank vice president in two thousand and three she was a shipping clerk for auto parts when her grandson told her about a job at a company called dogs d o cx dogs once housed here in  was a sweatshop for forged mortgage documents they were sitting in a room signing their name as fast as they possibly could to any kind of nonsense document that was put in front of them docs and companies like it were recreating missing mortgage assignments for the banks and providing the legal required signatures of bank vice pres and neuter linda greene says she was named a bank vice president by docs because her name was short and easy to spell and as demand exploded docs needed more linda greets so you're linda green yes if you felt having seen the clip having seen all the linda greens that there are out there is that for real i sue linda greene's not her specifically but people like her when i left the credit practice that's exactly why i went to the other side is because of this type of stuff that exists out there you represented the bad guys and you have somebody signing three thousand documents and they saying they personally move the document when it's impossible to well yeah and frankly the poor woman linda green the real linda green was a woman who basically was a minimum wage person was vice president of twenty banks that was amazing and actually here's sixty minutes did a great job they actually hear some of the the banks wells fargo h s b c bank of america biggest banks in the country all benefited  from the greens interesting interesting by the way if i strongly encourage you to watch a sixty minute piece it is available online go to c b s news dot com search under sixty minutes this again was the next housing shock it was april the third two thousand and eleven how serious is this problem it's a mixed bag on the seriousness of it because typically when it matters to you there's been some situation in life you've lost your job and gotten behind or something to where you're in default but what they're doing and this is the problem is when you have a country of laws and you say this procedure matters like presumption of innocence before you know with a short cut those processes it hurts the system itself and that's the problem with rob hurts the system itself but doesn't it hurt me to hearings everybody does it hurt oh let's say that i were someone who was impacted by a robo signed document and i got behind in my payments i mean legitimately i'm behind  lawyers know about this now just to lawyers who practice in bankruptcy court or i would say a lot of bankruptcy court if not most of the bankruptcy attorney type attorneys no this type of thing if you haven't received an industr if you don't object to it you know allowed to stand then that could be considered legitimate they could ask you a political question about how how we can bail out those who committed fraud time after time after time but i won't instead what we need to do is we need to go back to sixty minutes and in this clip that we're about to show the we are talking with sheila bair who was the director of the f d i c and the impact robo signing on our economy there were a million foreclosures last year and there will be another million this year those lawsuits or forcing open those bundled mortgage backed securities that wall street cooked up in the mid two thousand and they're exposing a lack of ownership documents deposit insurance corporation you just described it is pervasive yeah it is pervasive it absolutely is pervasive and it was just a matter of cutting corners not spending enough money not having the quality controls incompetent banking back then is causing foreclosure ghetto today although banks say the courts have been accepting their paperwork now that's changing as desperate homeowners countersued the banks over the document fiasco this leaves houses unsold indefinitely that the government should force banks to pay into a massive fund but you think there needs to be a cleanup fund i do just likely not have a good word for it for a natural disaster yes somewhat like that yes this is yes this is one of you making but yes you don't are continuing with our investigate an end to the foreclosure crisis it is impacting us all around the united states however right here in washington state there is some relief that you can get in fact there is some some new laws that are in place that may help you strongly encourage you to go to the washington state office of the attorney general i'm going to get that website up on the screen and there's some really good information there but you know what what do you do if you got in a foreclosure notice well what about if you are still in good shape on your loan but you know because of a personal situation that some some tough times are coming ahead and so you contact your bank but they don't get back to you that's exactly what happened a very johnson right here in the puget sound very turn the tides are the era made it very very public that the bank wasn't being responsive and it's some point time in the future right here on public exposure as part of our continuing investigation of foreclosure crisis johnson's going to be right here with us an attorney who deals with voters or do you do if you get a foreclosure notice well when a client comes to me and they've gotten when i first say let me see the document because a lot of times the banks will send a letter threatening to foreclose and some individuals see that as an actual foreclosure notice at least in washington state there's very specific requirements typically under the deed of trust act that identifies what the documents are in the language it needs to be in the documents and when it actually is a formal foreclosure document now interest that's just the way the system works you know it would it would seem to me that banks aren't in the real estate business or at least they shouldn't want to be in the real estate business so they would do just about anything they possibly could within reason to be able to not foreclose and that's not true there was not well it's a mixed bag there are some advantages of foreclosing economically which i'm not going to get into tonight but they say it sometimes make more money on a foreclosure than if they help the person get out of it relief you know maybe lower my house payment i think i might be able to make it what do i do then well typically what i advise a sub or prong attack the first thing you do is you clean up your credit you clean up your outstanding debts you do everything you can to make you financially sound as possible so you request that law mod you're more likely to get it because if you present a better loan mot you know basically with what they have and you're likely to make those payments the banks will work with you and the other approach though is it's like the velvet glove in the first you know you have to be ready with your litigation you have to look at this foreclosure documents see if there's a robo signing him see if they've made some fraud in correct dates what anything that makes it legally insufficient you have your attorney ready on top if the loan mud doesn't go through and the continued act unfairly you bring the legal hammer well it would be pretty simple i mean surely a bank would realize that if they have you know fraudulent documents or robo signing documents when they wouldn't even pursue it then right well the problem is the banks are very insulated you have the banks appear then you have the servicers at sceptically who you give the money to when you pay your mortgage each month and then you actually a foreclosure trustee that's all the way down at the end and they're the ones executing this the banks oftentimes own even know what's going on and well ok let's let me give an example i'm not going to use the real name of names of banks i've got to go to a b c mortgage company and i go and i get a three hundred thousand our mortgage and i paid on it for a while but now you know the payments of you know fourteen hundred dollars a month are just too tough for me and i need to reduce them but i'm not dealing with a b c mortgage company more often times i've sold five or six times so who do i do well what you always start off with his whoever is sending you the check or you know the the stub and you pay it that's the first step try give him a call sometimes they'll tell you who actually owns it if that doesn't work and you resort to legal means either hire a lawyer maybe go to a title company use the truth  act a qualified written response a couple of them legal methods and try to force them to tell you who it is once you identify who it is you get a loan money from them fill it out see if you can get it going ask you this now you know realizing that you're a lawyer and you charge for your services if i can't afford to pay my house payment how can i afford to pay a lawyer oftentimes you can't which is why at least in washington state we have a very robust pro bono program many of the attorneys such to do and a lot of work that i do volunteer there and often times you can look on the web gets help that can teach a normal person how to pursue these things legally we actually has as we introduce this segment we talked about the attorney general's website here in washington state and i looked at them there seem to be an awful lot of resources it is a pretty good from a resource i have been an amazingly impressed with the attorney general site and i think there are a lot of resources there there's also northwest justice project and columbia legal services a couple of really good outfits here in washington at least that work in this and really help out in other states have similar programs to washington state residents have more rights than others with regard to foreclosures i'm not familiar with other states for closure law so i can't speak to that but there's quite a few here do banks have more rights than individuals well typically just bigger it's a matter of money they can pay for a lot of lawyers and less of a little guy can afford one it's david versus goliath not everyone has a sling shot but if you find robo signing can an individual find the robo signing absolutely i've actually had clients come in with the evidence in front of me slammed on the paperwork i'm like yeah you found it a lot of robo signing system about finding the signatures if somebody such as well you mentioned linda green and you see it spelled five different ways and obviously five procedures then you know if you ever signed your documents check it signature you know we're almost out of time but when you find that do you call up the bank's lawyer and say hey i'm going to put the fear of linda green in you i typically find it's better to file first and let them negotiate later ok with that that's going to be the last where we just wanted to remind everyone there right here on public exposure we're doing a continuing investigation into the foreclosure crisis