“Defendant Wells Fargo’s deceptive and intentional conduct displayed a complete and total disregard for the rights” of the couple, wrote Judge Elliott, a circuit judge in the 43rd Judicial District of Missouri. “Wells Fargo took its money and moved on, with complete disregard to the human damage left in its wake.”
Gretchen Morgenson of the New York times has revived the issues of fraudulent foreclosures in mainstream media by publishing a sharply critical attack on Wells Fargo. Like Elizabeth Warren has done, Morgenson brings attention to two connected policies of the TBTF banks: (1) the the recent revelation that Wells Fargo forced 8 accounts upon each customer of the commercial banking side of the bank — regardless of whether the customer even knew those accounts existed and (2) the obvious similarity with the fraudulent sales of MBS and the fraudulent foreclosures initiated by Wells Fargo.
Senator Elizabeth Warren, who always knows more than she says, made a statement on one of the network news shows that the Banks decided that the best way to make more money was to cheat their customers. She went on to say that the latest Wells Fargo scandal was revealing something that has always been the case with the large banks since the early 1990’s, to wit: that there is a commonality between this one Wells Fargo abuse that occurred over many years and the conduct of the same bank and the other major banks in the global economic crisis of 2008 caused by those banks.
Warren chooses her words carefully. So her use of the word “customers” instead of consumers might be an indication that she was thinking about the “investors” in mortgage bonds as customers of the same bank. Pension Funds and other managed funds were customers of the banks when they gave those banks money for the purchase of mortgage bonds issued by a new business – a REMIC Trust that would use the money to acquire residential mortgage loans. The banks called it securitization. But the rest of us who have analyzed it are quite sure that it was a fraudulent scheme from the very beginning. — And it was not a securitization scheme.
The “new business” did not exist. In most cases the illusion of its existence was created by partially complete written documents that were never used or followed. The new business never had a bank account and never received the proceeds from the sale of the mortgage bonds. This was no ordinary IPO. The “new business” was actually just a proprietary arm of the investment bank that used the false documents to claim a position as Master Servicer — over a Trust that was empty.
Pretending that the “new business” was real, Wells Fargo and other participants in the scheme pocketed the money from the managed funds except for that part that was used to fund the origination of mostly toxic loans. They needed the loans to be toxic so they could foreclose. When they foreclosed they received the first legal document in the entire chain — either a foreclosure judgment or a Trustee’s deed.
CHAIN OF NOTHING: The banks treated the deposits of money from the managed funds as if it were their own. They broke every promise they made to the “investors”, commingled the money and acquired no loans because the loans were already funded at origination by the illegal use of investor (bank customer) money. In all the assignments ever represented over the last ten years, at least, there is zero evidence that any transaction occurred in which the assignee paid anything for the loans said to have been transferred by the words in the assignment. Why would the assignor not insist on receiving money in exchange for the assignment? The answer is obvious — they didn’t own the loan. And following all that back to origination you find that the originator was, in nearly all cases, never paid for the assignment of the loan because the originator did not make the loan. In fact, you find that there was no loan contract between the “borrower” and anyone who advanced money to or on behalf of the homeowner. The investors were left out in the cold while the supposed “intermediary” banks played as though they were the lenders.