Investigator Bill Paatalo BlockBuster Finding: WaMu Investor Code “AO1″ Revealed – Chase Stipulates It Represents “WaMu Asset Acceptance Corp.”

 http://bpinvestigativeagency.com/wamu-investor-code-ao1-revealed-chase-stipulates-it-represents-wamu-asset-acceptance-corp/

(DISCLOSURE: This article is not intended to be construed as legal advice. Seek advice from a licensed attorney in your jurisdiction regarding any of the information provided below.)

High praise to Attorney Ron Freshman in San Diego, CA and his paralegal Kimberly Cromwell who recently obtained this remarkable “Stipulation of Fact” from JPMorgan Chase Bank’s counsel. (See #8 – Chase Stipulated Fact – AO1 – WMAAC).  Last November, I wrote the following article seeking the identity of private investor “AO1.” (See: http://bpinvestigativeagency.com/who-is-private-investor-ao1-jpmorgan-chase-refuses-to-reveal-the-identity-of-this-investor/).

Thanks to the aggressive prosecution and discovery efforts put forth by Attorney Freshman and his team, the answer has now been revealed. JPMorgan Chase’s counsel has stipulated in paragraph #8, “Investor code AO1 in the Loan Transfer History File represents WaMu Asset Acceptance Corporation.

Folks, I have opined against Chase for years now that this investor code does not signify “banked owned” loans on the “books of Washington Mutual Bank,” but rather a securitization subsidiary of Washington Mutual, Inc. I’ve been attacked by Chase who has argued vehemently that my opinion is simply dead wrong, and has sought to have my testimony stricken. Well it appears as though I’ve now  been vindicated! This stipulated fact runs contrary to Chase’s long standing position, in thousands of foreclosures across the United States, that it acquired “AO1″ loans because they were “on the books” of  “Washington Mutual Bank” per the Purchase & Assumption Agreement (PAA) with the FDIC. This has been a lie, as these “AO1″ loans could not have been a part of the PAA due to the sale and securitization of said loans by WMB through its “off-balance sheet activities.” More so, Chase’s use of the FIRREA argument against homeowners for loans not on WMB’s books may have suffered a tremendous blow here.

It has long been my opinion that testimony put forth by Chase witnesses, like the following by Peter Katsikas, have been downright false. Again, more vindication. Here’s what Katsikas had to say under oath regarding investor code “AO1″:

PETER KATSIKAS,

called as a witness, having been duly sworn, testified as follows:

(Beginning – P. 43):

Q. And do you know whether or not at the time of the acquisition of the assets that are identified in the purchase and assumption agreement with the FDIC to Chase dated September 2008, did it include a list of the loans that Chase was acquiring?

A. I mean, I didn’t see an actual list, but there’s — it’s in the system. It’s in the MSP servicing — that’s a system the bank uses to service the accounts.

Q. Is it your testimony that the Freeman loans were owned by Washington Mutual F.A. at the time the bank failed?

A. Yes.

Q. Is it your testimony that Washington Mutual Bank or some subsidiary of the bank was not servicing those loan at the time?

MR. HERMAN: Can you read that back, please.

(Question read)

MR. HERMAN: At what time?

MR. WRIGHT: Prior to September 25, 2008, between the time they were made and September 25, 2008.

A. The servicer was Washington Mutual F.A.

Q. Okay. Was there an investor?

A. It was bank-owned. It’s always been bank-owned.

Q. It’s always been bank-owned?

A. Correct.

Q. And you know that because?

A. I reviewed Chase’s books and records.

Q. What in the books and records would indicate to you that it was

bank-owned versus not bank-owned?

A. Well, they’re through the investor screens and also the ID codes,investor ID codes.

Q. Okay. And the ID codes are letters, aren’t they?

MR. HERMAN: Objection.

A. They consist of letters and numerals.

Q. Okay. And what letters would indicate an investor?

A. There’s three digits or three characters.

Q. Two letters and a number?

A. No, it could be a mixture of.

Q. So what three characters — well, let’s put it another way. What characters would indicate a Chase-owned asset — a WaMu-owned asset?

Excuse me.

A. For these two loans?

Q. Yes.

A. AO1.

Q. AO1?

A. Yeah.

Q. And that AO1 stands for what?

A. That’s just the three digit code, which is bank-owned.

Q. AO1?

A. Uh-huh.

(Recess)

Katsikas Depo Transcript

Bill Paatalo – Private Investigator – OR PSID# 49411
BP Investigative Agency, LLC
P.O. Box 838
Absarokee, MT 59001
Office: (406) 328-4075

SEC “Cease & Desist” Reveals Deception – Wilmington Savings Fund Society, FSB as Trustee / “Transfer Agent” Was Acting On Behalf Of Unknown Investors

SEC “Cease & Desist” Reveals Deception – Wilmington Savings Fund Society, FSB as Trustee / “Transfer Agent” Was Acting On Behalf Of Unknown Investors

On September 22, 2016, the SEC issued the following “Cease & Desist” order against “Wilmington Savings Fund Society, FSB” who was the successor to “Christiana Bank & Trust Company.” (See: Wilmington Savings Fund Society – SEC Cease and Desist 2016 ). The following excerpts spell out quite clearly that this entity has been operating as a Trustee / “Transfer Agent” on behalf of unverifiable investors. WSFS’ failure to maintain “books and records,” as well as its filing of records that were “inaccurate and/or incomplete,” means it is very likely that this Trustee represented no one.

 

I.

The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities Exchange Act of 1934 (“Exchange Act”), against Wilmington Savings Fund Society, FSB (“WSFS” or “Respondent”).

 

Summary

1. These proceedings arise from WSFS’ fundamental failure to comply with the rules and regulations that govern the conduct of transfer agents. Transfer agents are gatekeepers who provide critical services to issuers and their shareholders, including maintaining accurate shareholder records, timely processing of transfers, and responding to shareholder inquiries. To that end, issuers of securities, including corporations with securities registered under Section 12 of the Exchange Act, engage transfer agents to perform various recordkeeping functions.
2. Pursuant to Section 17A of the Exchange Act, the Commission promulgated rules governing services provided by registered transfer agents (the “Transfer Agent Rules”). As a registered transfer agent, WSFS was required to, among other things: (1) keep its registration current and accurate and to file annual reports regarding its transfer agent services; (2) make and maintain certain books and records for each issuer to which it provided transfer agent services; and (3) have written policies and procedures with respect to certain of its transfer agent services.
3. WSFS commenced acting as a transfer agent in 2010. From that time through 2013, however, WSFS failed to keep its registration current and accurate and failed to file an accurate annual report of its services. In addition, although WSFS maintained some records for issuers to which it provided transfer agent services, it did not maintain all of the records or create all of the reports required by the Transfer Agent Rules. Further, those records WSFS did maintain were inaccurate and/or incomplete. Finally, during this period, WSFS did not have any written policies or procedures to ensure compliance with the Transfer Agent Rules and WSFS employees were unaware of the Rules and received no training regarding the Transfer Agent Rules until 2013.

 

Background

7. On December 3, 2010, WSFS acquired Christiana Bank & Trust Company (“CB&T”). CB&T ceased to exist and WSFS began performing the services formerly performed by CB&T, including transfer agent services, under the name Christiana Trust. WSFS provided transfer agent services, as defined by Section (3)(a)(25) of the Exchange Act, to a number of clients, including to at least one issuer with a security that was registered under Section 12 of the Exchange Act.
8. The transfer agent services undertaken by WSFS included maintaining master securityholder files (i.e., official lists of individual securityholder accounts), registering ownership and the transfer of ownership of securities, monitoring the issuance of securities, and handling, processing and storing paper securities certificates. WSFS Filed Inaccurate Transfer Agent Registration and Annual Reporting Forms in Violation of Sections 17A(c)(1) and 17A(d)(1) and Rules 17Ac2-1 and 17Ac2-2 Thereunder
9. Section 17A(c) of the Exchange Act requires transfer agents to register with the Commission or, if the transfer agent is a bank, with a bank regulatory agency, before providing transfer agent services. Pursuant to Section 17A(c)(2), to register, a bank transfer agent files a registration form (Form TA-1), which provides basic information about the transfer agent’s business and activities. The Form TA-1 must be kept current and updated on an as-needed basis. If any of the information on the Form TA-1 becomes inaccurate, misleading or incomplete, Rule 17Ac2-1(c) requires the transfer agent to file an amendment to the form within 60 days of the occurrence. Rule 17Ac2-2(a) requires each registered transfer agent to also file an annual report with the Commission on Form TA-2, describing its transfer agent activities. These forms provide important information about the organization and activities of registered transfer agents, which allows the Commission to more effectively and efficiently monitor the activities of registered transfer agents and to evaluate compliance with the Transfer Agent Rules.
10. On December 3, 2010, WSFS acquired CB&T and immediately began performing the transfer agent services that had previously been performed by CB&T. However, although it was required to amend its Form TA-1 within 60 days of any change that would render the form “inaccurate, misleading, or incomplete,” WSFS did not file a Form TA-1 until June 22, 2011, six months later. Moreover, when WSFS filed its untimely Form TA-1, it inaccurately listed the name of the entity performing transfer agent services as “Wilmington Savings Fund Society, FSB,” rather than “Wilmington Savings Fund Society, FSB D/B/A Christiana Trust.” This is inaccurate because WSFS markets its transfer agent services under the name Christiana Trust.
11. In addition, WSFS did not file an annual Form TA-2 for the year ending December 31, 2010, even though it had operated as a transfer agent since acquiring CB&T earlier that month.
12. Further, when WSFS finally filed its first annual Form TA-2 on April 16, 2012, for the year ending December 31, 2011, WSFS failed to identify the correct number of individual securityholder accounts for which it maintained master securityholder files. WSFS was unable to provide the correct number on its Form TA-2 because it could not identify all of the issuers to which it provided transfer agent services. WSFS Failed to Maintain Accurate Books and Records in Violation of Sections 17(a) and 17A(d)(1) and Rules 17Ad-10 and 17Ad-11.
13. Pursuant to Rule 17Ad-10(e), a recordkeeping transfer agent must keep an accurate control book, which is a record or other document that shows the total number of shares (in the case of equity securities) or the principal dollar amount (in the case of debt securities) authorized and issued by the issuer.

 

14. In addition, Rule 17Ad-10(a) requires a recordkeeping transfer agent to accurately post transactions to the master securityholder file with details, such as the certificate number, number of shares or principal dollar amount, the securityholder’s registration, the address of the registered securityholder, and the issue and cancellation dates for the security (“Certificate Detail”), about the securities issued, purchased, transferred or redeemed. When there is a discrepancy between the Certificate Detail for a security transferred or redeemed and the Certificate Detail posted to the master securityholder file, Rule 17Ad-10(a)(1) requires that the details of that discrepancy must be maintained in a subsidiary file. The transfer agent must diligently and continuously seek to resolve those differences and then promptly update the master securityholder file.
15. A transfer agent’s failure to perform its duties promptly, accurately, and safely can compromise the accuracy of an issuer’s securityholder records, disrupt the channels of communication between issuers and securityholders, disenfranchise investors, and expose investors, securities intermediaries, and the securities markets as a whole to significant financial loss.
16. WSFS maintained master securityholder files for several issuers to which it provided transfer agent services; however, those files contained multiple inaccuracies. For example, for certain issues, WSFS failed to maintain accurate records of the outstanding balances and registered incorrect securityholder names in the master securityholder files.

 

17. Further, WSFS did not maintain subsidiary files or a control book for any issuers to which it provided transfer agent services and, therefore, WSFS could not determine whether, for any issuers, there were differences between the total number of shares or total principal dollar amount of securities in the master securityholder file for a particular issue and the number of shares or principal dollar amount in the control book for that issue (one type of a “Record Difference”). WSFS was required to report Record Differences that existed for more than 30 days (“Aged Record Differences”) and exceeded certain aggregate dollar thresholds that are established by Rule 17Ad-11 of the Transfer Agent Rules. WSFS was unable to determine whether Aged Record Differences existed and, therefore, was unable to determine whether it was required to report any Aged Record Differences. Indeed, WSFS’ account administrators did not even know that WSFS was required to maintain subsidiary files or a control book.

 

This comes as no surprise to those of us who have been fighting these “straw-man Trustees.” I believe, based on further “Transfer Agent – TA-2″ filings I have reviewed, that this is common amongst all trustees. For example, take a look at this “TA-2″ filing for Transfer Agent – U.S. Bank Trust, N.A. from back in 2008 which reported over 8,000 “Lost Securityholder Accounts.”

https://www.sec.gov/Archives/edgar/data/1145893/000114589309000002/xslFTAX01/primary_doc.xml

If the Trustees / Transfer Agents have no verifiable records of who owns the underlying certificates, it becomes crystal clear that the servicers and trustees represent no one.

 

Bill Paatalo
Oregon Private Investigator – PSID#49411

BP Investigative Agency, LLC
P.O. Box 838
Absarokee, MT 59001
Office: (406) 328-4075

The Neil Garfield Show at 6pm EST: Contrived complexity from the usual suspects: MGIC master insurance pools

Thursdays LIVE! Click in to the The Neil Garfield Show

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

Tonight California attorney Charles Marshall hosts the show and is joined by Investigator Bill Paatalo.  Paatalo recently stumbled upon an insurance policy that was issued for loans in a trust, but discovered that the trust no longer existed due to a payoff of all loans within the trust years before by Mortgage Guarantee Master Policy (MGIC). However, that didn’t stop BNY Mellon “as Trustee” from filing a foreclosure complaint on behalf of the dissolved trust.

The insurance agreement is a “treasure trove” of insight as to the secret workings between the servicers (who are named as the “Insured”) and MGIC.

The Plaintiff not only ceased to exist due to a merger, but the trust itself was terminated with all loans paid off long before the filing of the complaint.

Bill Paatalo and California attorney Charles Marshall believe that MGIC issue is yet another example of contrived complexity by lenders/’trusts’/purported trustee’s and ‘beneficiaries’ in mortgage transactions, particularly when recording documents pursuant to taking properties to sale, or when subverting the credit bidding rules at sale.

It is likely that the insurance carrier is calling the shots with modifications and foreclosures because the policy states approval must be provided by the insurer.

Is this another sham wherein the instructions from the banks are filtered through yet another layer of complexity?  Homeowners should inquire if there is an insurance policy on the purported trust that claims to own their loan.  Radian and AIG also offer policies like MGIC.

 

Charles Marshall, Esq.

Law Offices of Charles T. Marshall

415 Laurel St., #405

San Diego, CA 92101

cmarshall@marshallestatelaw.com

Phone 619.807.2628

 

Investigator Bill Paatalo

BP Investigative Agency, LLC
P.O. Box 838

Absarokee, MT 59001
Office: (406) 328-4075

bill.bpia@gmail.com

http://www.bpinvestigativeagency.com

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