The Chase-WAMU Illusion

In the mortgage world “successor by merger” is simply a living lie that continues as you read this article. Like many other major illusions in our world economy, the Chase-WAMU merger was nothing more than illusion

The reason for the rebellion showing up as votes for Sanders and trump and the impending exit of the UK from the European Union is very simple — every few decades the populace gets a ahead of their elected leaders and yanks their leash so hard that some of them choke.

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

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see FDIC_ Failed Bank Information – WASHINGTON MUTUAL BANK – Receivership Balance Sheet Summary (Unaudited)

see wamu_amended_unsealed_opinion

When Bill Clinton was asked how he balanced the budget and came out with a $5 Trillion surplus when he left office his reply was unusually laconic — “Arithmetic.” And he was right, although it wasn’t just him who had put pencil to paper. Many Republican and Democrats had agreed that with the rising economy, the math looked good and that their job was not to screw it up. THAT was left to the next president.

I’m not endorsing Clinton or Trump nor saying that Democrats or Republicans are better that the other. Indeed BOTH major political parties seem to agree on one egregiously erroneous point — the working man doesn’t matter.

The people who matter are those with advanced degrees and who reach the pinnacle of the economic medal of honor when they are dubbed “innovators.”

The reason for the rebellion showing up as votes for Sanders and Trump and the impending exit of the UK from the European Union is very simple — every few decades the populace gets a ahead of their elected leaders and yanks their leash so hard that some of them choke. To say that the BREXIT vote was surprising is the height of arrogance and stupidity. People round the world are voicing their objection to an establishment that doesn’t give a damn about them and measures success by stock market indexes, money supply and GDP activity that is manipulated at this point that it bare little if any resemblance to the GDP index we had come to rely upon, albeit that index was also arbitrarily and erroneously based on the wrong facts.

The fact that large percentages of the populace of many countries around the world are challenged to put food on the table and a roof over their heads doesn’t matter as long as the economic indices are up. But truth be told even when those indices go down, the attitude is the same — working people don’t matter. They are merely resources like gold, coal and oil from which we draw ever widening gaps between the people who run the society and the economy and those who drive the economy and society with their purchases.

In the mortgage world “successor by merger” is simply a living lie that continues as you read this article. Like many other major illusions in our world economy, the Chase-WAMU merger was nothing more than illusion — just like BOA’s merger with BAC/Countrywide (see Red Oak Merger Corp); Wells Fargo’s merger with Wachovia who had acquired World Savings; OneWest’s acquisition of IndyMac;  CitiMortgage acquisition of ABN AMRO, CPCR-1 Trust;  BOA’s merger with LaSalle; Ditech’s acquisition by multiple entities GMAC, RESCAP, Ally,  Walter investment etc.) when DiTech was dead and the name was the only this being traded, and so much more. All these mergers bear one thing in common — they were cover screen for one simple fact: they had not in one instance acquired any loans but then relied on the illusion of the merger to call themselves “successors by mergers.”

Let’s take the example of WAMU. When they went broke they had less than $3 Billion in assets (see link above). This totally congruent with the $2 billion committed by Chase to acquire the WAMU estate form the FDIC receiver Richard Schoppe (located in Texas) and the US Trustee in bankruptcy — especially when you consider the little known fact that Chase received 1/3 of a tax refund due to WAMU.

That share of the Tax refund was, as you might already have guessed, MORE than the $2 billion committed by Chase. whether Chase ever actually paid the $2 billion is another question.But in any event, pure arithmetic shows that the consideration for the purchase of WAMU by Chase was LESS THAN ZERO, which means we paid Chase to acquire WAMU.

This in turn is completely corroborated by the Purchase and Assumption Agreement between WAMU, the FDIC Receiver, the US Trustee in Bankruptcy and of course Chase. On the first page of that agreement is a express recital that says the consideration for this merger is “-$0-.” But before you look up the “Reading Room on the FDIC FOIA cite, here is one caveat: some time after the original agreement was published on the site, a “different” agreement was posted long after WAMU was dead, the US Trustee had been discharged, and the FDCI receiver was discharged as a receiver. The “new” agreement implies that loans were or may have been acquired but does not state which loans or how much was paid for these loans. The problem with the new agreement of course is that Chase paid nothing and was not entitled to nothing, except the servicing rights on some fo those loans.

The so-called new agreement placed there by nobody knows, also stands in direct contrast of the interview and depositions of Richard Schoppe — that if there were loans to sell the principal amount would have been hundreds of billions of dollars for which Chase need pay nothing. I dare say there are millions of people and companies who would have taken that deal if it was real. But Schoppe states directly that the number of assignments was NONE, zero, zilch.

Schoppe also stated that the total amount of loan originations was just under $1 Trillion. And he said that the loan portfolio might have been, at some time, around 1/3 of the total loans originated. Putting pencil to paper that obviously means that 2/3 of all originated loans were either pre-funded in table funded “loans” or that they were immediately sold into the secondary market for securitization. All evidence points to the fact that WAMU never owned the loans at all — as they were table funded  through multiple layers of conduits none of whom were disclosed as required under the Truth in lending Act.  Because the big asset that WAMU retained were (a) the servicing rights and (b) the right to claim recovery for servicer advances. It could be said that the only way they could perfect their claim for “recovery” of “servicer” “Advances” was by acquiring WAMU since Chase was the Master servicer on nearly all WAMU originations.

The interesting point of legal significance is that Chase emerges as the real party in interest even though it it appeared only as the servicer in the background after subsequent servicers were given “powers” of attorney to prevent the new “servicer” (actually an enforcer) from claiming a recovery  for “servicer” “Advances.,” that are recoverable not from the borrower, not from the investor, and not from the trust but in a foggy chaos in which the property was liquidated.

So the assets of WAMU at the time it went belly up was under $3 Billion which means that after you deduct the brick and mortar locations and the servicing rights Chase still got the deal of a lifetime — but one thing doesn’t add up. If WAMU had less than $3 Billion in assets and 99% of that were conventional bank assets excluding loans, then the “value” of the loan portfolio, using FDIC Schoppe estimates was $3 Million. If the WAMU loan portfolio implied by the a,test antics of Chase was true — then Chase acquired $300 BILLION in loans for $3 MILLION. Even the toxic waste loans were worth more than one tenth of one percent.

Chase continues to assert ownership with impunity on an epic scale of fraud, theft and manipulation of the courts, investors and borrowers. The finding that Chase NOT assumed repurchase obligations in relation to the originated loans goes further to corroborate everything I had written here. There seems to be an oblique reference to attempted changes in the “P&A” Agreement, and the finding that the original deal cannot be changed, but the actual finding of two inconsistent agreements posted on the FDIC site is worth investigating. I can assure the reader that I have found and read both.

And lastly I have already published numerous articles on victories in court (one fo which was mine and Patrick Giunta) for the borrower based upon the exact principles and facts written in this article — where the judge concluded that US Bank had never acquired the loan, that the “servicer” in court testifying through a robo-signer had no power over the loan because their power was  derived from Chase who was named as servicer for a REMIC Trust that never acquired the loan nor any rights to the loan.

The use of powers of attorney were found to be inadequate simply because the party who executed the POA had no rights to the money, the enforcement of the loan nor any collection or foreclosure. If Chase had acquired the loan from WAMU they would have won. Their total reliance on deflective legal presumptions based upon presumed fact that were untrue completely failed.

BOTTOM LINE: CHASE ACQUIRED NO LOANS FROM WAMU. Hence subsequent documents of transfer or powers (Powers of attorney) are void.

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4th DCA Florida: Exploding the Merger Myth

Achieving standing via merger also requires that the surviving entity prove that it “acquired all of [the absorbed entity’s] assets, including [the] note and mortgage, by virtue of the merger.”Fiorito v. JP Morgan Chase Bank, Nat’l Ass’n, 174 So. 3d 519, 521 (Fla. 4th DCA 2015).

see http://4closurefraud.org/2016/06/07/fl-4th-dca-segall-v-wachovia-bank-na-reversed-wachovia-failed-to-prove-standing-to-foreclose/

Finally the courts are turning back to the simple rules of law that always applied until the era of false claims of securitization. Hopefully this decision will be persuasive authority in all jurisdictions. As stated in other cases, the banks can’t continue to operate using multiple choice assertions. Either their entity is real or it isn’t. Either they acquired the loan or they didn’t — and the fact that there was a merger does NOTHING for them in asserting transfer of the loan. They must show that the subject loan was in fact acquired by the surviving entity in the merger. This was always the law before and now we are simply turning back to it.

Red Oak Merger Corp. a/k/a Countrywide, a/k/a BAC a/k/a Bank of America

When BOA says it is a “Successor by merger” to Countrywide, it is no more true than Chase’s claims that it is the successor by merger to WAMU and no different than the false claims of OneWest as to IndyMac. In each instance there was a merger but in none of them were loans acquired because they had already been sold.
If you look at the actual merger disclosures, it is highly doubtful and even inconsistent with other disclosures that Bank of America Corp or Bank of America N.A. actually owns any loans originated by Countrywide. In fact, as you drill deeper you will be drawn to my conclusion —— that Countrywide was a conduit and not a lender, who operated through other thinly capitalized “originators” none of whom were actually making loans.
None of them were lenders. None were creditors. The money for the alleged loans came from a dynamic dark pool consisting solely of money from investors — by-passing the so called “REMIC” Trust that claims ownership even though it was never active as a business entity or as a pass-through entity. The Trust never received the proceeds of sale of securities the Trust issued.  Nobody complained because it was really not the Trust that was the active entity, it was the investment bank that had created the illusion of mortgage backed securities that were not backed by mortgages and not securities under deregulation back in 1998-1999. Investors who failed to peek under the hood jumped at high ratings and insured investments. But other fund managers who did peek under the hood, discovered at best a very high risk venture and at worst, a criminal conspiracy. These conduits were all getting signatures that were then parlayed into the illusion of assets that were sold into the secondary mortgage market and then subjected to false claims of securitization.
This situation is like Chase claims that WAMU originated mortgages. The only difference is that WAMU was actually capitalized to start off the origination of loans with its own funds and did not start acting as a mere conduit until around 2001, based upon all appearances. WAMU eventually originated almost $1 Trillion in loans despite the fact that it lacked the resources to make those loans. Likewise Countrywide, on a much larger scale was only a conduit rather than a lender for the many trillions of dollars that were originated using the Countrywide “platform.”
In both cases the loans, by all accounts, were presold or contemporaneously sold into the secondary market the moment the “borrower” signed papers that led to doom. In the case of Countrywide, MERS was used extensively, to hide the fact that there were no transactions in which anyone actually bought the loans because the loans were already paid for with investor funds. That’s why you get answers from the “corporate representative” in court saying “Fannie Mae [or Freddie Mac] was the investor “from the start.” That has been accepted in courts across the land despite the fact that the GSE’s were never direct lenders. Their only role at the origination was as guarantor, if that.
So the upshot of all this is that the mega banks are playing musical chairs as servicers and trustees, to be sure, but also playing games with corporate entities such that they shield themselves from violations of Federal and state lending laws. BOA did not merge with Countrywide or BAC (which is a mere name change of Countrywide). CW merged with Red Oak merger Corp. and BOA claims that Red Oak was a wholly owned subsidiary. There is nothing nefarious about forming a subsidiary to facilitate an acquisition. But what is wrong is that when BOA says it is a “Successor by merger” to Countrywide, it is no more true than Chase’s claims that it is the successor by merger to WAMU and no different than the false claims of OneWest as to IndyMac. In each instance there MAY have been a “merger” but in none of them were loans acquired because they had already been sold.
There were no assignments and there was no payment for the loans. The transaction that they have successfully argued in court should be legally presumed to exist, does not in fact exist. The presumption is in direct contradiction to the factual truth.
https://www.vcita.com/v/lendinglies to schedule, leave message or make payments.

Chase Loses on Assignment and Assumption Argument with WAMU

A purchase and assumption agreement was not enough to prove JPMorgan Chase Bank N.A.’s legal standing in a foreclosure case before the Fourth District Court of Appeal.
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For a description of our services  click here: https://wordpress.com/post/livinglies.wordpress.com/32498
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THE FOLLOWING ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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see http://www.dailybusinessreview.com/law-news/id=1202753997800/JPMorgan-Chase-Loses-Foreclosure-Case-After-5-Debt-Sales?mcode=1202617860989&curindex=2&slreturn=20160315114531

Congrats to Attorney Ricardo Corona, Esq., the one who won this case.

On the road today.

I just wanted to point out that what I had testified 8 years ago in a class action is pretty much well-settled now, despite the nagging naysayers that always emerge when confronted with an observation that conflicts with their assumptions. WAMU originated around $1 trillion in loans. Any cursory overview of their financial statements would show that they could not possibly have loaned even a substantial fraction of that amount. It follows that all of them were pre-funded through conduits of conduits who were illegally using investor money obtained under false pretenses.

For most of the loans, therefore, WAMU never owned them because they were never the lender. The rest were “sold” (without ever receiving one cent of consideration) into the secondary market where they were subject to false claims of securitization. The financial equivalent of a house of mirrors.

Any three year old understands that if you give away that tasty apple you don’t have it anymore. So when the FDIC took over WAMU, who had virtually no assets, and then combined with the US Trustee in bankruptcy to sell the servicing rights and other services of WAMU, Chase was the buyer of everything EXCEPT the loans. No assignments exist because none were executed. I spoke to Richard Schoppe the FDIC Trustee who directly confirmed this to me years ago.

It therefore makes sense that the paperwork used in court is fabricated, forged or irrelevant to ownership, authority or even balances. In a case Patrick Giunta and I won about a year ago, a veteran Judge ruled that the Trust never owned the loan, that the transfer  documents were meaningless, that the “new servicer” had no right to service the loan, and that Chase probably owed our client money for fooling around with the escrow account. Lawyers for US Bank as trustee for the inactive REMIC Trust tried using all kinds of documents including brand new powers of attorney that said nothing of value.

The “WAMU” notes, by the way, were mostly destroyed. Almost all of the notes you see today and represented as originals would not survive a real forensic examination. Many of the loan documents were printed and mechanically signed within hours or days of being presented in court as the originals signed by the homeowner. That is why I always caution against admitting the signature — it usually isn’t the original signature but it sure looks like it. Now Chase is walking this practice back because the executives wish to avoid civil and maybe other prosecution. So they are using “substitutes” for the notes.

“Because they didn’t have possession of the note, they had to rely on the purchase and assumption agreement, which the Fourth DCA found insufficient,” said defense attorney Ricardo M. Corona Jr. of the Corona Law Firm in Miami.

About That Chase-WAMU Deal

Imagine my surprise when I recently went to the FDIC website, clicked on FOIA at the bottom of the page, then went to Reading Room and looked again at the Chase-WAMU-FDIC-US Trustee Purchase and Assumption Agreement. Having previously read and studied it I was attempting to direct someone to the language that showed that no loans were purchased from WAMU basically because there were no loans in WAMU’s inventory. Staring me in the face was an entirely different document bearing the same date as the one that I had previously seen. Anyone who has an explanation of this is invited to write to me at neilfgarfield@hotmail.com.

In the interim between my first reading of the agreement and now, I had several conversations including the FDIC receiver who was appointed to “resolve” the WAMU bankruptcy. The receiver (Schoppe) told me that no loans had been purchased or listed as part of the Purchase and Assumption Agreement. He also told me that an assignment did not exist and that no other document from the Trustee in the WAMU bankruptcy or the FDIC receiver existed showing the purchase of any loan. And he told me that the effective consideration paid by Chase was less than zero because Chase received around $2 billion in tax refunds due WAMU, which more than offset the purchase price. In fact, in the version I previously read, the consideration was stated as “Zero.”

With that in hand I disseminated information and used it in court to show that Chase had not in fact purchased loans but had instead purchased servicing rights. As the plot thickened, it turned out that those servicing rights were granted by Pooling and Servicing Agreements for REMIC Trusts that never acquired any loans. With no loans in the trust, the PSA grant of servicing rights was meaningless.

And if you look at the statements from Chase to their shareholders and press releases there is no evidence they acquired the loans. Nonetheless tens of thousands of people, perhaps hundreds of thousands of people, lost their homes on the presumption that Chase was in fact the creditor. They were threading a nonexistent needle with nonexistent facts. And in litigation it became apparent that this was the case because they tried to introduce “Powers of Attorney” in lieu of the PSA to support their contention that SPS was now the servicer of most of those loans. But they didn’t quite make out their case when it came to determining whether the Plaintiff in the foreclosure action was ever a creditor. So they lost. But for every one they lost, less astute judges were granting them foreclosures by the thousands.

And if you look at articles like the one in the link below you will see that while it looks like they are talking about loans they are actually talking about securities from “securitizations” that do not exist — i.e., the loans were never acquired by the REMIC Trusts.

And THAT leaves us with the question of where did the alleged loans go? The trust doesn’t have it, the certificate holders in the empty trust don’t have it and neither does Chase. Judges have been inclined to simply say that all this complexity is irrelevant, in an attempt to clear their docket. But they have done both the borrowers and the investors a disservice. And they did the government a big disservice. My answer to the question I pose is that the loans didn’t go anywhere because, in the legal sense, they never got started in the first place. (No consummation). If the party who funded the “loan” was not present in the documents or by proxy, then the party who funded the loan is not “in privity” (i.e., part of the loan contract) with the borrower. And since the party whose name appears on the loan documents was neither a lender or a creditor of the borrower, they were merely the “holder” of the document subject to borrower’s defenses to the “transaction” — namely no consideration.

And THAT my friends is the reason for all the fabricated, forged, back-dated and “found” documents and notes. The banks had to invent what the courts wanted to see.

So the overall answer is that Chase is neither a creditor nor the authorized servicer of anyone because nobody actually “owns” the loan. Pension funds and other investors clearly have a right of action against the Investment banks that sold them bogus mortgage backed securities that were neither securities nor mortgage backed. And those investors might have some action in equity against borrowers, but not a right of enforcement of the mortgage which never should have been recorded in the first place. Of course that probably will never happen because the investment bank pocketed the money that was supposed to go into the REMIC Trusts. Huge groups of investors in multiple “REMIC Trusts” had their money commingled by the investment bank who now has no way of figuring out whose money is in what “loan.” Thus there is no loan contract, and there could never be standing by anyone other than either a true creditor, which does not appear to exist, or a holder in due course, which cannot exist.

The reason why the banks are doing everything to resist proof of payment is that there was no payment anywhere in their chain. In a word, there was nobody to pay because nobody in their chain had anything to sell. Hence there were no purchases and there were no sales, making the assignments and endorsements fraudulent documents. If they had evidence of a purchase they would claim to be holder in due course which enables the holder to enforce against the party who signed the note and mortgage regardless of any defenses the borrower might have had against the “lender” or the “successors.”

And THAT, my friends, is why nobody from Wall Street is filing a lawsuit to vacate rescissions that might be years past the three year limitations. They have no standing — i.e., they don’t have a credible party who can claim to be a creditor and they can’t use the note and mortgage because they are void by operation of law. It is the absence of such lawsuits that corroborates what I am saying. In a flash they could easily vacate the rescission if they could only show that they had any right to be in court by reference to real transactions instead of the fake ones they are using in foreclosures.

The correction for this is simple to say: create new servicers that have full authority to interact with the defrauded investors and the hapless borrowers who were pawns in the securitization scam that was eventually dubbed “Securitization Fail” by Adam Levitin.

Just look at the following article and see how Chase twisted itself and the government into a mental pretzel:

see http://www.ritholtz.com/blog/2013/03/jpm-wamu/

Chase: $33 Billion in Fines and Settlements and It’s Business As Usual.

4closurefraud.org has compiled an interesting list of the “Cost of doing business” in the fraudulent corrupt world of falsely securitized loans. To date, according to this list Chase has paid $33,318,000.50. And they are considered to be a strong bank because they have, so far, gotten away with financial murder. But as the new film, “The Big Short” will show, fraud “Always goes south.”

The big question is when people actually come to understand that there was no loan what will happen? It wasn’t a gift and it wasn’t loan, so what is it? The fact is that the banks stole investors money and then put some of it use for the benefit of the banks and not the investors. They trapped investors into deals they never wanted and did the same to borrowers. The rest of the money they kept as “trading profits.”

If the banks were to prevail the new law would be that you can steal money, make a deal, and enforce it against both the person from whom you stole the money and the person who thought they were getting a loan when in fact they were being used as a pawn in fraudulent scheme to steal the identity of the borrowers. What a ride!

And the next question is how much should be awarded as a punitive damage award? $33 Billion has not been enough to even make Chase blink.

Also see http://4closurefraud.org/2015/09/22/the-big-short-trailer-2015-thebigshort/

JPMorgan’s Fines To Date: The Cost of Doing Business
http://4closurefraud.org/2015/06/03/jp-morgans-fines-to-date-the-cost-of-doing-business/

Chase Found Guilty (AGAIN) for Fabricating and Uttering False Documentation: CA Appeals Award $250,000+ Attorney Fees

For further information please call 954-495-9867 or 520-405-1688.

This article is not a substitute for a legal opinion from an attorney licensed to practice in the jurisdiction in which your property is located. Get a lawyer.

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see http://www.housingwire.com/articles/30540-chases-fraudulent-foreclosure-court-says-executive-falsified-documents

In January Patrick Giunta and I won a case against US Bank, Chase and SPS. The basis was simple. The Trust never acquired the loan. Thus US bank failed to establish standing. The Plaintiff was US Bank as trustee for the certificate holders, but the real player was Chase who then slipped in SPS as a “Successor” to the “Servicing” of the a loan in which there were no servicing duties. At trial they tried coming up with new fabricated documents and the Judge refused to admit them into evidence. Not only were the documents fabricated but also the “business records” showing a mixed bag of tricks with reversals of payments received and money going in and out of escrow that clearly could not be reconciled. The robo-witness could not come up with a default date nor could he reconcile the amount demanded for reinstatement with any terms of the loan.

Why was Chase operating behind the scenes creating these bogus claims? Also a simple answer. They wanted to stop making “servicer advance” payments, get the foreclosure and the sale and then eat up all the proceeds of sale with their false claims for fees, “recovery” of servicer advances and other claims.

In this case, reported by housing wire.com, there are many similarities:

JPMorgan Chase (JPM) created and recorded false documentation that showed the bank owned the mortgage of two California residents in order to foreclose on their home, the California Court of Appeals stated in a ruling Monday.

The Kalickis sued WaMu in 2009, alleging that the bank wrongfully foreclosed on their property in 2008. In 2010, Chase was granted a motion to intervene because it had purchased WaMu’s assets and held the interests in the loan.

The Kalickis amended their complaint to add Chase as a defendant and dismissed WaMu from the suit. In the complaint, the Kalickis alleged that Chase claimed ownership of their loan based on fraudulent documents.

In September 2012, a trial court in California ruled in favor of the Kalickis, stating that they owned the property and quieted the title in their favor.

The court also found that Chase had executed and recorded false documentation that showed that the ownership of the Kalickis’ mortgage was transferred to Chase. The court also ruled that a Chase executive created a document that “fraudulently represented that a prior assignment had been lost and that Chase owned the Kalickis’ mortgage.”

The lower court ruling voided all of the fraudulent documents and prohibited Chase from recording any false or misleading documents representing that it owned the Kalickis’ mortgage.

The court later found in the Kalickis’ favor and awarded them “reasonable” attorney fees in the amount of $255,135, stating the amount included feeds for reviewing and replying to Chase’s opposition briefs. Chase appealed that ruling, which led to the ruling Monday in the California Court of Appeals.

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