Hat Tip to Dan Edstrom in Northern California, our senior securitization analyst for finding this report.
Investors Have Had Enough!!
“If Citibank wants to settle with the Justice Department and [Attorney General] Eric Holder, that’s fine. Just please don’t settle with investors’ money. Because that’s whose money it is,” Fiorillo says. “It’s not Citibank’s money. I’ve said it 100 times and I will continue to say it. I am now leading a louder and louder chorus with people who have had enough of this.”
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I know this stuff isn’t easy, but managers of pension funds and hedge funds and other such mutual or discretionary funds should have realized that the Banks were “settling” claims against the Banks with investor money. And if they dig deeper they will find two things:
1. That the Trusts were unfunded, the loans were not secured and the appraisals and terms were manipulated to close rather than to assure payment as promised to the investors.
2. That underneath this mess, the banks actual profits offset their claimed losses 100:1 — THAT money belongs to the investors as well — or it is owed back to borrowers as undisclosed and fraudulent proceeds of fake transactions. (See TILA and RESPA). In this case it should be accompanied by treble damages, interest, return of all payments, and disgorgement of all undisclosed profits arising out of each “closing.” These things WILL happen, but only when investors and borrowers join hands directly and compare notes.
For the first time major players representing the investors in the Great Mortgage Bond Sting are speaking loudly and uncensored. They don’t like losing money and they don’t like settlements in which investor money is used to pay the fines and penalties. They DO like modifications which are preferable to costly foreclosures but that is not good for servicers and lawyers who DO want foreclosures.
And under all of this is a simple fact — nearly all the borrowers would sign a real mortgage or deed of trust that did not involve fraud or fabricated documents. Investors are just starting to realize that the borrowers have been fighting a battle that inures to the benefit of investors — pointing out that the servicing companies and trustees and lawyers are all acting under fictitious powers from fabricated documents that exclude the best interest of either the investors or the borrowers.
After sounding like a broken record for 7 years it seemed that nobody would listen to me — at times — but persistence is my strongest suit. Those loans are NOT enforceable just as has been consistently alleged in the investor lawsuits and the suits brought by insurers, government agencies, law enforcement, and counterparties to hedge contracts. The Banks never owned the loans but they pretended to own them as long as they could make money pretending to own them. The Banks never owned the Bonds, but that hasn’t stopped them from selling $3 TRILLION in bonds to the Federal reserve.
And because arrogance that succeeds breeds escalating behavior of the worst kind, the Banks who committed atrocities in the financial world are settling — using the money that investors gave them for a return on their investments so they could continue to pay pension benefits to pensioners.
Maybe it will be sooner rather than later when the obvious solution is finally adopted. When investors and borrowers find a different way of getting together — rather than through servicers who are aiming to screw both sides in foreclosures that are wrongful fraudulent, illegal and immoral. The only winner in foreclosures are the intermediaries. The real parties in interest both come out losers.
Filed under: AMGAR, CDO, CORRUPTION, evidence, foreclosure, foreclosure defenses, GTC | Honor, investment banking, Investor, MODIFICATION, Mortgage, originator, Pleading, securities fraud, Servicer, TRUST BENEFICIARIES, trustee Tagged: | DoubleLine Capital LP, Vincent Fiorillo