National Honesty Day? America’s Book of Lies

Today is National Honesty Day. While it should be a celebration of how honest we have been the other 364 days of the year, it is rather a day of reflection on how dishonest we have been. Perhaps today could be a day in which we say we will at least be honest today about everything we say or do. But that isn’t likely. Today I focus on the economy and the housing crisis. Yes despite the corruption of financial journalism in which we are told of improvements, our economy — led by the housing markets — is still sputtering. It will continue to do so until we confront the truth about housing, and in particular foreclosures. Tennessee, Virginia and other states continue to lead the way in a downward spiral leading to the lowest rate of home ownership since the 1990’s with no bottom in sight.

Here are a few of the many articles pointing out the reality of our situation contrasted with the absence of articles in financial journalism directed at outright corruption on Wall Street where the players continue to pursue illicit, fraudulent and harmful schemes against our society performing acts that can and do get jail time for anyone else who plays that game.

It isn’t just that they escaping jail time. The jailing of bankers would take a couple of thousand people off the street that would otherwise be doing harm to us.

The main point is that we know they are doing the wrong thing in foreclosing on property they don’t own using “balances” the borrower doesn’t owe; we know they effectively stole the money from the investors who thought they were buying mortgage bonds, we know they effectively stole the title protection and documents that should have been executed in favor of the real source of funds, we know they received multiple payments from third parties and we know they are getting twin benefits from foreclosures that (a) should not be legally allowed and (b) only compound the damages to investors and homeowners.

The bottom line: Until we address wrongful foreclosures, the housing market, which has always led the economy, will continue to sputter, flatline or crash again. Transferring wealth from the middle class to the banks is a recipe for disaster whether it is legal or illegal. In this case it plainly illegal in most cases.

And despite the planted articles paid for by the banks, we still have over 700,000 foreclosures to go in the next year and over 9,000,000 homeowners who are so deep underwater that their situation is a clear and present danger of “strategic default” on claims that are both untrue and unfair.

Here is a sampling of corroborative evidence for my conclusions:

Senator Elizabeth Warren’s Candid Take on the Foreclosure Crisis

There it was: The Treasury foreclosure program was intended to foam the runway to protect against a crash landing by the banks. Millions of people were getting tossed out on the street, but the secretary of the Treasury believed the government’s most important job was to provide a soft landing for the tender fannies of the banks.”

Lynn Symoniak is Thwarted by Government as She Pursues Other Banks for the Same Thing She Proved Before

Government prosecutors who relied on a Florida whistleblower’s evidence to win foreclosure fraud settlements with major banks two years ago are declining to help her pursue identical claims against a second set of large financial institutions.

Lynn Szymoniak first found proof that millions of American foreclosures were based on faulty and falsified documents while fighting her own foreclosure. Her three-year legal fight helped uncover the fact that banks were “robosigning” documents — hiring people to forge signatures and backdate legal paperwork the firms needed in order to foreclose on people’s homes — as a routine practice. Court papers that were unsealed last summer show that the fraudulent practices Szymoniak discovered affect trillions of dollars worth of mortgages.

More than 700,000 Foreclosures Expected Over Next Year

How Bank Watchdogs Killed Our Last Chance At Justice For Foreclosure Victims

The results are in. The award for the sorriest chapter of the great American foreclosure crisis goes to the Independent Foreclosure Review, a billion-dollar sinkhole that produced nothing but heartache for aggrieved homeowners, and a big black eye for regulators.

The foreclosure review was supposed to uncover abuses in how the mortgage industry coped with the epic wave of foreclosures that swept the U.S. in the aftermath of the housing crash. In a deal with the Office of the Comptroller of the Currency and the Federal Reserve, more than a dozen companies, including major banks, agreed to hire independent auditors to comb through loan files, identify errors and award just compensation to people who’d been abused in the foreclosure process.

But in January 2013, amid mounting evidence that the entire process was compromised by bank interference and government mismanagement, regulators abruptly shut the program down. They replaced it with a nearly $10 billion legal settlement that satisfied almost no one. Borrowers received paltry payouts, with sums determined by the very banks they accused of making their lives hell.

Investigation Stalled and Diverted as to Bank Fraud Against Investors and Homeowners

The Government Accountability Office released the results of its study of the Independent Foreclosure Review, conducted by the Office of the Comptroller of the Currency and the Federal Reserve in 2011 and 2012, and the results show that the foreclosure process is lacking in oversight and transparency.

According to the GAO review, which can be read in full here, the OCC and Fed signed consent orders with 16 mortgage servicers in 2011 and 2012 that required the servicers to hire consultants to review foreclosure files for efforts and remediate harm to borrowers.

In 2013, regulators amended the consent orders for all but one servicer, ending the file reviews and requiring servicers to provide $3.9 billion in cash payments to about 4.4 million borrowers and $6 billion in foreclosure prevention actions, such as loan modifications. The list of impacted mortgage servicers can be found here, as well as any updates. It should be noted that the entire process faced controversy before, as critics called the IFR cumbersome and costly.

Banks Profit from Suicides of Their Officers and Employees

After a recent rash of mysterious apparent suicides shook the financial world, researchers are scrambling to find answers about what really is the reason behind these multiple deaths. Some observers have now come to a rather shocking conclusion.

Wall Street on Parade bloggers Pam and Russ Martens wrote this week that something seems awry regarding the bank-owned life insurance (BOLI) policies held by JPMorgan Chase.

Four of the biggest banks on Wall Street combined hold over $680 billion in BOLI policies, the bloggers reported, but JPMorgan held around $17.9 billion in BOLI assets at the end of last year to Citigroup’s comparably meager $8.8 billion.

Government Cover-Up to Protect the Banks and Screw Homeowners and Investors

A new government report suggests that errors made by banks and their agents during foreclosures might have been significantly higher than was previously believed when regulators halted a national review of the banks’ mortgage servicing operations.

When banking regulators decided to end the independent foreclosure review last year, most banks had not completed the examinations of their mortgage modification and foreclosure practices.

At the time, the regulators — the Office of the Comptroller of the Currency and the Federal Reserve — found that lengthy reviews by bank-hired consultants were delaying compensation getting to borrowers who had suffered through improper modifications and other problems.

But the decision to cut short the review left regulators with limited information about actual harm to borrowers when they negotiated a $10 billion settlement as part of agreements with 15 banks, according to a draft of a report by the Government Accountability Office reviewed by The New York Times.

The report shows, for example, that an unidentified bank had an error rate of about 24 percent. This bank had completed far more reviews of borrowers’ files than a group of 11 banks involved the deal, suggesting that if other banks had looked over more of their records, additional errors might have been discovered.

Wrongful Foreclosure Rate at least 24%: Wrongful or Fraudulent?

The report shows, for example, that an unidentified bank had an error rate of about 24 percent. This bank had completed far more reviews of borrowers’ files than a group of 11 banks involved the deal, suggesting that if other banks had looked over more of their records, additional errors might have been discovered.

http://www.marketpulse.com/20140430/u-s-housing-recovery-struggles/

http://www.csmonitor.com/Business/Latest-News-Wires/2014/0429/Home-buying-loses-allure-ownership-rate-lowest-since-1995

http://www.opednews.com/articles/It-s-Good–no–Great-to-by-William-K-Black–Bank-Failure_Bank-Failures_Bankers_Banking-140430-322.html

[DISHONEST EUPHEMISMS: The context of this WSJ story is the broader series of betrayals of homeowners by the regulators and prosecutors led initially by Treasury Secretary Timothy Geithner and his infamous “foam the runways” comment in which he admitted and urged that programs “sold” as benefitting distressed homeowners be used instead to aid the banks (more precisely, the bank CEOs) whose frauds caused the crisis.  The WSJ article deals with one of the several settlements with the banks that “service” home mortgages and foreclose on them.  Private attorneys first obtained the evidence that the servicers were engaged in massive foreclosure fraud involving knowingly filing hundreds of thousands of false affidavits under (non) penalty of perjury.  As a senior former AUSA said publicly at the INET conference a few weeks ago about these cases — they were slam dunk prosecutions.  But you know what happened; no senior banker or bank was prosecuted.  No banker was sued civilly by the government.  No banker had to pay back his bonus that he “earned” through fraud.

 

 

BONY Objections to Discovery Rejected

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It has been my contention all along that these cases ought to end in the discovery process with some sort of settlement — money damages, modification, short-sale, hardest hit fund programs etc. But the only way the homeowner can get honest terms is if they present a credible threat to the party seeking foreclosure. That threat is obvious when the Judge issues an order compelling discovery to proceed and rejecting arguments for protective orders, (over-burdensome, relevance etc.). It is a rare bird that a relevance objection to discovery will be sustained.

Once the order is entered and the homeowner is free to inquire about all the mechanics of transfer of her loan, the opposition is faced with revelations like those which have recently been discovered with the Wells Fargo manual that apparently is an instruction manual on how to commit document fraud — or the Urban Lending Solutions and Bank of America revelations about how banks have scripted and coerced their employees to guide homeowners into foreclosure so that questions of the real owner of the debt and the real balance of the debt never get to be scrutinized. Or, as we have seen repeatedly, what is revealed is that the party seeking a foreclosure sale as “creditor” or pretender lender is actually a complete stranger to the transaction — meaning they have no ties i to any transaction record, and no privity through any chain of documentation.

Attorneys and homeowners should take note that there are thousands upon thousands of cases being settled under seal of confidentiality. You don’t hear about those because of the confidentiality agreement. Thus what you DO hear about is the tangle of litigation as things heat up and probably the number of times the homeowner is mowed down on the rocket docket. This causes most people to conclude that what we hear about is the rule and that the settlements are the exception. I obviously do not have precise figures. But I do have comparisons from surveys I have taken periodically. I can say with certainty that the number of settlements, short-sales and modifications that are meaningful to the homeowner is rising fast.

In my opinion, the more aggressive the homeowner is in pursuing discovery, the higher the likelihood of winning the case or settling on terms that are truly satisfactory to the homeowner. Sitting back and waiting to see if the other side does something has been somewhat successful in the past but it results in a waiver of defenses that if vigorously pursued would or could result in showing the absence of a default, the presence of third party payments lowering the current payments due, the principal balance and the dollar amount of interest owed. If you don’t do that then your entire case rests upon the skill of the attorney in cross examining a witness and then disqualifying or challenging the testimony or documents submitted. Waiting to the last minute substantially diminishes the likelihood of a favorable outcome.

What is interesting in the case below is that the bank is opposing the notices of deposition based upon lack of personal knowledge. I would have pressed them to define what they mean by personal knowledge to use it against them later. But in any event, the Judge correctly stated that none of the objections raised by BONY were valid and that their claims regarding the proper procedure to set the depositions were also bogus.

tentative ruling 3-17-14

Hearsay on Hearsay: Bank Professional Witnesses Using Business Records Exception as Shield from Truth

Wells Fargo Manual “Blueprint for Fraud”

Hat tip to my law partner, Danielle Kelley, Esq., for sending me the manual and the reports on it. Anyone desirous of a consultation on the application of what is on this blog, must either be a lawyer or have a lawyer who is licensed in the jurisdiction in which the property is located. For scheduling call 954-495-9867 (South Florida Office), 850-765-1236 (North Florida Office), and 520-405-1688 (Western United States). International callers: The same rules apply.

Well that didn’t take long. Like the revelations concerning Urban Lending Solutions and Bank of America, it is becoming increasingly apparent that the the intermediary banks were hell bent for foreclosure regardless of what was best for the investors or the borrowers. This included, fraud, fabrication, unauthorized documents and signatures, perjury and outright theft of money and identities. I understand the agreement between the Bush administration and the large banks. And I understand the reason why the Obama administration continued to honor the agreements reached between the Bush administration and the large banks. They didn’t have a clue. And they were relying on Wall Street to report on its own behavior. But I’m sure the agreement did not even contemplate the actual crimes committed. I think it is time for US attorneys and the Atty. Gen. of each state to revisit the issue of prosecution of the major Wall Street banks.

With the passage of time we have all had an opportunity to examine the theory of “too big to fail.” As applied, this theory has prevented prosecutions for criminal acts. But more importantly it is allowing and promoting those crimes to be covered up and new crimes to be committed in and out of the court system. A quick review of the current strategy utilized in foreclosure reveals that nearly all foreclosures are based on false assumptions, no facts,  and a blind desire for expediency that  sacrifices access to the courts and due process. The losers are the pension funds that mistakenly invested into this scheme and the borrowers who were used as pawns in a gargantuan Ponzi scheme that literally exceeded all the money in the world.

Let’s look at one of the fundamental strategies of the banks. Remember that the investment banks were merely intermediaries who were supposedly functioning as broker-dealers. As in any securities transaction, the investor places in order and is responsible for payment to the broker-dealer. The broker-dealer tenders payment to the seller. The seller either issues the securities (if it is an issuer) or delivers the securities. The bank takes the money from the investors and doesn’t deliver it to an issuer or seller, but instead uses the money for its own purposes, this is not merely breach of contract —  it is fraud.

And that is exactly what the investors, insurers, government guarantors and other parties have alleged in dozens of lawsuits and hundreds of claims. Large banks have avoided judgment based on these allegations by settling the cases and claims for hundreds of billions of dollars because that is only a fraction of the money they diverted from investors and continue to divert. This continued  diversion is accomplished, among other ways, through the process of foreclosure. I would argue that the lawsuits filed by government-sponsored entities are evidence of an administrative finding of fact that causes the burden of proof to be shifted to the cloud of participants who assert that they are part of a scheme of securitization when in fact they were part of a Ponzi scheme.

This cloud of participants is managed in part by LPS in Jacksonville. If you are really looking for the source of documentation and the choice of plaintiff or forecloser, this would be a good place to start. You will notice that in both judicial and non-judicial settings, there is a single party designated as the apparent creditor. But where the homeowner is proactive and brings suit against multiple entities each of whom have made a claim relating to the alleged loan, the banks stick with presenting a single witness who is “familiar with the business records.” That phrase has been specifically rejected in most jurisdictions as proving the personal knowledge necessary for a finding that the witness is competent to testify or to authenticate documents that will be introduced in evidence. Those records are hearsay and they lack the legal foundation for introduction and acceptance into evidence in the record.

So even where the lawsuit is initiated by “the cloud” and even where they allege that the plaintiff is the servicer and even where they allege that the plaintiff is a trust, the witness presented at trial is a professional witness hired by the servicer. Except for very recent cases, lawyers for the homeowner have ignored the issue of whether the professional witness is truly competent,  and especially why the court should even be listening to a professional witness from the servicer when it is hearing nothing from the creditor. The business records which are proffered to the court as being complete are nothing of the sort. They are documents prepared for trial which is specifically excluded from evidence under the hearsay rule and an exception to the business records exception. And the easy proof is that they are missing payments to the investor. That is why discovery should be aggressive.

Lately Chase has been dancing around these issues by first asserting that it is the owner of a loan by virtue of the merger with Washington Mutual. As the case progresses Chase admits that it is a servicer. Later they often state that the investor is Fannie Mae. This is an interesting assertion which depends upon complete ignorance by opposing counsel for the homeowner and the same ignorance on the part of the judge. Fannie Mae is not and never has been a lender. It is a guarantor, whose liability arises after the loss has been completely established following the foreclosure sale and liquidation to a third-party. It is also a master trustee for securitized trusts. To say that Fannie Mae is the owner of the alleged loan is most likely an admission that the originator never loaned any money and that therefore the note and mortgage are invalid. It is also intentional obfuscation of the rights of the investors and trusts.

The multiple positions of Chase is representative of most other cases regardless of the name used for the identification of the alleged plaintiff, who probably doesn’t even know the action exists. That is why I suggested some years ago that a challenge to the right to represent the alleged plaintiff would be both appropriate and desirable. The usual answer is that the attorney represents all interested parties. This cannot be true because there is an obvious conflict of interest between the servicer, the trust, the guarantor, the trustee, and the broker-dealer that so far has never been named. Lawsuits filed by trust beneficiaries, guarantors, FDIC and insurers demonstrate this conflict of interest with great clarity.

I wonder if you should point out that if Chase was the Servicer, how could they not know who they were paying? As Servicer their role was to collect payments and send them to the creditor. If the witness or nonexistent verifier was truly familiar with the records, the account would show a debit to the account for payment to Fannie Mae or the securitized trust that was the actual source of funds for either the origination or acquisition of loans. And why would they not have shown that?  The reason is that no such payment was made. If any payment was made it was to the investors in the trust that lies behind the Fannie Mae curtain.

And if the “investor” had in fact received loss sharing payment from the FDIC, insurance or other sources how would the witness have known about that? Of course they don’t know because they have nothing to do with observing the accounts of the actual creditor. And while I agree that only actual payments as opposed to hypothetical payments should be taken into account when computing the principal balance and applicable interest on the loan, the existence of terms and conditions that might allow or require those hypothetical payments are sufficient to guarantee the right to discovery as to whether or not they were paid or if the right to payment has already accrued.

I think the argument about personal knowledge of the witness can be strengthened. The witness is an employee of Chase — not WAMU and not Fannie Mae. The PAA is completely silent about  the loans. Most of the loans were subjected to securitization anyway so WAMU couldn’t have “owned” them at any point in the false trail of securitization. If Chase is alleging that Fannie Mae in the “investor” then you have a second reason to say that both the servicing rights and the right to payment of principal, interest or monthly payments in doubt as to the intermediary banks in the cloud. So her testimony was hearsay on hearsay without any recognizable exception. She didn’t say she was custodian of records for anyone. She didn’t say how she had personal knowledge of Chase records, and she made no effort to even suggest she had any personal knowledge of the records of Fannie and WAMU — which is exactly the point of your lawsuit or defense.

If the Defendant/Appellee’s argument were to be accepted, any one of several defendants could deny allegations made against all the defendants individually just by producing a professional witness who would submit self-serving sworn affidavits from only one of the defendants. The result would thus benefit some of the “represented parties” at the expense of others.

Their position is absurd and the court should not be used and abused in furtherance of what is at best a shady history of the loan. The homeowner challenges them to give her the accurate information concerning ownership and balance, failing which there was no basis for a claim of encumbrance against her property. The court, using improper reasoning and assumptions, essentially concludes that since someone was the “lender” the Plaintiff had no cause of action and could not prove her case even if she had a cause of action. If the trial court is affirmed, Pandora’s box will be opened using this pattern of court conduct and Judge rulings as precedent not only in foreclosure actions, disputes over all types of loans, but virtually all tort actions and most contract actions.

Specifically it will open up a new area of moral hazard that is already filled with debris, to wit: debt collectors will attempt to insert themselves in the collection of money that is actually due to an existing creditor who has not sold the debt to the collector. As long as the debt collector moves quickly, and the debtor is unsophisticated, the case with the debt collector will be settled at the expense of the actual creditor. This will lead to protracted litigation as to the authority of the debt collector and the liability of the debtor as well as the validity of any settlement.

Quite a Stew: Wells Fargo Pressure Cooker for Sales and Fabricated Documents

Wells Fargo Investigated by 4 Agencies for Manual on Fabricating Foreclosure Documents

Wells Fargo is under investigation for a lot of things these days, just as we find in Bank of America and other major “institutions.” The bottom line is that they haven’t been acting very institutional and their culture is one that has led to fraud, identity theft and outright fabrication of accounts and documents.

There can be little doubt about it. Documents that a real bank acting like a bank would have in its possession appear to be completely absent in most if not all loans that are “performing” (i.e., the homeowner is paying, even if the party they are paying isn’t the right and even if the loan has already been paid off). But as soon as the file becomes subject to foreclosure proceedings, documents miraculously appear showing endorsements, allonges, powers of attorney and assignments. According to a report from The Real Deal (New York Real Estate News), these are frequently referred to as “ta-da endorsements” a reference from magic acts where rabbits are pulled from the hat.

Such endorsements and other fabricated documents have been taken at face value by many judges across the country, despite vigorous protests from homeowners who were complaining about everything from “they didn’t have the documents before, so where did they get them?” to luring homeowners into false modifications that were designed to trap homeowners into foreclosure.

After 7 years of my reporting on the fact that the documents do not exist, including a report from Katherine Anne Porter at what was then the University of Iowa that the documents were intentionally destroyed and “lost” it has finally dawned on regulators and law enforcement that something is wrong. They could have done the same thing that I did. I had inquiries from hundreds (back then, now thousands) of homeowners looking for help.

So the first thing I did was I  sent qualified written requests to the parties who were claiming to be the “lenders.” After sending out hundreds of these the conclusion was inescapable. Any loan where the homeowner was continuing to make their payments have no documentation. Any loan where the homeowner was in the process of foreclosure had documentation of appear piece by piece as it seemed to be needed in court. This pattern of fabrication of documents was pandemic by 2007 and 2008. They were making this stuff up as they went along.

It has taken seven years for mainstream media and regulators to ask the next obvious question, to wit: why would the participants in an industry based on trust and highly complex legal instruments created by them fall into patterns of conduct in which nobody trusted them and where the legal instruments were lost, destroyed and then fabricated? In my seminars I phrased the question differently. The question I posed is that if you had a $10 bill in your hand, why would you stick it in a shredder? The promissory note and the other documents from the alleged loan closings were the equivalent of cash, according to all legal and common sense standards. Why would you destroy it?

As I said in 2008 and continue saying in 2014, the only reason you would destroy the $10 bill is that you had told somebody you were holding something other than a $10 bill. Perhaps you told them it was a $100 bill. Now they want to see it. Better to “lose” the original bill then admit that you were lying in the first place. One is simple negligence (losing it) and the other is criminal fraud (lying about it). The banking industry practically invented all of the procedures and legal papers associated with virtually every type of loan. The processing of loans has been the backbone of the banking industry for hundreds of years. Did they forget how to do it?

The answers to these questions are both inconvenient and grotesque. I know from my past experience on Wall Street that bankers did not deserve the trust that everyone seemed to repose in them. But this conduct went far beyond anything I ever saw on Wall Street. The answer is simply that the bankers traded trust for money. They defrauded the investors, most of whom were stable managed funds guarding the pensions of millions of people. Then they defrauded homeowners creating a pressure cooker of sales culture in which banking evolved simply into marketing and sales. Risk analysis and risk control were lost in the chaos.

The very purpose for which banks came into existence was to have a place of safety in which you could deposit your money with the knowledge that it would still be there when you came back. Investors were lured into a scheme in which they thought their money was being used to fund trusts; those trusts issued mortgage bonds that in most cases were never certificated. In most cases the trust received no money, no assets and no income. The fund managers who were the investors  never had a chance.

The money from the investors was instead kept by the broker-dealers who then traded with it like drunken sailors. They pumped up real estate PRICES  far above real estate VALUES, based on any reasonable appraisal standards. The crash would come, and they knew it. So after lying to the investor lenders and lying to the homeowner borrowers they lied to the insurers, guarantors, co-obligors and counterparties to credit default swaps that had evolved from intelligent hedge products to high flying overly complicated contracts that spelled out “heads I win, tails you lose.”

In order to do all of that they needed to claim the loans and the bonds as though they were owned by the broker-dealers when in fact the broker-dealers were merely the investment banks that had taken the money from investors and instead of using it in the way that the investors were told, they created the illusion (by lying) of the scheme that was called securitization when in fact it was basically common fraud, identity theft of both the lenders and borrowers, in a Ponzi scheme. When Marc Dreier was convicted of similar behavior the amount was only $400 million but it was the larger scheme of its kind ever recorded.

When Bernard Madoff was convicted of similar behavior the amount was only $60 billion, but the general consensus was that this was the largest fraud in history and would maintain that status for generations. But when the Madoff scandal was revealed it was obvious that members of the banking industry had to be involved; what was not so obvious is that the banking industry itself had already committed a combination of identity theft, fraud and corruption that was probably 300 times the size of the Madoff scandal.

The assumption that these are just loans that were to be enforced just like any other loans is naïve. The lending process described in the paperwork at the closings of these loans was a complete lie. The actual lender did not know the closing had occurred, never received the note and mortgage, nor any other instrument that protected the investor lenders. The borrower did not know the actual lender existed. Closing agent was at best negligent and at worst part of the scheme. Closing agent applied money from the investors to the closing of the “loan” and gave the paperwork that should’ve gone to the investors to third parties who didn’t have a dime invested in the deal. Later the investment banks would claim that they were suffering losses, but it was a lie, this time to the taxpayers and the government.

The reason the investment banks need to fabricate documentation is simply because their scheme required multiple sales of the same loan to multiple parties. They had to wait until they couldn’t wait any longer in order to pick a plaintiff to file a foreclosure lawsuit or pick a beneficiary who would appear out of nowhere to start the nonjudicial sale of property in which they were a complete stranger to the transaction.

The reason that homeowners should win in any reasonable challenge to a foreclosure action is that neither the forecloser nor the balance has been correctly stated. In many cases the balance “owed” by the borrower is negative! Yes that means that money is owed back to the borrower even know they stopped making payments. This is so counter intuitive that it is virtually impossible for most people to wrap their brains around this concept and that is exactly what Wall Street banks have been counting on and using against us for years.

LA Times Report on Wells Fargo Sales Culture

PICK-A-PARTY — BOA – RED OAK – Countrywide Merger Revealed in all its “Glory”

Maybe now I will get something other than a blank look when I referred to anomalies in what appears to be the merger of Bank of America with Countrywide. For about 18 months now I have been saying that there is something wrong with that report, because the documents in the public domain show two things, to wit: first, that BAC was merely a name change for Countrywide;  and second, it appears to be a merger between Red Oak Merger Corp. and Countrywide.  My conclusion was that Bank of America was claiming what it wanted depending upon the circumstances and disregarding the actual transactions. In fact, in various court actions ranging from foreclosures to investor and insurer lawsuits over bogus mortgage bonds, Bank of America was submitting documents referring to agreements that referred to fictional transactions.

This behavior should come as no surprise to anyone who has been following the actions and statements of the major banks throughout the financial crisis.  The various positions asserted by Bank of America in court actions around the country contradict each other and are obviously intended to mislead the court. It is for that reason that I have maintained the position that any benefit claimed by Bank of America by virtue of its alleged merger with Countrywide should be tested thoroughly in discovery.  Lawyers, judges and borrowers should stop assuming that if the bank says something it must be true. My position is that if a bank says something it probably is not true or it is misleading or both.

This is not merely some technical objection. This issue runs to the heart of our title system. There are many of us who are sending up warning flares. Judges, attorneys, title agents, and other experts have examined this issue and concluded that we are headed for a crash of the recording system that will undermine the title and priority of owners and lenders.

Thanks to one of my readers, I obtained the following quote and link which requires substantial study and analysis to see how this will impact any case in which  your opposition is Bank of America.

BAC is not just a “shareholder” of
Countrywide, as it argued to the Court at the outset of the case.
Then from Charles Koppa on the idiotic practice of allowing a controlled company or subsidiary be substituted for the trustee on the deed of trust on record — namely in this case Bank of America (AGAIN) who owns and controls Recontrust. SO in this case, like nearly all of the non-judicial situations, pick-a-party: the beneficiary on the deed of trust vanishes and is replaced with a “new beneficiary” by fiat more than anything in fact. Then the new beneficiary effectively names itself as the new trustee on the deed of trust. THIS PRACTICE SHOULD BE CHALLENGED AND NOW IS A GOOD TIME TO DO IT. THE COURTS ARE GETTING WISE TO THESE ANTICS.
From Koppa:
ReconTrust is “owned” by Bank of America Corporation.
 
Bank National Associations are governed by The Office of Controller of The Currency.
Anything on ReconTrust, NA?  It should be Governed by OCC, part of the US Treasury Dept (NOT the SEC)?
 
If ReconTrust is a subsidiary of Bank of America Corporation…. This is NOT Bank of America, “NA”or “BANA”.  So, which are THEY??
How can one “NA”= National Association, own a second “NA”.  Looks like self-dealing to us whistleblowers! 
Jes Thinkin: Who receives proceeds of lien foreclosure sales conducted by ReconTrust  which become REO re-sales of Land Titles @ 100% profit??
Who receives proceeds from Trustee Sales to third parties where “bid purchase proceeds” are delivered to ReconTrust @ 100% profit (to WHO)???
 
OPINION 1: Add common ownership by BANA of LandSafe Title for “corrections” on all ReconTrust foreclosure land title transactions; means possible crimes of “Conversion”.  Borrowers real property Trust Deed/Mortgage (a hard record asset) transfers via MERS/REMIC and off-balance sheet accounting into purported RMBS Products via Bank of America Securities, etc. as a non-transparent new soft asset class, which funds lien security investment credits without reference to the borrower.
 
Opinion 2: Countrywide/BAC converts “loan obligations debt” with homeowners… into pre-funded aggregated “securities credits” assigned to affiliated servicers by the Sponsor of the SEC Prospectus (Like BANA).  Upon loan default servicer changes hats and squires foreclosure liquidation of the fabricated “lien security” (under SEC).  This delivers “huge profits” beyond the REMIC Trust —- via BAC Home Loans and “controlled servicers” named by the Shadow Sponsor.  Affiliated servicer names ReconTrust as a self-substituted Foreclosure Trustee which seems to be clear of all regulation and criminality!!
 
Opinion 3:  Double income on a single transaction = “Embezzlement”.  20% Real Estate Equity is confiscated into the RBMS via “identity theft”of innocent homeowners using proceeds to the REMIC via the FED discount process! 
 
Opinion 4:  Vertical integration of all steps accomplishes “conversion for purposes of embezzlement”, which violates Anti-Trust Act, RICO, mail/wire fraud, etc.  What part of organized crime might IRS, OCC and SEC regulators actually understand when the California18 brings legal action via the evidence against ReconTrust prepared in vain for CA-AG Harris a year ago?
 
What is your opinion?
 
Charles J. Koppa 760-787-9966, www.TitleTrail.com

Rhode Island Supreme Court Steps Forward for Borrowers

Slowly but surely it seems that the court system are now taking notice of the fact that there is something intrinsically wrong with both the mortgages and the foreclosure process. In this case the Rhode Island Supreme Court specifically found the grounds that could establish that the mortgage was not validly assigned. This case was about whether or not the homeowners case should have been dismissed. The Supreme Court decided that the homeowners case should not have been dismissed.

But in this case the court affirmatively stated that defects in the assignment process would void the assignment and thus defeat the foreclosure.

Paragraph 12 of the complaint alleges: “On or about September 10, 2010, MERS attempted to assign this Mortgage to Aurora. * * * Theodore Schultz signed. Theodore Schultz had no authority to assign.” Thus, the plaintiffs have alleged that the one person who signed the mortgage assignment did not have the authority to do so. This allegation is buttressed by other allegations in the complaint. Paragraph 13 states that “Theodore Schultz was an employee of Aurora, not a Vice-President or Assistant Secretary of MERS.” Paragraph 17 alleges that “MERS did not order the assignment to Aurora.” Finally, paragraph 19 contends that “[n]o power of attorney from MERS to either Theodore Schultz or Aurora is recorded and referenced in the subject assignment.” These allegations, if proven, could establish that the mortgage was not validly assigned, and, therefore, Aurora did not have the authority to foreclose on the property.(e.s.)

SEE Chhun v. Mortgage Elec Registration Sys Inc.

The court also addressed the issue of standing and of course the related issues of standards for review on appeal. In view of decisions like this that are becoming increasingly frequent, the new strategy of the banks is to file for foreclosure in the name of the originator or some remote controlled entity of the broker-dealers. Bank of America has spawned numerous new banks and other entities (e.g. EverBank and Urban Lending Solutions)  In order to put distance between BOA and the irregularities of both the mortgage closing and the foreclosure; and BOA has filed numerous actions where it initially stated that it was the servicer for an undisclosed third-party owner of the loan and then later retracted the allegations of its complaint stated that it was in fact the lender at all times material to the mortgage and the foreclosure.

 

Wall Street Analysts Don’t Get It

I am not in the habit of giving investment advice and I am not about to start. But it has come to my attention that there are numerous pundits who call themselves analysts that are pumping the stock of Bank of America. I know how this works, but besides the corruption their articles reflect a general consensus on Wall Street that is based on a false premise. In 2007 are predicted that the banks would show and announce losses and then show a steady stream of profits and potential profits. This was because they were essentially stealing money from the investors and committing other fraudulent acts against investors government-sponsored entities and virtually everyone else in the mortgage foreclosure business. In the context of an exploding or imploding “securitization” market where the trading in the bogus mortgage bonds was frozen, the banks would have drawn a lot of attention if they were all reporting the money they had taken as revenue or profit. I predicted that they would later bring that money back in on a steadily increasing basis laundering the stolen cash through the mortgage foreclosure process. One of the basic strategies they employed was the creation of the inclusion of proprietary trading profits that could not be easily audited or confirmed.

 During the period of the mortgage meltdown, the banks were reporting an increase in deposits and an increase in loans. The pundits who are writing articles at the behest of Bank of America and other institutions are looking at the surface of the reports instead of drilling down and doing the analysis that should be done before they open their mouths and say something about the value of the stock.

They still don’t get that the increase in deposits and the increase in loans was completely fake. The “deposits” were really investments from pension funds and the like who thought they were buying mortgage bonds. Instead of brokering the transaction Bank of America took the money in as a deposit. Instead of sending the money to the REMIC trust that “issued” the “mortgage bonds” from the “trust” that didn’t have a cent of money or assets and no revenue stream to pay on the bonds, Bank of America skimmed up to 25% off the top and then created a fake underwriting portfolio where loans were originated or acquired to make it look like the securitization game was on.  That is what accounted for the increase in loans reported by the banks.

But to complete the fraud they issued the bonds in the name of the broker dealer (street name) and issued the promissory notes from borrowers to nominees, which was the equivalent of “street name.”  In most cases the delivery of the promissory note was never completed and certainly never given to the strawman that served as the originator of the loan and was named on the note and mortgage. The investors didn’t stand a chance. And the stockholders of BAC don’t stand a chance either because the cover-up is falling apart. Now the last ditch effort to pretend the loans were not securitized when they are in foreclosure litigation (reverting back to the original strategy in place 2001-2009) is also failing because lawyers are smelling blood in the water. When BAC comes down it will be faster and sooner than any of the pundits can imagine.

 

Sent from the Seeking Alpha Portfolio app. Get the app.

Bank Of America: Billions In Additional Profits Coming, Here’s How

Wed, Jan 29 | by Josh Arnold Includes: bac

Yesterday, I took a look at Bank of America’s (BAC) net interest margin as a way to gauge the company’s ability to increase earnings in the future. Today, we’ll take a look at another piece of BAC’s business, its mix of loans and leases to its deposit base. This is a key metric in banking as it compares the amount of low cost, “sticky” money to the amount of that money that is being lent…

Read more at Seeking Alpha:
http://seekingalpha.com/article/1975551?source=ipadportfolioapp_email

US Bank, BofA, LaSalle Bank and Other Trustees Slammed the Door on Their Own Toes

NOTE: THE FOLLOWING IS A LEGAL ANALYSIS THAT MAY OR MAY NOT APPLY TO CASES ON WHICH YOU ARE WORKING. IT IS REALLY MEANT FOR ATTORNEYS WHO ARE REPRESENTING PARTIES IN FORECLOSURE LITIGATION. No lay person should assume that anything in this article is true or applies to their case. Nobody should use this information without careful consultation with a knowledgeable attorney licensed in the jurisdiction in which the subject property is located. This may or may not have applicability to other securitized debt including student loans, auto loans etc. Each case rests on its own merits. Do not assume that there is any magic bullet that ends any case in favor of the borrower.

For Litigation Support for Attorneys in all fifty states, please call 520-405-1688. For general search and information products, consultations and services please go to http://www.livingliesstore.com.

MBS TRUSTEES HAVE NO RIGHT TO BRING FORECLOSURE ACTIONS

SEE QUOTES FROM US BANK WEBSITE

Upon analysis, research and reflection it appears as though the game could be over in the US Bank cases, the Bank of America cases, and any case in which the foreclosing party is identified as the Trustee. US Bank clearly has no right or even access to the foreclosure process. How do we know? Because US Bank says so on its own website. SEE  https://www.usbank.com/pdf/community/Role-of-Trustee-Sept2013.pdf.

Here are some notable quotes from the US Bank websites which references materials to make their own assertions apply to all trustees over MBS trusts:
“Parties involved in a MBS transaction include the borrower, the originator, the servicer and the trustee, each with their own distinct roles, responsibilities and limitations.”

“ U.S. Bank as Trustee:

“As Trustee, U. S. Bank Global Trust Services performs the following responsibilities:

Holds an interest in the mortgage loans for the Benefit of investors
Maintains investors/securities holder records
Collects payments from the Servicer
Distributes payments to the investors/securities holder
Does not initiate, nor has any discretion or authority in the foreclosure process (e.s.)
Does not have responsibility for overseeing mortgage servicers (e.s.)
Does not mediate between the servicers and investors in securitization deals (e.s.)
Does not manage or maintain properties in foreclosure (e.s.)
Is not responsible for the approval of any loan modifications (e.s.)

“All trustees for MBS transactions, including US Bank have no advanced knowledge of when a mortgage loan has defaulted.

“ Trustees on MBS transactions, while named on the mortgage and on the legal foreclosure documents, are not involved in the foreclosure process.”

“ While trustees are listed on mortgages, and therefore in legal documents as well, as the owner of record, its interest is solely for the benefit of investors. The trustee does not have an economic or beneficial interest in the loans and has no authority to manage or otherwise take action on the loans which is reserved for the servicer.” (e.s.)

“Additional sources of information:
— American Bankers Association White Paper, The Trustee’s Role in Asset-backed securities, dated November 9, 2010, http://www.aba.com/Press+Room/110910Roleofatrustee.htm

– The Trust Indenture Act of 1939

In several cases I am litigating, the servicer seems to be saying that they approve the foreclosure but do not want the turnover of rents. This brings up the question of whether the notice of default was sent by the Trustee, who according to the attached information would not even know if the default is being “called,” in which case the notice would be fatally defective. The fatal defect would be that it is not a function of the Trustee if the PSA has the usual language. That function is exclusively reserved for the Servicer. Since the PSA probably has language in it that restricts the knowledge of the Trustee to virtually zero, and certainly restricts the knowledge of the Trustee as to all receipts and disbursements processed by the sub-Servicer, the broker dealer (investment bank), and the Master Servicer. Thus the Trustee of the MBS trust is the last party on whom one could depend for information about a default — except that if “Servicer advances” (quotations used because the money is coming from the investment bank) then the Trustee would presumably know that from the creditor’s point of view, there is no default.

A NOTICE OF FILING could be sent to the Court with the full pdf file from the US Bank website while the smaller pdf file containing excerpts from the full pdf file could be attached as an exhibit to the Motion. THIS WILL HAVE BROAD RAMIFICATIONS FOR THOUSANDS OF FORECLOSURE CASES ACROSS THE COUNTRY. IF THE TRUSTEE INITIATED THE FORECLOSURE, EVERYTHING IS VOID, NOT VOIDABLE ACCORDING TO NEW YORK AND DELAWARE LAW. ACTIONS COULD BE BROUGHT BASED UPON JURISDICTIONAL GROUNDS FOR WRONGFUL FORECLOSURE THUS TURNING EACH FORECLOSURE CASE INTO AN ACTION FOR DAMAGES OR TO REGAIN TITLE SINCE THE SALE WAS BOGUS.

But the complexity gets worse. If the action should have been brought by the servicer, but the creditor was really a funded trust who was legally represented by a properly authorized servicer, then the bid by the Trustee at the auction might have been valid. Hence the attack should be on the foreclosure process itself rather than the credit bid.

Not to worry. I don’t think any of the Trusts were funded — or to put it more precisely, I have found no evidence in the public domain that any of the MBS trusts were in fact funded the way it was set forth in the prospectus and pooling and servicing agreement. There does not appear to be any actual trust account over which the Trustee has control. Hence both the existence and capacity of the Trust and the Trustee are issues of fact that must be decided by the Court.
That leaves the MBS trusts with no money to originate or acquire mortgages. So who really owns the loans? This is why in Court on appeal, the attorneys agree that they don’t know who owns the loans. But what they really mean, whether they realize it or not, is that they don’t know if any of the loans are secured by a perfected mortgage. If none of the parties in their “chain” actually came up with money or value, then the lien is not perfected or valid. The mortgage would be subject to nullification of the instrument.
If the question was really who owns the loans, the answer is simple — the investors who put up the money. We all know that. What they are dancing around is the real nub of the confrontation here:  Since we know who put up the money and therefore who owns the loan, was there any document or event that caused the loan as owned by the investors to be secured? The answer appears to be no, which is why the investment banks are all being sued every other day for FRAUD. First they diverted the investor money from the trust and then they diverted the title from the trust beneficiaries to one of their own entities. The actions of the investment banks constitutes, in my opinion, an intervening tortious or criminal act that frustrated the intent of both the borrowers (homeowners) and the lenders (investors).

So the real question is whether the Court can be used to reform the closing and create a loan agreement that is properly enforceable against lender and borrower. That appears to require the creation of an equitable mortgage, which is held in extremely low regard by courts across the country. And then you have questions like when does the mortgage begin and what happens to title with respect to intervening events?
The simple answer, as I said in 2007, is do some sort of amnesty and reframe the deals to reflect economic reality allowing everyone to bite a bullet and everyone to cover their losses but avoid, at this point another 6 million families being displaced. My experience with borrowers is that the overwhelming majority would sign a new mortgage document that is enforceable together with a new note that is enforceable and leaves all issues behind even though they know they could push the issue further. The borrower s are a lot more honest and straightforward than their banker counterparts. The deal should essentially be between the investors and the homeowners.
The question is whether the case is dismissed, possibly with prejudice, or if they can try to substitute the servicer as the Plaintiff in a style that would or might read “SPS, as servicer, on behalf of ????, Trustee for the asset backed trust” or “on behalf of the trust beneficiaries.”

The further question is whether the complaint could be amended. But if the servicer didn’t send the NOTICE OF DEFAULT, there is nothing to amend since on its face, the Notice of Default was sent by a party who not only was not authorized to start the process but who was expressly precluded from having any knowledge of the default.

This in turn leads to the further question of whether the verification was valid if signed on behalf of US Bank or any other party “as trustee” on the complaints to foreclose.
The smaller file tells the whole story we have been arguing and it should be attached. I would attach the smaller one page synopsis of quotations from their website. It leaves no room for interpretation — trustees do not, and cannot initiate foreclosures or anything else relating to enforcement. They may not meddle in the foreclosure and they may not meddle or mediate in settlement or mediation. Here is the smaller file: US BANK ROLE OF TRUSTEE

As to Bank of America, the situation is even more dire —-

contains the Federal reserve Order approving the Bank of America – LaSalle merger. I can find no such order for the CitiMortgage-ABN Amro mortgage. It is also true that I can find no evidence that the BOA merger was completed whereas there is plenty of evidence that the Citi-ABN merger was in fact completed. This means that CitiMortgage became the parent company of LaSalle Bank.

While it is theoretically possible for an ACQUISITION of LaSalle to have taken place in which BOA acquired LaSalle Bank, no evidence exists that any such transaction exists between BofA and Citi. It is clear that Citi completed its deal in September of 2007 at around the same time that BOA was getting the approval order shown above on the federal reserve website.  But most curiously the Fed does not mention the Citi-ABN Amro deal. What we know for sure is that there was no MERGER between BofA and Citi.

In my opinion based upon review of this order from the Federal Reserve and other pronouncements from the FED, this order was either never officially issued in actuality or it never was used. In the absence of further contrary information which I have not been able to uncover, thus far, the irrefutable conclusion is that BOA never became the successor by merger to LASalle Bank. Therefore BOA was never the trustee for the asset backed REMIC trust. Therefore, the transaction to which US Bank refers granted US Bank nothing even if the position of trustee is determined to be a commodity — an idea that would create havoc in the marketplace.

As for whether US Bank as trustee for MBS trusts has standing, the answer is no and they have absolutely no right, obligation or even access to the foreclosure or settlement process. In the same REMIC out in California, I am the expert witness on a case in which the same trust is represented by Chase as servicer. The case has not caught up with the fact that Chase has sold or transferred servicing rights to SPS (Select Portfolio Services) or at least that is what they say.

This being the case, several questions arise:

Since this information from the public domain is on the U.S. Bank website without any disclaimers, are we sure they authorized the foreclosure and the action for turnover of rents? Or are they going to say it was an error by the law firm? Who is actually the client of the opposing law firm — the trust beneficiaries, the trust,, the trustee or US Bank who doesn’t really appear to be the trustee?

The same question could be asked of Bank of America who says they are or were a trustee based upon a dubious series of announcements that seem to lack the same underlying transactions as all securitized loans that report a transaction has taken place (i.e.., on the note the contract is implied because the borrower agrees to repay a loan to a lender that never gave them the money).

The Devil Is In the Details: Summary of Issues

Editor’s note: in preparing a complex motion for the court in several related cases I ended up writing the following which I would like to share with my readers. As you can see, the issues that were once thought to be simple and susceptible to rocket docket determination are in fact complex civil cases involving issues that are anything but simple.

This is a guide and general information. DO NOT USE THIS IF YOU ARE NOT A LICENSED ATTORNEY. THESE ISSUES ARE BOTH PROCEDURALLY AND SUBSTANTIVELY ABOVE THE AVERAGE KNOWLEDGE OF A LAYMAN. CONSULT WITH AN ATTORNEY LICENSED IN THE GEOGRAPHICAL AREA IN WHICH THE PROPERTY IS LOCATED.

If you are seeking litigation support or referrals to attorneys or representation please call 520-405-1688.

SUMMARY OF ISSUES TO BE CONSIDERED

 

1)   Whether a self proclaimed or actual Trustee for a REMIC Trust is empowered to bring a foreclosure action or any action to enforce the note and mortgage contrary to the terms of the Trust document — i.e., the Pooling and Servicing Agreement (PSA) — which New York and Delaware law declare to be actions that are VOID not VOIDABLE; specifically if the Trust document names a different trustee or empowers only the servicer to bring enforcement actions against borrowers.

2)   Whether a Trustee or Servicer may initiate actions or take legal positions that are contrary to the interests of the Trust Beneficiaries — in this case creating a liability for the Trust Beneficiaries for receipt of overpayments that are not credited to the account receivable from the Defendant Borrowers by their agents (the servicer and the alleged Trustee) and the creation of liability to LaSalle Bank or the Trust by virtue of questionable changes in Trustees.

3)   Whether US Bank is the Plaintiff or should be allowed to claim that it is the Trustee for the Plaintiff Trust. Without Amendment to the Complaint, US Bank seeks to be substituted as Plaintiff in lieu of Bank of America, as successor by merger with LaSalle Bank, trustee for the Plaintiff Trust according to the Trust Document (the Pooling and Servicing Agreement) Section 8.09.

a)    A sub-issue to this is whether Bank of America is actually is the successor by merger to LaSalle Bank or if CitiMortgage is the successor to LaSalle Bank, as Trustee of the Plaintiff Trust — there being conflicting submissions on the SEC.gov website on which it appears that CitiMortgage is the actual party with ownership of ABN AMRO and therefore LaSalle Bank its subsidiary.

b)   In addition, whether opposing counsel, who claims to represent U.S. Bank may be deemed attorney for the Trust if U.S. Bank is not the Trustee for the Trust.

i)     Whether opposing counsel’s interests are adverse to its purported client or the Trust or the Trust beneficiaries, particularly with respect to their recent push for turnover of rents despite full payment to creditors through non stop servicer advances.

4)   Whether any Trustee for the Trust can bring any enforcement action for the debt including foreclosure, assignment of rents or any other relief.

5)   Whether the documentation of a loan at the base of the tree of the assignments and transfers refers to any actual transaction in which the Payee on the note and the Mortgagee on the Mortgage.

a)    Or, as is alleged by Defendants, if the actual transaction occurred when a wire transfer was received by the closing agent at the loan closing with Defendant Borrowers from an entity that was a stranger to the documentation executed by Defendant Borrowers.

b)   Whether the debt arose by virtue of the receipt of money from a creditor or if it arose by execution of documentation, or both, resulting in double liability for a single loan and double payment.

6)   Whether the assignment of mortgage is void on its face as a fabrication because it refers to an event that occurred long after the date shown on the assignment.

7)   Whether the non-stop servicer advances in all of the cases involving these Defendants and U.S. Bank negates the default or the allegation of default by the Trust beneficiaries, the Trust or the Trustee, regardless of the identity of the Trustee.

a)    Whether a DEFAULT exists or ever existed where non stop servicer advances have been paid in full.

b)   Whether the creditor, under the debt obligation of the Defendant borrowers can be allowed to receive more than the amount due as principal , interest and expenses. In this case borrower payments, non stop servicer advances, insurance, credit default swap proceeds and other payments by co-obligors who paid without subrogation or expectation of receiving refunds from the Trust Beneficiaries.

c)    Whether a new debt arises by operation of law as a result of receipt of third party defendants in which a claim might be made by the party who advanced payment to the creditor, resulting in a decrease the account receivable and a corresponding decrease in the borrower’s account (loan) payable.

i)     Whether the new debt is secured by the recorded mortgage that the Plaintiff relies upon without the borrower executing a security instrument in which the real property is pledged as collateral for the advances by third parties.

8)   Whether turnover of rents can relate back to the original default, or default letter, effectively creating a final judgment for damages before evidence is in the court record.

9)   Whether the requirements of a demand letter to Defendants for turnover of rents can be waived by the trial Court, contrary to Florida Statutes.

a)    Whether equity demands that the turnover demand be denied in view of the fact that the actual creditors — the Trust Beneficiaries of the alleged Trust were paid in full up to and including the present time.

b)   Whether, as argued by opposing counsel, the notice of default letter sent to Defendant Borrowers is an acceptable substitute to a demand letter for turnover of the rents if the letter did not mention turnover of rents.

c)    Whether the notice of default letter and acceleration was valid or accurate in view of the servicer non-stop advances and receipt of other third party payments reducing the account receivable of the Trust beneficiaries (creditors).

i)     Whether there was a difference between the account status shown by the Servicer (chase and now SPS) and the account status actually shown by the creditor — the Trust Beneficiaries who were clearly paid in full.

10)         Whether the Plaintiff Trust waived the DUE ON SALE provision in the alleged Mortgage.

a)    Whether the Plaintiff can rely upon the due on sale provision in the mortgage to allege default without amendment to their pleadings.

11)         Whether sanctions should apply against opposing counsel for failure to disclose essential facts relating to the security of the alleged creditor.

Whether this (these cases) case should be treated off the “rocket docket” for foreclosures and transferred to general civil litigation for complex issues

The US BANK-BOA-LaSalle-CitiGroup Shell Game

‘The bottom line is that the notice of substitution of Plaintiff in judicial states, or notice of substitution of Trustee in non-judicial states should be the first line of battle. Neither one of them is valid and in both cases you have a stranger to the transaction being allowed to name itself as creditor, name its own controlled entity or subsidiary as trustee, and then ignore the realities of the money paid to the real creditor. They are claiming damages from the borrower — all for a debt that in the ordinary course of things has already been paid several times over. But it is true that it wasn’t paid to THEM because THEY were never and are not now the creditor fulfilling the definition of a creditor who could bid at the foreclosure auction. It is not that the borrower doesn’t owe money when he borrows it, it is that he doesn’t owe it to any of the people who are claiming it. And that is what gives rise to liability of law firms to borrowers.” Neil F Garfield, http://www.livinglies.me

If our information can be corroborated through discovery with a corporate representative of US BANK or Chase Bank as the servicer, it is possible that a solid cause of action can be filed against the law firm that brought the action, particularly if the law firm took its instructions from the Desktop system of LPS.

In that system law firms are instructed to file foreclosures without contact with the actual client. We saw several cases where sanctions were levied against lawyers and their alleged clients, but none so stark as the one in Florida where the lawyer for US Bank as Trustee for XXX, when faced with questions he couldn’t answer admitted that he had never spoken with anyone from U.S> Bank and didn’t know who had retained his firm.

The law firm that brought the foreclosure action and especially the law firm that is demanding an assignment of rent to protect a creditor who has already been paid through non stop servicer advances was most likely not authorized to demand the assignment of rents which might be why there was no written demand as required by statute. I am considering the possibility of an actual lawsuit against one such law firm for interference with contract on both the foreclosure and the assignment of rents issue.

The Banks are being very cagey about this system — one which they would never use for their own portfolio loans, which begs the question of why they would have two entirely different system of accounting and legal process. But the long and the short of it is that LPS in Jacksonville, Florida is used much the same way as MERS. It maintains a database service that requires a user name and password and that gives unlimited access to the client folders. Anyone can go in and authorize the foreclosure based upon a default that is invested by the person entering the data. They leave out any servicer advances or other third party payments and arrive at an amount to reinstate that is just plain wrong. So virtually all notices of default are wrong which means that the required notice is defective.

You should know that many judges appear unimpressed that there was no valid assignment of the mortgage. I think that it is clearly reversible error. The assignment frequently is clearly fabricated and back-dated because of references to events that happened a year after the assignment was executed. The assignment clearly did not exist at the time of the lawsuit and the standing issue is clear under Florida law although some courts are balking at the idea that standing cannot be cured after the lawsuit. The reasoning is quite simple — if it were otherwise, you could file suit against a grocery store for a slip and fall, and the go over to the store to have your slip and fall.

In one of my cases involving multiple properties, they have an assignment that was prepared and executed by Shapiro and Fishman supposedly dated in 2007 —- but it refers to Bank of America as successor by merger to LaSalle. it is backdated, fabricated and fictional, which is to say, fraudulent.

The assignment has two problems -– FACIALLY DEFECTIVE FABRICATION OF ASSIGNMENT:  the first problem is that the alleged BOA merger with LaSalle could not have happened before 2008 — one year after the assignment was executed. So the 2007 assignment refers to a future event that was not reported by BOA until 2008, and was not approved by the Federal Reserve until 2008. On its face, then, based upon public record, the assignment is void as a total fabrication.

The second problem is that it is unclear as to how the merger could have occurred between BOA and La Salle, to wit:. you might need to read this a few times to understand the complexity of the issues involved — issues that few judges or lawyers are interested enough to master.

LASALLE ABN AMRO ACQUISITION:
Since neither entity vanished in the deal it is an acquisition and not a merger. LaSalle and ABN AMRO did a reverse merger in 2007.

That means that while LASalle was technically the acquirer, because it “bought” ABN AMRO, and ABN AMRO became a subsidiary — the reality is that LaSalle issued so many shares for the acquisition of ABN AMRO that the ABN AMRO shareholders received the overwhelming majority of LaSalle Shares compared to the former owners of LaSalle shares.

Hence in substance LaSalle Bank was a subsidiary of ABN AMRO and the consolidated financial statements show it. But in form it appears as the parent.

So if someone, like BOA, was to say they merged with or acquired LaSalle, they would also be saying that included its subsidiary ABN AMRO — and they would have to do the deal with the shareholders of ABN AMRO because those shareholders control LaSalle Bank, which brings us to CitiGroup —-

CITIGROUP MERGER WITH ABN AMRO: Also in 2007, CitiGroup announced and continues to file sworn statements with the SEC that it had merged with ABN AMRO, which means, if you followed the above, that CitiGroup actually owned LaSalle. It looks more like an acquisition than a merger to me but the wording makes it unclear. This would mean that LaSalle still technically exists as a subsidiary of  CitiGroup.

ALLEGED BOA MERGER WITH LASALLE: In 2008 the Federal Reserve issued an order approving the merger of BOA and LaSalle, in which case LaSalle vanishes — but ABN AMRO is the one with all the assets. BUT LaSalle is named as Trustee of the asset pool. And the only other allowable trustee would be another bank that merged with LaSalle as a successor without the requirement of filing more papers to be a Trustee and BOA clearly qualifies on all counts for that. Section 8.09 of PSA.

But the Federal Reserve order states that the identities of ABN AMRO and LaSalle are the same and the acquisition of one is the acquisition of the other — thus unintentionally ratifying CitiGroup’s apparent position that it owns ABN AMRO and thus LaSalle.

Findings of fact by an administrative agency are presumptively true although subject to rebuttal.

Here is the kicker: there is no further mention in any SEC filings of a merger between BOA and LaSalle, unless I missed it. There is no reference to the fact that CitiGroup controlled LaSalle and ABN AMRO at the time of the Federal Reserve order approving the BOA merger with LaSalle Bank in 2008.

CitiGroup has not, to my knowledge ever reported the sale or loss or merger of LaSalle. Since Citi made the acquisition before BOA, and since BOA apparently did not buy LaSalle from Citi, how could BOA claim to be a successor by merger with LaSalle?

Hence there are questions of fact as to whether BOA ever consummated any transaction in which it acquired or Merged with LaSalle, which while technically possible, makes no business sense. UNLESS the OBJECTIVE was to transfer the interest of LaSalle as trustee to BOA, as a precursor to a much wider deal in which BOA then sold its position as Trustee to US Bank as a  commodity and then filed in the Kalam cases a notice of substitution of Plaintiff without amending the pleadings.

US BANK Notice of Substitution of Plaintiff without Any Motion to Amend Pleadings: The reason they filed it as a notice was that they obviously did not want to allege the purchase of “being a trustee”, which would have been a contested issue in the pleadings. But the amendment is required in my opinion and there should be a motion to strike the notice of substitution of Plaintiff without amendment. The motion to strike should state that no objection to granting the order to amend, but that the circumstances should be pled and we should be able to respond with a denial and affirmative defenses if you choose.

Why Are We having So Much Trouble Connecting the Dots?

Matt Weidner reports that he went to court on a case where IndyMAc was the plaintiff. IndyMac was one of the first banks to collapse. It was found that they owned virtually zero mortgages and had “securitized” the rest which is to say they never loaned the money or got paid off by a successor. Now the servicing rights on IndyMac have been sold. So when the time came for trial he finds the lawyer fighting with his own witness. It seems that she would not say she worked for IndyMac because she didn’t. That meant there was no corporate representative present to testify for the plaintiff. case over? Not according to what we have seen where IndyMac foreclosures continue to be rubber stamped by Judges who do not understand the gravity of the situation.

The precedent being set is for anyone who knows about a default to race to the courthouse with a complaint to foreclose after fabricated a notice of default and asserting themselves as the successor to whoever the borrower was paying. The borrower doesn’t know the difference and generally doesn’t care because they mistakenly think they are screwed no matter what. So the pretender lender that was collecting takes it time partly because they are simply collecting fees on “non-performing” loans. Meanwhile our creative criminal goes in and alleges that he is the holder of a lost note, submits affidavits, but of course stays away from the essential allegation that there ever was a transaction between himself and the borrower. These days Judges don’t seem to require that.

Judgment is entered for our creative criminal and he becomes by court order, the creditor who can submit a credit bid at auction. He makes the non-cash bid at the auction and presto he just got himself a free house which he sells at discount on the open market. He only needs to do a few of those before he vanishes with a few million dollars. In fact, we have learned that such “foreclosures” are going on now sometimes creatively named such that it looks like the name of a bank. That is why I have been saying for 7 years that  the foreclosures, if they are allowed to proceed, will eventually create chaos in the marketplace.

You might ask why the banks don’t raise a big stink about this practice. The answer is that there are only a few such scams going on at the moment. And the banks are relying on the loopholes created in pleading practice to get their own foreclosures through the same way as our criminal because they really don’t own the loan or even the servicing rights. Yup! That is called a syllogism: if the creative criminal is a criminal for doing what he did, then the bank or anyone else who engages in the same behavior is also a criminal.

And that is why the justice department and regulators are ramping up their investigations and charges, getting ready to indict the bankers who thought they were untouchable. If you read the reports of securities analysts, you will see three types of authors — those who obviously have drunk the Kool-Aide and believe Bank of America and Chase hinting the stock is a good buy, those who are paid to plant pretty articles about the banks, and supposedly declining foreclosures and increasing housing prices, and those who have looked at the jury conviction of Countrywide, looked at the pace of settlements, and looked at the announcements that there are many more investigations and charges to be resolved, and who have seen the probability of indictments, and they conclude that BOA is soon going to be on the chopping block for sale in pieces and the same will happen with Chase, Citi and maybe even Wells.

While the media is not paying attention to the impending doom of the mega banks, the market is discounting the stock and the book value of these companies is dropping like a stone because real investment analysts under stand that much of what is being carried on the books as assets, is really worthless garbage. Charges of fraud are announced practically everyday, saying that the banks defrauded investors, defrauded Fannie and Freddie, and defrauded each other, as well as insurance companies and counterparties on credit default swaps. In other words it is pretty well settled that the sale of mortgage bonds was a sweeping fraudulent scheme and that the word PONZI scheme is accurate, not some conspiracy theory as I was treated back in 2007-2010.

So now that we know that there was complete fraud at one end of the stick (where the funding for the origination and acquisition of mortgages took place), the question is why is anyone looking at foreclosures as inevitable or proper or even possible. It is the same stick. If one end is burning then it is quite likely that the other end will be burning soon and that is exactly what I predict for the coming months.

Having been in court multiple times over the last month representing clients seeking to retain their homes it is readily apparent that the Judges are changing their minds about whether the foreclosure is inevitable or that collection by these creative criminals is wise or legal — i.e., whether the enire exercise involves an arrogant willingness to commit perjury. Since the mortgages were part of the scheme and the part where the lender appeared with the money is covered in fraud, it is certainly reasonable to assume that the the fraudulent schemes included the origination and transfer of mortgage paper. And that is exactly the case.

If it wasn’t the case there never would have been fraud at the top because the investors would be on the note and mortgage and some some nominee of the broker dealer (“BANK”) or they would have been on a recorded assignment closed out within 90 days of the start of the REMIC trust, which would have been funded by money from investors paid to the investment bank (broker dealer) who then forwarded the net proceeds tot he Trust. None of that ever happened, though, which is how the fraud was enabled.

Practice Hint: I like to demonstrate by drawing a large “V” where the bottom is the closing agent, the left side is the money trail and the right side is the paper trail — and showing that they never meet. That means the paper trail is a fictional story about transactions that never occurred. The money trail is actual facts and data showing actual transactions where money exchanged hands but there was no documentation. The “Trust” was never funded with money or assets, so the money went straight down the left side from the investors at the top of the left side to the closing agent, who applied the investors money to close a transaction that was documented as though the originator had loaned the money. The same reasoning applies to transfers and assignments.

The core of the cases filed by the banks is that the Note is prima facie evidence that a transaction occurred. It is entitled to a presumption of validity. But where the borrower denies the transaction ever occurred, and files the right discovery to get evidence of the wire transfers and canceled checks, the banks go wild because they know their entire case will not only fall apart but subject them to prosecution.

Which brings us to Marshall Watson, who seeks to be licensed again to practice law, and David Stern who is about to be disbarred forever. The good news is that they were disciplined for fabrication and forgery of documents. The bad news is that the inquiry stopped there and nobody ever asked why it was necessary to fabricate or forge documents.

FRAUD! In Foreclosure Court Indymac/Onewest Doesn’t Own Notes and Mortgages, But “They” Continue To Foreclose Anyway
http://ireport.cnn.com/docs/DOC-1051166/

-Suspended Ft. Lauderdale foreclosure mill head seeks return
http://therealdeal.com/miami/blog/2013/10/24/suspended-fort-lauderdale-foreclosure-mill-head-seeks-return/

Florida Bar referee calls for ex-foreclosure king’s disbarment
http://therealdeal.com/miami/blog/2013/10/30/florida-bar-referee-calls-for-ex-foreclosure-kings-disbarment/

2 Florida Cases Decided in Favor of Borrower

The Wadsworth case clearly shows that the appellate courts are requiring the trial court to scrutinize the claims and filings of would-be forecloser and that things like notice of acceleration and the right to cure are important enough to reverse summary judgment. This is directly contrary to the rulings of many judges who say that the lack of notice is NOT a basis for granting a motion to dismiss. It can be argued that if it is enough to defeat a motion for summary judgment, it ought to be sufficient to dismiss the complaint that does not allege the existence of the loan, the financial injury and the compliance with paragraph 22, with a copy thereof.

Wadsworth

The Beaumont decision is especially interesting because it deals with a rather obvious alteration of documents by Bank of America or its “successors” or lawyers. Or I would not be surprised to learn that LPS was involved in this one. They changed the due date and foreclosed. The trial court disregarded the defense that the note was altered and said it wasn’t enough that they alleged these facts on information and belief.  The appellate court that might be true, but the documents of records clearly raise the issue themselves.

Beaumont

Fannie and Freddie Demand $6 Billion for Sale of “Faulty Mortgage Bonds”

You read the news on one settlement after another, it sounds like the pound of flesh is being exacted from the culprits again and again. This time the FHFA, as owner of Fannie and Freddie, is going for a settlement with Bank of America for sale of “faulty mortgage bonds.” And most people sit back and think that justice is being done. It isn’t. $6 Billion is window dressing on a liability that is at least 100 times that amount. And stock analysts take comfort that the legal problems for the banks has basically been discounted already. It hasn’t.

For practitioners who defend mortgage foreclosures, you must dig a little deeper. The term “faulty mortgage bonds” is a euphemism. Look at the complaints there filed. When they are filed by agencies it means that after investigation they have arrived at the conclusion that something was. very wrong with the sale of mortgage bonds. That is an administrative finding that concluded there was at least probable cause for finding that the mortgage bonds were defective and potentially were criminal.

So what does “defective” or “faulty” mean? Neither the media nor the press releases from the agencies or the banks tell us what was wrong with the bonds. But if you look at the complaints of the agencies, they tell you what they mean. If you look at the investor lawsuits you see that they are alleging that the notes and mortgages were “unenforceable.” Both the agencies and the investors filed complaints alleging that the mortgage bonds were a farce, sham or in other words, a PONZI Scheme.

Why is that important to foreclosure defense? Digging deeper you will find what I have been reporting on this blog. The investors money was not used to fund the REMIC trusts. The unfunded trusts never had the money to buy or fund the origination of bonds. The notes and mortgages were never sold to the Trusts even though “assignments” were executed and shown in court. The assignments themselves were either backdated or violated the 90 day cutoff that under applicable law (the laws of the State of New York) are VOID and not voidable.

What to do? File Freedom of Information Act requests for the findings, allegations and names of investigators for the agency that were involved in the agency action. Take their deposition. Get documents. Find put what mortgages were looked at and which bond series were involved. Get a list of the mortgages and the bonds that were examined. Get the findings on each mortgage and each mortgage bond. Use the the investor allegations as lender admissions admissions in court — that the notes and mortgages are unenforceable.

There is a disconnect between what is going on at the top of the sham securitization chain and what went on in sham mortgage originations and sham sales of loans. They never happened in the real world, no matter how much paper you throw at it.

And that just doesn’t apply to mortgages in default — it applies to all mortgages, which is why all the mortgages that currently exist, and most of the deeds that show ownership of the property have clouded and probably “defective” and “faulty” titles. It’s clear logic that the government and the banks are seeking to avoid, to wit: that if the way in which the money was raised to fund the loans or purchase the loans were defective, then it follows that there are defects in the chain of title and the money trail that were obviously not disclosed, as per the requirements of TILA and Reg Z.

And when you keep digging in discovery you will find out that your client has some clear remedies to collect the profits and compensation paid to undisclosed recipients arising out of the closing of the “loan.” These are offsets to the amount claimed as due. If the loan was not funded by the Trust, then the false paper trail used by the banks in foreclosure is subject to successful attack. If the loans were in fact funded directly by the trust complying with the REMIC provisions of the Internal Revenue Code, then the payee on the note and the mortgagee on the mortgage would be the trust — or if the loan was actually purchased, the Trust would have issued money to the seller (something that never happened).

And lastly, for now, let us look at the capital structure of these banks. A substantial portion of their capital derives from assets in the form of mortgage bonds. This is the most blatant lie of all of them. No underwriter buys the securities issued by the company seeking financing through an offering to investors. It is an oxymoron. The whole purpose of the underwriter was to create securities that would be appealing to investors. The securities are only issued when you have a buyer for them, and then the investor is the owner of the security — in this case mortgage bonds.

The bonds are not issued to the investment bank as an asset of the investment bank. But they ARE issued to the investment bank in “street name.” That is merely to facilitate trading and delivery of certificates which in most cases in the mortgage bond market don’t exist. The issuance in street name does not mean the banks own the mortgage bonds any more than when you a stock and the title is issued in street name mean that you have loaned or gifted the investment to the investment bank.

If you follow the logic of the investment bank then the deposits of money by depository customers could be claimed as assets — without the required entry in the liabilities section of the balance sheet because every dollar on deposit is a liability to pay those monies on demand, which is why checking accounts are referred to as demand deposits.

Hence the “asset” has been entered on the investment bank balance sheet without the corresponding liability on the other side of their balance sheet. And THAT remains that under cover of Federal Reserve purchase of these bonds from the banks, who don’t own the bonds, the value of the bonds is 100 cents on the dollar and the owner is the bank — a living lies fundamental. When the illusion collapses, the banks are coming down with it. You can only go so far lying to the public and the investment community. Eventually the reality is these banks are underfunded, under capitalized and still being propped up by quantitative easing disguised as the purchase of mortgage bonds at the rate of $85 Billion per month.

We need to be preparing for the collapse of the illusion and get the other financial institutions — 7,000 community and regional banks and credit unions — ready to take on the changes caused by the absence of the so-called major banks who are really fictitious entities without a foundation related to economic reality. The backbone is already available — electronic funds transfer is as available to the smallest bank as it is to the largest. It is an outright lie that we need the TBTF banks. They have failed and cannot recover because of the enormity of the lies they told the world. It’s over.

Gretchen Morgenson: Tide Turning as Judges Get Irritated by Bank and Lawyer Behavior

“Two recent rulings — one in New York involving Bank of America and one in Massachusetts involving Wells Fargo — serve as examples. In the Wells Fargo case, a ruling on Sept. 17 by Judge William G. Young of Federal District Court was especially stinging. In it, he required Wells Fargo to provide him with a corporate resolution signed by its president and a majority of its board stating that they stand behind the conduct of the bank’s lawyers in the case.”

Editor’s Comment: As I am litigating directly now I see evidence of the same trends discussed in the New York Times article. I adopted a different stance than most foreclosure defense attorneys whose strategies are not less valid than my own. They just don’t suit me. I am accustomed to being the aggressor. So I enter a cases in which the bank has been delaying prosecution of the foreclosure case and step up the pace. The Judges here in Tallahassee and elsewhere are taking note — that the banks are curiously opposing our attempts to move the case along. The resulting shift in perception is palpable. Judges are looking at the files and realizing that it is not because of borrowers who frankly did nothing in the file, but because of the banks who never prosecuted the case.

We ask for expedited discovery and a trial order. The bank attorneys inevitably back pedal and state they cannot agree to expediting the case — which has led the Judges to muse aloud about who is the Plaintiff and who is the defendant.

You would think that the bank would be anxious to produce its witnesses and exhibits for discovery. They are not. In one case the bank has been thwarting the deposition of the person who verified the complaint for over three months.  We only asked for the documents upon which the witness relied when she verified the complaint — something that obviously had to exist before they could file the complaint. So far, no witness nor documents.

When I was representing banks in foreclosures, if someone raised any kind of defense or objection I went out of my way to produce the records custodian,and all the records and proof of the receipt of the money including canceled checks and the bookkeeping records of the banks so there would be no mistake about the existence of the default. I would carefully confirm the figures and history of the borrower before I sent the notice of default, acceleration and right to reinstate because all my figures had to be correct — or else the notice was defective and I would have had to start all over again (something I learned the hard way).

Judges are sensing a disconnect between the banks and their alleged lawyers, and they are right to question that. The assignment usually comes from LPS and the Plaintiff bank usually has no direct knowledge of the action because LPS fabricates most of the documents. That is why Judge Young said that if you want to proceed, I want to see a resolution of the Board of Directors of Wells Fargo bank that they ratify and accept the actions taken by the the attorneys supposedly representing them.

You can almost feel the vibrations of a ship groaning as it makes a turn. The banks are in for a rude awakening.

Fair Game

Why Judges Are Scowling at Banks

By GRETCHEN MORGENSON

District court judges are not generally known as flamethrowers, but some seem to be losing patience with banks in cases involving lending practices.

How Does Insurance Payee Match Up with Claims of Ownership of the Loan?

There have been many admissions by government officials and even parties to the litigation over mortgage Foreclosures to the effect that at this point the ownership of most loans is in doubt. Even President Obama said it, reflecting the views and advice of the senior advisors at the White House. On appeal, recently in California, BOTH sides admitted they had no way of identifying the true creditor — and that is why we have all this litigation, why we have gridlock on modifications and settlements. So what do we do?

One insurance expert I interviewed suggested that his industry might solve the problem, but I think his points raise more questions than answers. Nonetheless, to prove the question, and overcome certain presumptions that are legally applied, examining the insurance policies and the changes that occur in forced placed insurance might reveal the issues and even illuminate the potential solution.

Bank of America is an example of a bank that rushes to take any excuse to place insurance from their own carrier BalBOA, naming BOA as the loss payee on liability policies. The usual previous loss payee was someone else — perhaps the originator or some alleged assignee. The procedure of forced placed insurance creates both additional income to the bank and skips over the question of who owns the loan. When the insurance is reinstated or shown to have never lapsed in the the first place, it often names BOA thus lending support to the bank’s position that it is the owner of the loan.

Looking at the title insurance, who is the loss payee? Besides the owner’s policy there is a rider for the mortgagee named in the mortgage. Of course that party may not be a mortgagee when the mortgage is examined carefully. But changes in loss payees under title insurance usually requires notice and consent of the owner of the property.

Thus the question could be asked in Discovery about who was responsible for tracking title insurance, liability insurance and PMI, why does the policy name a loss payee other than the bank claiming ownership and what efforts were made by the bank to correct the identity of the creditor?

The same thing applies to PMI. If the payee is somebody different than the Forecloser you will notice that none of the banks allege that this is a breach of the mortgage contract. Why not? I think it is because the insurer would demand more proof than what is offered in court as to ownership and that the bank would not be able to satisfy the insurer that it had an insurable interest in the property.

Quicken Loans Cut to the Quick for $3.5 million on $180k Loan

“[Customers and employees] accuse the company of using high-pressure salesmanship to target elderly and vulnerable homeowners, as well as misleading borrowers about their loans, and falsifying property appraisals and other information to push through bad deals….

A group of ex-employees, meanwhile, have gone to federal court to accuse Quicken of abusing workers and customers alike. In court papers, former salespeople claim Quicken executives managed by bullying and intimidation, pressuring them to falsify borrowers’ incomes on loan applications and to push overpriced deals on desperate or unwary homeowners.”

Internet Store Notice: As requested by customer service, this is to explain the use of the COMBO, Consultation and Expert Declaration. The only reason they are separate is that too many people only wanted or could only afford one or the other — all three should be purchased. The Combo is a road map for the attorney to set up his file and start drafting the appropriate pleadings. It reveals defects in the title chain and inferentially in the money chain and provides the facts relative to making specific allegations concerning securitization issues. The consultation looks at your specific case and gives the benefit of litigation support consultation and advice that I can give to lawyers but I cannot give to pro se litigants. The expert declaration is my explanation to the Court of the findings of the forensic analysis. It is rare that I am actually called as a witness apparently because the cases are settled before a hearing at which evidence is taken.
If you are seeking legal representation or other services call our South Florida customer service number at 954-495-9867 and for the West coast the number remains 520-405-1688. In Northern Florida and the Panhandle call 850-765-1236. Customer service for the livinglies store with workbooks, services and analysis remains the same at 520-405-1688. The people who answer the phone are NOT attorneys and NOT permitted to provide any legal advice, but they can guide you toward some of our products and services. Get advice from attorneys licensed in the jurisdiction in which your property is located. We do provide litigation support — but only for licensed attorneys.
See LivingLies Store: Reports and Analysis

Editor’s Comment and Analysis: Quicken is one of those company’s that looks like a lender but isn’t. They say they are the bank when they are not. And they have been as predatory or more so than anyone else in the marketplace, despite the PR campaign of Dan Gilbert, formerly of Merrill Lynch Bond Trading department, who now heads up the company after selling it and then buying it back. They also have an “appraisal” company that is called Cornerstone Appraisals, that shares in the appraisal fees a fact missed by every one of the lawsuits I have seen.

The Quicken two step generally involved the company as an aggressive originator and nowhere is their aggressiveness more apparent than in the lawsuit than in the lawsuit described below. The one fact that everyone still has wrong however is that there is an assumption that Quicken loaned the money to the borrower. In fact, Quicken was neither the underwriter nor the lender and never had a risk of loss on any of the loans it originated. It used the Countrywide IT platform to underwrite the loans, inflated appraisals to increase its fees, and lured borrowers into deals that were impossible — like the lawsuit described below where a piece of property was worth about 1/6th of the original appraisal amount. AND when even the borrower thought the appraisal was ridiculous and refused to sign the loan, they reduced the appraisal and loan so it was still more than 4x the value of the property.

After that the closing funds came from an investment bank, not Quicken Loans or even Countrywide. The investor money was applied to the closing but the investors received nothing of what they were promised. They didn’t get a note or a mortgage. THAT paperwork went to naked nominees of the investment bank so they could steal, trade and create the largest inflation of pseudo-dollars in the shadow banking world that we have ever known — ten times the actual money supply.

Quicken Loans arrogantly rolled the dice and ended up with punitive damages in the millions and a large fee award top the the law firm of Bordas and Bordas in Wheeling Ohio. The Bordas firm proved many points worth mentioning.

  1. Appraisal fraud was at the heart of the mortgage meltdown. If industry standards were applied as stated in the petition of more than 8,000 licensed appraisers in 2005, these deals would never have happened and none of the foreclosures would have happened. And let’s remember that the appraisal is a representation of the LENDER not the borrower.
  2. Cases taken on contingency fee represent a huge share of commerce in the legal profession. My opinion is that liability and damages are starting to form a pattern and that cases against lenders for wrongful foreclosure, slander of title, fraud, RICO and other causes of action will start settling like PI cases currently do, which is why so many lawyers go into personal injury law.
  3. Judicial recognition of the overbearing and egregiously fraudulent behavior of the banks against unwary or unsophisticated homeowners is at the brink of total acceptance.
  4. As courts begin to zoom in on these closings they don’t like what they see. None of it makes sense because none of it is legal.
  5. Courts don’t like to be played as the fool or tool of a gangster perpetrating a large scale fraud. They get testy when pushed, and that is exactly what happened in Ohio.
  6. Most importantly, plain old good lawyering will win the day if you are prepared, understand the material and practice your presentation. Jason Causey, Jim Bordas, and their legal team deserve many kudos for taking on a company whose PR image was squeaky clean and then showing the dirt underneath — just as the Trusts were gilded with a few good looking loans and the rest, underneath, were toxic waste.

“Quicken ordered an appraisal of the home that Jefferson was interested in refinancing and the appraisal request included an estimated value of the subject property of $262,500. The trial court would later conclude the value of the property was $46,000.

“Appraiser Dewey Guida of Appraisals Unlimited, Inc. valued the property at $181,700 and after Jefferson backed out of the process for a few weeks because of her concern that she would be unable to afford the payments, Johnson was able to close her on a $144,800 loan.

“Although Jefferson had initially received a written Good Faith Estimate for a loan in the amount of $112.850 with a 2.5 “loan discount points” and no balloon feature, this much larger loan actually charged her for 4.0 points, while only giving her 2.5, and had a balloon payment after 30 years of $107,015.71, the amount of which was not disclosed, according to court documents.”

 

  1. Quicken Loans ordered to pay $3.5M in mortgage case, appeals

    wvrecord.com › Ohio County

    Aug 7, 2013 – WHEELING – A judgment in a fraud lawsuit against Quicken Loans has only gotten bigger since an appeal to the state Supreme Court, so the 

  2. Mortgage Mess: Why Quicken Loans May Not Be as Squeaky Clean

    http://www.cbsnews.com/…/mortgage-mess-why-quicken-loans-may-not-be-as…

    Feb 8, 2011 – Quicken Loans‘ lending practices may not be as exemplary as the company contends. A federal lawsuit starting in Detroit today and other legal 

  3. Ripoff Report | quicken loans directory of Complaints & Reviews

    Ripoff Report | Complaints Reviews Scams Lawsuits Frauds Reported. Company Directory | quicken-loans. Approximately 342 Reports Found Showing 1-25.

SEC Waking Up: Madoff Conspirators Face Charges — Now About Those Mortgage Bonds

If you are seeking legal representation or other services call our South Florida customer service number at 954-495-9867 and for the West coast the number remains 520-405-1688. In Northern Florida and the Panhandle call 850-765-1236. Customer service for the livinglies store with workbooks, services and analysis remains the same at 520-405-1688. The people who answer the phone are NOT attorneys and NOT permitted to provide any legal advice, but they can guide you toward some of our products and services. Get advice from attorneys licensed in the jurisdiction in which your property is located. We do provide litigation support — but only for licensed attorneys.

 

See LivingLies Store: Reports and Analysis

 

After a long slumber of non-regulation and failure to bring charges for securities fraud the SEC is finally getting into the “game” — the culture of fraud on Wall Street. When the Madoff story broke it was inconceivably large. $60 Billion generated through a PONZI scheme — selling securities or taking money under a prospectus that promised that the flow of money would be invested for the benefit of the investors. The hallmark of such schemes is that they eventually fail when people stop buying the securities or depositing money. At that point the money deposited with the fraudster eventually fails to provide the funds necessary to keep paying investors the return they were promised and fails to cash out investors who want their money back. It fails because the scheme was either not to invest the money at all or to seek cover under investments that clearly were never going to be in compliance with the prospectus or any other standard of investment.

 

So now we ask again, what about the MBS players? Mortgage-backed securities dwarfed the Madoff scheme. $13 trillion-$20 trillion or more was taken from investors under a prospectus that promised funding of mortgages of the highest quality. Like Madoff, the investment bankers took what they wanted before they used the money to pay back investors or fund mortgages. And when they did fund mortgages they intentionally inserted false entities as lenders — entities with no relationship to the investors. The effect was a conversion of the intended investment into an unsecured loan to either the investment bank or the borrower and no claim to bring against the borrower,directly or indirectly. The secured interest was destroyed and then claimed by the Banks. The claim for repayment was also converted to the benefit of the Banks, who then “traded” in their proprietary account in which the gains were kept by the Bank and the losses were tossed over the fence to the investors under a pooling and servicing agreement that was ignored except for laying off the losses on the investors.

 

When investors stopped buying MBS the scheme promptly collapsed. Investment banks still continued to advance money to investors directly or indirectly through the subservicers. They did this for the same reason any PONZI operator pays his “investors” (victims) — to keep them buying into the investment pool and to create the illusion that nothing is wrong. At the same time the Banks were advancing money on alleged mortgage loans, they were declaring loans in default, foreclosing and claiming losses in their “ownership” of the mortgage bonds they had sold to pension funds. Eventually even the taxpayer became an unwitting and unwilling investor to save the world from the brink of economic collapse. It was believed the Banks were in trouble because they had recklessly lost money in risky trades. This was never true.

 

And now the massive deluge of Foreclosures continues the fraud. Just as the investors were not represented at the closing of alleged mortgage loans, they are not represented in Foreclosures. The banks are foreclosing in their own names — cutting off the investors completely when the bank takes title to the property at the foreclosure sale — and cutting off insurers, CDS counter parties, guarantors, and other co-venturers and co-obligors from seeking refunds or forcing the repurchase of the loans that were never subject to any form of underwriting standards of the industry.

 

The money they took off the top, the money they received from third parties who waived rights to collect from the borrower, was converted from a trade on behalf of their principals — the investors (victims) who thought that their money was being deposited with the investment bank to fund a REMIC trust. The investor money became the bank’s money. The investors’ ownership of loans, notes, mortgages, and bonds became the property ofthe banks and so it stays today, except for the settlements with investors who are suing and except for the long list of fines and penalties leveled on the banks for pennies on the dollar. The pending BOA Article 77 hearing in which the insurers are pointing to the incestuous relationship between the “trustees” of the REMIC trusts and the investment banks is starting to come back and haunt both the trustee, who knew there was no funded trust, and the bank that was merely Madoff by another name.

 

So the payments due to investors stopped or were cut back without credit for the money received by the investment banks as agents of the investors. Thus the account receivable of the investor is kept away from the courts because it would show vastly different balances than the balance claimed by the servicer’s and banks. The balance is much lower than what is represented in court. And it probably has been eliminated entirely when the net is cast over principals and agents’ receipt of funds. The Foreclosures are wrong. They simply continue the fraud and ratify by judges’ orders the theft of money, loans and what should have been notes payable to the investors or the REMIC trust that was never funded — and therefore could never have purchased the loans.
If the money was applied properly most of the investors would be covered by the money that still remains in the banks that they are claiming as their own capital. Applied properly in accordance with generally accepted accounting principles, this would reduce the account receivable from the loans. It would also by definition reduce the corresponding account payable from the borrowers, making modification and settlement easy —but for the interference of the servicers and investment banks who are trying desperately to hold onto their ill-gotten gains.

OCC Announces EverBank Agrees to Pay $37 Million to Customers, $6.3 Million to Housing Assistance Groups

Internet Store Notice: As requested by customer service, this is to explain the use of the COMBO, Consultation and Expert Declaration. The only reason they are separate is that too many people only wanted or could only afford one or the other — all three should be purchased. The Combo is a road map for the attorney to set up his file and start drafting the appropriate pleadings. It reveals defects in the title chain and inferentially in the money chain and provides the facts relative to making specific allegations concerning securitization issues. The consultation looks at your specific case and gives the benefit of litigation support consultation and advice that I can give to lawyers but I cannot give to pro se litigants. The expert declaration is my explanation to the Court of the findings of the forensic analysis. It is rare that I am actually called as a witness apparently because the cases are settled before a hearing at which evidence is taken.
If you are seeking legal representation or other services call our South Florida customer service number at 954-495-9867 and for the West coast the number remains 520-405-1688. In Northern Florida and the Panhandle call 850-765-1236. Customer service for the livinglies store with workbooks, services and analysis remains the same at 520-405-1688. The people who answer the phone are NOT attorneys and NOT permitted to provide any legal advice, but they can guide you toward some of our products and services. Get advice from attorneys licensed in the jurisdiction in which your property is located. We do provide litigation support — but only for licensed attorneys.
See LivingLies Store: Reports and Analysis

In its never-ending quest for putting distance between the Bank and the Homeowners who have been misled into thinking that Bank of America has any servicing or ownership rights over their mortgage, BOA has been transferring any mortgage they can to other entities — perhaps even paying the other entities to “take” the mortgages, which BOA didn’t own in the first place.

One such entity is EverBank which is a small thinly capitalized entity. The gimmick worked. Using the balance sheet of EverBank instead of Bank of America, the fine was probably one tenth or less than the the fine that would have been levied upon Bank of America. EverBank is getting paid to be thrown under the bus. The OCC used the EverBank Balance Sheet as a measuring stick and figured that $37 million fine for wrongful foreclosure processing was enough. If they had looked behind the curtain, which they most certainly had the knowledge about, they would have been fining Bank of America for the wrongful, illegal and immoral foreclosures.

And EverBank continues to file foreclosures that are riddled with obvious defects because they don’t have a real plaintiff, a real lender, a real loan, a real default or any real servicing rights. It is safe to say that they are so far removed from the realities of any actual transaction that it will be impossible to actually respond to discovery requests.

So I figured I would share with you some notes on a few of the cases with EverBank that you might find useful. As stated a thousand times before, do NOT use these forms or notes or anything else unless you ARE an attorney licensed in the jurisdiction in which the property is located or you consult with one.

NOTES ON EVERBANK FORECLOSURES

  1. The Plaintiff is self-identified in its own attachments as a servicer which means that judgment can only be rendered for the real creditor who under Florida Statutes governing credit bids can only be the actual creditor.
  2. The complaint is in rem and does not sue on the note, so there is no basis for the deficiency demanded in the wherefore clause.
  3. The servicing rights actually never existed because they would arise from a pooling and servicing agreement for a REMIC trust that was never funded nor was it able to purchase loans, nor were such loans transferred within the time limits prescribed by the REMIC laws and the terms of the pooling and servicing agreement. Since the REMIC was ignored, the terms of the PSA were ignored, no servicer could exist except with apparent authority. It remains to be seen to whom the the payments were made after receipt of payments from the Homeowner Defendant. despite the lack of any actual legal authority for servicing rights through any enforceable agreement to which the Homeowner defendant was a party  parties variously assigned servicing rights and endorsed the unenforceable note.
  4. Generally they were transferred by BOA as successor to BAC as successor to one of several Countrywide entities none of which were the lenders, servicers, or mortgage brokers for the loan. The reference to succession is false. Countrywide changed its name to BAC for a short while, following which Bank of America falsely claimed ownership, as successor to Countrywide despite the fact that the FDIC records show that a merger of some sort took place between Red Oak merger Corporation and Countrywide, but there is no indication that the agreement in the FDIC records shown in its “Reading Room” on the internet, that Bank of America ever acquired Red Oak or that Red Oak was a wholly owned subsidiary of Bank of America or anything of the sort.
  5. The mortgagee is named as either MERS as a naked nominee with no interest in the loan, or another entity that does not exist in the records of the Florida Secretary of state or anywhere else, and does not even pretend to be an entity organized and existing under the laws of any state. Hence there is no actual payee under the note and there never was, and there is no mortgagee under the mortgage, because the alleged party having an interest int he collateral is a naked nominee without any disclosure as to the true party in interest. This prevents the entire purpose of recording which is to allow for the complete transparency of ownership and encumbrances so that buyers and sellers can be certain that their transaction is valid.
  6. The complaint fails to state any loan or advance of money was ever made to the defendant Homeowner because the Homeowner has learned through hiring professional forensic auditors that none of the parties in the chain leading up to the Plaintiff Evergreen ever had ownership or servicing rights tot he loan. Instead, the loan came from the account of an investment bank that was used as a conduit for the money of investors who thought they were buying mortgage bonds from a REMIC trust organized under the laws of the State of New York. However the trust was never funded and the loan was never transferred into the trust. Accordingly the real creditor, with whom, the Defendant would like to engage in settlement or modification discussions, is a group of investors who might be loosely identified as a general partnership that does not qualify as a bank, lender, or even mortgage broker.
  7. The complaint fails to state any injury to any party in the complaint. his is because the money came from investors and on top of that, the intermediaries in the cloud of false securitization claims, received multiple payouts of the entire loan balance that should have reduced the account receivable of the investors who were the only parties who advanced money, to either zero, less than zero (with money owed back to the borrower) or at least less than the amount demanded  by Evergreen, who had no right to issue a demand letter since the actual owners of the loan had never given such an instruction.

ROUGH DRAFT OF MOTION TO DISMISS

Motion to Dismiss:
a. The pleadings conflict with the attachments. Everbank is named as either servicer or holder but no party is named as creditor. The attachments show a different party as the lender.
b. The complaint fails to allege injury to Evergreen and a short plain statement of how EverBank was financially damaged. Plaintiff fails to attach cancelled check(s) or wire transfer receipt(s) or wire transfer instructions for an actual transaction — which is the essential element and foundation for use of the note and mortgage as evidence of the transaction and the terms of repayment depending upon whether Plaintiff is attempting to enforce the terms of the NOTE, MORTGAGE, DEBT, LOAN OR ASSIGNMENT.
c. Prior communications with Countrywide, BAC and BOA and the borrower indicate alternately that each of those entities was the holder, but then revealed the existence of a loan pool claiming an interest. Plaintiff should be required to attach a copy of the cancelled checks or wire transfer receipts to show which party is actually claiming injury and a short plain statement of why their claim is secured.
d. Plaintiff has failed to allege that it or any affiliate or predecessor or successor has responded to the RESPA 6 (Qualified Written Request) sent by borrower or the Debt Validation Letter sent to the apparent servicer which alternated between Countrywide, BAC and Bank of America.
e. Plaintiff has filed to allege and attach relevant copies of documentation demonstrating proof of ANY POTENTIAL OR ACTUAL LOSS nor any authority to represent the creditor(s) and identifying the creditor who meets the standard of a party qualified to submit a credit bid at foreclosure auction, execute a satisfaction of mortgage upon payment, or a a correct accounting of the loan receivable or bond receivable if the loan is in fact claimed by any of the above stakeholders to be owned by a loan pool, REMIC, Special purpose vehicle or trust.
f. Unless the Plaintiff can allege and attach documents showing financial injury to Plaintiff as of the date that the complaint was filed, it lacks standing in this case.
g. Since the case is essentially in rem with the requested relief being the foreclosure sale of the property owned by the Defendant, Plaintiff has failed to state a cause of action upon which relief could be granted.

h. Even if the court were to rule that the Plaintiff had standing to initiate foreclosure proceedings, the Plaintiff must identify the party in the Judgement who will be  named, and supply the accounting required to show the amount of  financial injury, produce and attach the required documents to the complaint and prove its allegations and exhibits by competent evidence.

i. It is apparent here that Plaintiff lacks standing and certainly has failed to plead and attach required documents demonstrating financial injury since according to its own pleadings and attachments it was neither the lender nor the purchaser of the loan according to the existing allegations and exhibits.

WHEREFORE, Defendant prays that this Honorable Court will dismiss Plaintiff’s complaint with prejudice unless Counsel for Plaintiff can proffer in good faith that it can plead and attach the required exhibits and grant Defendant reasonable attorney fees and costs for defending a patently sham pleading.

OCC Announces EverBank Agrees to Pay $37 Million to Customers

Aug 23, 2013 – EverBank was subject to a cease and desist order for unsafe and unsound practices in mortgage servicing and foreclosure processing.

EXCLUSIVE: EverBank takes flight as regular ‘jumbo’ loan RMBS issuer
http://www.housingwire.com/news/2013/04/01/exclusive-everbank-takes-flight-regular-jumbo-loan-rmbs-issuer

Everbank Exits Wholesale Lending to Focus on Correspondent

http://www.mortgagenewsdaily.comNews HeadlinesMND NewsWire Home

Federal Reserve Seeks to Fine HSBC, SunTrust, MetLife, U.S.

4closurefraud.org/…/federal-reserve-seeks-to-fine-hsbc-suntrust-metlife-…

Apr 1, 2012 – Last week, a senior Federal Reserve official recommended fines for these Bank, MetLife, U.S. Bancorp, PNC Financial Services, EverBank, OneWest and in residential mortgage loan servicing and foreclosure processing 

Federal Agent Misconduct in Favor of BofA and McCarthy Holthus and Levine law firm?

HAS FORECLOSURE DEFENSE BECOME A TERROR THREAT?

WHO IS TERRIFIED HERE?

This is a story about abuse of power or abuse of apparent power. The object is to cover-up crimes that remain largely undetected because the complex maze created by the “Thirteen Banks.”The stakes could not be higher. Either the current major Banks will be sustained or they will come crashing down with a feeding frenzy on a carcass of a predator that stole tens of trillions of dollars from multiple countries, hundreds of millions of people, and millions of homes across the world that should, by all accounts under the Law, still belong to the owner who was displaced by foreclosure. The banks are willing to do anything and they are paying outsize fees and other legal expenses (topping $100 Billion now).

The agents involved — Mike Lum from Homeland Security, Tim Hines, FBI Agent, and Sean Locksa, FBI agent — were either moonlighting (the agents say they were acting in their official capacity) and using their badges in appropriately or they were sent to intimidate litigants with Bank of America represented by McCarthy Holthus and Levine. A few years back, I received reports that the law firm, and in particular attorney Levine, had sent letters to local prosecutors to request action against people who were defending their property from foreclosure. The agents admitted to Blomberg today that they received a “tip” and that “it” was “no longer” a criminal manner and that they had ended their investigation.

In one prior case I saw a letter and I believe I might have seen an affidavit signed by Levine. The result was a series of indictments against one individual that were later dismissed. I have no information on the other cases all dating back to around 2010. I know one of the people, the one who I know was indicted, spent the last bit of her money hiring a criminal attorney to defend her. The case was “settled with a dismissal.” She subsequently lost two homes that were previously unencumbered in a foreclosure where different parties stepped in to foreclose than the ones who asked for lift stay in her bankruptcy. None of the parties were creditors or properly identified.

I now believe I have enough information to connect the dots, and raise the question as to whether members of local, federal and state law enforcement are colluding (or are being wrongfully used by the suggestion of false information) with Bank of America and at least one law firm — McCarthy Holthus and Levine — in which litigants and perhaps witnesses are intimidated into submission to wrongful foreclosures. The information contained in this article relates primarily to Arizona and to a lesser degree, California. I have no information on any other such activity in any other state of the union.

It also appears as though Bank of America and McCarthy Holthus and Levine were taking advantage of some sloppiness at the Post Office, for which the Postmaster in Simi Valley has apologized and sent a refund to the complainant, Darrell Blomberg whose story can be read below. The interesting thing here is that Blomberg reports that McCarthy Holthus and Levine directly received a letter that was addressed to Celia Mora, a suspected robo signor who apparently lives in Simi Valley, according to the post office, but whose mail bears a San Diego postmark.

The joint terrorism task force supposedly represented by the three men identified above, will not answer calls relating to this matter. Thus we only have Blomberg’s report and my own information and analysis — and of course public record. We do have a callback received today by Blomberg who reports that the agents answered a limited number of questions.

The information contained in this report is substantially corroborated by another source who, like Blomberg I consider to have the highest integrity and who was also visited this past week by the same agents who visited Blomberg. Since no specific act was alleged in the interviews except the perfectly legal request to the post office to confirm an address of a potential witness and test mailings to see who was receiving the mailings, it is hard to conclude anything other than that these agents were being used officially or unofficially to intimidate litigants who have been successful at defending their homes in foreclosure for years, and to intimidate them into ceasing their factual and investigative help to other homeowners who are also being wrongfully foreclosed.

If these interviews were sanctioned by the terrorism task force, the FBI or Homeland security it clearly represents the use of Federal law enforcement authority for the benefit of gaining a civil advantage — a crime in most jurisdictions. How high the orders went in those organization I do not know. If there were no such orders and these agents were doing a “favor” then they are subject to discipline for misuse of their badge and deliberately misleading the persons interviewed into thinking that this was an official investigation. The agencies involved might be negligent in supervising the activity of these agents. Neither of the sources for this story have any mark on their record except the mark of distinction — one having worked for decades in law enforcement in economic crimes.

Was Darrel Blomberg getting too close to the truth?

In litigation, one of the points raised by Blomberg was that Celia Mora — allegedly signed an affidavit perhaps by herself and perhaps as a robo signor. The issue of forgery didn’t come up. There was a San Diego post mark same day as the affidavit was allegedly signed 160 miles away. Blomberg’s position was Mora had no actual authority no actual executive position or managerial position, and signed clerically under instruction without knowledge of the contents. That is it. The fact that McCarthy Holthus and Levine actually received the letter addressed to Mora through normal postal service leads one to believe that the affidavit may have been created at the law firm and perhaps even signed there in Arizona. Hence any criminal behavior suggested was not the work of Blomberg but could have been the work of the law firm or Bank of America. To my knowledge there is no investigation pending relating to the use of the mails, false documents, improper signatures, lack of authority or any of the issues presented by Blomberg.

From there it became a vague charge of harassment communicated by three Federal Agents. Harassment was the word used by the agents in the interview with Blomberg and the interview with my other source. But no specific act was stated even in passing as to what act would be investigated as harassment, no less a matter of national security. More telling, when the agents left both interviews, neither source was instructed or requested to stop any specific act. That leads to the question, if there was no conduct they sought to stop, why were they there at all?

Note that McCarthy Malthus and Levine has been replaced by the law firm of Bryan Cave since June, 2013 in Blomberg’s case. Generally speaking Greg Iannelli, Esq. handles the more sensitive pieces of litigation that could blow the lid off of the fraudulent scheme of securitization.

Read Blomberg’s account here —> 2013-08-29, Unexpected Visit from the National Joint Terrorism Task Force

Background and analysis: Why do the banks continue to use low paid clerical workers to sign affidavits and other documents for which they obviously lack authority or knowledge? Why won’t a true executive with true authority and actual personal knowledge based upon his or her own actual observation, investigation and analysis to make sure the foreclosure is proper as to the property, the persons, the balance due and the existence of a default — especially with reference to the actual creditor’s books of account?

Convenience doesn’t cover it. With legal costs topping $100 Billion it would be impossible to pass the giggle test on any explanation of convenience when it comes to the paperwork. My conclusion is that it is worth getting embarrassed in court as long as the number of times is small enough that the overall scheme is not toppled. The use of clerical personnel to sign and approve documents relating to foreclosure is akin to allowing teller’s decide whether you can have a loan on that new car or new house. It doesn’t happen. If it doesn’t happen when the “loan” goes out, then it is fair to assume that the same standards would apply when the loan turns bad and comes back in.

Think about it. The Banks are reporting record profits. U. S. Bank reported $42 Billion in just one quarter. They are attributing their profits to proprietary trading — something I have attributed to laundering the illicit retention of funds that should have been used to pay investors the principal and accrued interest that was due on the promise of investment banks when they issued bogus mortgage bonds. That money was received by the Banks as agents for the investors and therefore, whether paid or not, is a credit against the account receivable owned by the investors.

The Glaski appellate attorneys gratuitously admitted that the true owner of the debts will never be known. Yet the true relationship between the homeowners and the lenders is regarded as known and enforceable. In short, the position of the Banks is that we don’t know who this money belongs to but it must belong to someone so we are going to collect it and foreclose. We’ll get back to you later on what we did with the money. The Banks are required to take that idiotic position because (a) it is still working in court and (b) they get to avoid liability to investors, guarantors, insurers, borrowers and government agencies that could exceed $10 trillion. So $100 Billion in legal expenses is only 1% of their exposure. It is easy to see how the Math works. If the legal expenses were a far more significant portion of the money the Banks were holding then they would find another way to deal with it. 

If the false trading and laundering of money was properly entered on the books as merely repatriating money that was hidden, the investors would be spared the losses that threaten our pensions and cities. It would also alleviate or eliminate the corresponding account payable due from homeowners, city budgets and other “borrowers” who were the unwitting pawns in a scheme to defraud investors. The collateral damage to all citizens, all taxpayers, all consumers, all workers and all homeowners has been obvious since 2007.

The extraordinary story is aggravated by the knowledge that the legal expenses of the Banks has now topped $100 Billion. Like I said, think about it. Nobody spends $100 Billion unless it is worth it. It is worth the price because of the amount of liability they are avoiding, and the amount of money they stole that went offshore. The amount of the theft can be estimated in a variety of ways, and the results are always the same. They siphoned trillions of dollars from many countries. In the U.S. alone it appears that the total was in excess of $17 Trillion, which is $3 Trillion MORE than the total amount of lending on residential “loans.” Extrapolating the most recent profit report from U. S. Bank from a quarter (three months) to a year, that one Bank is reporting annual earnings from “proprietary” trading in excess of $160 Billion per year. That is one of 18 Banks that were involved in this crime against humanity. Do the math.

So the Banks retain money that they never legally earned at the expense of deceived investors, Cities and sovereign wealth funds AND at the expense of the “borrowers” in the “underlying” deals. And by not crediting the lenders, the corresponding reduction of the account payable from “Borrowers” is also absent. No consent for principal reduction is required because the balance has also been reduced or extinguished by payment. Follow the money trail and the results was astonish you. This is like organized crime with all the trimmings of governmental complicity.

Now I am reporting that based upon a pattern of conduct that appears particularly egregious in Arizona, this unholy alliance between the people who committed the wrongs and government is becoming apparent. Who would have imagined indictments and “investigations” of people litigating their cases against the Banks after the scale the crime became apparent in 2008-2009?

CAVEAT: The agents in the Blomberg interview insist they were acting in their official capacity and I take them at their word. My problem with that assumption is that it means the system is susceptible of manipulation by attorneys who have no problem playing dirty tricks to gain a civil advantage. Or, worse, it means that there are high level people in the system who are willing to look the other way when this behavior pops up.

By this point in the savings and loan scandal in the 1980’s more than 800 bank presidents and loan officers, along with mortgage brokers and originators had been convicted by a jury and were serving their sentences. This time the tally is zero. But the reverse is not true. Mortgage brokers and originators and investors who played the system against itself have been investigated, prosecuted and sentenced to prison. And even homeowners have been accused of crimes that were identical to the crimes committed by Banks on a much larger scale. Steal a million, go to jail. Steal a Trillion and get immunity because the finance system might not survive removing the criminals from our society. No longer a nation of laws we have become a nation of men, corrupt men, who continue to accumulate wealth and power as they channel their illicit gains into reported Bank “profits” and control over world natural resources.

For about three years I have been investigating an unholy alliance between a law firm, McCarthy Holthus and Levine, Bank of America, U.S. Bank and law enforcement. It appears as though they have some special influence and that local, state and Federal law enforcement agents are acting as collectors and intimidators outside the boundaries of the law. Prosecutors have followed this line of attack against those pro se litigants who are getting close to the truth that the foreclosures — all of them — were bogus, if they were based upon mortgages and deeds of trust carrying claims of securitization, arising from Assignment and Assumption Agreements, Pooling and Servicing Agreements, and false prospectuses to investors.

The attached report from Darrel Blomberg, a person of unparalleled integrity, tells the story of agents from the FBI who (whether they realized it or not) are clearly acting at the behest and for the benefit of Bank of America, who was represented by McCarthy Holthus and Levine. In the past week, the agents have been visiting at least two people based upon a “harassment” allegation. The agents declared themselves to be part of a joint terrorism task force. The act of harassment was a request for confirmation of address and confirmation of address that ended up both in the offices of Bank of America and the office of McCarthy Holthus and Levine. It was addressed to the U.S. Postmaster who apologized for gaffes in processing the requests and even refunded money to Blomberg. No investigation has been threatened by the U.S. Postal inspector against either the Bank or the law firm. And none has been threatened against Blomberg.

Having a few pages of the attempt to get address of a robo signor whose signature appears to have been forged, these agents have interviewed two people in Arizona that have been known to provide factual assistance to other homeowners and whose own cases have been spread out over many years as the Bank continues to fail in its attempt to claim ownership or verify the balance of the debt. These agents identified themselves as having been dispatched from the FBI, Homeland security and the joint task force. Whether they were merely moonlighting or were in fact dispatched by their superiors, it is clear that no criminal matter was under investigation, and that their purpose was to intimidate two people who fortunately are not easily intimidated. Based upon my investigation it appears as though that law Firm, McCarthy, Holthus and Levine who is frequently replaced by Bryan Cave, has been doing dirty work for the banks through contacts in law enforcement.

It is happening and this should be stopped before it becomes a commonplace act throughout the country.

In the final analysis the issue of ownership of the loan is going to unravel this mess because it is only then that we can look at the books of account and see what money is owed on the original account receivable for the creditor/investor/REMIC.

The analysis of ownership does not merely look to the agreements the parties entered into because the label parties give to a transaction does not determine its character. See Helvering v. Lazarus & Co. 308 U.S. 252, 255 (1939). The analysis must examine the underlying economics and the attendant facts and circumstances to determine who owns the mortgage notes for tax purposes. See id. The court in In re Kemp documents in painful detail how Countrywide failed to transfer possession of a note to the pool backing a Mortgage Backed Security (MBS) so that Countrywide failed to comply with the requirements necessary for the mortgage to comply with the REMIC rules. See In re Kemp, 440 F.R. 624 (Bkrtcy D.N.J. 2010). Defendant in this case has done exactly what was adjudicated in Kemp, failure to sufficiently show a timely transfer that complied with the strict language of the trusts’ Agreements.

As the Kemp court notes, “[f]rom the maker’s standpoint, it becomes essential to establish that the person who demands payment of a negotiable note, or to whom payment is made, is the duly qualified holder. Otherwise, the obligor is exposed to the risk of double payment, or at least to the expense of litigation incurred to prevent duplicative satisfaction of the instrument. These risks provide makers (Plaintiff in this case) with a recognizable interest in demanding proof of the chain of title” (specifically referring to the trust participants). 440 B.R. at 631 (quoting Adams v. Madison Realty & Dev., Inc., 853 F.2d 163, 168 (3d Cir. N.J. 1988). And because the originator did not comply with the legal niceties, the beneficial owner of the debt, the trustee, cannot file its proof of claim either.

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