How Much More Foreclosure Fraud Is Under Seal?
The NYT has a fascinating story about the $75,000 house that led to the GMAC deposition on robosigning that finally alerted the world to the extent of the fraud behind foreclosures. It’s worth reading for the description of Thomas Cox, a lawyer who volunteers at legal assistance to make right for his years of doing foreclosures, the description of the errors GMAC made even after the court started looking closely, and the detail that GMAC has now spent more on legal fees trying to foreclose on this house than the house itself is worth.
But I’m particularly interested in this:
Mr. Cox vowed to a colleague that he would expose GMAC’s process and its limited signing officer, Jeffrey Stephan. A lawyer in another foreclosure case had already deposed Mr. Stephan, but Mr. Cox wanted to take the questioning much further. In June, he got his chance. A few weeks later, he spelled out in a court filing what he had learned from the robo-signer:
“When Stephan says in an affidavit that he has personal knowledge of the facts stated in his affidavits, he doesn’t. When he says that he has custody and control of the loan documents, he doesn’t. When he says that he is attaching ‘a true and accurate’ copy of a note or a mortgage, he has no idea if that is so, because he does not look at the exhibits. When he makes any other statement of fact, he has no idea if it is true. When the notary says that Stephan appeared before him or her, he didn’t.”
GMAC’s reaction to the deposition was to hire two new law firms, including Mr. Aromando’s firm, among the most prominent in the state. They argued that what Mrs. Bradbury and her lawyers were doing was simply a “dodge”: she had not paid her mortgage and should be evicted.
They also said that Mr. Cox, despite working pro bono, had taken the deposition “to prejudice and influence the public” against GMAC for his own commercial benefit. They asked that the transcript be deleted from any blog that had posted it and that it be put under court seal. [my emphasis]
GMAC’s first response to this affidavit was a request to the judge to prevent it from being posted to the Toobz (presumably 4closureFraud.org). But the judge refused.
Stephan’s deposition was taken to advance a legitimate purpose, and the testimony elicited has direct probative value to this dispute. Attorney Cox did not himself take action other than to share the deposition with an attorney in Florida. That the testimony reveals corporate practices that GMAC finds embarrassing is not enough to justify issuance of a protective order. Further, Plaintiff has failed to establish that GMAC has been harmed specifically as a result of the dissemination of the June 7, 2010 deposition transcript, given that similarly embarrassing deposition testimony from Stephan’s December 10, 2009 Florida deposition also appears on the Internet, and will remain even were this Court to grant Plaintiff’s motion. Accordingly, because Plaintiff has failed to satisfy its burden of persuasion under Rule 26(c), its Motion for Entry of Protective Order is denied.
There are, we are learning, depositions all over the country showing that servicer employees committed outright fraud. But presumably, every time they’re taken, the servicer attempts to hide them behind claims of trade secrets.
How much more evidence of corporate law-breaking is hiding in foreclosure courts under seal?
They are behaving just like the government does. Trade secrets/state secrets. Good on Judge Powers. Too bad Judge Henry Kennedy [Uthman documents] didn’t do the same.
hear, hear
and thnak you emptywheel for this article
May I second(or third) that thank you for the link to the NYT piece?
It reminded me of how L’Affaire Abramoff was set in motion by a simple accounting issue raised by an obsure Indian tribe.
Ya never know!
I like that: making fraud and deceit and lying under oath into a trade secret.
Takes some balls.
Why not? The government does it all the time, not necessarily fraud, but criminal/incompetent conduct gets slapped with a “state secrets” label and poof! Problem solved.
Since the banks “own the place” why wouldn’t they treat their legal obligations with the same contempt?
Well, why not. DOJ routinely hides evidence of crime behind state secrets. The corporations are going to insist on any right the govt has, you know.
After all they’re just people, too.
Absolutely.
Part and parcel of a truly Fascist state.
the parade of horribles…
It also takes some balls to try to sweep the whole thing under the rug with statements like this:
But that’s exactly what they are arguing. It goes something like this: “Forget about what we did wrong, these deadbeats didn’t pay their mortgages and we’re going to foreclose and evict them whether we committed fraud or not.” Again, it’s the fault of the homeowners who bought more than they could afford. They really are going to continue to try to blame everything on the little guy.
Some quotes from a Reuters article via a dkos diary
Yup, I think the “procedural” part about that guys statement is that they’ve buried the paperwork that would prove that the previous steps in the chain were fraud too. A “procedural” fraud to hide another fraud.
As a collateral matter, one is compelled to think along the following lines:
So, we have to ask:
More questions than answers, so far. Inquiring taxpayers want to know.
–
* The complaint is captioned United States of America ex rel. [whistleblower’s name], plaintiff v. [fraudulent-acting defendant’s name], defendant. The “Ex rel.” term means “on the relation of”, as in the whistleblower relates the story to the government. For that reason, the whistleblowers presenting these False Claims Act suits are ordinarily called “relators”.
DOJ can, and regularly does, get multiple 6 months extensions of the period under seal to continue it’s review. FWIW. Don’t expect any Qui Tams to shooting out the other end of the pipeline in 60 days
I had no such expectation; I didn’t mention the whole idea of DoJ getting extensions b/c I didn’t want to confuse the issue.
I suppose the only way to find out – no practical way to get it out of DoJ – would be to start pinging the banksters themselves about their balance sheets and whether they accurately reflect any such qui tam exposure. But that kind of thing would likely fall under an exception to honest disclosure like Bushie imposed on the telcos to hide how much they were hauling in from warrantless wiretapping.
except via DA’s, AG’s, and those that pick them up from citizens first taking action. The drawback is, what beyond tax fraud is going to give rise to a cause of action?
I read not quite half of the depo from a servicer in FL posted by Cynthia, with the intention of reading the rest of it later. It is beyond embarrassing and on line. Incredible what these cheaters have done. I hope the whole lot of them will be forced to quit this foreclosure “business” and that we find out how much of these debts is on the books for numerous banks, each claiming it for their bottom line. Blaming the homeowners when it is bank fraud, I would like to know what percentage of the foreclosed homeowners have been taken to the cleaners.
Thanks for highlighting this article, Marcy. For whatever reason, in addition to wanting to know what’s going on, I am really curious about how all of this was exposed and how it came to a tipping point. You know that there were many, many people who knew this was going on but it never really saw the light of day. You have to wonder if a lot of people in the various financial services businesses aren’t in some kind of shock as they continue to operate this way.
Also, this:
This is so reminiscent of the situation with mortgage-backed securities in the ratings agencies where people from S & P (I think it was) admitted that they were pressured by their superiors to rate the bonds without seeing “the tape” which contained the paperwork behind the underlying mortgages. So they rubberstamped the bonds with a AAA without any sampling of the integrity of the packaged loans. I read about this shortly after the 9/08 meltdown. There was a series of emails published.
Isn’t there a case before SCOTUS in which it is being argued that corporations have the right to privacy, and can’t this be used for the purpose of sealing away potentially embarassing information such as the Stephan depo?
Yup. I’m hoping scribe comments on it, bc he’s been following that one closely.
If corp-rats are going to argue that rights like free speech and privacy apply to them, as artificial persons, they can damned well obey the same laws as us. Or they lose those rights, because they are NOT PEOPLE.
obama has become the cardinal richlieu of out times-
whatever is required for the benefit of the state and the president (and in fairness, the society) will be done
with the corollary
that harm done to individuals is never to be a consideration.
-“state’s secrets” filings in opposition to individuals seeking legal relief
-apparent lack of concern for individuals forced out of their homes (including an ineffective hamp program)
-orders to assinate specific citizens ( though this is probably pst ops)
-vindictive opposition to government whistleblowers
-an oil spill reimbursement program working too slowly and without generosity
-incarceration in guantanamo of individuals handed over to the u.s. for bounty fees
what have i missed???
Speaking of holding back your “Ace”,forthwith an excerpt from a YEAR ago:
Who OWNS Foreclosed U.S. Properties?,
Part II: the role of MERS Oct 26, 2009
In Part I, “Scam in the making”, I explained how Wall Street created the U.S. housing-bubble and its concurrent Ponzi-scheme – with the full assistance of its accomplices: U.S. rating agencies and U.S. regulators. I also explained why it had to be obvious before they started creating this bubble that it would end with an unprecedented wave of foreclosures.Because a big part of the bubble/Ponzi-scheme was “mortgage securitization” (which meant the bank originating the mortgage no longer held title to the mortgage), and because the U.S. financial crime syndicate knew there would be a huge wave of foreclosures, it had to invent an entity which could serve as a proxy in foreclosure proceedings – representing all of the players in these debt “daisy-chains”.This was why MERS was created in 1995. As I wrote in Part I, MERS is nothing more than a confidential electronic registry which exists only to “track mortgages and the changes of servicing rights and mortgage ownership”. In other words, it has no proprietary interest in these mortgages.
On a related subject, it was recently reported that the huge stash of money which Wall Street has in a “savings account” with the Federal Reserve now exceeds $1 trillion. Doesn’t it seem odd that with Wall Street banks regularly bragging about how much money there are making with their own, in-house trading that they would leave a trillion dollars sitting in a savings account during this fantasy-rally in U.S. markets (which they helped to engineer)?
Obviously the banksters dare not admit to their shareholders or the media that they have stockpiled a trillion dollars as a down-payment for all the pay-outs they will be forced to make in future litigation. Instead, they just hide this money with the Federal Reserve and pretend it doesn’t exist. Meanwhile, as I also pointed out in a recent commentary, U.S. banks are holding at least 5 million already-foreclosed homes off of the market. No point in trying to “sell” these properties if they don’t actually own them.
Who OWNS Foreclosed U.S. Properties?, Part II: the role of MERS …
Oct 26, 2009 … If the bank who “sold” them the “foreclosed” property never had legal title then obviously that bank had nothing to sell to the “buyer”. …
seekingalpha.com/…/33036-who-owns-foreclosed-u-s-properties-part-ii-the-role-of-mers – Cached – Similar
you quote:
but MERS says on their website:
As I said downthread,on another EW thread,the Wiki entry for MERS is pretty interesting,too.
When pressed in court, MERS has tried to say they have legal standing to press foreclosure because they are the ‘nominee’ of the legal assignee of the loan, when pressed to name the assignee, they say they represent the trust that issued the MBS, but since the mortgage was never assigned to the trust, the trust doesn’t have standing either.
These facts coming out in court are the only reason anyone knows about the fraud that was perpetrated at the time of securitization.
To my knowledge, MERS has never been able to prove their legal standing in any foreclosure.
To my knowledge, MERS has never been able to explain to any court, exactly who owns the mortgage which they are seeking to foreclose.
that is a terrific excerpt marcy and it demonstrates the depravity of the lending institutions
first, that they would spend more on foreclosing then the home is worth
second that they would rather foreclose, subject to auction at a lower price, then cram down their own liability
third, to me the 500 lb gorilla;
these robo signers were doing 10’s of thousands a month
this is hard for me to get a handle on
I could never in my wildest imagination believe a bank could sell enough homes that those in defualt could possibly number in the millions, per bank
how the hell does a bank get to make that many loans, what does that translate to in actual loans if the defaults alone come to a few hundred thousand a year?
it boggles my mind
Here’s something that may or may not be well known but that caught my attention and that I wanted to throw out for anyone who might want to look into this further:
On CNBC right now is David Grais, lead counsel for Federal Home Loans. They’re saying that he has been dubbed the nemesis of the mortgage-backed industry. He’s doing an investigation of 11 securities dealers on behalf of investors (Fannie and Freddie?) who bought the mortgage-backed securities. The basis of the investigation is that investors were misled about the composition of the mortgage bonds (which is something we’ve known for a long time now.) The new information to me is about his investigation. He said they’ve found that about half of the underlying mortgages were misrepresented. He said that one of the biggest problems is mortgages that were supposed to be primary residence mortgages but were really investment properties, probably a lot of those “flip this house” deals. They are going as far as to check the address at which the mortgage and utility bills were sent to at the six-month mark after the sale, and if the bills were not being sent to that address, they assume it was really an investment property.
Sounds like they are really digging into this and that they intend to be refunded for the purchase of the securities. He said that they don’t have to prove fraud, they only have to prove that the securities were misrepresented and that if they can prove that, they are entitled to be refunded the purchase price (par) which is a major problem for the big banks who were cranking these things out like crazy in the mid 2000s. He mentioned that statutes of limitations are coming up for some states for the 2005 loans. He also mentioned that there is a possibility of a settlement with the banks — and of course I think that’s the most likely situation. It was also mentioned that (not surprisingly IMHO) the banks are not being very cooperative right now.
One other thing was mentioned that I didn’t understand but that might be important — they said that the banks are (or were) paying their liabilities from investor pools.
oops, I posted the same thing.
It was stunning to watch. It was the centerpiece of CNBC’s noon “Strategy Session” half-hour or hour segment. Grais is with a firm that represents the Federal Home Loan Bank Board (FHLBB) or one of the FHLBB regional boards. FHLBB is NOT Fannie or Freddie (F&F) but invested in RMBS just like F&F did. Bill Black used to be a regional counsel for a FHLBB.
As investor, FHLBB is protected by “warranties & representations” that the “issuers” of RMBS made as part of the sale of securities. The warranties are essentially guarantees that the collateral in the RMBS is good and meets specific representations as to underwriting standards and enforceability (i.e., that the RMBS trustee was assigned the NOTES). If the issuers breached those warranties, FHLBB can “put back” the RMBS to the issuers and force the issuers to buy them back at PAR (100 cents on the dollar).
Now that everyone knows the RMBS collateral was shit, RMBS investors are falling all over each other to “put back” the RMBS to the issuers, including Bank of America (BAC), JPMorgan Chase (JPM), Wells Fargo (WFC), Citigroup (C), MorganStanley (MS) and possibly GMAC, plus gobs of other smaller or regional banks like Bank NY Mellon and PNC. BAC alone is facing $74 BILLION in losses on “put backs” or forced repurchases of RMBS.
Thanks.
My other question would be, who got the mortgage payments. If they went to the investors, doesn’t that reduce the amount that is owed to them in refund, and the banks would only have to supplement what was already received?
And on CNBC a few minutes ago they were talking about misrepresentations in MBS, some of which were purchased by F&F. Those mistatements could result in the purchasers putting the securities back to the banks at par and a hell of a lot of losses. But there is a statute of limits croping up on some of it. The market is down today and the banks as well, as this whole mortgage thing is starting to “leak” out of the box. TBTF here we come again. Bank of A and JPM took over two of the largest loan mills, so they could be at the center of the storm.
Absolutely right.
My god we are so lucky to have Marcy and Cynthia K. They busted this wide open a year ago and just never gave up. FDL and all the Firepups should be proud. We kept hammering and snooping and commenting and driving traffic to Yves Smith at Naked Capitalism and Felix Salmon at Reuters and to CreditSlips and calling out Timmeh & Bernanke & the bank mobsters for their pathetic lies. I am just so proud and gratified by the impact FDL has and that we can have by supporting FDL.
(going out of the country for ten days tomorrow so I wanted to leave kudos so I wouldn’t forget at the last minute)
Well, Cynthia did. I just understood what was happening because I listened to what she said.
It has been such a trip! I was serious last week when I said we should nominate Cynthia and FDL for a Pulitzer prize for covering foreclosure-fraud-pandemic-gate. They have a new category for digital media.
I am confused about some of this. When they foreclose, do they have to have the original note on hand that references the mortgage property and terms? Or is it enough to say “he didn’t make the payments and here is the record of that’? I mean you get the feeling that the banks are simply saying he didn’t pay the bill so out you go, never mind the note and the terms. Trust us.
“Standing” in a foreclosure is the having of an interest in the note (that is, ownership of the note), as I understand it. Without standing, you do not have the right to foreclose (basically, if you don’t own the note, you cannot foreclose). Part of the fraud that has been going on involves fabrication of mortgage notes. Another part is the failure to register note transfers at the county Register of Deeds (who keeps records of who officially owns the note). Another is that the notes were never properly executed and entered into the trust for the RMBS. Basically they are hiding the note and then trying to foreclose.
Part of the problem (on the borrower’s side) with the methods the bankers & servicers are using is that it intentionally obscures who ACTUALLY owns the note, so its much harder for a borrower to prove fraud when the foreclosure happens.
The county registers do not keep track of who owns the notes directly. In the past, when a note changed hands, the buyer took the mortgage assignment and recorded it. As a result, the register’s office had a de facto list of noteholders. That is not the case now. Notes aren’t recorded, and mortgage holders did not do assignments.
I tried to calculate how much revenue the counties have lost due to the 64 million mortgages that were registered with MERS but evidently, not the counties.
Using Hennepin Co. Mn as the example, (fee/tax = .0024 X the mortgage amount), and $200,000 as the avg mortgage, I come up with nearly $31 Billion.
Am I on the right track here?
If Obama wants to help these crooks steal from us, then we must make every effort to impeach him.
If we are not successful in convincing him to help us prevent this fraud, the result will be the Republicans being given an opportunity to blame the inevitable calamity on the President, and the Democrats, and all that will be necessary to seal the deal will be the impeachment of the president.
If Obama colludes with Wall St. to further this fraud, he’ll be impeached and the Republicans will have their permanent majority.
Thus is the progressive experiment put to rest for good, and fascism triumphant.
Geez, I hope you are wrong about all that.
Think about it.
This issue will not just blow-over, there is absolutely no chance this will not result in an even more angry populace.
The progressive left is well aware of the fraud and who is ultimately to blame.
The ignorant right is already angry and ready to do what ever Beck and the Koch Bros. tells them to do.
IMO, either the President, and the democrats champion the peoples rights, and prosecute the real criminals, or the Republicans will take the obvious opportunity to absolve themselves of the blame they rightly deserve by prosecuting the President and by extension, the democrats.
Backs are approaching the wall, and that’s the point when rats are most dangerous.
And consider that both Houses of Congress are big time majority Democratic right now. So the fact they’re NOT doing that shows the Democratic Party’s (at the national level) true colors, as well as Obama’s.
It’s easy to lay everything on Obama and be done with it. For every wrong decision he makes, there’s a Constitutional check and balance that’s supposed to correct it. But the Democrats in Congress CHOOSE not to hold him accountable. That makes them accessories.
This is happening cuz the Banks have the Prez support…ordinary Americans be damned.
Is it just me, or are the houses merely incidental to the MOTU–but that the actual real estate, the LAND, the real prize they are after?
And on another note, fairly or unfairly,everytime I hear GMAC I think of Cereberus ,Merkin and Bernie Madoff.
J. Ezra Merkin – Wikipedia, the free encyclopedia
On March 30, 2009, it was announced that Cerberus would lose its controlling stake in …. By 1992, Bernie Madoff began underwriting Merkin’s lifestyle. …
en.wikipedia.org/wiki/J._Ezra_Merkin – Cached –
– Cerberus indirectly linked to Madoff scandal
Dec 18, 2008 … Two Cerberus Capital Management portfolio companies are caught up in the Bernard Madoff scandal now rocking Wall Street. …
http://www.privateequityonline.com/Article.aspx?article=33204... – Cached –
Journal – MYTHS ABOUT MADOFF’S “PONZI SCHEME” – Bernie’s …
Mar 17, 2009 … Bernie Madoff’s colossal investment fraud is almost everywhere …. Gabriel Capital, which partnered with Cerberus in the takeover of the …
journals.democraticunderground.com/leveymg/400 – Cached
Usually, banks have no interest in holding real estate. They don’t want to be in the real estate business, they want to be in the banking business.
Well, that would be so in a rational world.
Jane has a fresh cross-post available: Glenn Greenwald: What Obama Could Do Now
Does Glenn say anything about liquidating the banks?
As more instances of foreclosure fraud come to light, I’m hearing the same pushback story from the mortgage industry. That the borrower defaulted on their payments, so any problem with origination documents are moot. The homeowner’s defense against foreclosure is to challenge the standing of their mortgage holder to foreclose because of title documentation problems. An important point, to be sure, but there’s another aspect that hasn’t been discussed at all. If the title hasn’t been properly documented and recorded as required by every state’s law, the borrower could pay down their note for 30 years, every payment on-time, never be in default, and then find out that the title to the property can’t be transfered to them. They would have to take legal action to secure a clear title, or abandon their title claim and sue the lender to recover 30 years of principle and interest payments. To my mind, the borrower has every right to withhold note payments until the problems with the title documents are fully resolved. Why would anyone continue to pay when delivery of their purchase (title to the property) is doubtful? The whole argument about foreclosure being OK because of default on note payments is a huge red herring. The legitimacy of the note comes from the assurance of transfer of clear title to the borrower immediately following the final payment. No title, no deal — and most definitely no further payments. In fact, launch a countersuit to the foreclosure to recover all principle and interest from the lender because the entire deal was fradulent from the beginning; the lender never had a title to transfer.
What’s more, it has been reported that registration with MERS has coincided with the shreading of the original documents.
Unbelievable, but these guys are incredibly averse to leaving any paper lying about that might get in the way of their scam.
They just never thought about the fact that lack of paper is also evidence of the scam.
As I understand it, the note is a negotiable instrument. If it has been shredded, there IS no note upon which to make payments. It all comes down to proof of owning the note (hence, produce the note!).
Turning $1.4 Trillion worth of mortgages into $14 Trillion worth of RMBSs under normal circumstances result in not a metaphorical mountain, but an actual mountain of paper.
Trouble is, that not only did they forego creating any new paper, in some cases they destroyed the existing paper.
Thus the trail of evidence leads through a virtual, electronic mountain in search of literal, but non-existant paper.
My understanding is that unless they have the note, you don’t owe them anything (you owe the owner of the note ONLY). If they cannot produce the note then they don’t have standing to receive payments or to foreclose. Whether or not the borrower has fallen behind in payments to the note holder is THE issue. The servicers and banksters are attempting to foreclose without proving that they have the note. If they don’t have the note, then they are not entitled to payments of any sort, so how can the borrower be behind in their payments to the servicer/bankster?
That part of your comment is also correct and may be another shoe dropping after the RMBS issuers are all liquidated (“resolved” under Dodd-Frank). But Mithras @40 is correct about the crucial role the note plays in acquiring standing. Standing is essential for anybody to sue anybody else in any court over any dispute. Standing is a constitutional requirement, because Article III has been interpreted to grant jurisdiction to courts only over “cases and controversies,” which must be “concrete” so that court decisions are not just hypothetical or advisory.
In response to joanneleon @ 29
The REOs are being sold in blocks to hedge funds and private equity firms, according to Nomi Prins
Also, there is anecdotal evidence from on-the-ground observers such as 1der, that HUD is buying back some REOs for more than the value of the underlying mortgage. Perhaps this is a backdoor TARP2 to prop up real estate prices?
I definitely think you are right.
What’s happening once again is Obama/Treasury is quietly taking this shit off the banks books and going to stick us with another couple hundred trilliion more in debt to prop up the banks. Ben is stepping in to print more money and putting it on our tab. None of the benefits will come our way, though. Gotta control spending, you know.
Eventually, there will be no way to ever pay it back, so they’ll dump it and the country.
These guys are insane, all of them.
I don’t know if it’s insanity, but they’re definitely treading water as hard as they can. They’re unable to believe that everything (and I mean everything) is about to come crashing down like Humpty Dumpty, never to be put back together again. Somehow they feel if they can just tread water a little while longer, someone will be along to rescue them. Well, maybe you’re right, as I type this I find myself feeling that denial of this magnitude is a form of insanity.
Fraud is not a trade secret. That rule is abused way too much. Some judges can be convincedbthat anything a corporation does is proprietary. Bullshit. If it’s not a process or know how relating directly to a product or service, it’s not intellectual property and shouldn’t be protected. You don’t want it to come up in court, don’t do anything wrong and nobody will sue you.
My two cents on foreclosure fraud here.
In response to Watt4Bob @ 36
According to Yves Smith, the myth that the original notes were destroyed was created by
In her deposition, Tammie Lou Kapusta indicated that some of the original documents had been shipped to Guam and the Philippines, where it was processed to take advantage of the time zone for 24/7 operations.
Creation of the myth, or actual destruction of the documents represent the same reality to us, now we know the ‘real’ paper documents present an enormous problem for the crooks.
If they follow the rules governing MBSs, they risk audits by investors who want to know what exactly they are investing in, if they hide, destroy or loose the documents, they risk what we’re seeing now.
It’s totally understandable that they might be afraid to actually destroy the paper, but shipping them to Guam or the Philippines was probably intended to incrementally achieve the same goal, that is, they never intended to see them again.
The fact that they could not totally achieve their goal before ending up in court is reminiscent of GWB and the republicans failing to leave office prior to the economy needing to be bailed-out, things are happening way to fast for these guys, the noose is tightening and I expect even more surprising and unbelievable behavior as this situation is dragged into the light of day.
Reminds me of the missing emails and assorted documentation re: waterboarding and related activities.
In response to PatrickD @ 34
Your excellent comment shows how the entire mortgage-foreclosure scheme was an equity-stripping scam. Easy mortgage were the bait to acquire title to the property, and deposit it in the MERS cookie jar. Then wait for the people to default, or have your servicer force them into default with bogus fees. Then grab the property back out of the MERS cookie jar. And while you’re at it, grab as many other homes as you can manage to fabricate ‘lost note’ affidavits and robo-signed assignments for.
Check out this case where twelve years of equity was stolen from a homeowner.
…and, finally, only the land-owners get to vote.
S&P Equity Research downgraded Bank of America from “strong buy” to “hold,” a drop of two notches and lowered the target price by $3 (a big drop since current price is $12.)
Also:
In response to Mithras61 @ 43
You wrote:
In fact, the original notes were endorsed in blank to the trustees of the MBSs, which makes them bearer instruments. This means whoever has been storing the notes can theoretically claim title to the homes, or sell the bearer instruments, or hold them hostage.
It is mind boggling that there is a clearer paper trail in the ownership of a vehicle,rather than a home.
Wonder if any similar scam has been used in repos of vehicles—yet?
Thank you so much Marcy for burning the spotlight on this for over a year (two years?). All the comments are amazing, I learned more on FDL than I did in law school about how this fraud conspiracy affects real property law. I’m sorry I will miss the next ten days, since I’ll be out of the country. But I fully expect to have folks overseas ask me “where is this Fire Dog Lake you have in your country? The people who live by that lake seem to know about your banker Mafia before your own government does.”
Have a safe journey-to and fro. Thank you for your amazing insights .
Marcy is the amazing one, not me. She taught many of us (me at least) how to do this online webby-collaboration thing.
parsnip @48
“an equity-stripping scam”
wow, that would be a whole nother level of misconduct.
Thank you Cynthia! Your wildly successful clinic on securitization fraud has now gone global. I can’t open a web site of any newspaper here or in the UK, or turn on a cable teevee channel, without seeing the fruits of your persistent digging as a top story. Congratulations!
Considering all the redundant eavesdropping reportedly going on by the government either legally or otherwise, I would expect it would be prudent, considering national security and all, that all these goings on in the financial world should be monitored. To me these TBTF organizations are the true terrorists and enemies of the American People. They are out to screw us royally.
Have you checked out the previous jobs held by the new National Security guy,Donilon?
Yes I did Gitch, and I can see there is a definite pattern to Barry’s appointments. This Donilon helped Fannie block any oversight by Congress years before FM foundered amid a massive accounting scandal. He worked as a registered lobbyist for FM from 1999 to 2005 while company officials insisted finances were sound. He also earned more than $1.8 million in bonuses before the government took over in the wake of an accounting scandal. Obama was against lobbyists during the campaign for Prez. So much for that policy. It looks to me like this fella came from the same school of “hard knocks” as the infamous Gordon Liddy. Mr. Donilon, it appears, was sued in federal court and later dropped from a pair of FM shareholder lawsuits. Apparently this character is also a member of the Trilateral Commission and was appointed as an advisor along with 10 other members of the TC to top-level and key positions in the Obama administration within Barry’s first ten days in office. I’m sure Mr. Donilon will have the American People’s best interests in mind regarding this ongoing foreclosure fiasco and would report any wrong doing by any financial institutions and their operatives while monitoring any communication via email or phone by same.
Stephen, I apologize if my comment seemed snarky. It wasn’t meant to be. Yes, I am aware also of much that you have delineated, but you have surpassed my info with details I had not known.I appreciate the amplification.
Now ,earlier in the week I did sarcastically say that the any investigations into the foreclosure morass could theoretically be shut down for national security purposes. That was pure snark…at the time…
Everything is fine at my end Gitch, I did not assume any snark was made. To the contrary after following EW for a few years now I am grateful for all your excellent insight and knowledge as well as all the many others who contribute. In all honesty, I am up here in Yukon Canada and I pay particular interest in American politics and worldly concerns that are sliced, diced and analyzed by regulars on this site. I lived in Monterey Cal. during the Nixon resignation and will always remember how well the American Congressional System worked in weeding out a bad element, I was very impressed. Now it seems there are no touchstones in the system to maintain sanity, only the integrity and intellect of people like yourself and especially Marcy. I’m afraid the American People will eventually have to stand up and demand justice somewhere down the road but they need the leadership and Obama does not cut it. Whatever happens in the USA affects us all.
Thank you, this is great article. It’s so validating to see this stuff in print!
well..blog land…you know what I mean.
ew, thanks another great post.
Keep banging away at this!
On top of all that EW has been turning up on this thread, and Cynthia Kouril’s work on Foreclosure Fraud: Banks Reviewing Documents – Why? , The Financial Crisis Inquiry Commission has been at work. MortgageGate has been in their sights, too. In September, they conducted a hearing in Sacramento. One of their conclusions:
Florida led nation in mortgage fraud, federal commission says. Another hearing a few days later was covered at Huff Po, New Proof Wall Street Knew Its Mortgage Securities Were Subpar: Clayton Execs Testify (First Posted: 09-25-10 06:56 PM, Updated: 09-25-10 09:46 PM) During this hearing, little-known Clayton Holdings, a Connecticut-based firm that analyzes home mortgages for banks, hedge funds, insurance companies and government agencies, provided its data Thursday to the Financial Crisis Inquiry. Most of the substance of the testimony will not be new to anyone following Cynthia Kouril’s and EW’s reports, but it does give the FCIC sound data, and a platform on which to stand in its December report due to Congress. Clayton Holdings felt obliged a few weeks later to submit a 4 page letter to the FCIC in which they distanced themselves from the testimony provided by Keith Johnson, the firm’s former president.
With all the news on the mortgage front, there will be pressure on Congress to hold more hearings, and that is good. At the same time, they will be getting the FCIC’s recommendations: A report of the Commission’s findings is due to the Congress, President and, most importantly, the American people on December 15, 2010. This will give them something of substance to serve as the basis for legislation. One major question is if enough of their recommendations will get to Congress during the lame duck session to do anything before the new Congress is seated.
Bob in AZ
Just to compare — Tanta on Calculated Risk wrote a column in 2008 about her professional experience with lost note affidavits:
Almost sounds like a fairytale now. I don’t think she’d be signing hundreds of these a day, thousands a month.
Of note, the rest of the column is an interesting case of a man in Florida who bought a multimillion dollar house and then refused to make payments because no one could prove they owned the note. He agreed he owed money, but to who? WaMu had tried to foreclose but dropped their case when in 2003 they couldn’t produce the note. But apparently that didn’t stop them from selling the bad whatever they had to another investor, who again was trying to foreclose in 2005. Like, if WaMu can’t foreclose, how can they sell?