Freddie Mac Comments on the Final Report and Recommendations on Residential Mortgage Foreclosure Cases Florida Supreme Court

Recommendation regarding verification of “ownership” of the mortgage

“The Task Force has recommended a requirement for a plaintiff in a foreclosure action to verify that it owns and holds the note. Typically, the plaintiff in a foreclosure action does not own the underlying note or loan that is secured by the property subject to the foreclosure proceeding. Freddie Mac’s servicers initiate foreclosure actions in their names, even though they are not the owners of the notes or loans in question, because they are the mortgagees as shown on the land records (by fraudulent, fabricated assignments) and they are the holders (not in due course) or otherwise in possession of the (fabricated) notes. During foreclosure proceedings, our servicers and foreclosure counsel have authority to negotiate and execute loan restructurings (against what the pooling and servicing agreements state) and other foreclosure alternatives (trial modifications that are ultimately denied) with borrowers as well as attend (pointless) mediation. To require investors who do not service the loan to be a party in the foreclosure action and attend mediation would be costly and unduly burdensome, which may result in additional costs being passed on to the borrower. The intended purpose of the mediation program could be achieved effectively without this verification requirement.”

Robert E. Bostrom
Freddie Mac
Executive Vice President
General Counsel & Corporate Secretary

“TYPICALLY……….The Plaintiff in a foreclosure action does not own the underlying note or loan………”


It IS Typical today!

You know what’s the biggest crack up?

Here we are struggling mightily to PROVE that the Plaintiff doesn’t own the mortgage or note in cases where the Plaintiff is forging documents to PROVE that they DO own the mortgage and note………………and la-de-da in waltzes Freddie Mac’s VP and bumbles his way into the most inane (and shockingly honest) comment in the world!


15 Responses to “Freddie Mac Comments on the Final Report and Recommendations on Residential Mortgage Foreclosure Cases Florida Supreme Court”
  1. To Tell The Truth says:

    Fannie Mae fire sales dilute regional home values
    DETROIT – Aug. 22, 2011 – Fannie Mae and Freddie Mac are selling hundreds – perhaps thousands – of foreclosed properties in metro Detroit for far less than they appear to be worth, a practice that leaders say is driving down local property values and weakening neighborhoods.

    In some instances, homes listed by the government-financed mortgage giants are being snapped up by private investors, then re-sold within days or weeks for far more money.

    Local officials blame the federal government – which took control of Fannie and Freddie in 2008 at a cost to taxpayers of at least $141 billion – for doing little to stop the fire sales.

    “It’s an unconscionable practice,” said Oakland County, Mich., Treasurer Andy Meisner. “It’s fiscally irresponsible from their perspective because they’re getting pennies on the dollar, and it’s fiscally reckless from our perspective” because Fannie and Freddie “are almost single-handedly … killing our property values.”

    Meg Burns, chief of policy at the Federal Housing Finance Agency, which regulates Fannie and Freddie, acknowledged the two companies are eager to sell foreclosed homes as quickly as possible. But she said the aim is to prevent vacant homes and neighborhood deterioration, not to destroy property values.

    A Detroit Free Press investigation, including an analysis of more than 700 real estate transactions in the past year, finds that Fannie and Freddie are selling foreclosed homes, on average, for one-third less than the homes’ already-deflated market value in some areas, and at less than half of market value in other neighborhoods.

    Critics say the low list prices are part of the companies’ rush to get foreclosed homes off their books while U.S. taxpayers are still covering the mortgage giants’ losses, three years after the federal government bailout.

    In February and March, 34 Fannie and Freddie properties in Southfield, Mich., were sold by the mortgage giants for 55 percent of their market value, on average, property records show.

    In Farmington, Mich., and Farmington Hills, Mich., 30 homes sold at 66 percent of their market value.

    And 75 Fannie and Freddie homes in Warren, Mich., sold for an average of 45 percent of their market value.

    The price tags on some home sales were equally jaw-dropping. Take these examples in Oakland County:

    • A foreclosed Ferndale home with a market value of more than $70,000 was sold by Fannie for $11,100 in February.

    • A Waterford home valued at $73,000 was sold by Fannie for $8,619 in January.

    • Freddie sold a Milford Township home on 5 acres for $101,000 in 16 days. Its market value was nearly twice that: $194,300.

    Oakland County Deputy Executive Bob Daddow called the sales a “travesty” that have helped home values fall by a third since 2007, costing local governments tax revenues.

    “It crushes our budgets. … We’re completely revamping government as we once knew it,” Daddow said.

    Critics say Fannie and Freddie can sell homes far below their value because, under the terms of the companies’ 2008 taxpayer bailout, taxpayers cover the cost of their losses.

    Moreover, because the mortgage giants dominate the local market of distressed property sales, ordinary homeowners and other sellers of foreclosed homes are forced to compete with their prices, further driving down property values and local tax revenues.

    The situation is particularly acute in the region’s poorest cities. In Detroit, 49 Fannie properties sold this summer at 22 percent of market value, on average.

    And across Wayne County, Fannie Mae properties went at fire-sale prices, records show:

    • $2,500 for an Ecorse home that is valued at $60,000

    • $45,000 for a Livonia home valued at nearly $100,000

    • $11,000 for a home in Westland valued at $56,400.

    Wayne County Executive Robert Ficano said the U.S. Treasury Department, which is bailing out Fannie and Freddie, should investigate the sales and “hold people accountable for things that just don’t make common sense.”

    Similar complaints echoed from Macomb County, Mich.

    “It’s fundamentally clear to me that the federal government is … dumping them on the market,” Warren Mayor Jim Fouts said of the home sales and the blight that follows. “It’s creating some unacceptable problems for cities like Warren,” which is located in Macomb County.

    Across Macomb County, Fannie Mae appears to be selling on the cheap: $29,000 for a Fannie property in Harrison Township valued at $152,240; $18,000 for a Fannie property in Eastpointe valued at $64,120.

    Burns, the official at the Federal Housing Finance Agency, disputes that the mortgage giants are dumping homes, arguing they are merely trying to stabilize neighborhoods by keeping homes from sitting empty.

    “Our overarching concern is vacant properties sitting on the market for too long.”

    An FHFA spokeswoman, Corinne Russell, added that Fannie and Freddie have procedures to ensure that sales of foreclosed homes are “sound and that every effort is made to preserve the assets, helping to protect the community from destabilization and decline.”

    Fannie Mae spokesman Andrew Wilson said the company typically bases its listing price on an appraisal and the recommendation of a broker.

    “Once a value has been established … our marketing efforts are primarily focused on finding buyers for our properties at a price that promotes neighborhood stabilization,” he said. “Our No. 1 goal is to sell to owner-occupants who will move into the neighborhood and help to stabilize the community.”

    Wilson declined to answer other questions about Fannie’s practices or address the metro Detroit home sale data compiled by the Detroit Free Press.

    Freddie spokesman Brad German said he rejected “assertions that we’re selling at uncompetitive prices.”

    Nationally, during the first quarter of 2011, German said Freddie Mac properties sold at 92 percent of market value, as determined by market sales.

    “We stand by our pricing and marketing strategy, which is helping us minimize losses while being good stewards of taxpayer resources and supporting the housing market,” German said.

    German also took issue with the Free Press analysis, arguing that the assessed value of a home doesn’t always capture factors that can lower the price the home is eventually sold for, such as the current condition of the property and the market.

    But Dearborn, Mich., appraiser Jumana Judeh said assessed value – used in part to figure property taxes – remains “an excellent reflection of the market.”

    Wayne State University law professor John Mogk, an expert in real estate and urban development, also called assessed values a valid benchmark and “a reasonable standard to use.”

    In Michigan, the assessed value is supposed to be half the market value of a home. Independence Township, Mich., appraiser Louise Braun used twice a home’s assessed value as her benchmark to compare Fannie and Freddie sales of foreclosed homes against the sale of other single-family homes in several Oakland County communities.

    • In June, for example, Fannie and Freddie foreclosures sold at 67 percent of the market value in Berkley, on average. Non-foreclosed homes in Berkley sold at 96 percent of market value, on average.

    • Fannie and Freddie homes in Orion Township and Lake Orion sold, on average, for 70 percent of their value. Non-foreclosures sold at 114 percent of market value.

    • And in Independence Township and Clarkston, the Fannie and Freddie homes sold, on average, for 76 percent of market value, compared with the non-foreclosures that sold for 108 percent of market value, on average.

    Georgia Institute of Technology accounting professor Charles Mulford, who studies how companies report their finances, said Fannie and Freddie feel no compulsion to maximize profits now that they are controlled – and subsidized – by the government. The companies, he said, are more interested in getting troubled mortgages, including foreclosed homes, “off the books so they can start anew, making new loans, loans that are more profitable.”

    Dwayne McLachlan, president of the Michigan Assessors Association and the Pittsfield Township assessor, said the impact of depressed home sales on communities can be devastating.

    “All it takes is one low sale in a neighborhood to corrupt that market for that (subdivision) or site condo complex,” said Braun, the Independence Township appraiser.

    Time and again, area property records show, investors are snapping up low-ball listings by Fannie and Freddie and turning a quick and sizable profit, an indication that the mortgage giants are listing the homes for far too little, real estate experts said.

    Ted Phillips, executive director of the United Community Housing Coalition, a Detroit advocacy group for low-income housing, said he has seen Fannie Mae refuse to allow homeowners to stay in a home for less than what they owe on a mortgage – only to sell the property to an investor for far less than what the struggling homeowner had offered to pay.

    “Then you’ve got another slum rental property in the community. If they’re using tax dollars, why aren’t they using tax dollars efficiently?” he said.

    “Even the worst slum landlord understands that basic concept. Why wouldn’t you take the $10,000 from the homeowner? But they will take $2,000 or $3,000 from an investor?”

    Freddie Mac sold a Warren property on March 15 for $31,000. The home resold 10 days later for $45,500. The city says no building permits were pulled, indicating that it was unlikely the buyer made any big improvements before reselling the home at a 47 percent profit.

    Fannie Mae sold an Auburn Hills, Mich., home in June 2010 for $45,000. It was resold for $129,900 in January. No permits were pulled on that home, either.

    That home was among 38 Fannie and Freddie properties that were resold, or “flipped,” in Oakland County during the first four months of 2011. The homes fetched, on average, twice what Fannie and Freddie received for the homes.

    While resales by investors may help stabilize housing prices, critics say the U.S. taxpayers who bailed out Fannie and Freddie are the ones being shortchanged when these homes are listed for less than what they might fetch.

    “It’s another indicator the selling price is not representative of the market,” said Philip Mastin, director of assessments and equalization for Wayne County, who said Fannie and Freddie homes are being resold at nearly double the original price in his county.

    Listings of Fannie and Freddie homes show that the mortgage giants were prepared to sell some houses for less than what comparable properties in the same neighborhood fetched, records show.

    For example, Fannie listed a four-bedroom home in Troy, Mich., at $141,000 in March, even though four similar or smaller homes nearby sold for roughly $160,000. The Fannie home was on the market for three days before it had a buyer for $170,000 – nearly $30,000 above its list price.

    Freddie Mac was willing to take $153,900 for a property in South Lyon, Mich., last spring, even though there was a nearly identically sized home in that subdivision listed at the same time for $193,000 and a smaller house for $164,900. Freddie got $155,000 for its property; the other sellers got $179,000 and $165,500.

    German, the Freddie spokesman, said the mortgage giant’s properties sell in an average of 110 days nationally. But in metro Detroit, Freddie’s own numbers show that its properties are selling far more quickly – in roughly 50 days. Property experts say that indicates the homes are listed too low.

    Of the 72 homes that Freddie contracted for sale in Oakland County in April, 58 were on the market for less than a month before buyers signed contracts, according to data compiled by Braun.

    One of the Freddie foreclosures, in Springfield Township, Mich., was offered in the Multiple Listing Service at 9:19 a.m. on April 11 for $38,900 – even though its market value was $123,000. Within 24 hours, someone had a contract to buy it for $42,500.

    Judeh, the Dearborn appraiser, said homes typically need three to six months of marketing. “And if you don’t market them properly, it becomes dumping, not selling, and there’s a huge difference,” Judeh said.

    Through May, home prices in metro Detroit have fallen 38 percent since 2000, according to the S&P/Case-Shiller home price index. As Fannie and Freddie contribute to the downward spiral in property values, tax revenues fall, too.

    In Eastpointe, property values have dropped 54 percent since 2008, and Linda Weishaupt, assessor and deputy city clerk, blames foreclosures for much of that decline.

    Since 2009, property values have dropped 21 percent in Rochester Hills, Mich., and the city expects another 10 percent reduction over the next two years, said Keith Sawdon, city finance director.

    Erik Ambrozaitis, a Rochester Hills Realtor and mayoral candidate, said the decline in revenues is “the crisis. The roads in front of my house are starting to crumble. As a Realtor, I’m deeply concerned. As a homeowner, I’m really concerned. As a former council member, it is a disaster.”

    Mastin, the Wayne County official, said even if home prices recover, communities won’t recoup lost revenues quickly.

    “We will never be able to recover what’s been lost,” Mastin said. “What’s been taken away has been taken away.”

    © 2011 Detroit Free Press. Distributed by McClatchy-Tribune Information Services.

  2. Carol says:

    Freddie and Fannie operators along with those banksters who committed fraud must be FIRED immediately and jailed. Taken down with handcuffs! just like any criminal! They are the threat to society!

  3. Ron Moss says:

    Consumer protection is set up to protect contributors, In our case that means, Wells Fargo, Bank of America, etc but not for consumers of credit. They must go to jail as wew would if it were reversed whic is exactly what it should be , reversed, All MERS ordered Foreclosures should be reversed

  4. yvonne says:

    Am I misunderstanding what Fannie Mae i saying and doing? I am thinking from what I read that they are conspiring with the banksters…by not wanting them to show they have the original note? Making it easy for them to perpetuate the lies and frauds? Someone, kindly explain if I have misunderstood or not?

  5. Jan says:

    The biggest revelation (interesting that the word means “the revealing of the truth) today is that the banks are prohibited by their bank charter to lend their own money or the depositors money. So the big question is, where did they get the money to lend us in the first place? Then we go to the Federal Reserve’s manual- Modern Money Mechanics, that describes in detail that they “create money out of thin air”.. They can then multiply the amount lent 10 times and invest it at their leisure. Well gee, if that’s the case, then where is their “proof of loss”? These masters of the shell game have duped us all! If we are the ones that create the credit with our signatures, then we are really the creditors and the banks are the debtors. They deposit the money that was received from the note you sign in their bank (under your name), then turn around and “lend” it back to us. Then sell the payments to the investors in the securities pools. This money manipulation is all for the purpose of obtaining profits to the money masters – men who do nothing to earn it, they just create an entry on a computer screen. And the sheeple have to work to pay taxes to make up for the interest the money masters charge to “issue” our debt currency. When the masses wake up and “get it”, the only solution is like they did when Rome collapsed – forgive ALL the debt and start over. Only this time, we need to kick the crooks out of our country and start issuing our money INTEREST FREE, and eliminate all income and property tax! THEN will this country become truly free again.

    • h5mind says:

      I spoke to a senior official at Freddie Mac regarding the tremendous problems I was having getting my loan modified. He very candidly admitted, as did Mr. Bostrom in the above letter, that investors own these notes, not Freddie. But herein lies the rub: your loan was not delivered intact to one particular investor, but instead sliced up like pepperoni and scattered across multiple mortgage-backed securities. These ‘investment vehicles’ were then further disseminated to who-knows-where.

      Thanks to how MERS tracks the passing of title from one hand to another (or doesn’t track, depending on your viewpoint) It is now nearly impossible to identify exactly who are all the firms or investors with a securitized interest in your home. Even the investors themselves have little idea. If they do manage to follow the paper trail to those owning your mortgage, they then have to reconstitute the loan into a single modifiable entity with the permission of all affected investors. This is rarely, if ever, given.

      You can see now why although the banks talk a good game of modifying loans, their track record is abysmally poor thanks to this equitable interest debacle, even if they weren’t greedy, heartless bastards to boot.

      A bit of advice: you don’t get what your deserve, but what you negotiate for. We sold our last house to a couple who subsequently lost it when the economy tanked and Freddie denied their modification request. That property, with a $400K tax value and $365K loan balance, sold for $31k in March of this year– a 92% discount. Nice house, nice location, plenty of upgrades, etc. I would have bought it again had I known. I’m sure the previous owners would have as well. These are the sort of slimy deals Freddie is making to quietly unload the thousands of properties on their books. The point is, hold out for your own deal, and make it happen.

    • akismet-280a7d19e5830e457c059542903c3854 says:

      We have been reading about this foreclosure thing for over a year now. I have the conviction that the banking industry aided and abetted by the democrats (not the Republics) in Washington DC set the table for all of this. Those in the business of “flipping” acerbated the situation.

      So then if this is right and I think if we were to think objectively then our conclusion would be that this statement is correct.Then who or what group should pay the piper for this dance? Please don’t quote legalize doctrine! I’m talking right and wrong.

      I have been a state of Florida certified general contractor since the year 1973. I have been in this industry beginning in 1963 working a summer job as an electricians helper. My business and every other individual’s business in the industry has suffered a serious negative impact with this situation the likes of which I have never previously seen.

      general contractor FHA registered home inspections toll free 877-382-0811

  6. Michelle Leonard says:

    IS THIS FOR REAL! I am shocked that these comments where made. All I have to say is thank you Bostrom for all the info!!!!!

  7. Rob Harrington says:

    Bostrom, in the same breath, also acknowledges they have the right to foreclose because “they are the mortgagees on the land records…’

    So what if those records have been FRAUDULENTLY recorded in the county records with forgeries and by parties who are not actually real employee/officers of the foreclosing “holder of due course” entity? Would that invalidate Bostrom’s claims to the Chief Justice?

    Ouch! And the net seems to be closing in on the conspiracy….

    Are any expert foreclosure defense attorneys challenging and disputing the validity of this letter to the Honorable Chief Justice?

  8. zurenarrh says:

    Holy shit! Good, nay great, find! I like how Bostrom tries to portray stealing someone’s house as an act of benevolence, because getting the REAL owners involved would just be too expensive for the poor “borrower!”

    Not only does he acknowledge that servicers don’t own the Note/Mortgage, he openly acknowledges that THE INVESTORS ARE THE OWNERS. Granted, he backs into that acknowledgment, but nevertheless, that’s what he’s saying.

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