Legal Challenges, Advocacy And Notable Cases


LoanSafe Member
I decided to create a place for current developments, advocacy, and posting of notable wins and losses. Isisis already started a thread dedicated to California, which is a non-judicial foreclosure state. As others move through the process, it would be helpful to post additional State cases and legal advocacy actions that have bearing on court issues, restitution, and economic recovery of the pro se foreclosure defendant.

HUD is in the news. For those who have been processed into new securities and don't know it yet, this opinion article contains several links discussing HUD practices, policy initiatives, DASP effects on the mod offer and required wait time to foreclose, plus how the FHA loan selloffs short-changed HUD's home ownership retention objectives.

Is HUD really acting in the interest of Homeowners?


LoanSafe Member
Feb 11 2016. Here's a good one...
A.G. Schneiderman-Led State & Federal Working Group Announces $3.2 Billion Settlement With Morgan Stanley
Settlement Includes $550 Million For New York, Including Millions To Help New Yorkers Avoid Foreclosure And Rebuild Their Communities; Significant Resources Dedicated To Transforming Code Enforcement Systems And Combating Proliferation Of Zombie Homes
Settlement Addresses Misconduct That Contributed To The 2008 Financial Crisis

... this is probably the first time I've seen Morgan Stanley "admit" anything ...

"In the statement of facts, Morgan Stanley acknowledged that it increased the acceptable risk levels for loans in its securitized pools. This allowed Morgan Stanley to purchase various loans with loan-to-value (LTV) ratios over 100%, i.e. loans that were “underwater.” In a May 31, 2006 email, the head of Morgan Stanley’s team tasked with doing due diligence on the value of properties underlying the mortgage loans asked a colleague, “please do not mention the ‘slightly higher risk tolerance’ in these communications. We are running under the radar and do not want to document these types of things.”

In another email on November 21, 2006, a member of the Morgan Stanley due diligence team forwarded a list of questionable loans, seeking review and approval to purchase them and adding “I assume you will want to do your ‘magic’ on this one?” In another similar instance from July 2006, the head of Morgan Stanley’s valuation due diligence cleared dozens of risky loans for purchase after less than one minute of review per loan file.

In the settlement, Morgan Stanley also acknowledged that it securitized certain loans that neither complied with underwriting guidelines nor had adequate compensating factors. Morgan Stanley also purchased and securitized many loans which its credit and compliance team recommended not be purchased, after its finance team decided that the loans had “acceptable risk.” Furthermore, Morgan Stanley allowed loans that it knew were risky to be purchased and securitized without a loan file review for credit and compliance."