And To Think I Wanted To Refer A Client to This Guyin HPN Blog
On Friday, Florida Foreclosure Defense Attorney Mark Stopa posted a blog claiming to morally outraged about how Fannie Mae will only sell their inventory in REO packages to investors who come to the table with a minimum of $10 million dollars.
This blog is an example why foreclosure defense attorneys are getting their asses handed to them in the courts by the punk kids at the foreclosure mills. It is filled with so many inaccuracies that if these are the types of arguments that pass for foreclosure defense, Florida homeowners are in serious trouble.
Here’s what Stopa writes:
I’ve often expressed my disgust at how Fannie Mae and Freddie Mac frequently pay banks 100% of their judgment amounts in foreclosure cases. It’s an appalling dynamic in foreclosure-world, one where banks often have no incentive to modify mortgages because “our” government will pay the banks in full once the foreclosure is over (and all the banks have to do is convey title to Fannie and Freddie). Incredibly, just when I thought I couldn’t be any more appalled, somehow, my disgust with this dynamic … with “our” government … reached a new level today.
The first thing that popped into my head after reading this was Lois Griffin from Family Guy saying, “Peter, hold on to that thought, because I’m gonna explain to you when we get home all the things that are wrong with that statement.” in response to Peter’s observation, “Yeah Brian, your doing the same thing that Mia Farrow did to that Chinaman that Woody Allen brought home from the circus! “
Stopa’s claim about Fannie Mae is filled with as many inaccuracies as Peter Griffin’s summary of Woody Allen’s affair and later marriage to his step-daughter, Soon-Yi Previn.
It is apparent Stopa has never bothered to actually copy of or read Fannie Mae guidelines before writing such a ludicrous claim. As I’ve written about before, Fannie Mae and Freddie Mac don’t buy anything at a foreclosure because they already have an ownership interest. The bogus foreclosure sale is just a formality to re-join the mortgage and the note so that Fannie Mae and Freddie Mac can do a post-foreclosure sale of the property with a free and clear title.
As my article from February points out,
As soon as the homeowner closes on his or her mortgage, the mortgage is recorded in the office of county Register of Deeds generally with MERS being named on the mortgage as the lender’s nominee. The note is then sold to a Fannie Mae or a Freddie Mac investor off the books depending on which agency is insuring the debt. The mortgage then stays in the name of the originating lender on record with the county Register of Deeds.
Once the mortgage servicer is ready to initiate the foreclosure, the note is then temporarily assigned to the mortgage servicer from Fannie Mae or Freddie Mac because Faannie Mae and Freddie Mac guidelines forbid Fannie Mae and Freddie Mac from foreclosing in their own names. Again, the assignment from Fannie Mae or Freddie Mac is done off the books with the mortgage being assigned from MERS to the current mortgage servicer showing MERS as the original mortgagee.
Fannie Mae and Freddie Mac guidelines specifically say that Fannie Mae and Freddie Mac are the owners of the respective notes regardless if it’s in their respective portfolio or not. Unlike most Mortgage Backed Securities which have separate Trustees and Insurance Providers, Fannie Mae and Freddie Mac act fulfills both responsibilities. Therefore, both Fannie Mae and Freddie Mac contend that if they insure it, they are considered the owner.
However, his Matt Weidner-syle histrionics and moral outrage doesn’t stop with his inaccurate claims that “our government” is buying Fannie Mae mortgages at face value. Stopa continues with what he believes is some type of secret government conspiracy involving millionaires and the media because FHFA now requires buyers of distressed Fannie and Freddie assets buy these REO properties in $10 million dollar bundles.
You know what’s arguably even worse? Nobody is even talking about this. No news stories. No media coverage. Nothing. I mean, seriously … Would you have known about this if Mark Stopa – basically a nobody in the scope of national news and politics – hadn’t blogged about it?
Why such secrecy? Where is the media coverage? Where’s the outrage? Who is running our government, exactly? This is as big an issue as Obamacare … thousands of homeowners getting foreclosed and their homes being sold in bulk to the mega-wealthy … why is nobody even talking about it? Is America really a land where our government takes houses from the poor and middle class and sells them in bulk at discounted rates to the mega-wealthy … and it does so completely in secret? Does anyone care?
The mainstream media outlets and industry trade publications have posted articles on FHFA selling these REOs in bulk packages in $10 million bundles. It was first reported on CNN back in February. Reuters reported Bank of America did their second offering of distressed Fannie properties in April. Mark, is it a secret if you’re not paying attention or not keeping up with whats going on?
FHFA is selling these REOs this way because it’s faster and cheaper than selling these properties one at a time to individual investors. They’re also doing it to keep the amateur investors and speculators from creating another housing crisis. Your person who is “personally involved” should have told you this because one, it’s simple logic and two, it’s not a big secret.
Contrary to your comment that, “This is what is driving the whole foreclosure crisis, and nobody knows about it.” It was amateur speculators and sub-prime mortgages that contributed to the housing collapse not FHFA selling post-foreclosures REOs in bulk.
People wonder why I keep ragging on foreclosure activists and foreclosure lawyers in Florida. Mark Stopa’s comments are a perfect example of why I keep doing it. They continually fan the flames of paranoia with inaccurate and false information in the hope of getting some free media coverage. They also do it based on a naive assumption that by fanning these flames that it will bring business from the activists community who believe everyone is entitled to a free house.