COVER-UP: Whatever Happenned to Those Settlements?

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see http://www.mpamag.com/news/foreclosure-settlement-funds-misspent-26697.aspx

The media and the Bank lobby keep referring to illegal activity, risky or mismanagement. I call it a cover-up that dwarfs Watergate by comparison. Here are some facts:

  1. Foreclosures are still increasing, despite dozens of articles per day that say otherwise. Those articles are writing about a particular city or county whereas the true numbers can only be measured nationally. Wall Street has creatively used its dominance in the press to get them using the terms that would lead one to believe that the foreclosure crisis in behind us.
  2. This wasn’t negligence. It is intentional, it is fraud, it is illegal and probably criminal. The banks didn’t suddenly wake up one morning with amnesia abut how to make a loan and how to account for it. They also didn’t accidentally destroy the original loan papers. It was intentional. Why did they destroy cash equivalent instruments? Because they had made reports to multiple third parties about the loan that would be readily obvious that (a) the loan did not qualify to be approved (b) that the loan did not qualify for the investment criteria needed by the stable managed funds (pension, for example) and (c) it is much easier on bankers if they admit to negligence than to produce proof of fraud (they obviously had made multiple misrepresentations and sales to multiple third parties).
  3. The foreclosures are for the benefit of the intermediary banks whose self-proclaimed status as agents for unidentified creditors makes a mockery of our marketplace and our judicial system.
  4. The banks were found by administrative and law enforcement agencies to have committed fraud on the courts, to have pushed through foreclosures in which they had no ownership or rights to the alleged loans, that probably was never consummated (in the legal sense) in the first place.
  5. The homeowners whose files were reviewed by investigators and found to have fatal defects were never notified by the investigators or anyone else about the finding and the agreement by the banks. This one example of the wrong-headed policies started by Bush and continued by Obama have been wrong headed and bone-headed.
  6. Hundreds of Billions, approaching $1 Trillion have been paid in settlements by the major banks, many with specific provisions that the settlement was to be to the benefit of homeowners who were illegally foreclosed or who were in foreclosure when the foreclosing party was (a) non existent or (b) a sham naked nominee with no interest in the loan, the note or the mortgage and or (c) a party who has never been disclosed in the courts during foreclosure litigation but who was directing the entire false and fraudulent scheme of “securitization”.
  7. The banks make no bones about it — they admit that the Trusts are and always were empty but have been asserting successfully to Judges who didn’t think through that whether there were actual underlying transcriptions where money exchanged hands or not, is irrelevant because they “hold” the note. So they admit that nobody in the chain of custody upon which they rely ever actually had any financial interest in the alleged “loan” with the homeowner and admit further, upon interrogation that they have no privity of contract with the homeowner.  The banks successfully turned the heads of thousands of judges with the myth of the homeowner getting a free house.
  8. Out of hundreds of billions of dollars in settlements, homeowners have seen virtually nothing — disbursements of less than 1% of the alleged principal or their alleged loan.
  9. It is an inescapable conclusion that the funds for the”Settlements” (a) remain unpaid or (b) resulted in payment of an amount equivalent to a nuisance settlement when the issuer was taking hundreds of thousands of dollars without any right, justification or excuse by proceeding with a foreclosure they have admitted, according to their own audit that the foreclosure was wrongful.

In short what is happening here is that the crimes or illegal activities are ongoing every day and not subject to (a) being barred by the statute of limitations and (b) foreclosure is  a behavior to avoid detection (which is a crime in itself) and (c) each time a Judge enters an order allowing or ordering forced sale, the Court itself is complicit in the cover-up, even if the Court is “unaware” of it.

All of this is presumptively true because of the findings of fact by the investigative and regulatory agencies, whether they are admitted or not by the mega banks. The burden should be placed on the foreclosing party, whose history of fabrication, lying under oath, and forgery SHOULD make the testimony, documents, and representations proffered by counsel for banks presumptively NOT CREDIBLE. Instead Judges have treated them like they are holders in due course where the risk falls entirely on the homeowner who also has the burden of proving defenses against a holder in due course who is not subject to those defenses (but who also doesn’t exist).

In my opinion policy makers, regulators and law enforcement are still functioning under the Wall Street myth that if the mega banks fall so does the economy. It is quite the reverse. If the mega banks fall then banking becomes local again, and there is no such thing as too big to fail. There is not single function performed by a mega bank that couldn’t be done by a small community bank or credit union. The current policy has allowed the mega banks to raise a cloud over everything with their unregulated “Shadow banking” sector which now accounts for around 15-20 times the amount of all the money in the world. That being the case, we are allowing our institutions to be marginalized. When the Fed, or Congress or anyone else attempts to address the problems of economic growth and inequality they are using primitive tools without any real effect.

We have replaced income and currency with debt that is “cash equivalent”. As long as allow that, we will forever be on the brink of the worst depression in history — which history tells us frequently leads to war. As a distraction there are those who point to the National Debt without making any reference to the more important household debt. It is an irrefutable fact that out economy is built on consumption. 70% of our gross domestic product is consumption of goods and services by ordinary consumers. Thus the only rational, practical policy is one that increases consumption. Instead politicians are creating ideological talking points. Where does consumption ordinarily come from? Do those people have the money or credit to make purchases? If they don’t, then what policy will put money in their hands in a manner in which overall consumption increases.

DELAWARE TO MERS: NOT IN OUR STATE!

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Delaware sues MERS, claims mortgage deception

Posted on Stop Foreclosure Fraud

Posted on27 October 2011.

Delaware sues MERS, claims mortgage deceptionSome saw this coming in the last few weeks. Now all HELL is about to Break Loose.

This is one of the States I mentioned MERS has to watch…why? Because the “Co.” originated here & under Laws of Delaware…following? [see below].

Also look at the date this TM patent below was signed 3-4 years after MERS’ 1999 date via VP W. Hultman’s secretary Kathy McKnight [PDF link to depo pages 29-39].

New York…next!

Delaware Online-

Delaware joined what is becoming a growing legal battle against the mortgage industry today, charging in a Chancery Court suit that consumers facing foreclosure were purposely misled and deceived by the company that supposedly kept track of their loans’ ownership.

By operating a shadowy and frequently inaccurate private database that obscured the mortgages’ true owners, Merscorp made it difficult for hundreds of Delaware homeowners to fight foreclosure actions in court or negotiate new terms on their loans, the suit filed by the Attorney General’s Office said.

[DELAWARE ONLINE]

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CAL. AG DROPS OUT OF TALKS WITH BANKS: AMNESTY OFF THE TABLE

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EDITOR’S NOTE: California has approximately a 1/3 share of all foreclosures. So Harris’ decision to drop out of the talks is a huge blow to the mega banks who were banking (pardon the pun) on using it to get immunity from prosecution. The answer is no, you will be held accountable for what you did, just like anyone else. As I have stated before when the other AG’s dropped out of the talks (Arizona, Nevada et al), this growing trend is getting real traction as those in politics have discovered an important nuance in the minds of voters: they may have differing opinions on what should be done about foreclosures but they all hate these monolithic banks who are siphoning off the lifeblood of our society. And there is nothing like hate to drive voting.

This is a process, not an event. We are at the end of the 4th inning in a 9-inning game that may go into overtime. The effects of the mortgage mess created by the banks are being felt at the dinner table of just about every citizen in the country. The politics here is creating a huge paradox and irony — the largest source of campaign donations has turned into a pariah with whom association will be as deadly at the polls as organized crime.

The fact that so many attorneys general of so many states are putting distance between themselves and the banks means a lot. It means that the banks are in serious danger of indictment and conviction on criminal charges for fraud, forgery, perjury and potentially many other crimes.

IDENTITY THEFT: One crime that is being investigated, which I have long felt was a major element of the securitization scam for the “securitization that never happened” is the theft of identities. By signing onto what appeared to be mortgage documents, borrowers were in fact becoming issuers or pawns in the issuance of fraudulent securities to investors. Those with high credit scores were especially valued for the “cover” they provided in the upper tranches of the CDO’s that were “sold” to investors. An 800 credit score could be used to get a AAA  rating from the rating agencies who were themselves paid off to provide additional cover.

But it all comes down to the use of people’s identities as “borrowers” when in fact there was no “Lending” going on. What was going on was “pretend lending” that had all the outward manifestations of a loan but none of the substance. Yes money exchanged hands, but the real parties never met and never signed papers with each other. In my opinion, the proof of identity theft will put the borrowers in a superior position to that of the investors in suits against the investment bankers.

NO UNDERWRITING=NO LOAN: There was no underwriting committee, there was no underwriting, there was no review of the appraisal, there was no confirmation of the borrower’s income and there was no decision about the risk and viability of the so-called loan, because it wasn’t about that. The risk was already eliminated when they sold the bogus mortgage bonds to investors and thus saddled pension funds with the entire risk of loss on empty “mortgage backed pools.” So if the loan wasn’t paid, the players at ground level had no risk. Their only incentive was to get the signature of the borrower. That is what they were paid for — not to produce quality loans, but to produce signatures.

Little did we know, the more loans that defaulted, the more money the banks made — but they were able to mask the gains with apparent losses as an excuse to extract emergency money from the US Treasury using taxpayer dollars without accounting for the “loss” or what they did with the money. Meanwhile the gains were safely parked off shore in “off-balance sheet” transaction accounts.

The question that has not yet been asked, but will be asked as prosecutors and civil litigators drill down into these deals is who controls that off-shore money? My math is telling me that some $2.6 trillion was siphoned off (second level — hidden — yield spread premium) the investors money before the balance was used to fund “loans.”

When all is said and done, those loans will be seen for what they really were — part of the issuance of unregistered fraudulent securities. And you’ll see that the investors didn’t get any more paperwork than the borrowers did as to what was really going on. The banks want us to focus on the the paperwork when in fact it is the actual transactions involving money that we should be following. The paperwork is a ruse. It is faked.

NOTE TO LAW ENFORCEMENT: FOLLOW THE MONEY. IT WILL LEAD YOU TO THE TRUTH AND THE PERPETRATORS. YOUR EFFORTS WILL BE REWARDED.

California AG Harris Exits Multistate Talks
in News > Mortgage Servicing
by MortgageOrb.com on Monday 03 October 2011
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The multistate attorneys general group working toward a foreclosure settlement with the nation’s biggest banks suffered a blow Friday, when California’s Kamala Harris announced her departure from negotiations.

Harris notified Iowa Attorney General Tom Miller and U.S. Associate Attorney General Thomas Perrelli of her decision in a letter that was obtained and published by the New York Times Friday. According to the letter, Harris is exiting the talks because she opposes the broad scope of the settlement terms under discussion.

“Last week, I went to Washington, D.C., in hopes of moving our discussions forward,” Harris wrote. “But it became clear to me that California was being asked for a broader release of claims than we can accept and to excuse conduct that has not been adequately investigated.”

“[T]his not the deal California homeowners have been waiting for,” Harris adds one line later.

Harris, who earlier this year launched a mortgage fraud task force, says she will continue investigating mortgage practices – including banks’ bubble-era securitization activities – independent of the multistate group.

“I am committed to doing as thorough an investigation as is needed – and to taking the time that is necessary – to set the stage for achieving appropriate accountability for misconduct,” she wrote.

Harris also told Miller and Perrelli that she intends to advocate for legislation and regulations that increase transparency in the mortgage markets and “eliminate incentives to disregard borrowers’ rights in foreclosure.”

Harris’ departure is considered significant given the high number of distressed loans in California. In August, approximately one in every 226 housing units in the state had a foreclosure filing of some kind, according to RealtyTrac data.

EPIDEMIC OF FRAUD: 75% OF ALL ASSIGNMENTS ARE INVALID

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 3 MILLION FORECLOSURES VOID

Southern Essex Registry of Deeds Audit Reveals That 75% of Assignments of Mortgage Are Invalid; O’Brien Says Banks Responsible for an Epidemic of Fraud. Once again urges Attorney’s General to stop Bank settlement talks

Posted on29 June 2011.

Southern Essex Registry of Deeds Audit Reveals That 75% of Assignments of Mortgage Are Invalid; O’Brien Says Banks Responsible for an Epidemic of Fraud.  Once again urges Attorney’s General to stop Bank settlement talks

Commonwealth of Massachusetts

Southern Essex District Registry of Deeds
Shetland Park
45 Congress Street
Suite 4100
Salem, Massachusetts 01970

JOHN L. O’BRIEN, JR.
Register of Deeds
Phone:
978-542-1704
Fax:
978-542-1706
website:
www.salemdeeds.com

NEWS FOR IMMEDIATE RELEASE
Salem, MA
June 29th, 2011

Contact:
Kevin Harvey, 1st Assistant Register
978-542-1724
kevin.harvey@sec.state.ma.us

Marie McDonnell, President, McDonnell Property Analytics, Inc.
508-694-6866
marie@mcdonnellanalytics.com

Yesterday at the Annual Conference of The International Association of Clerks, Recorders, Election Officials and Treasurers (IACREOT), Register John O’Brien revealed the results of an independent audit of his registry.  The audit, which is released as a legal affidavit was performed by McDonnell Property Analytics, examined assignments of mortgage recorded in the Essex Southern District Registry of Deeds issued to and from JPMorgan Chase Bank, Wells Fargo Bank, and Bank of America during 2010.  In total, 565 assignments related to 473 unique mortgages were analyzed.

McDonnell’s Report includes the following key findings:

–          Only 16% of assignments of mortgage are valid

–          75% of assignments of mortgage are invalid.

–          9% of assignments of mortgage are questionable

–          27% of the invalid assignments are fraudulent, 35% are “robo-signed” and 10% violate the Massachusetts Mortgage Fraud Statute.

–          The identity of financial institutions that are current owners of the mortgages could only be determined for 287 out of 473 (60%)

–          There are 683 missing assignments for the 287 traced mortgages, representing approximately $180,000 in lost recording fees per 1,000 mortgages whose current ownership can be traced.

McDonnell told O’Brien, “I have been auditing residential mortgage loans for the past twenty years on a one-by-one basis.  In the process, I have been cataloging the ramp up in predatory lending and mortgage fraud for all of those years, but I was not prepared for the shocking results of my audit.  What this means is that the degradation in standards of commerce by which the banks originated, sold and securitized these mortgages are so fatally flawed that the institutions, including many pension funds, that purchased these mortgages don’t actually own them because the assignments of mortgage were never prepared, executed and delivered to them in the normal course of business at the time of the transaction.  In a blatant attempt to engineer a ‘fix’ to the problem, the banks set up in-house document execution teams, or outsourced the preparation of their assignments to third parties who manufactured them out of thin air without researching who really owns the mortgage.”

O’Brien asked McDonnell what this means for his constituents.  “It is vitally important for your constituents to know that if they are in foreclosure now or if their homes have been foreclosed upon, they can stop the foreclosure from proceeding, or institute a court action to vacate a completed foreclosure. The Massachusetts Supreme Judicial Court has established the law of the land in its decisions U.S. Bank, N.A. v. Ibanez and Wells Fargo Bank, N.A. v. LaRace and I can tell you that every single assignment of mortgage that was recorded for the purpose of foreclosing the homeowner is invalid, overtly fraudulent, or criminally fraudulent. My findings also show that your constituents who are not in foreclosure, and have never been delinquent in their payments also have clouds on title due to the recording of defective and invalid discharges and assignments of mortgage.”

“My registry is a crime scene as evidenced by this forensic examination,” stated John O’Brien. “This crime that has affected thousands of homeowners in Essex County who, through no fault of their own, have had their property rights trampled on and their chain of title compromised. This evidence has made it clear to me that the only way we can ever determine the total economic loss and the amount damage done to the taxpayers is by conducting a full forensic audit of all registry of deeds in Massachusetts. I suspect that at the end of the day we are going to find that the taxpayers have been bilked in this state alone of over 400 million dollars not including the accrued interest plus costs and penalties. The Audit makes the finding that this was not only a MERS problem, but a scheme also perpetuated by MERS shareholder banks such Bank of America, Wells Fargo, JP Morgan and others. I am stunned and appalled by the fact that America’s biggest banks have played fast and loose with people’s biggest asset – their homes.  This is disgusting, and this is criminal,” said O’Brien.

O’Brien continued “Once again I am asking Attorney General Martha Coakley and the other state Attorney’s General to follow the lead of New York Attorney General Eric Schneiderman and stop any settlement talks with the banks. The results of this report are only for my registry, but I can assure you that this type of criminal fraud is rampant across the nation. This leaves me to question why anyone would consider settling with these banks until we know the full extent of the damage that they have caused to the homeowners chain of title across this country and the amount of money they have bilked the taxpayers for their failure to pay recording fees.”

The Full Report is included with this release and may also be requested at www.mcdonnellanalytics.com.

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