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Scott Brown speaking to supporters
What did he know about foreclosure fraud, and when did he know it?
Andrew Levitin at Credit Slips looks at Sen. Scott Brown's tenure as a real estate attorney during the mortgage fraud crisis. Brown says he worked with local banks and many mortgage companies, including with Fidelity National, a large real estate services company. At the time, Fidelity was the parent company of LPS. LPS, in turn, was one of the leading offenders in foreclosure fraud.

That led Levitin to ask some key questions.

Who were those "mortgage companies" that he worked for? It's nice that Brown named a bunch of local banks, but I wonder what lies under the "mortgage company" label? What did Scott Brown understand about the mortgage market he was facilitating? Did he recognize that there was a bubble? (He was a town property assessor at one point, so one would think he'd notice this sort of thing.) If not, what does that say? And if so, what does that say? How many predatory loans did Scott Brown facilitate? How many of the loans where he handled the closing resulted in foreclosure? What would he say to those families that lost their homes to predatory loans?
Since Brown has raised the issue of character and integrity in this race, he should be asked these questions. He was working with these companies at the height of the robo-signing, foreclosure fraud crisis. Was Brown blissfully unaware of the problems in the mortgage industry, or was he turning a blind eye? Given that he's not the sharpest knife in the drawer, it's entirely likely he wasn't catching on to the larger picture, but was merely a useful player for these mortgage companies.

Goal Thermometer


There is one thing we do know, as pointed out by David Dayen. When Congress was working on the Dodd/Frank financial reform legislation to address some of the abuses in the banking system that drove them to seek profit in mortgage fraud, Scott Brown was working to weaken that law on behalf of the financial firms.

He brags a lot about how his vote broke a filibuster against Dodd/Frank. What he doesn't brag about is how he used his vote to force a weaker law on behalf of the financial industry, once again playing the role of useful tool. It's no wonder Brown's the darling of the financial sector.

Please donate $3 to Elizabeth Warren on ActBlue.

Originally posted to Joan McCarter on Fri Sep 28, 2012 at 10:38 AM PDT.

Also republished by Massachusetts Kosmopolitans.

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Comment Preferences

  •  Tip Jar (23+ / 0-)

    "There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning." —Warren Buffett

    by Joan McCarter on Fri Sep 28, 2012 at 10:38:07 AM PDT

  •  Hmmmmmmmmmm... :) (0+ / 0-)

    "If you're going to go down with the ship, make it a submarine." - Wayne Shorter

    by Oliver Tiger on Fri Sep 28, 2012 at 10:53:12 AM PDT

  •  Really? What is this crap other than innuendo? (3+ / 0-)
    Recommended by:
    Demi Moaned, coffeetalk, valion

    I'm a real estate attorney. I did a significant amount of work during the boom.   I worked with many banks and mortgage companies, but I didn't underwrite the mortgages and I doubt Scott did either.

    The job of the attorney is to do the legal part of the closing which is mostly contract review and title work, seldom did I ever see my clients financials, it simply wasn't part of the process.  

    If a bank was willing to lend money and the client wanted the house, who was I to say no as long as I made sure the client understood the nature of the loan they were getting.

    Funny, that no one was unhappy when the prices were going up.

    Not every foreclosed  loan is fraudulent, some people were just greedy or believed the hype that values always go up.

    Not every foreclosure is fraudulent. Yes the crises certainly highlighted the problems in the process and there was some fraud, although i doubt as much as it was made out to be, but lets not forget the foreclosure attorneys only provide as much as the Courts require.  And up until recently they didn't require that much in the form of documentation.

    No I am not a Scott Brown fan.

    •  comments at the link also disagree. (1+ / 0-)
      Recommended by:
      KenBee

      so i'm on the fence.
      i'm also flat busted.
      all i got to give warren is a little of my time.
      but she's got all i got to give.

      * Join: OBAMA'S TRUTH TEAM * Addington's Perpwalk: TRAILHEAD of Accountability for Bush-2 Crimes.

      by greenbird on Fri Sep 28, 2012 at 11:31:09 AM PDT

      [ Parent ]

    •  True. The courts assumed that attorneys, (2+ / 0-)
      Recommended by:
      a2nite, KenBee

      as officers of the court would have all the documentation they claimed to have and would have reviewed it for accuracy and completeness.
      That they were taking advantage of the fact that ordinary citizens are not clued into the differences between the civil and criminal court and did not know that, if they did not show up to contest the suit, a judgement would be automatically entered against them is their own fault.
      After all, didn't all those judgements by credit card companies and merchants garnishing their lay-aways teach them?
      How come nobody warned them that student loans for educational programs that led nowhere could no longer be discharged in bankruptcy?
      The transfer of monetary wealth to the 1% was not a happenstance.  It was all legal. Fortunately, it's only money and we can use the law to take it back. All we have to do is elect the right legislators.

      We organize governments to provide benefits and prevent abuse.

      by hannah on Fri Sep 28, 2012 at 11:31:22 AM PDT

      [ Parent ]

  •  title insurance (1+ / 0-)
    Recommended by:
    KenBee

    IMHO, title insurance is itself a scam.  It used to be that when a transfer of real estate (land and/or buildings) was contemplated, a lawyer would be hired to research the public records and make sure that the title was up to date, that the person selling had clear title and that nobody had lodged any claims against the property. If there were claims, then those were to be settled before the transaction could occur. Somewhere in the 1980s, in part to facilitate a quicker turn around of transactions and spur speculative purchases, title companies, instead of doing the research, just issued insurance policies for a fee (of course) which would, supposedly cover the cost of correcting the title retroactively, if it was later found to be questionable. (Heirs suddenly turning up is a pretty common problem since property records and wills are often not filed in the same place. Never mind all the people who never bothered with wills to document the disposition of their assets).
    Unfortunately, as so often happens with insurance, whatever is being covered tends not to be accurate, because the people who will have to correct any mistakes will get paid more later. There is less and less incentive for lawyers to get it right the first time.
    The other problem with real estate lawyers is that, if they are hired by the banks, that's whom they work for. Ditto for the realtors.  They work for the people who hire them, even if they get paid out of the proceeds of the sale. So, for a buyer to be protected and have recourse in the event of a mistake, the buyer should hire his/her own broker and lawyer to review all documents and make sure that what they sign is the same as what they reviewed. Often times, the numbers change (because those are the numbers the secretary ALWAYS puts in). So, it's no wonder the bubble was fraught with error and compounded error.

    We organize governments to provide benefits and prevent abuse.

    by hannah on Fri Sep 28, 2012 at 11:20:34 AM PDT

    •  Misunderstanding of title insurance (1+ / 0-)
      Recommended by:
      valion

      While I will never argue that title insurance is perfect, it is not a scam in and of itself. Title insurance does not generally insure against those claims that could be found prior to closing. In fact most of those are excluded from coverage by the terms of the policy--unless the title company makes a choice to cover it, or a big mistake in searching. But for the most part, title insurance covers latent claims that could not have been discovered prior to closing. Title insurance started because those law offices doing the title searches to which you refer would get in financial trouble when a latent claim became active and they didn't have the reserves (like insurance companies have) to pay the people who were harmed. Lawyers didn't want their malpractice involved, and it really wasn't malpractice to begin with because the claims were not caused by an error in searching, but because the situation was unknown. For example, one type of claim would be caused by a mistake in a survey that failed to show that a property encroaches onto another or a mistake in an old subdivision that started in the wrong place or made mistakes in calls, or the section was not shaped as the surveyor thought creating defects in legal descriptions. The lawyer would not know that. Or, if a person who deeded the property back in the chain of title did so under duress or diminished capacity. How would the lawyer who was not involved in that particular transaction know that? When allegations come forward and someone sues the current owner for that issue, title insurance covers the defense and any loss. IMHO it is unwise for title companies to make management decisions not to search, but their attitude was that they had to cover the losses, so it was their choice to make. You can argue that it affects title which affects entire communities, so it should be a public policy to require actual searches, and I would agree with that.

      Using my free speech while I still have it. http://www.ellenofthetenth.blogspot.com/

      by ebgill on Fri Sep 28, 2012 at 12:43:19 PM PDT

      [ Parent ]

      •  Thanks for the elaboration. n/t (0+ / 0-)

        We organize governments to provide benefits and prevent abuse.

        by hannah on Fri Sep 28, 2012 at 01:19:38 PM PDT

        [ Parent ]

      •  Title insurance is a bet (0+ / 0-)

        as I see it.

        They make a simple search back 'a ways' and if they see nothing that alarms them they bet, you pay , for me it was $556 to cover it, as I got the extra coverage for an additional $50 that seemed much better for the kind of thing it covered and that I generally anticipated..as low probabilities, but anticipated.

        Yet with 15 minutes extra searching, and I had never done that kind of thing before, I found two totally wack transactions that their title company search hadn't. I had to go to the microfilm to do it..yet it was less than 5 years old.

        "We generally never get this kind of question..most people don't look this kind of thing up", she said. She being the head of the largest title company in the county.  She was amused a bit by my questions, and basically we had a good conversation about what they would and would not do. (I would have thought they would see lots more ADHD engineers:>)

        What they don't do in 'insure the title' but 'insure the legal claims costs of defending the title' and probably may make some compensation if they lose: my guess is they would make another calculation/swag and pay only if they felt they could lose..ie: you'd have to sue them maybe, and they would have to believe you would and would have a good enough case of negligence.
          'Title Insurance' is just one of the little cheap scams of the larger shell and pea confidence game that is much, too much of the real estate industry. Like all insurance you hate it til you need it.

        That whine said, I have been lucky to have only had to deal with good, even excellent people as my agents, yet the seriously dangerous amount of negligence and incompetence seen around me was simply amazing. And not legal altho the physical: bare live wires, poo in the toilets, criminals for maintenance and security...all implies not great for their legal practices. And that was the largest RE company in that small city.

        This machine kills Fascists.

        by KenBee on Fri Sep 28, 2012 at 02:47:21 PM PDT

        [ Parent ]

        •  not everything that shows (1+ / 0-)
          Recommended by:
          KenBee

          on a tract search is a title problem. It may have been insured over on a prior policy. or would not appear in the official record, which is not the tract at least in IL, but the Grantor/Grantee index. This is insurance remember, not a title report that shows anything that could be anything. If it's not shown, they insured you for it in most cases or it's just invalid. You said you found "wack transactions". Does that mean completely invalid transactions? For example, I can record a deed from myself to the Willis Tower in Chicago. It won't show on the title policy to the Willis Tower because I never owned the Willis Tower, and I can't deed what I don't own. There was an old man who died several years back who periodically deeded the Sears Tower (now Willis) to folks for many years in the 1960s- 1980s. He was well known. None of the deeds were valid. They never stopped any sale or mortgage on the Sears/Willis Tower because it would have been wrong if they did.

          Title does only insure only loss or damage, but if there is no loss or damage what are you looking for? If you want guaranteed title in a particular condition loss or no loss, you are talking about a Torrens system. I live in Chicago. We had one from the Chicago Fire until the late 1980s or early 1990s depending on the particular property. It was a nightmare. People were happy to see it go.

          Also, you should not hesitate to make claims. It costs only the postage stamp to make a title claim and you cannot call something a scam if you failed to do what you have to do to invoke it. The policy is far easier to read than any other type of insurance. The boilerplate is only 4 pages and not even full pages. They have to pay for defense, even if the matter is not covered. There is new case law on that in Illinois and it is very harsh toward the title company.

          I don't think the title side of title is a problem. Escrow is a whole other matter, but that of course is not title, but escrow. Two totally different things.

          All this being said, I personally prefer going straight to the underwriter and would not bother with agents.  Also, the physical part of the property, other than survey and boundary lines or known possession issues, has nothing to do with title insurance. If there are problems with the condition of a building, call the cops, or the municipal building department.

          Using my free speech while I still have it. http://www.ellenofthetenth.blogspot.com/

          by ebgill on Thu Oct 04, 2012 at 12:19:40 PM PDT

          [ Parent ]

          •   interesting (0+ / 0-)

            so much later and only accidentally noticed it just today..something made me click 'replies' on my 'welcome back' page instead of my usual ' comments'

            The  title was a concern because (besides that it's all our money, I have institutional trust issues, and never have had title insurance before) the previous owner was foreclosed on, it was a MERS transaction..so there is that whole ball of yarn...and...
               It was a state property taken in Imminent Domain and resold three owners ago, and the bit I found was done by the last owner. (The Foreclosed On,  incidentally for 20k more than his original note, he was an absentee landlord/slumlord)  
              I had to get personal with the head of the local title company when the title company hadn't seen two transactions where he added someone to the title, then took them off..
                I wanted to make sure they couldn't wiggle somehow if there were other unrecorded hard money loans that would later crop up...and had to bring these transactions to their attention, on paper to be reassured that this kind of thing would be covered by their defense.

            I am assuming from the timing that it was during his struggles with both the city bldg dept and the loan company that he borrowed money from an individual and then took the person back off in two recorded transactions....soon before foreclosure.

            The other oddness I wanted to ask about was how could there be a recorded debt against the deed when he was already likely behind on his loan payments at that point and be taking money from someone as I suppose a second loan..
               I wanted to make sure the title company could say all those debts were discharged during foreclosure.  
                 At that point likely he was already underwater, but it may have been a family member trying to help, he may have pledged some other security.
            Why I said 'wack' transactions is my question of how can he take money from someone as a recorded loan against a property he is being foreclosed on..it seems 'wack' as in fraudulent, and the mortgage holder would seemingly not be notified or approve somehow? Does that make sense?

            Here's hoping some leg breakers don't appear and try to collect for some hard money lender with an unrecorded note.

            Already a son of The Foreclosed has announced
            he is going to move back to town and live in the house and a former tenant broke in and tore out insulation looking for some stash of something.
              Yet another previous tenant wanted to come in and make a memorial to his dead son.
              Title Company probably can't help with that stuff. :>

            thanks for your reply..

            This machine kills Fascists.

            by KenBee on Thu Oct 04, 2012 at 02:41:55 PM PDT

            [ Parent ]

  •  Well that explains why he's the pickup truck guy (0+ / 0-)

    or the PinUp guy, and not the real estate legal professional.

    And he works to undermine reasonable real estate reforms and banking regulations?

    That's why all he's got are racist dogwhistles.

    Get back in yer truck and drive away.

     

    This machine kills Fascists.

    by KenBee on Fri Sep 28, 2012 at 02:53:00 PM PDT

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