CA Appelate Decision: Damage Claims Against OneWest Goes to Jury, Summary Judgment reversed

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Sue Rose is my new administrative assistant. Danielle and Geordan do not work for livinglies or the Garfield firm. If you have placed an order which is unfulfilled please call the above numbers.


see CA Appeals OrderReversesMSJ

This case allows the jury to hear claims against OneWest for fraud, negligent misrepresentation, concealment, promissory estoppel, negligence, wrongful foreclosure, and violation of CA Business and Professional Code.

Here is an example of the obvious: a Judge takes no risk in denying a motion for summary judgment. It is only when the Judge grants summary judgment that there is a risk of reversal. With the current judicial climate changing in favor of borrowers, [including findings that the mortgage was absolutely void (invalid, non-perfected) where a sham nominee like MERS was used], Judges should take note that they are better off getting in front of the new trend and allow borrowers’ claims to be heard in a fair manner, observing the requirements of due process.

If the Banks collapse because they created 100 million invalid mortgages, that is not a problem for the Judge. And, as I have said many times here, there are 7,000 banks and credit unions that can take up whatever falls out of the mega banks as a result of investors and regulators realizing that the mortgages are void, the assets on bank balance sheets don’t exist or are far overvalued, and the liability section of the bank balance sheet is far understated as a result of damage claims like the one featured in this article.

As noted earlier on these pages, the threshold legal question has been reversed. The question now is what difference does it make if the borrower is in default if the foreclosing party had no right to foreclose?  The previous question that I heard hundreds of times from the Judges themselves was incorrect from the beginning. Their question was what difference does it make if the loan was securitized, as long as the borrower is in default? And that is where the dissenting justice in this case also got it wrong. He is still assuming that these loan transactions were in fact consummated as reflected in the alleged loan documents. The underlying assumption of the dissenting judge is obvious: that the loan contracts were fundamentally valid and whatever defects existed could be corrected before or even during foreclosure. NOT TRUE!

Here in this case is an example of how judges are now perceiving the entire loan transaction instead of just the claim of a default. And the result is that this California appellate court decided to let the case go to trial and allow a jury to hear the claims against OneWest, whose behavior was predatory from the start of when they acquired IndyMac business in 2008-2009.

The appellate court reversed the trial judge who had granted Summary Judgment for OneWest — a little plaything organized over a weekend by some of the richest people in the country. On a net basis they paid nothing and made a ton of money off of loss sharing and guarantee payments from the FDIC and and the GSE’s respectively. They also foreclosed on thousands of homes in cases where they had no interest in the loan and no right to foreclose, collect or do anything else with respect to the loan.

The hidden issue here is whether the Judge, having been reversed, will now allow the homeowner’s attorney to probe deep into the dealings of OneWest during discovery. I suspect that the trial judge will allow more liberal discovery after being reversed. And if that happens you might not never hear about this case again — as it joins the tens of thousands of cases that have been settled under seal of confidentiality. Essentially the strategy of the banks is that if they lose, they can always pay off the homeowner to keep the case from being publicized.

Modification Minefields as Foreclosures Resume Upward Volume

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Listen to Neil Garfield Show on Thursday February 26, 2015 at 6pm EDT., and each Thursday



New Jersey now has an upsurge of Foreclosure activity. It is on track to become first in the nation in the number of foreclosures. What is clear is that the level of foreclosure activity is being carefully managed to avoid attention in the media. Right now, foreclosure articles and the infamous acts of the banks in pursuing foreclosures is staying off Page 1 and usually not  anywhere in newspapers and other media outlets online and and in distributed media. The pattern is obvious. After one area becomes saturated with foreclosures, the banks switch off the flow and then move to another geographical area. This effectively manages the news. And it keeps foreclosures from becoming a hot political issue despite the fact that millions of Americans are being displaced by illegal foreclosures based upon invalid mortgage documents and the complete absence of any real creditor in the mix.

As foreclosures rise, the number of attempts at modification also rise. This is a game used by “servicers” to assure what appears to be an inescapable default because their marching orders are to get the foreclosure sales, not to resolve the issue. The investment banks need foreclosures; they don’t need the money and they don’t need the house —- as the hundreds of thousands of zombie foreclosures attest where the bank forecloses and abandons property where the borrower could and would have continued paying.

The problem with modifications is the same as the problem with foreclosures. It constitutes another layer of mortgage fraud perpetrated by the Wall Street banks, who are now facing increasingly successful challenges to their attempts to complete the cycle of fraud with a foreclosure.

The “servicer” whom nearly everyone takes for granted as having some authority to move forward is in actuality just as much a stranger to the transaction as the alleged Trust or “Holder”. The so-called servicer alleged authority depends upon powers conferred on it by the Pooling and Servicing Agreement of an unfunded Trust that never completed its mission to originate or acquire loans. If the REMIC trust doesn’t own the loans, the servicer claiming authority from the PSA is claiming vapor. If the Trust doesn’t own the loan then the PSA is irrelevant and the powers conferred in the PSA are pure vapor.

This brings us full circle to where we were in 2007-2008 when it was the banks themselves that claimed that there were no trusts and that there was no securitization. They were, as it turns out, telling the truth. The Trusts were drafted but never funded, never used as conduits and never engaged in ANY transaction in which the Trust had funded the origination or acquisition of loans. So anyone claiming authority from the trust was claiming authority from a fictional character — like Donald Duck.

Complicating matters further is the issue of who owns the loan when there is a claim by Freddie or Fannie. Both of them say they “have” the mortgage online when they neither “have it” nor “own it.” Fannie and Freddie were one of two things in this mess: (1) guarantors, which means they have no interest until after a creditor liquidates the property and claims an actual money loss and Fannie and Freddie actually pays off the loss or (2) Master trustee (and probably guarantor as well) for a REMIC Trust that probably has no greater value than the unfunded REMIC Trusts that are unused conduits.

Further complicating the issue with the former Government Sponsored Entities (Fannie and Freddie) is the fact that many banks have been forced to buy back or pay damages for violating underwriting standards and other types of fraud.

So how do you get or sign a modification with a servicer that has no authority and represents a Trust that has no interest in the loan? The answer is that there is no legal way to do it — BUT there is a way that would allow a legal fiction to be created if a Court issued an order approving the modification and declaring the rights of the parties. The order would say that XYZ is the servicer and ABC is the creditor or owner of the loan and that the homeowner is the borrower and that the modification agreement is approved. If proper notice (including publication) is given it would have the same effect as a foreclosure and would eliminate all questions of title. Without that, you will have continuing title problems. You should also request that the “Servicer” or “Trustee” arrange for a “Guarantee of Title” from a title company.

For the tricks and craziness of what is happening in modifications and the issues presented in New Jersey and other states click the link above.

Pleading Wrongful Foreclosure

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


The above link provides some very good guidance about pleading wrongful foreclosure although it appears to relate more to non-judicial states than judicial states. Remember that pleading fraud not only requires specificity but must be proved. The fact that the foreclosure filing was wrong is one thing but proving it was fraudulent rather than negligent or breach of contract is quite another.

If you are in active litigation then seeking sanctions might be either an alternative or something in addition to a separate lawsuit that arises when the case is decided in favor of the homeowner. As we have seen over the last few years, the grounds upon which these cases are decided in favor of the homeowner vary widely. Some decisions show that the acts of Deutsch or Chase or Wells Fargo or CitiMortgage et al were committed with full knowledge of what they were doing and that they were playing a shell game on the court and on the borrower. Those cases seem more conducive for fraud or spurious litigation or wrongful foreclosure. A decision based upon non-compliance with paragraph 22 — defects in the notice of default or right to reinstate or notice of acceleration might be the subject of abuse of process and might not. But without more in the proof or opinion from the Court the issue of fraud or intentional tort of some other kind seems more difficult.

Lack of standing means the homeowner wins but it does not mean necessarily that a case for fraud or wrongful foreclosure will be successful. The opposition will respond (affirmative defense) that the mistake in standing does not establish any entitlement to damages or any other action by the court because the right to foreclose still exists on behalf of some entity. But this defense is basically a crystal ball defense unless there is an established creditor who is legally pursuing collection on the loan.

Cases in which the bank blocked the sale or refinance of the property, or unilaterally tried to avoid a modification, or where the borrower was in fact current when actions by the bank forced the borrower into the illusion of default are the best cases, in my opinion, for a wrongful foreclosure.

In short, the law is murky on these issues because the whole truth about securitization “fail” has not been fully absorbed and processed by the judicial system. Right now most judges are making rulings based upon the assumption that securitization is irrelevant — a view that is inconsistent with the the alleged right of the beneficiary or mortgagee to initiate foreclosure and pursue collection. The rights to do so exist in the PSA which is often admitted into evidence. Thus the same court that accepts the PSA into evidence will often rule that the provisions that require servicer advances (hence, no default as per books of the Trust or Holders of Certificates) or PSA provisions that block any right to pursue foreclosure or collection by the Trustee or the Trust are not relevant. But the general rule is that once a document is admitted into evidence the parties can use it any way they want.

JDSupra: It isn’t the crime — it is the cover up

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Bryan G. Scott has written an excellent article that should be read in its entirety at

This article runs to the heart of the mortgage mess, the cover-up and the potential impact on past, present and future foreclosures in the application of statutes of limitation relating to causes of action for violation of the truth in lending act, statutory remedies, and common-law actions in negligence and fraud. Using law from construction defects suits, the author has identified key factors in challenging the defense of the statute of limitations.

Because of the obvious danger posed by dishonest defendants concealing defects to take advantage of the statute of repose, many state legislatures have enacted fraud exceptions to their statutes of repose. The North Carolina statute of repose explicitly excludes “any person who shall have been guilty of fraud, or willful or wanton negligence” in the course of improving real property, and further excludes any person who has “wrongfully concealed” the fraud or willful or wanton negligence. N.C. Gen. Stat. § 1-50(a)(5)(e). Establishing the fraud or willfulness or wantonness necessary to invoke this exception is a high standard and typically requires proving the contractor or developer deliberately covered or concealed defects that it knew or should have known of in conscious disregard of the eventual owner’s rights. Where the defendant’s actions do not rise to this level, the North Carolina statutory exception does not apply.

[EDITOR’S NOTE: We already know that the servicers, investment banks and originators committed various acts of forgery, perjury, fabrication, robo-signing and other things that NO BANK WOULD ACCEPT IF THEY WERE ON THE OTHER SIDE OF THIS ISSUE. They continue to hide the true facts, cover-up and otherwise obscure or wear down beleaguered homeowners. These are facts that lay solely within the care, custody and control of the banks who control the servicers and the trustees. The investors, trustees and borrowers are considered barred from even inquiring into the nonexistent transactions that lay at the base of the chain of fabricated documentation and the only way to get it is through illegal means that cannot be used in court or discovery which the courts won’t allow. In my opinion there are very few TILA violations where the statute of limitations should bar a claim because the basic facts of the loan contract have been withheld and intentionally misrepresented.]

The North Carolina Court of Appeals reaffirmed the application of equitable estoppel to construction defect disputes in its September 2014 decision in Trillium Ridge Condominium Association, Inc. v. Trillium Links & Village, LLC, No. COA14-183, ___ N.C. App. ___ (Sept. 16, 2014) (slip op.).

As explained in Trillium Ridge, equitable estoppel is available in proper cases under North Carolina law to bar a defendant from relying on either a statute of limitations or statute of repose. Equitable estoppel requires “(1) conduct on the part of the party sought to be estopped which amounts to a false representation or concealment of material facts; (2) the intention that such conduct will be acted on by the other party; (3) knowledge, actual or constructive, of the real facts.” White v. Consol. Planning, Inc. 166 N.C. App. 283, 305 (2004), disc. review denied, 359 N.C. 286 (2005). The party asserting the defense must have “(1) a lack of knowledge and the means of knowledge as to the real facts in question; and (2) relied upon the conduct of the party sought to be estopped to his prejudice.” Id. at 807. Furthermore, the plaintiff must have been induced to delay filing its legal action by the defendant’s misrepresentations. Jordan v. Crew, 125 N.C. App. 712, 720, disc. review denied, 346 N.C. 279 (1997).


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On tonight’s show we will talk about the alleged trusts that allegedly own the loans. In most cases, they do not own the loan nor do they represent the interests of the owners. The owners of the DEBT are the investors who advanced money to the investment bank that sold mortgage bonds to the investor (pension fund). There are two main reasons why this is important:

  1. An unfunded trust has no money to buy or originate loans. Therefore it is an improper party to bring any action to collect or enforce the debt. This is especially true when the unfunded trust has no legal claim to enforce the loan on behalf of the owners. The REMIC Trust should not be allowed to cause a foreclosure, or interfere with the rights of borrowers and investors. Its “servicers” have no right to collect money and when they do collect money from the borrower, they owe the money back to the borrower who paid it to the servicer. This has been discussed in cases highlighted on this blog over the last week.
  2. The unfunded trust is evidence of a fraudulent scheme in which the investors (pension funds) were tricked into advancing money to an investment bank who then misused the money, didn’t deliver it to the trust that issued the mortgage bonds that were sold, and then acted as a conduit between the investors and the borrowers — without either one knowing what was really happening. In a foreclosure, this means that the alleged enforcement of the loan is really furtherance of the fraudulent scheme against investors. Raising this issue does NOT mean there is no debt. It means, in most cases, that foreclosure is not an option because the perpetrators of the fraud and the initiators of the collection and enforcement of the alleged “loan” are one and the same. Hence the Court SHOULD be interested in not being part of a fraudulent scheme. It is a classic case of unclean hands.

The issue is proof and mores specifically the willingness of the court to let you prove your case. This comes down to pleading, discovery, motions to compel that spell out your narrative for the case and investigation through forensic auditors and private investigators. Unfunded REMIC Trusts represent a potential attack against the party initiating foreclosure that can be fatal to their claim if properly presented.

As a general observation these attacks are met with claims of presumptions when dealing with negotiable paper, and the claim that the borrower has no standing to raise the issue. But the borrower clearly does have standing to raise the issue if the borrower is claiming return of all money paid and claiming that the foreclosure action is part of a fraudulent scheme to the detriment of the real creditor and the detriment of the borrower, both of whom under Federal Law are required to pursue options for modification or settlement.

And the legal presumptions only apply to paper that is truly negotiable and where there is no evidence of trustworthiness or lack of credibility. The recent transfers from Chase and other entities to SPS are not really transfers of servicing rights. The “loan” is clearly already declared to be in default — making the claim of negotiable paper (and the presumptions) moot. So the entrance of SPS or another “servicer” under these circumstances is just another layer to fool the court and the borrower.

They are merely hiring SPS to

(a) enforce, because SPS is not processing payments from the borrower nor making payments to the investors (that is done by Chase or whoever is the the named servicer in the PSA) and

(b) create the illusion of business records by having an SPS representative testify that the business records of SPS should be admitted because SPS examined the prior records of the prior servicers and found them to be correct in what they call a “boarding” process. This is a blatant attempt to circumvent the rules of evidence. Both the attempt at creating legal presumptions regarding the note and mortgage and the attempt to use the business records of an “enforcer” posing as a “servicer” should be rejected.


Az Federal Judge Strikes at Heart of Nonjudicial Foreclosure, Denies OneWest Motion to Dismiss

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


See OWB CASE Buffington v USBank_MTD Denied incl FDCPA 28USDC AZ


A Federal Judge upheld a Complaint against OneWest on all counts except fraud. Actually the Judge was doing the homeowner a favor because the burden of proof on fraud is clear and convincing evidence whereas the burden of proof for the rest of the causes of action is only a preponderance (50% + 1) of the evidence. If it is more likely than not that the homeowner is right on the multi-count complaint that has now survived dismissal, the homeowner wins and the damages goes to the jury to jury to decide how much that should be. TRESPASS might also require a higher burden of proof. During the litigation, the homeowner will be able to inquire and potentially receive the necessary facts to support a fraud claim as well.

This is a dramatic reversal — lawsuits just like this one were previously dismissed in Az Federal Court. One of them was dismissed after 14 months of non-action by the court.



COUNT 3 UPHELD FOR FALSE DOCUMENTS — Plaintiffs suffered false foreclosure recordings on their real property title record, additional damage to their credit reputation, and false late fees and penalties, as well as attorney fees and costs.

COUNT 4 UPHELD FOR PAYMENT/DISCHARGE/ SATISFACTION — based upon receipt of FDIC loss share payments that were intentionally withheld and therefore causing a misrepresentation to borrower as to the the existence of a default or the actual amount of the balance due to the actual creditor.






Levitin and Yves Smith – TRUST=EMPTY PAPER BAG

Living Lies Narrative Corroborated by Increasing Number of Respected Economists

It has taken over 7 years, but finally my description of the securitization process has taken hold. Levitin calls it “securitization fail.” Yves Smith agrees.

Bottom line: there was no securitization, the trusts were merely empty sham nominees for the investment banks and the “assignments,” transfers, and endorsements of the fabricated paper from illegal closings were worthless, fraudulent and caused incomprehensible damage to everyone except the perpetrators of the crime. They call it “infinite rehypothecation” on Wall Street. That makes it seem infinitely complex. Call it what you want, it was civil and perhaps criminal theft. Courts enforcing this fraudulent worthless paper will be left with egg on their faces as the truth unravels now.

There cannot be a valid foreclosure because there is no valid mortgage. I know. This makes no sense when you approach it from a conventional point of view. But if you watch closely you can see that the “loan closing” was a shell game. Money from a non disclosed third party (the investors) was sent through conduits to hide the origination of the funds for the loan. The closing agent used that money not for the originator of the funds (the investors) but for a sham nominee entity with no rights to the loan — all as specified in the assignment and assumption agreement. The note and and mortgage were a sham. And the reason the foreclosing parties do not allege they are holders in due course, is that they must prove purchase and delivery for value, as set forth in the PSA within the 90 day period during which the Trust could operate. None of the loans made it.

But on Main street it was at its root a combination pyramid scheme and PONZI scheme. All branches of government are complicit in continuing the fraud and allowing these merchants of “death” to continue selling what they call bonds deriving their value from homeowner or student loans. Having made a “deal with the devil” both the Bush and Obama administrations conscripted themselves into the servitude of the banks and actively assisted in the coverup. — Neil F Garfield,

For more information on foreclosure offense, expert witness consultations and foreclosure defense please call 954-495-9867 or 520-405-1688. We offer litigation support in all 50 states to attorneys. We refer new clients without a referral fee or co-counsel fee unless we are retained for litigation support. Bankruptcy lawyers take note: Don’t be too quick admit the loan exists nor that a default occurred and especially don’t admit the loan is secured. FREE INFORMATION, ARTICLES AND FORMS CAN BE FOUND ON LEFT SIDE OF THE BLOG. Consultations available by appointment in person, by Skype and by phone.


John Lindeman in Miami asked me years ago when he first starting out in foreclosure defense, how I would describe the REMIC Trust. My reply was “a holographic image of an empty paper bag.” Using that as the basis of his defense of homeowners, he went on to do very well in foreclosure defense. He did well because he kept asking questions in discovery about the actual transactions, he demanded the PSA, he cornered the opposition into admitting that their authority had to come from the PSA when they didn’t want to admit that. They didn’t want to admit it because they knew the Trust had no ownership interest in the loan and would never have it.

While the narrative regarding “securitization fail” (see Adam Levitin) seems esoteric and even pointless from the homeowner’s point of view, I assure you that it is the direct answer to the alleged complaint that the borrower breached a duty to the foreclosing party. That is because the foreclosing party has no interest in the loan and has no legal authority to even represent the owner of the debt.

And THAT is because the owner of the debt is a group of investors and NOT the REMIC Trust that funded the loan. Thus the Trust, unfunded had no resources to buy or fund the origination of loans. So they didn’t buy it and it wasn’t delivered. Hence they can’t claim Holder in Due Course status because “purchase for value” is one of the elements of the prima facie case for a Holder in Due Course. There was no purchase and there was no transaction. Hence the suing parties could not possibly be authorized to represent the owner of the debt unless they got it from the investors who do own it, not from the Trust that doesn’t own it.

This of course raises many questions about the sudden arrival of “assignments” when the wave of foreclosures began. If you asked for the assignment on any loan that was NOT in foreclosure you couldn’t get it because their fabrication system was not geared to produce it. Why would anyone assign a valuable loan with security to a trust or anyone else without getting paid for it? Only one answer is possible — the party making the assignment was acting out a part and made money in fees pretending to convey an interest the assignor did not have. And so it goes all the way down the chain. The emptiness of the REMIC Trust is merely a mirror reflection of the empty closing with homeowners. The investors and the homeowners were screwed the same way.

BOTTOM LINE: The investors are stuck with ownership of a debt or claim against the borrowers for what was loaned to the borrower (which is only a fraction of the money given to the broker for lending to homeowners). They also have claims against the brokers who took their money and instead of delivering the proceeds of the sale of bonds to the Trust, they used it for their own benefit. Those claims are unsecured and virtually undocumented (except for wire transfer receipts and wire transfer instructions). The closing agent was probably duped the same way as the borrower at the loan closing which was the same as the way the investors were duped in settlement of the IPO of RMBS from the Trust.

In short, neither the note nor the mortgage are valid documents even though they appear facially valid. They are not valid because they are subject to borrower’s defenses. And the main borrower defense is that (a) the originator did not loan them money and (b) all the parties that took payments from the homeowner owe that money back to the homeowner plus interest, attorney fees and perhaps punitive damages. Suing on a fictitious transaction can only be successful if the homeowner defaults (fails to defend) or the suing party is a holder in due course.

Trusts Are Empty Paper Bags — Naked Capitalism


Just as with homeowner loans, student loans have a series of defenses created by the same chicanery as the false “securitization” of homeowner loans. LivingLies is opening a new division to assist people with student loan problems if they are prepared to fight the enforcement on the merits. Student loan debt, now over $1 Trillion is dragging down housing, and the economy. Call 520-405-1688 and 954-495-9867)

The Banks Are Leveraged: Too Big Not to Fail

When I was working with Brad Keiser (formerly a top executive at Fifth Third Bank), he formulated, based upon my narrative, a way to measure the risk of bank collapse. Using a “leverage” ration he and I were able to accurately define the exact order of the collapse of the investment banks before it happened. In September, 2008 based upon the leverage ratios we published our findings and used them at a seminar in California. The power Point presentation is still available for purchase. (Call 520-405-1688 or 954-495-9867). You can see it yourself. The only thing Brad got wrong was the timing. He said 6 months. It turned out to be 6 weeks.

First on his list was Bear Stearns with leverage at 42:1. With the “shadow banking market” sitting at close to $1 quadrillion (about 17 times the total amount of all money authorized by all governments of the world) it is easy to see how there are 5 major banks that are leveraged in excess of the ratio at Bear Stearns, Lehman, Merrill Lynch et al.

The point of the article that I don’t agree with at all is the presumption that if these banks fail the economy will collapse. There is no reason for it to collapse and the dependence the author cites is an illusion. The fall of these banks will be a psychological shock world wide, and I agree it will obviously happen soon. We have 7,000 community banks and credit unions that use the exact same electronic funds transfer backbone as the major banks. There are multiple regional associations of these institutions who can easily enter into the same agreements with government, giving access at the Fed window and other benefits given to the big 5, and who will purchase the bonds of government to keep federal and state governments running. Credit markets will momentarily freeze but then relax.

Broward County Court Delays Are Actually A PR Program to Assure Investors Buying RMBS

The truth is that the banks don’t want to manage the properties, they don’t need the house and in tens of thousands of cases (probably in the hundreds of thousands since the last report), they simply walk away from the house and let it be foreclosed for non payment of taxes, HOA assessments etc. In some of the largest cities in the nation, tens of thousands of abandoned homes (where the homeowner applied for modification and was denied because the servicer had no intention or authority to give it them) were BULL-DOZED  and the neighborhoods converted into parks.

The banks don’t want the money and they don’t want the house. If you offer them the money they back peddle and use every trick in the book to get to foreclosure. This is clearly not your usual loan situation. Why would anyone not accept payment in full?

What they DO want is a judgment that transfers ownership of the debt from the true owners (the investors) to the banks. This creates the illusion of ratification of prior transactions where the same loan was effectively sold for 100 cents on the dollar not by the investors who made the loan, but by the banks who sold the investors on the illusion that they were buying secured loans, Triple AAA rated, and insured. None of it was true because the intended beneficiary of the paper, the insurance money, the multiple sales, and proceeds of hedge products and guarantees were all pocketed by the banks who had sold worthless bogus mortgage bonds without expending a dime or assuming one cent of risk.

Delaying the prosecution of foreclosures is simply an opportunity to spread out the pain over time and thus keep investors buying these bonds. And they ARE buying the new bonds even though the people they are buying from already defrauded them by NOT delivering the proceeds fro the sale of the bonds to the Trust that issued them.

Why make “bad” loans? Because they make money for the bank especially when they fail

The brokers are back at it, as though they haven’t caused enough damage. The bigger the “risk” on the loan the higher the interest rate to compensate for that risk of loss. The higher interest rates result in less money being loaned out to achieve the dollar return promised to investors who think they are buying RMBS issued by a REMIC Trust. So the investor pays out $100 Million, expects $5 million per year return, and the broker sells them a complex multi-tranche web of worthless paper. In that basket of “loans” (that were never made by the originator) are 10% and higher loans being sold as though they were conventional 5% loans. So the actual loan is $50 Million, with the broker pocketing the difference. It is called a yield spread premium. It is achieved through identity theft of the borrower’s reputation and credit.

Banks don’t want the house or the money. They want the Foreclosure Judgment for “protection”



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