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RECOMMENDED READING:

CHAIN OF TITLE by David Dayen. Available on Amazon

LISTEN LIBERALS! by Thomas Frank. Available on Amazon and Kindle.

Pretender Lenders: How Tablefunding and Securitization Go Hand in Hand” By William Paatalo and Kimberly Cromwell. CLICK: http://infotofightforeclosure.com/tools-store/ebooks-and-services/?ap_id_102

Mnuchin as Treasury Secretary: Lackey for the TBTF Banks

Mnuchin was and remains “the guy between the guys.” Billed as the organizer of OneWest his role was to provide a layer between the founders and the rest of the world. His prospective appointment As Secretary of the US Treasury means that the TBTF banks would have a lackey to do what the banks wanted the US Treasury to do.

Get a consult! 202-838-6345

https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments.
 
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
—————-
 *
It is reported that OneWest foreclosed on 40,000 homes. I have already described to you that Foreclosures sponsored or initiated by OneWest were very often done in the name of another entity. For example, Fannie Mae or Freddie Mac. Those are not counted in the number of homes foreclosed by OneWest. My experience is that the number of homes foreclosed where OneWest was the party “pulling the strings” (not entirely accurate since control was centralized far from OneWest) is at least equal to the number reported for foreclosure cases in which OneWest was the foreclosing party.
 *
The average “originated” principal amount of debt in which a homeowner received financial benefit from a direct receipt of funds or funds paid out on behalf of the homeowners to pay off an old “loan” or to pay the seller is reported as an average of $225,000.
The rest is arithmetic. If you multiply the number of foreclosures reported (40,000) times the principal amount of debt that a rose from the origination of transactions with homeowners on refi or prospective homeowners who were buying ($225,000) then you get a total of $9,000,000,000.
 *
If you look at the deal between the FDIC, the US Bankruptcy Trustee for IndyMac, and OneWest, you will not find $9 billion in consideration for the purchase of loans by OneWest from the IndyMac estate. Both the FDIC and the US Bankruptcy Trustee were under a duty to maximize the return to creditors. They did not receive $9 billion for sold loans because there were no loans to sell. OneWest principals merely put up or promised to commit around $1-$2 Billion in capital to qualify as a bank and to take over the service contracts and brick and mortar locations of IndyMac. This is nearly identical to the Chase-WAMU deal.
 *
But there is more: under a very lucrative loss sharing agreement with the FDIC, OneWest submitted claims to the FDIC to cover 80% of the alleged losses on nonperforming loans and then, after getting paid, proceeded to foreclose for the whole amount. 
 *
There is no evidence of any particular loan or pool of loans being sold to OneWest for any consideration that traveled from OneWest to either the FDIC as receiver or the US Bankruptcy trustee for the state of IndyMac. Yet OneWest followed the industry practice of stepping AS THOUGH they were the creditor, claiming they were the holder of negotiable paper because the real creditors — investors who advanced money as though they were buying real MBS (which were bogus securities issued by a nonexistent entity that never did any business) — were unaware of the status of their claim against the REMIC Trusts that were ostensibly purchasing loan portfolios but lacked the funding to do so because the Trusts never received the proceeds of sale of the MBS. 
 *
Second, OneWest did not actually have any business records. They are all  fabricated or outsourced (or both) to a subdivision of several different “servicing” entities that are directed by LPS/Blacknight. LPS is tasked with (1) selecting the Plaintiff or beneficiary of a foreclosure (2) collecting and creating records (3) fabrications and forgeries (and robosigning) of assignments, endorsements etc.
 *
Bottom Line: OneWest foreclosed on loans in which it was neither the owner nor the servicer. While it acquired servicing rights from IndyMac, the real servicers were selected by “Master Servicers” (underwriters/TBTF Banks) of the nonexistent trusts. So while IndyMac theoretically had servicing rights for the most part the actual job of servicing was done elsewhere, under the watchful eye of LPS. Thus when OneWest acquired the IndyMac servicing “business” it was in a actuality acquiring nothing.
 *
Thus approximately $9 billion in foreclosures, as reported in the media resulted in windfall profits to OneWest of a percentage of the liquidated properties, estimated total at around $6 billion, around two thirds of which $6 billion) was given to the “Master Servicers” as “recovery” of “servicer advances” (which neither came from the servicers nor were they advances as the payments were taken from dynamic dark pools consisting mostly of investor money), netting $2 Billion to OneWest plus “servicing fees” despite the fact that they performed very little or no servicing.
 *
The organizers of OneWest were billionaires that went into it on the premise and promise that they would make a few billion dollars, although they were never entirely clear on where the profits were coming from. OneWest was then sold after the windfall the profit projections slumped because there were practically no more alleged IndyMac originated “loans” to foreclose. The PR spin was that they were getting out because their temporary agreement to operate OneWest was expiring. But the real reason was that there was nothing left to plunder and the founders were getting increasingly uncomfortable about where the money was coming from. OneWest could have easily slipped into the roles occupied by Ocwen, SPS, Bayview et al etc and “acquired” more loans in Re-REMIC deals, but the founders wanted no part of it.
 *
Homeowners lost their homes on the premise that they thought they had a legitimate loan from a legitimate lender. But IndyMac was originating loans under pre-sale agreements that were effective BEFORE even the applications for loans were received. The Purchase and Assumption Agreement provided that the actual lender’s identity would be withheld from the borrower (a direct violation of TILA). The money for the funding of the alleged loan transactions came from the dark pools, the constituents of which were robbed of their right to the notes and mortgages. The irony is that the counterparty to IndyMac’s Purchase and Assumption Agreements were mere conduits and in many cases sham conduits.
 *
Mnuchin was and remains “the guy between the guys.” Billed as the organizer of OneWest his role was to provide a layer between the founders and the rest of the world. His prospective appointment As Secretary of the US Treasury means that the TBTF banks would have a lackey to do what the banks wanted the US Treasury to do. This greases the wheels of false securitization. The banks have never stopped in their “perfect” crime wave and are if anything speeding up with false and sometimes true claims of securitization of just about anything — including “servicer advances.” That adds insult to injury in that they are using their scheme of theft from investors and selling rights to participate in the scheme to investors. In the end, it is simply a scheme to use other people’s money and then step into their shoes without them knowing it.

David Dayen: Bankers and Profiteers of the “Great Foreclosure Machine”

https://www.democracynow.org/2016/12/2/bankers_behind_great_foreclosure_machine_joine

 

We look at two of Donald Trump’s Cabinet picks: Steven Mnuchin for treasury secretary and Wilbur Ross for commerce secretary. Mnuchin has deep ties on Wall Street, including working as a partner for G

oldman Sachs, and his hedge fund played a role in the housing crisis after it scooped up the failing California bank IndyMac in 2008. Trump’s commerce secretary pick, Wilbur Ross, is a billionaire private equity investor who specializes in flipping bankrupt companies for profit, often buying the U.S. companies at low prices and then selling them to overseas investors. He and his companies have sometimes shipped jobs and factories overseas—practices Donald Trump has railed against. We are joined by David Dayen, whose recent article for The Nation is “Wilbur Ross and Steve Mnuchin—Profiteers of the Great Foreclosure Machine—Go to Washington.”


TRANSCRIPT
This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: We turn to look in more detail at two of Donald Trump’s Cabinet picks: Steven Mnuchin for treasury secretary and Wilbur Ross for commerce secretary. Mnuchin has deep ties to Wall Street, including working as a partner for Goldman Sachs, where his father also worked. Mnuchin’s hedge fund also played a role in the housing crisis after it scooped up the failing California bank IndyMac in 2008. Under Mnuchin’s ownership, IndyMac foreclosed on 36,000 families, particularly elderly residents trapped in reverse mortgages. Mnuchin was accused of running a foreclosure machine. People protested outside his home. The bank, which was renamed OneWest, was also accused of racially discriminatory lending practices. In 2015, Mnuchin sold the bank for $3.4 billion, $1.8 billion more than he bought it for.

Trump’s commerce secretary pick, Wilbur Ross, is a billionaire private equity investor. Ross specializes in flipping bankrupt companies for profit, often buying the U.S. companies at low prices, then selling them to overseas investors. He and his companies have sometimes shipped jobs and factories overseas, practices Donald Trump has railed against. He, too, had a role in the foreclosure crisis. In 2007, Wilbur Ross bought the second-largest servicer of subprime loans in America, a company called American Home Mortgage Servicing.

To talk more about Mnuchin and Ross, we’re joined by David Dayen, author of the award-winning book Chain of Title: How Three Ordinary Americans Uncovered Wall Street’s Great Foreclosure Fraud. His most recent piece for The Nation, “Wilbur Ross and Steve Mnuchin—Profiteers of the Great Foreclosure Machine—Go to Washington.”

So, talk about the significance of this, David. Talk about who Mnuchin and Ross are.

DAVID DAYEN: Right, so they are both—I call them profiteers because they, like most banks and mortgage servicing companies, just profited from the lack of attention to the foreclosure crisis at the federal level. Mnuchin foreclosed on 36,000 people—in California alone. He foreclosed on much more through OneWest Bank, where he was CEO. And Wilbur Ross, through American Home Mortgage Servicing, which eventually became a company called Ocwen, also did so, and they did so illegally.

 

These were fraudulent foreclosures, where fake documents were used to prop up those foreclosures. There are depositions with individuals from OneWest Bank saying that they spent 30 seconds looking at foreclosure files before signing affidavits that said that they knew everything in that file and reviewed all the business practices. There were forged documents routinely from Wilbur Ross’s American Home Mortgage Servicing. They were done by a third-party company known as DocX, where the CEO of that company actually is in prison right now, went to prison for five years for forging millions of mortgage assignments to be used as evidence in court cases all over the country. So, these were very normal practices, but it’s very ironic that the Obama administration kind of lost track and didn’t pay attention to this crisis that was going on. And now, after Trump’s election, he brings in two people who profited almost the most from that to help run his Cabinet.

AMY GOODMAN: And what does it mean to be head of treasury and commerce? How does that relate to what their history is around the issue of foreclosure?

DAVID DAYEN: Well, certainly, the Treasury Department is a regulatory position now. Steven Mnuchin will be the head of the Financial Stability Oversight Council, which is a superregulator that monitors systemic risk, where there was a lot of systemic risk from the financial crisis and the foreclosure crisis, and he can kind of shut it down. Steven Mnuchin has said that he will seek to privatize Fannie Mae and Freddie Mac, where nine out of 10 mortgages are owned or guaranteed right now. That’s going to be a huge windfall for the hedge funds that bought Fannie and Freddie stock at a low point, at a dollar a share. If that’s spun out and privatized, it would be $30 to $40 a share.

Incidentally, one of the biggest benefactors of that would be John Paulson, who was a business partner to Steven Mnuchin in the OneWest deal. So, you know, through deregulation, through just the lack of attention to these matters, Steven Mnuchin is going to have a lot of control. Wilbur Ross, maybe less so at the Commerce Department, but still you’re talking about Donald Trump’s closest advisers, and it’s very likely they’re going to take their eyes off the ball with respect to the practices of the mortgage industry.

AMY GOODMAN: Well, David Dayen, I want to thank you for being with us, author of the award-winning book Chain of Title: How Three Ordinary Americans Uncovered Wall Street’s Great Foreclosure Fraud. We will link to your piece in The Nation.

Starting at 6pm Eastern. The Neil Garfield Radio Show: Why don’t we sue the Certificate Holders? With California Attorney Charles Marshall.

radio

Sue the Trust: Live at 6 pm

Thursdays LIVE! Click in to the The Neil Garfield Show

Or call in to listen at (347) 850-1260,  6pm Eastern Thursdays

Tonight Neil Garfield and California attorney Charles Marshall will address why  homeowners haven’t sued the Certificate Holders of a specific Trust who are allegedly directing the foreclosure behind the scenes.
The short answer is that the investors sue the underwriter and the seller and nobody has ever sued the investors.
 
The long answer runs is always more complex and includes :

  1. The investors are the real parties in interest.
  2. By now they know their money never went into any trust and that it was commingled with all kinds of investors who thought they were dealing with hundreds of “Trusts”.
  3. The Trusts don’t exist unless they have a res.
  4. The trusts never received the proceeds of sale of the MBS issued by the trust nor were they ever intended to receive those proceeds, unbeknownst to the investors.
  5. The promotional material on derivatives and securitization of residential “loans” repeatedly refers to “bankruptcy remote” and other language stating that the investors don’t need to worry about liability for lending violations because they had the protection of the trust layered on top of everything.
  6. BUT it was pretty early on that the media was reporting on the many crazy NINJA loans and teaser payments that could never be maintained. So it seems unlikely that the managers of stable managed funds and other institutional investment funds could not have known that those loans were being created at a furious pace.
  7. BUT BUT is it equally probable that the managers knew it was their money being used to fund those loans? The alter  you get int eh scheme the more likely it is that they knew and didn’t care because they were being told everything is fine, we have insurance etc.
  8. And THAT brings us to the possibility of suing the investors of XYZ Trust and all other investors with an interest in XYZ trust by piercing the veil with an entity that essentially does not exist — no bank account, no assets, no liabilities, no income no expenses and no trust officer running things. You probably would have to sue the trust as well but you could argue around that saying that you refuse to sue the trust because it is an entity with no legal existence if there is no res. If you sue them you are basically saying the trust DOES exist.
  9. Then there is the possibility that the investors could be sued based upon knew or should have known. They are professional fund managers  with decades worth of experience in securities analysis. How could they not know?
  10. If you get past a motion to dismiss and into discovery you will have a field day. This is where the large settlements occur.
  11. So far all the settlements with investors have been sealed and neither side wants the info to come out. If it did, then the fund managers would have to write down their “assets” to reflect the fact that the MBS, even though sold to the Federal Reserve at 100% of par value, are worthless.
California Attorney Charles Marshall, Esq.
Law Offices of Charles T. Marshall
415 Laurel St., #405
San Diego, CA 92101
cmarshall@marshallestatelaw.com
Phone 619.807.2628
Fax 866.575.7413

Pinning Them Down on Musical Chairs

In the final analysis there is nothing about the business model that makes sense. Switching servicers and owners is simply not the norm of the industry except in relation to cases in foreclosure. It only makes sense if you assume that they are hiding the truth.

Get a consult! 202-838-6345

https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments.
 
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
—————-
So I just responded to a homeowner who, with a little help from us, sent out a QWR and DVL and received a response that was quite revealing.  The homeowner was dealing with the usual chorus line of ever-changing servicers and alleged “lenders” (pretender lenders).
 *
After YEARS of denying that anyone other than BOA owned the loan they now admit that they are now asserting that Freddie Mac owns the loan, although, despite the QWR and DVL letters, they have never produced a single document that shows that.
 *
And after years of denying the involvement, Bayview makes the singular uncomfortable admission that LPS/Blacknight in Jacksonville maintains the system of records for Bayview (along with most everyone else in the “securitization” scheme). I say that means LPS is the servicer. If that opinion is right, then LPS is the servicer for virtually every loan made in the last 15 years. [Remember this is the company who published a menu of services that included the fabrication and forgery of documents]
 *
What they don’t say is that LPS (now known as Blacknight) maintained everything from the beginning because the loan didn’t legally exist nor was it ever purchased or acquired by anyone. The debt was and remains owing to institutional investors who don’t know they are owed money from the party who received their money. Neither the creditor nor the debtor know of each other’s identity or existence.
 *
So here are some of my responses to the array of documents sent to the homeowner leading one to the inevitable conclusion that they are intended merely to confuse and obfuscate.
  1. Freddie Mac is the owner. When did it become the owner?
  2. Did Freddie Mac approve the modification?
  3. Does Bayview have the right to commit to modification? ON behalf of whom did Bayview approve the modification? Who is bound by the modification agreement?
  4. Servicing changed from BAC—>BOA effective 7/11/11. BAC was the new name of Countrywide. So when did Countrywide get involved and how?
  5. When was servicing changed from BOA (the original pretender lender) to BAC or Countrywide?
  6. Servicing changed from BOA—>Bayview 8/1/15. It would be interesting to learn what other events may have prompted this change of servicer.
  7. What documents exist showing BOA right to service the loan?
  8. What documents exist showing Countrywide right to service the loan?
  9. What documents exist showing BAC right to service the loan?
  10. What documents exist showing Bayview right to service the loan.
  11. Request copies of servicing agreement.
  12. Who was the owner of the loan when the loan was first originated?
  13. Who was the owner of the loan when the servicing of the loan was transferred to Countrywide?
  14. Who was the owner of the loan when the servicing of the loan was transferred to BAC?
  15. Who was the owner of the loan when the servicing of the loan was transferred back to BOA?
  16. Who was the owner of the loan when the servicing of the loan was transferred to Bayview?
  17. Why was I not notified that Freddie Mac has become the owner of the loan? [Suggest letter to Freddie Mac asking if they are the owner and if they are aware there is a modification.]
  18. LPS/Blacknight: I am surprised they admitted it. So the question to them would be (a) are all records concerning my loan maintained by Blacknight and (b) is Blacknight actually my servicer? — Since Bayview says Blacknight has the records you could write to Blacknight and ask where your records are kept and who has access to them.
  19. The other question is if LPS/Blacknight maintains the system of records, what does Bayview do?
  20. 11/22/16 statement was prepared by Blacknight? where did they get information from? If there is a credit balance shouldn’t you get the money?
  21. If Freddie Mac is the owner then why did Bayview sign the acknowledgment as lender?
  22. If Bayview is the servicer why doesn’t the acknowledgment say that they are signing on behalf of FreddieMac, the owner?
  23. If Freddie Mac is the owner, why does the modification not state that and why does Bayview sign as and have you sign “in witness whereof, lender and Borrower have executed this agreement.”
  24. Since the modification has supposedly been completed, why hasn’t Freddie Mac or its authorized agent sent a correction to the credit bureaus — with the foreclosure dismissed?

David Dayen at The Nation:Ross and Mnuchin—Profiteers of the Great Foreclosure Machine—Go to Washington

 

https://www.thenation.com/article/wilbur-ross-and-steve-mnuchin-profiteers-of-the-great-foreclosure-machine-go-to-washington/

In my book Chain of Title, I refer to the collection of lenders, mortgage-servicing companies, third-party document processors, foreclosure-mill law firms, and trustee banks as all part of the Great Foreclosure Machine. I’m now realizing I should have trademarked the phrase, because Donald Trump just picked two engineers of that machine to serve in his cabinet.

Yes, I said two. Most in liberal circles and on Capitol Hill are buzzing about Steve Mnuchin, chosen as Treasury secretary. And that’s with good reason; he is in fact despicable, the “Forrest Gump of the financial crisis,” as Elizabeth Warren put it, ever-present for every assault on homeowners. People keep bringing up Mnuchin’s 17 years at Goldman Sachs, following in the footsteps of his dad, also a partner there. But that may be the least distressing part of his résumé, depending on what you thought of Suicide Squad.

I did a comprehensive profile of Mnuchin six months ago when Trump tapped him as national finance chair of his campaign. And the picture that emerges is that of a profiteer. In an unusual deal with the FDIC, Mnuchin led an investment team that bought the predatory lender IndyMac, saddled with tens of thousands of failing mortgages, for $1.65 billion. The FDIC had a standard deal for buyers of crisis-era banks; they would cover all losses above the first 20 percent on loan defaults. Mnuchin, who became CEO of the lender, treated this as a money-printing machine: his bank, renamed OneWest, could foreclose on homeowners, harvest fees for appraisals and inspections and late payments, and get protected by a federal backstop. The FDIC lost $13 billion on IndyMac; Mnuchin and company made $3 billion in profits, most of that coming directly from the FDIC in loss-sharing costs.

What that meant for homeowners was they were rubble to be plowed so Mnuchin could profit. Borrowers got few options to modify loans, as OneWest dashed to foreclosure. The bank pursued all of the tricks of the era—servicer-driven defaults (where servicing companies tell homeowners they must miss payments to get help, and when they do, they move to foreclose), dual tracking (when servicers negotiate modifications and pursue foreclosures at the same time), and more. Activists ended up on this guy’s lawn demanding that the foreclosures stop.

And there was a decided racial component. Sixty-eight percent of OneWest’s 36,000-plus foreclosures in California were in nonwhite areas. Just two weeks ago, fair-housing advocates accused OneWest of racial discrimination in lending and where it closed bank branches. OneWest also was a market leader in foreclosing on the elderly; its subsidiary Financial Freedom has carried out a disproportionate number of reverse mortgage foreclosures, which target seniors to suck out their home equity.

It’s not hyperbole to say that every one of these foreclosures were fraudulent. I find it amusing that media outlets like Bloomberg describe this claim as a “mortgage meltdown controversy” and not a fact. But we have the information. The infamous July 2009 deposition of OneWest Vice President Erica Johnson-Seck is still online—you can see for yourself. Johnson-Seck signed 750 mortgage documents a week in the name of at least seven different financial institutions. These were sworn affidavits, where Johnson-Seck claimed under penalty of perjury that she reviewed all the relevant information in a mortgage file, material facts that could lead to someone’s losing their home. She was asked how long she spent executing each document.

“I have changed my signature considerably!,” Johnson-Seck said. “It’s just an E now. So not more than 30 seconds.”

She also admitted to not reading the documents before signing them, which at 30 seconds a clip was understandable. She didn’t know how any of the records were generated or who computed them. She didn’t even sign in the presence of a notary, undermining the entire purpose of having a notarized document. And by the way, these fraudulent affidavits and other fake documents covered up the underlying crime; IndyMac didn’t properly receive promissory notes or mortgages and were foreclosing without standing.

This is fraud upon the court, done 750 times a week on eventually 36,000-plus loans. Mnuchin’s OneWest was completely not unique in this regard; millions of homeowners were thrown out of their homes based on false documents, a phenomenon that continues to this very day. And Mnuchin profited, eventually selling OneWest to CIT (a company he will regulate at Treasury; he currently still sits on the board) for double the investment.

I could go on with Mnuchin: the $3.2 million in fake Bernie Madoff profits he refused to return, the quiet withdrawal of $50 million at Relativity Media just before it filed bankruptcy. But he’ll soon have a partner in the cabinet with whom to go over all these schemes: Commerce Secretary nominee Wilbur Ross.

Ross is an old school Wall Streeter, someone tied up in their secret societies and rituals. He’s a private-equity baron who scoops up failing companies (much like Mnuchin did with IndyMac), squeezes every last nickel out of them by firing workers and shipping business lines offshore, and manages to profit in the exchange, usually by navigating the companies through bankruptcy. His firm was in charge of the Sago Mine in West Virginia when it blew up, killing 12 workers; the mine had a history of safety problems. He moved Cone Mills overseas, eliminating about 75 percent of its US jobs. He invested in the Greek banking system and encouraged the fire sale of the country’s assets.

But Ross is tied up in the Great Foreclosure Machine as well. One of the companies he pulled out of bankruptcy in August 2007 was American Home Mortgage Servicing Inc., or AHMSI. Ross bought out the servicing rights—the rights to manage day-to-day operations and determine whether to modify or foreclose mortgages—on about $132 billion in loans. They were the second-largest servicer of subprime loans in America.

Lynn Szymoniak, a whistle-blower who fought AHMSI in court and who won a $95 million case against several servicers on behalf of the federal government in 2012, explains that Ross’s company outsourced its mortgage-document operations. They used a company called DocX, which forged millions of mortgage assignments, claiming to be the officers of dozens of different banks. These documents were fraudulently signed after the fact to recreate a chain of title that lenders broke; they were a document clean-up shop. Lorraine Brown, the CEO of DocX, went to prison for five years for this activity, making her the only person to be jailed for foreclosure fraud.

After entrusting its mortgage operation to fraudsters, AHMSI eventually changed its name to Homeward Residential, and got bought out by Ocwen. Wilbur Ross stayed involved in Ocwen, serving on the board of directors. If anything, Ocwen was worse than AHMSI. It routinely broke the law, with “systematic misconduct at every stage of the mortgage process,” according to Consumer Financial Protection Bureau Director Richard Cordray. In 2013, CFPB fined Ocwen $2.1 billion for, among other things: charging borrowers unauthorized fees, failing to apply borrower payments to loans, failing to maintain accurate accounting statements, imposing insurance policies on borrowers who already had them, deceiving borrowers about loan modifications, and robo-signing foreclosure documents in fraud upon state courts.

One of my favorite Ocwen stories is the backdating scandal. Under the law, servicers must inform borrowers of why they were denied a loan modification and give them 30 days to appeal. Ocwen sent thousands of these letters backdated 30 days from the sending, giving borrowers no time to act.

Ross eventually stepped down from the Ocwen board, and miraculously was able to sell $72 million in stock right before it dropped 20 percent in price.

Ross and Mnuchin were profiteers in a crisis that bore nearly all its misery on the backs of working people who suffered from the misfortune of acquiring a bad loan at the wrong time. But there’s a supreme irony here: The foreclosure crisis that these two moguls (and Trump himself) used as a moneymaking scheme may have handed Trump the election.

The Center for American Progress just released a study looking at the role of Midwestern housing instability in the 2016 election. They found that, between 2012 and 2016, negative equity rates—where a homeowner owes more on their house than it’s actually worth—got worse in counties in the Midwest that shifted from blue to red. The Democratic vote was similarly lower in urban counties where housing conditions eroded.

In other words, Barack Obama’s handling of the mortgage crisis, by protecting bank balance sheets instead of homeowner balance sheets, may have cost Hillary Clinton the election. This was the biggest mistake of the Obama presidency, instituting a foreclosure-mitigation program that servicers used as a predatory-lending scheme, and then failing to take advantage of the extreme legal exposure of the industry after the revelations of foreclosure fraud. And in a sad twist, the very people who will benefit from that failure, and Trump’s election, are the ones who profited from foreclosures the entire time.

OneWest’s Mnuchin: Putting the Fox in Charge of the Henhouse

see http://www.npr.org/2016/11/29/503755613/trumps-potential-treasury-secretary-headed-a-foreclosure-machine

There two ways of looking at this prospective appointment by President-Elect Trump.

One is that this appointment signals the intent to further “expedite” foreclosures instead of digging deeper into the real facts and fraud by Wall Street banks. Such an effort would eliminate the possibility of the US Treasury clawing back huge sums of money for nonexistent bank losses stemming from alleged defaulted loans.

Some may remember that the infamous TARP bailout was first described and approved as covering losses from the loans to residential homeowners. Then it evolved.  The description and approval was to cover losses from failed mortgage bonds. But neither defaults nor bond failures were actual losses of the banks.

They had sold the loans and bore no risk. And they were selling bonds not buying them. Then it evolved again. The description and approval was to cover lost profits on hedge products, insurance and credit default swaps, at which point it became a relief program for “troubled assets” which was code for giving the banks additional profit after already having gouged the US economy.

OneWest benefited from a cozy government relationship, over the objections of Sheila Bair, head of the FDIC. Like Chase, Wells Fargo, Citi, BOA and others OneWest acquired servicing rights but also was allowed to take the position that it owned loans acquired from its takeover of IndyMac, which had been addicted to fees generated from apparent “originations.”

The foreclosures that ensued resulted in a windfall profit to OneWest. Mnuchin was the organizer of OneWest, collecting up several billionaires around the country to create OneWest and do the deal with the FDIC in which it created the illusion of buying loans. But OneWest then got out of the business.

So I am reminded of history when FDR appointed one of the worst insiders to Wall Street schemes as first Chairman of the SEC. That was none other than Joseph Kennedy, the father of JFK. Wall Street cheered, being under the mistaken impression that they were free to create more schemes and defraud more people out of what was left in household and individual wealth.

Instead Joe Kennedy took the job seriously and was instrumental in creating numerous reforms and enforcement proceedings that shook Wall Street to its core — giving them pause before initiating some other fraudulent scheme. Republicans have been chipping away at that legacy for decades.

So the other possibility here is that the appointment of Mnuchin might be a replay of the appointment of Joe Kennedy. Mnuchin is the one guy who understands where the bodies are buried and understands how the latest meltdown was triggered by Wall Street fraud. He might be the right one to tackle this unprecedented problem without bringing down the entire financial system. If so, the TBTF banks might be redesignated as TBTE (Too Big To Exist).

If that dream comes true, then homeowners might get the relief necessary to recalibrate the US economy that is 70% dependent upon consumer spending. And it might just be acknowledged by government that what happened was a double blind fraud: institutional investors and individual homeowners were both victims that were entitled to reparations. And perhaps there will be created a mechanism for putting those two groups of victims together to salvage the “asset values” on their books.

Big Short II: Trump Picks Foreclosure King Mnuchin for Treasury Secretary

http://www.thedailybeast.com/articles/2016/11/29/trump-picks-foreclosure-king-mnuchin-for-treasury-secretary.html

Big Short II

Five years ago, foreclosed homeowners protested on the lawn of Steve Mnuchin’s Bel-Air mansion for his company’s ‘repulsive’ practices. Now he’ll be Trump’s secretary of the Treasury.

After an effort to purge lobbyists from his quickly arranged transition team, President-elect Donald Trump, who campaigned on a “drain the swamp” message, is set to promote another swamp-dweller to a high-ranking position in his administration.

Trump is set to announce that Steven Mnuchin will be his Treasury secretary, per a recommendation from his own transition team, the Associated Press reports.

 

Mnuchin served as Trump’s national finance chairman during the campaign after a long history in private investment banking and on Wall Street. Like Trump himself, Mnuchin was a donor to Hillary Clinton in prior campaigns. According to filings from the Federal Election Commission, he has contributed more than $8,000 to Clinton since 2000.

Prior to joining the team, Mnuchin worked at Goldman Sachs for 17 years and OneWest Bank, which got into hot water for a series of attempted home foreclosures after the 2008 housing bubble burst. He also founded RatPac-Dune Entertainment, a movie-production company that bankrolled Avatar, as well as other films. After OneWest was sold to CIT Group in 2015, Mnuchin went on to serve on its board and became the chairman and chief executive of the private investment firm Dune Capital Management.

 

During his tenure at OneWest, the bank was responsible for attempting to remove families from their homes against the families’ wills.  A New York judge erased $525,000 in mortgage debt owed by a Long Island couple to OneWest Bank in 2009 because the institution was harassing them. Suffolk County Judge Jeffrey Spinner blasted the bank’s “harsh, repugnant and repulsive” acts as they attempted to toss the family out on the street around Thanksgiving.

 

Spinner wrote that the bank refused to work out a deal with the couple to help make mortgage payments they owed and called the bank’s conduct “inequitable, unconscionable, vexatious, and opprobrious,” according to a report by the New York Post.

Around the same time, Mnuchin’s bank was hounding an 89-year-old widow, attempting to foreclose on her home in California.

Irene Jones, the woman in question, is reported to have said in court that the stress of repeated foreclosure threats from OneWest Bank and its predecessor IndyMac Bank made her husband depressed and contributed to his death.

That same year, the bank changed the locks on Minnesota woman Leslie Park’s home. She discovered that she had been locked out when she returned home in a blizzard. The bank later acknowledged that the incident was a mistake.

OneWest Bank also disproportionately foreclosed on senior citizens. Using a Freedom of Information Act request, the California Reinvestment Coalition determined that OneWest’s reverse-mortgage servicing subsidiary Financial Freedom was responsible for 39 percent of reverse-mortgage foreclosures nationwide, typically something that goes to senior citizens. But Financial Freedom only serves 17 percent of the market, so OneWest was foreclosing at twice the rate one would expect.

 

Upon learning that Mnuchin was likely to earn the administration spot, Paulina Gonzalez, executive director at the California Reinvestment Coalition, released a scathing statement.

“If Mr. Mnuchin is nominated to the position of secretary of the Treasury by President-elect Trump, it will continue an alarming trend of a series of appointments by Mr. Trump that signals a coming attack on civil rights, working families, and consumer protections by the administration,” she wrote.

 

“We expect that the Senate will dig into Mr. Mnuchin’s track record, and we imagine the many families who lost their homes at the hands of OneWest will be watching closely and will also want to share their experiences as part of any confirmation hearings.”

One-hundred-and-three-year-old Myrtle Lewis ran into such issues with OneWest in 2014. She accidentally allowed her insurance to lapse, which prompted the bank to attempt to foreclose on her property. Lewis reinstated her insurance and the bank still didn’t back off. It is unclear what happened to the property.

 

Similarly, OneWest Bank foreclosed on more communities of color than white communities, according to the California Reinvestment Coalition. Of the 35,877 foreclosures the bank conducted in California from April 2009 to April 2015, 68 percent occurred in areas where the non-white population was 50 percent or higher.

Get The Beast In Your Inbox!

The next Treasury secretary is far from a beloved figure.

In 2011, Bloomberg News reports, the “notoriously press-shy” Mnuchin endured “protests on the lawn of his Bel Air mansion by foreclosed homeowners angered at his lender’s handling of soured mortgages.”

 

In terms of policy, it is unclear what Mnuchin would prioritize in a Trump administration, but it appears that they are relatively on the same page with a primary issue.

In a July interview with CNBC, Mnuchin said that Dodd-Frank Wall Street Reform and Consumer Protection Act “needs to be looked at,” and said there were good and bad parts of the law that regulates the finance industry. Trump has expressed interest in dismantling Dodd-Frank.

 

During his presidential campaign, Trump made an issue of his opponents’ Wall Street ties, first criticizing Ted Cruz’s wife for her job at the financial titan Goldman Sachs and then skewering Hillary Clinton for her paid speeches to the firm.

 

“I know the guys at Goldman Sachs,” Trump said last February. “They have total, total control over [Cruz]. Just like they have total control over Hillary Clinton.”

Yet Mnuchin, and his father, worked for Goldman—as did Steve Bannon, Trump’s White House strategist who also served as Trump’s campaign CEO and ran the far-right media outlet Breitbart.

 

Mnuchin explained away his ties to a campaign that was widely hated by generally more liberal Hollywood executives by suggesting it would all be worth it if he landed an administration job.

 

“Nobody’s going to be like, ‘Well, why did he do this?’ if I end up in the administration,” he told Bloomberg in August.

Looks like everything went according to plan.

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