By the Foreclosure Defense Group of Occupy Nevada County

The Foreclosure Defense Group of Occupy Nevada County is made up of community members concerned about the high rate of foreclosures in our community. We are learning how to search county records for fraudulent assignments, and our research has revealed many improprieties by banks and loan servicers. We have witnessed many foreclosure auctions held on the steps of the Nevada City Courthouse, and have demonstrated against the seizure of homes by the very banks that caused the foreclosure crisis in the first place. We started a Foreclosure and Eviction Support and Empowerment Group, which meets Wednesdays at the Nevada City United Methodist Church. Community members who are going through foreclosure are now searching us out and we are trying to support them.

According to Realty Trac, over 5,000 homes in Nevada County have been foreclosed since 2008. There are currently 877 Nevada County homes listed for foreclosure.

In addition to the tragedy of personal loss, the foreclosure crisis has devastated Nevada County as a whole. Foreclosures provoke further decline in home prices, resulting in dramatic decreases in property tax revenue and drastic cuts to county jobs and services. Foreclosed homes cause neighborhood blight, crime, and public safety issues.

Estimated costs of the foreclosure crisis to Nevada County, including loss in home values, property tax loss, costs to local government, along with the methods of calculating these costs, can be found at the following website: http://dig.abclocal.go.com/kgo/PDF/Home-Wreckers-Report.pdf

Over the last two years incontrovertible evidence has emerged around the country that the loan servicers of the five largest banks have filed and recorded millions of fraudulent documents to illegally foreclose on homeowners. In February, 2012, San Francisco County Recorder Phil Ting announced that an audit of foreclosure documents in his office revealed that 99% of the sampled foreclosures had “suspicious activities” and 84% had “at least one clear violation of the law.” Most of these foreclosures contained more than one class of violation and some had up to six. In almost all cases these violations were related to chain of assignment issues, largely resulting from mortgage securitization, and the inability of foreclosure servicing agencies to demonstrate legal standing to foreclose.

In Nevada County the percentage of foreclosures has been much higher than in San Francisco County (5000 foreclosures in much-smaller Nevada County compared to 12,000 in San Francisco County). A thorough audit by the Nevada County Clerk-Recorder’s office would almost certainly reveal a similar proportion of suspicious activities and violations of law.

One problem for California counties, including Nevada County, is that banks are using the MERS (Mortgage Electronic Registry System) to transfer and assign mortgages. MERS is like a opaque “black box” that allows banks to obscure the chain of title on individual properties and avoid County recording fees. This has deprived the Nevada County Clerk Recorder’s Office of needed funds and has resulted in a significant reduction of staff. The system makes it very difficult for homeowners (and others) to track the various assignments and to uncover who is the legitimate owner of the loan (to whom they should be making payments). Audits of the MERS system have revealed widespread fraud. While banks require home buyers to be transparent, fill out mounds of paperwork, and pay recording fees, MERS enables the banks themselves to avoid doing so.

In short, there is little or no oversight of the foreclosure process, particularly in non-judicial foreclosure states like California. Our counties and homeowners are suffering the consequences.

There needs to be a state-wide and nation-wide solution to this problem. California Attorney General Kamala Harris is calling for a “Homeowner Bill of Rights,” comprised of a series of bills designed to protect homeowners from abusive mortgage practices and to help devastated communities recover from the foreclosure crisis. Among the other provisions in Harris’ bills are requirements that lenders prove to homeowners that they have a right to foreclose on a property before doing so ((http://www.smdailyjournal.com/article_preview.php?id=232815)). The legislation she supports is currently stalled in committee due to heavy lobbying by banking interests ((http://www.huffingtonpost.com/2012/04/17/kamala-harris-homeowners-bill-of-rights-setback_n_1433159.html)).

Our group has formed an Eviction Response Team, to support foreclosed families or tenants of foreclosed homes on an emergency basis if their rights are not being observed or if they are being harassed. (Yes, it happens here.)

We have formed a Fraud Investigation Team, to explore the extent of fraudulent assignments and other mortgage-related documents in the County Clerk-Recorder’s office.

We have also been exploring the legality of the foreclosure auctions taking place on the steps of the County Courthouse. Their courthouse location implies that they are lawful and sanctioned by the County. These auctioneers will not even give their names. According to the California Secretary of State, some of the foreclosing companies they represent are not licensed to do business in the State of California.