Lehman to Pay $2.4 Billion out of Bankrupt Estate

“Lehman’s own documents show it was aware of the widespread problems and deteriorating performance of the loans it had securitized,” with half the loans at one point containing material misrepresentations, the trustees said in a court filing.

Editor’s Note: The difference is money — investors have it and borrower’s don’t. So while investors are successfully litigating fraud and deceit, the borrowers can’t afford to litigate the same issues. The idea that Lehman was somehow honest with borrowers and not with investors is preposterous.

Lehman recently closed out a $2 billion dispute with Citigroup Inc. over derivatives, and similar litigation over derivatives with Credit Suisse Group AG is the last major remaining contest.

Around 14 large institutional holders, including Goldman Sachs Asset Management LP and BlackRock Financial Management, broke ranks with hedge funds and accepted a settlement last year valuing claims around $2.4 billion. Chapman noted that these “sophisticated players” held around 24 percent of the RMBS.

GO TO LENDINGLIES to order forms and services

Let us help you plan your answers, affirmative defenses, discovery requests and defense narrative:

954-451-1230 or 202-838-6345. Ask for a Consult. You will make things a lot easier on us and yourself if you fill out the registration form. It’s free without any obligation. No advertisements, no restrictions.

Purchase now Neil Garfield’s Mastering Discovery and Evidence in Foreclosure Defense webinar including 3.5 hours of lecture, questions and answers, plus course materials that include PowerPoint Presentations. Presenters: Attorney and Expert Neil Garfield, Forensic Auditor Dan Edstrom, Attorney Charles Marshall and and Private Investigator Bill Paatalo. The webinar and materials are all downloadable.

Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230 or 202-838-6345. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).

GO TO WWW.LENDINGLIES.COM OR https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments. It’s better than calling!

THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

===========================

See Lehman Brothers Knew 1/2 the loans were misrepresented to both borrowers and investors

The trustees representing RMBS holders are Deutsche Bank National Trust Co., Law Debenture Trust Co. of New York, U.S. Bank National Association and Wilmington Trust Co., according to court papers.

A group of hedge funds, including Whitebox Advisors LLC, Deer Park Road Management Co. and Tilden Park Capital Management LP, was formed in 2016, and expanded in May 2017 to include Prophet Capital Management LP, Tricadia Capital Management LLC, BlueMountain Capital Management LLC and others, according to court records.

The case is In re Lehman Brothers Holdings Inc., 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan.)

Practice note: Dig into the pleadings and exhibits in these cases and you will find a treasure trove of information that supports your contention at trial that the documents are unreliable and therefore the proof of the matters asserted must be proven with facts, not assumptions. You will probably uncover inconsistent allegations from Deutsch, Credit Suisse et al. They are most likely saying one thing in court with borrowers and another in court with investors.

An important note here is that these actions are based upon the presumptive finding of the US Bankruptcy trustee as to Lehman misrepresentations.

 

 

No Surprise: Ocwen & US Bank Hit by $3.8 Million Verdict in Chicago Federal Trial For Violations in Fake Foreclosure

“The jury, after deliberating for approximately 7 hours, determined that Ocwen breached its contract, violated RESPA for failing to adequately respond to Saccameno’s Qualified Written Request, violated the FDCPA and committed both unfair and deceptive acts in violation of the Illinois Consumer Fraud Act.  Monette Saccameno was awarded $500,000.00 in compensatory damages, $70,000.00 in non-economic damages, $12,000.00 in economic damages and $3,000,000.00 in punitive damages. Nicholas Heath Wooten, Esq.Ross Michael Zambon, Esq., and Mohammed Omar Badwan, Esq. led the litigation team on behalf of Saccameno.”

And I ask again: WHY DO OCWEN DOCUMENTS AND “BOARDING PROCESS” GET ANY LEGAL PRESUMPTION ON SCANT TESTIMONY AND EVIDENCE THAT WOULD NOT BE ACCEPTED AS FOUNDATION IN ANY COURT OTHER THAN ONE IN FORECLOSURE PROCEEDINGS? With this verdict and dozens of other verdicts, settlements, lawsuits and whistleblower  news stories has establishing a crystal clear pattern of conduct of fake foreclosures based upon false documentation, false posting of payments and a clear mission to seek foreclosure whether the homeowner is current in payments or not.

The many cases akin to this one against OCwen and US Bank should be served up to judges hearing foreclosure cases with a single message: the foreclosures you are allowing are wrongful. Your decisions are giving rise to many lawsuits for damages.

GO TO LENDINGLIES to order forms and services

Let us help you plan your answers, affirmative defenses, discovery requests and defense narrative:

954-451-1230 or 202-838-6345. Ask for a Consult. You will make things a lot easier on us and yourself if you fill out the registration form. It’s free without any obligation. No advertisements, no restrictions.

Purchase now Neil Garfield’s Mastering Discovery and Evidence in Foreclosure Defense webinar including 3.5 hours of lecture, questions and answers, plus course materials that include PowerPoint Presentations. Presenters: Attorney and Expert Neil Garfield, Forensic Auditor Dan Edstrom, Attorney Charles Marshall and and Private Investigator Bill Paatalo. The webinar and materials are all downloadable.

Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230 or 202-838-6345. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).

GO TO WWW.LENDINGLIES.COM OR https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments. It’s better than calling!

THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

===========================

Hat Tip Greg da’ Goose

Case Number: 1:16-cv-05278
Court: Illinois Northern
Nature of Suit: 423(Bankruptcy Withdrawl)
Companies:
Ocwen Financial Corporation
U.S. Bancorp

see OCWEN BANGED WITH $3.8 MILLION VERDICT

This case shows that juries are still angry about the 2008 meltdown and that the entire burden was shifted to homeowners and taxpayers — who “bailed out” financial institutions that had no losses.

And it also shows that lawyers can get rich by charging contingency fees in wrongful foreclosure actions that most lawyers avoid or rush to settlement. It provides ample encouragement for homeowners to sue and for lawyers to take the cases.

So for those of you who are  contemplating filing a wrongful foreclosure action against Ocwen, or U.S. Bank or any of the other players that are acting in concert with Ocwen, here is a case that no doubt will be settled under “seal of confidentiality” (like thousands of others). I think it is high time for borrowers to pool their complaints in either a class action or mass joinder action.

And here are some of the causes of action that could be filed that a federal jury found were reasons enough to award $500,000 in compensatory damages and $3 Million in punitive damages:

  1. Breach of contract
  2. RESPA violation (failure to respond to QWR)
  3. FDCPA violations
  4. Violation of state law — Illinois Consumer Fraud Act: Unfair and deceptive acts.

There are many other causes of action that could be filed. Each case needs to be evaluated as to which causes of action are most appropriate for the subject “loan”, most of which have resulted in substantial verdicts.

And don’t forget the role of US Bank whose name is used as trustee of a trust that  either doesn’t exist, doesn’t own the debt or both. US Bank is paid a fee to pose as trustee not to BE trustee.

See also

https://www.prnewswire.com/news-releases/atlas-consumer-law-secures-3-582-000-jury-verdict-obtained-by-monette-saccameno-a-resident-of-cook-county-illinois-and-against-ocwen-loan-servicing-llc-a-national-mortgage-loan-servicer-300628541.html

https://cookcountyrecord.com/stories/511388869-jury-awards-3-5m-to-woman-who-claimed-loan-servicer-mishandled-mortgage-during-after-chapt-13-bankruptcy

Ocwen (OCN) Receives Daily News Sentiment Rating of 0.15
https://www.thelincolnianonline.com/2018/04/13/ocwen-ocn-receives-daily-news-sentiment-rating-of-0-15.html

https://www.leagle.com/decision/infdco20180410901

Saccameno v. Ocwen Loan Servicing, LLC et al, No. 1:2015cv01164 – Document 265 (N.D. Ill. 2018)
DEFENDANTS’ MOTION FOR JUDGMENT AS A MATTER OF LAW Document #: 265 Filed: 04/09/18
https://www.gpo.gov/fdsys/pkg/USCOURTS-ilnd-1_15-cv-01164/pdf/USCOURTS-ilnd-1_15-cv-01164-3.pdf

Saccameno v. Ocwen Loan Servicing, LLC et al, No. 1:2015cv01164 – Document 231 (N.D. Ill. 2018)
MEMORANDUM Opinion and Order Signed by the Honorable Joan B. Gottschall on 3/9/2018
https://cases.justia.com/federal/district-courts/illinois/ilndce/1:2015cv01164/306387/231/0.pdf?ts=1520678019

Saccameno v. Ocwen Loan Servicing, LLC et al, No. 1:2015cv01164 – Document 152 (N.D. Ill. 2017)
MEMORANDUM Opinion and Order Signed by the Honorable Joan B. Gottschall on 11/8/2017
https://cases.justia.com/federal/district-courts/illinois/ilndce/1:2015cv01164/306387/152/0.pdf?ts=1517249686

Saccameno v. Ocwen Loan Servicing, LLC et al, No. 1:2015cv01164 – Document 75 (N.D. Ill. 2015)
MEMORANDUM Opinion and Order Signed by the Honorable Joan B. Gottschall on 11/19/2015
https://cases.justia.com/federal/district-courts/illinois/ilndce/1:2015cv01164/306387/75/0.pdf?ts=1448015323

US Government Publishing Office
15-1164 – Saccameno v. Ocwen Loan Servicing, LLC et al
https://www.gpo.gov/fdsys/granule/USCOURTS-ilnd-1_15-cv-01164/USCOURTS-ilnd-1_15-cv-01164-0

Bank Fraud News: The reason why banks and servicers should receive no presumption of reliability

The following is but a short sampling supporting the argument that any document coming from the banks and servicers is suspect and unworthy of any legal presumption of authenticity or validity. Judges are looking into self-serving fabricated documentation and coming to the wrong conclusion about the facts.

Chase following bank playbook: screw the customer

“Chase provided no prior notice to its cardholders that their crypto ‘purchases’ would be treated as ‘cash advances’ on a going forward basis,” according to the suit.

Tucker claims he was hit with about $140 in fees and a “sky-high” interest rate of 26 percent without warning after Chase reclassified his purchases as cash advances, a violation of the Truth in Lending act.

Fannie Mae and Freddie Mac Stealth: Hiding the elephant in the living room

Its never been a secret that Freddie Mac’s business policy is to remain stealth in any chain of title if possible, and to rely on the servicers to keep its presence a secret in foreclosure proceedings. In fact, this PNC case which was overturned against PNC, involved the Defendant’s assertion that PNC was concealing Freddie Mac’s interest in the loan. Freddie Mac’s business policy appears to rely upon nothing more than handshakes with the originators and servicers. Here is some verbiage from a “Freddie Mac – Mortgage Participation Certificates” disclosure (See: Freddie Mac – Mortgage Participation Certificates):

Deutsch files lawsuit against private mailbox troller following the Deutsch playbook of foreclosure

“Defendants, and each of them initiated a malicious campaign to disrupt the chain of title to prevent Plaintiff from enforcing its contractual rights in the 2006 DOT by way of recording fraudulent documents to purportedly assign the rights under the 2006 DOT without the consent of Plaintiff, and otherwise thereafter fraudulently transfer all rights via a trustee deed upon sale, even though no trustee sale was ever conducted. All subsequently recorded or unrecorded transactions are therefore null, void, and of no effect.”

EDITOR COMMENT: So Deutsch is admitting that its practice of recording fraudulent documents are “null, void and of not effect.” In order to get to that point Deutsch is going to be required to prove standing — i.e., definitive proof that it paid for the debt, which it did not. Deutsch is on dangerous ground here and might deliver a bonus for homeowners. As for the defense, is it really a crime to steal a fraudulent deed of trust supported by fraudulent assignments and endorsements?

Barclays Bank settles for $2,000,000,000 for fraud on investors

Barclays’ offering documents “systematically and intentionally misrepresented key characteristics of the loans,” and more than half of the loans defaulted, federal officials said.

Additionally, the Department of Justice reached similar settlements with two Barclays’ employees involved with subprime residential mortgage-backed securities. They will pay $2 million collectively.

The agreements mark the latest in a string of U.S. settlements with major banks over sales of tainted mortgage securities from 2005 to 2007 that helped set the stage for the real estate crash that contributed to the financial crisis.

Deutsch Pays $7.2 Billion for Fraudulent securitizations

Confirming settlement details the bank disclosed in late December, federal investigators said Deutsche Bank will pay a $3.1 billion civil penalty and provide $4.1 billion in consumer relief to homeowners, borrowers, and communities that were harmed.

The federal penalty is the highest ever for a single entity involved in selling residential mortgage-backed securities that proved to be far more risky than Deutsche Bank led investors to believe. Nonetheless, the agreement represents relief of sorts for the bank and its shareholders, because federal investigators initially sought penalties twice as costly.

Credit Suisse‘s announcement said it would pay the Department of Justice a $2.48 billion civil monetary penalty. The bank will also provide $2.8 billion in consumer relief over five years as part of the deal, which is subject to negotiations over final documentation and approval by Credit Suisse’s board of directors. [Credit Suisse owns SPS Portfolio Servicing.]

Ocwen Settles with 10 States for Illegal Servicing

“The consent order provides that Ocwen will transition its servicing portfolio off of its current servicing platform to a platform better able to manage escrow accounts and establish a new complaint resolution process,” the Georgia Department of Banking and Finance said in a press release. “Ocwen shall hire a third-party firm to audit a statistically significant number of escrow accounts in high-risk areas of the portfolio to determine whether problems continue to exist around the management of escrow accounts and to identify the root cause of those problems.

“Ocwen has faced many legal and regulatory challenges in recent years. In December 2013 it reached a settlement over foreclosure and modification processes with the CFPB and state regulators. A year later, it made a separate agreement with New York regulators that removed company founder William Erbey as CEO.

Wells Fargo Whistleblower is Fired Among Others Who refused to Lie to Customers

In 2014, according to Mr. Tran, his boss ordered him to lie to customers who were facing foreclosure. When Mr. Tran refused, he said, he was fired. He worried that he wouldn’t be able to make his monthly mortgage payments and that he was about to become homeless.

Joining a cadre of former employees claiming they were mistreated for speaking out about problems at the bank, Mr. Tran sued. He argued in court filings that he had been fired in retaliation for blowing the whistle on misconduct at the giant San Francisco-based bank. Mr. Tran said he didn’t want his job back — he wanted Wells Fargo to admit that it had been wrong to fire him and wrong to mislead customers who were facing foreclosure.

 

 

 

Adverse Possession vs Cancellation of Instrument and Quiet Title

In the final analysis, the only way to smoke out the banks on their fraudulent claims as “creditors” or “agents of creditors” is to create a situation where the creditor must be disclosed. In those cases where judges have ruled in discovery or ruled on the right to prepay, subject to identification of the creditor, the cases have all settled under seal of confidentiality. There are thousands of such cases buried under side agreements requiring “Confidentiality.”

Let us help you plan your complaint, discovery requests and defense narrative:

954-451-1230 or 202-838-6345. Ask for a Consult. You will make things a lot easier on us and yourself if you fill out the registration form. It’s free without any obligation. No advertisements, no restrictions.

Purchase now Neil Garfield’s Mastering Discovery and Evidence in Foreclosure Defense webinar including 3.5 hours of lecture, questions and answers, plus course materials that include PowerPoint Presentations. Presenters: Attorney and Expert Neil Garfield, Forensic Auditor Dan Edstrom, Attorney Charles Marshall and and Private Investigator Bill Paatalo. The webinar and materials are all downloadable.

Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230 or 202-838-6345. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).

GO TO WWW.LENDINGLIES.COM OR https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments. It’s better than calling!

THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

===========================

I have been seeing a number of people adding Adverse Possession to their theories about Quieting title. So let me say first that an order granting quiet title to a homeowner whose title is encumbered by a recorded mortgage or deed of trust is practically impossible not only because judges don’t want to grant it, but for the more important reason that quiet title is not legally sound strategy for homeowners seeking defend their homes from foreclosure.

In order to quiet title, one would need to allege and prove by clear and convincing evidence that the mortgage or deed of trust should never have been executed or recorded in the first place. Anything less than that does not deserve quiet title declaration from any court. The fact that a certain party purports to have authority to enforce the mortgage or deed of trust when in fact they don’t have such authority is damn good reason not  to let them enforce the mortgage or deed of trust. But that does not mean that the instrument is void.

Here is the response I gave to a question about adverse possession:

Adverse possession does not seem to apply to this situation. But it is possible that you could get traction by filing a lawsuit to cancel the DOT (Cancellation of Instrument) and maybe even get a order quieting title to your name. This is not simple and the requirements and elements of such claims are difficult to fulfill.

Adverse possession is usually utilized in boundary disputes.
A mortgage or a deed of trust is an interest in real property. And where we are dealing with the deed of trust,The trustee is receiving title to the property. So technically you are probably correct. But when you look deeper, You will see that adverse possession does not apply.
The transfer of title to a trustee under the deed of trust divests the homeowner of title. Under the terms of the DOT you are entitled to live there and act, for all  purposes, as though you are the title owner including in a foreclosure proceeding. Hence several elements of adverse possession are not met especially “adverse,” since you have express permission under a contract to be there and to act as the title owner.
ELEMENTS OF ADVERSE POSSESSION: (NOTE — the “title owner is the DOT trustee)
  • Continuous
  • Open
  • Notorious
  • Peaceful, Peaceable
  • Hostile (claiming title against the interest of the party who actually has title)
  • Adverse (no permission or contractual right to assert title against the party who is seized with title).
  • Exclusive (barring claims or use by the actual title owner
  • Visible (putting a fence on your neighbor’s yard, ignoring the property line)
  • Actual (not implied)
But the fact that the DOT conveyed title to a real trustee on behalf of a false beneficiary is probably the basis for a lawsuit to cancel the instrument (if you can prove your allegations) and then get an order declaring the title is quieted, free from the encumbrance of record that is declared by the judge to be void.
 *
You need to be careful though about your conclusion that the DOT was void. This involves several factual questions that are not obvious. Even a void instrument could conceivably be valid if it contains a defect that is corrected or could be corrected by affidavit pursuant to local law.
 *
Your argument would be that no such affidavit was ever offered. Thus even after you filed your lawsuit, they failed or refused to make any corrections.
 *
Their argument will circle around third party beneficiary, “standing,” and the fact that SOME party could enforce it if they could show that they were the intended beneficiary despite the recitation on the face of the DOT.
 *
This is not the basis for a simple legal argument. Each side must allege and prove their factual (what happened, when, where, who was involved and why) allegations by at least a preponderance of the evidence and most probably, legal or not, the homeowner would be held to a higher standard of clear and convincing evidence informally or formally because the recorded documents carry a “presumption” of authenticity and validity that the homeowner must overcome.
 *
Academically speaking such claims are well-founded. But in practice judges look at such claims as gimmicks to get around a legitimate debt. In order to combat that we must figure out a way to bring in a party who has a legitimate claim to represent the unknown and undisclosed creditors.
 *
The banks have successfully cast the money trail in obscurity. The banks are committing fraud with each foreclosure in my opinion and in the opinion of everyone else I know that has analyzed the securitization of mortgage debt. But they have made it appear that there is nobody other than the bank’s pet entities (the so-called trusts) to play the role of creditor.

Wells Fargo “Lending” Securities It Didn’t Own

Translation: WFB was the “custodian” of alleged “mortgage-backed” certificates issued for the benefit of investors who paid billions of dollars for ownership of the certificates. WFB “Loaned” those alleged securities to brokers. The brokers in exchange provided “collateral” the proceeds of which were reinvested by WFB. In short, WFB was laundering the investors money for the sole benefit of WFB and not for the investors who owned the certificates and certainly to the detriment of the brokers and their buyers of derivative instruments based upon the loan of the securities.

This case reveals the flowering of multiple levels arising from false claims of securitization. First WFB issues certificates from a fictitious trust that owns nothing. Then it keeps both the money paid for those certificates and it keeps the certificates as well. On Wall Street this practice is called holding securities in “street name.” Then WFB engages in trading on securities it doesn’t own, but which are worthless anyway because the certificates only represent a promise from the REMIC trusts that exists only on paper.

It is all based upon outright lies. And that is why the banks get nervous when the issue of ownership of a debt, security or derivative becomes an issue in litigation. In this case the bank represented the trades as ownership or derivative ownership of “high grade money market instruments” such as “commercial paper or bank time deposits and CDs.”

None of it was true. WFB simply says that it thought that the “instruments” were safe. The lawsuit referred to in the linked article says they knew exactly what they were doing and didn’t care whether the instruments were safe or not. If the attorneys dig deeper they will find that the certificates’ promise to pay was not issued by an actual entity, that certificates were never mortgage-backed, and that WFB set it up so when there were losses it would not fall on WFB even though WFB was using the named trust basically as a fictitious name under which it operated.

So I continue to inquire: why does any court accept any document from WFB as presumptively valid? Why not require the actual proof?

Let us help you plan your defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult.

Purchase now Neil Garfield’s Mastering Discovery and Evidence in Foreclosure Defense webinar including 3.5 hours of lecture, questions and answers, plus course materials that include PowerPoint Presentations. Presenters: Attorney and Expert Neil Garfield, Forensic Auditor Dan Edstrom, Attorney Charles Marshall and and Private Investigator Bill Paatalo. The webinar and materials are all downloadable.

Get a Consult and TEAR (Title & Encumbrances Analysis and & Report) 202-838-6345. The TEAR replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).

https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments. It’s better than calling!

THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

===========================

Hat Tip Bill Paatalo

see  WFB Securities Lending Scheme

The investments by WFB went into “mortgage backed assets.” Really? So let’s see how that works. First they create the certificates and sell them to investors even though neither the investors nor the trust have any interest in mortgage assets. Then they “loan” the same certificates to brokers, who provide collateral to WFB so that WFB can “reinvest” investor money using commingled investor money from a variety of sources.

Then derivatives on derivatives are sold as private contracts or insurance policies in which when the nonexistent trust assets are declared by WFB to have failed, in which WFB collects all the proceeds. The investors from all layers are screwed. And borrowers, as was originally planned, are screwed.

The lender to the borrower in the real world (where money is exchanged) are be the investors whose money was in the dynamic dark pool when the loan of money occurred. But the investors have no proof of ownership of the debt because of the false documents created by the “underwriter” bank.  The money from the second tier of investors is used to “purchase” the certificates WFB is “printing”. And then derivatives and hybrid derivatives and synthetic derivatives are sold multiplying the effect of every certificate issued. Such has the control over currency shifted from central banks who control around $8 trillion of fiat currency to the TBTF banks who boast a shadow banking market of $1 quadrillion ($1,000,000,000,000,000.00).

This every loan and every certificate is multiplied in the shadow banking market and converted into real money in the real world. Based upon prior securities analysis and review of disclosures from the publicly held banks it thus became possible for a “bank” to receive as much as $4.2 million on a $0.1 Million loan (i..e, $100,000). But in order to maintain the farce they must foreclose and not settle which will devalue the derivatives.

Then having done all that through control of a dynamic dark pool of investor money they must of course create the illusion of a robust lending market. True this particular case involves a business acquired when WFB acquired Wachovia. But WFB acquired Wachovia because it was the actual party in control of a false securitization scheme in which Wachovia acted primarily as originator and not lender.

WFB barely cares about the interest rate because they know the loans that are being approved won’t last anyway. But its trading desk secures extra profits by selling loans with a high interest rate, as though the loans had a low interest rate thereby guaranteeing two things: (1) guaranteed defaults that WFB can insure and (2) buying low (with investor money) and selling high (to investors).

All of which brings us back to the same point I raised when I first wrote (circa 2007) about the systemic fraud in securitization not as an idea, but in the way it had been put into practice. Using established doctrines in tax litigation there are two doctrines that easily clear up the intentional obfuscation by the banks: (1) The single transaction doctrine and (2) the step transaction doctrine. Yes it is that simple. If the investors didn’t part with their money then the loan of money would have never reached the desk of the closing agent. If the homeowners had not been similarly duped as to who and what was being done, they would never have signed on the dotted line.

To assume otherwise would be the same as assuming that borrowers were looking for a way to waste money on non-deductible down payments, improvements and furniture in exchange for a monthly payment that everyone knew they couldn’t afford.

 

FREE Information, Resources and Help with Your Mortgage Loans – Over 13,000,000 Visitors

GO TO LENDINGLIES to order forms and services

Thursdays LIVE! Click in to the The Neil Garfield Show

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

About Neil F Garfield

Schedule Private Consultation

Purchase Services and Products

Purchase Seminars

Submit Case Interview Form – Receive Customized Recommended Services

Q & A – What can you do for me?

Contact Information:

The Garfield Firm

GTC Honors, Inc.

Phone: 954-451-1230

Email: info@lendinglies.com

Services include: Expert Consultative Services, Strategy, Qualified Written Requests, Case Review and Reports, Forensic Analysis Referrals, and our Title and Encumbrance Analysis.

MISSION STATEMENT: I believe that the mortgage crisis has produced manifest evil and injustice in our society. I believe our recovery will never reach the majority of struggling Americans until we restore equal protection for all citizens and especially borrowers in our debt-ridden society. LivingLies is the vehicle for a collaborative movement to provide homeowners with sufficient resources to combat bloated banks who are flooding the political market with money. We provide thousands of pages of free forms, articles and discussion of statutes, case precedent and policy on this site. I provide paid services, books and products that enable us to maintain an infrastructure to provide a voice to the victims of Wall Street corruption.

Ask about our CONSULTATION SERVICES and LITIGATION SUPPORT.

Case reviews by Neil Garfield available. Litigation and Expert Consulting in all fifty states.

Educate Yourself and Your Lawyer: Read this Blog and Purchase Books & Services from our Online Store

  • GET A CONSULT WITH NEIL GARFIELD
  • PARALEGAL SERVICES
  • GET A REVIEW AND REPORT ON STATUS AND STRATEGIES
  • GET our Rescission Package
  • GET Litigation support
  • Get our COMBO Title and Securitization Report
  • FREE! Select recent articles from the right side of this page!

RECOMMENDED READING:

WHOSE LIEN IS IT ANYWAY? by Neil F Garfield. E-Book available on our online store.

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

DARK POOLS OF SECURITIES AND MONEY FUNDED MORTGAGE LOANS

In answer to questions frequently asked of me, the term “dark pool” was not coined by me nor was it discovered by me as an instrumentality of obscuring financial transactions. I have understood the workings of dark pools since my Wall Street days. But back then, in the 1960’s and 1970’s they were not so common.

What I did discover was a dark pools were in widespread use in the era of false claims of securitization — a discovery provoked by reading the prospectuses and pooling and servicing agreements (Trust instruments) for the issuance of of “certificates” a/k/a “mortgage bonds.”  There, in black and white, was a “reserve fund” consisting of money from investors who bought the certificates from underwriters using the fictitious name of a Trust that never existed. And it was stated therein that investors could be paid from this reserve — i.e.,. paid using their own money.

There were virtually no restrictions on the use of the “reserve fund.” The more I read and the more I asked my tipsters, it became very apparent that the reserve funds were interconnected, that the Trusts did not exist and so the reserve fund was actually a dark pool — a trading ground for securities and money. It is also the locale where the the most gross violations of law occur because they are hidden from public view and often hidden even from the financial statements of the participants.

Let us help you plan your cross examination, discovery requests and defense narrative: 202-838-6345. Ask for a Consult.
Purchase now Neil Garfield’s Mastering Discovery and Evidence in Foreclosure Defense webinar including 3.5 hours of lecture, questions and answers, plus course materials that include PowerPoint Presentations. Presenters: Attorney and Expert Neil Garfield, Forensic Auditor Dan Edstrom, Attorney Charles Marshall and and Private Investigator Bill Paatalo. The webinar and materials are all downloadable.
Get a Consult and TEAR (Title & Encumbrances Analysis and & Report) 202-838-6345. The TEAR replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments. It’s better than calling!
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

===========================

see DARK POOLS DEFINED — https://ag.ny.gov/press-release/ag-schneiderman-announces-landmark-resolutions-barclays-and-credit-suisse-fraudulent

Securitization was at first disclaimed by all the banks and servicers 10-15 years ago. Most people don’t remember that. The defense was “What Trust?”

Forensic researchers then discovered that underwriters or others had uploaded “securitization” documents to the SEC website and later added mortgage loan schedules, (that trend out to be false and fabricated) in which certain “REMIC” trusts claimed ownership of the “mortgage loans.”

Going with the flow, the banks and servicers then filed foreclosures in the name of the nonexistent trusts — and they got away with it. Today we have a mixed blend of claims of trust ownership of loans (i.e., the underwriter using the fictitious name of the nonexistent trust) and claims of corporate ownership of loans where a major bank or “successor” trust initiates foreclosure.

But in the end what they filed in foreclosures was antithetical to the claim they were making. None of the Trusts ever acquired loans from a settlor or trustor. Nor did any trust receive the proceeds of investor capital. By definition, securitization never actually happened. Adam Levitin calls this “securitization fail.”

The true money trail starts with the dark pool consisting of all proceeds of the sale of certificates or bonds issued by the underwriter in the name of the nonexistent trust. Hence the money is not in the trust; it is in the dark pool where money and trading, deposits and withdrawals occur in great frequency. Hence the underwriter has performed a Texas two step — on the one hand it claims that ownership is in the name of the fictitious REMIC Trust while at the same time funding the origination and acquisition of loans from the dark pool.

This is critically relevant to the foreclosures. In virtually all cases, the money came from the dark pool (not a trust) to originate (not allowed under the prospectus) or acquire loans. Careful securities analysis reveals a simple fact, to wit: that there IS a money trail but it leads back to the dark pools. Hence the paper trail that leads to the successors and “trusts” are documenting transactions that never occurred between the parties named on the written instruments. This in turn means that the certificates and bonds issued in the name of the named trust were neither backed by notes or mortgages and were most certainly not backed by debts.

A careful reading of certificates indicates that most of them have a disclaimer of any interest in the underlying debts, notes and mortgages. The investors acknowledge that all they are receiving is a promise to pay issued by in the name of the trust (but not issued By the trust). The real party in interest is the underwriter who also poses as “Master Servicer” for assets owned by the named Trust. But there are no such assets; so in the end we should be dealing with, and litigating with the underwriter.

Investors gave money to the underwriter believing their money would be deposited into the “REMIC” Trust. It wasn’t. Instead their money ended up in a dark pool with no rules. The money in the dark pool should be considered as deposits by investors rather than investments since the certificates were bogus. To consider it otherwise would be to deprive investors of the last vestige of ownership of the debts, notes and mortgages that were to be conveyed into the trust in exchange for the money paid to the “trust” by investors and then paid out by the “Trustee.” No such thing ever happened.

So the answer to the frequently asked question of “then where did the money come from” is that it came from an unregulated, undisclosed dark pool invented for the purpose of defrauding investors and homeowners. And the answer to the the other frequently asked question of “how do I prove that” is you don’t prove it. You prove the inevitable gaps that show that no financial transaction occurred anywhere along the paper trail.

Remember: documenting a false transaction doesn’t make it real. The document (note, mortgage, assignment, etc.) is either tethered to a real transaction in the real world that can be disclosed or it is untethered to any real transaction. If there is no real transaction in the real world the document becomes only a piece of paper. If there is a real transaction in the real world that your opposition can prove resulted in the creation of the document, then they win — simple as that. If there is no such transaction then the claimed liability does not exist, hence there can be no default. You can’t default on a nonexistent obligation. But obviously the investors have an equitable right to the loans funded with their money.

 

%d bloggers like this: