Rigging the Bids at Foreclosure Sales

From Dan Edstrom:

Department of Justice Press Release

For Immediate Release
April 16, 2010 United States Attorney’s Office
Eastern District of California
Contact: (916) 554-2700
Stockton Real Estate Executive Pleads Guilty to Bid Rigging at Auctions of Foreclosed Properties

SACRAMENTO, CA—United States Attorney Benjamin B. Wagner and Assistant Attorney General Christine Varney of the Department of Justice’s Antitrust Division announced today that Anthony B. Ghio, 43, of Stockton, pleaded guilty today before United States District Judge Edward J. Garcia to conspiring to rig bids at public real estate foreclosure auctions held in San Joaquin County.

These charges arose from an ongoing federal antitrust investigation of fraud and bidding irregularities in certain real estate auctions in San Joaquin County. The investigation is being conducted by the U.S. Attorney’s Office for the Eastern District of California, the Antitrust Division’s San Francisco Office, the Federal Bureau of Investigation, and the San Joaquin County District Attorney’s Office.

According to Assistant United States Attorneys Robin R. Taylor and Russell L. Carlberg, who are prosecuting the case with assistance from Barbara Nelson and Richard Cohen of the Antitrust Division, Ghio admitted in his guilty plea that he conspired with a group of real estate speculators who agreed not to bid against each other at certain public real estate foreclosure auctions in San Joaquin County. The primary purpose of the conspiracy was to suppress and restrain competition and obtain selected real estate offered at San Joaquin County public foreclosure auctions at noncompetitive prices.

Court documents show that after the conspirators’ designated bidder bought a property at a public auction, they would hold a second private auction. Each participating conspirator would submit bids in the private auction above the public auction price. The conspirator who bid the highest amount at the end of the private auction won the property. The difference between the noncompetitive price at the public auction and the winning bid at the second auction was the group’s illicit profit, and it was divided among the conspirators in payoffs. Ghio participated in the bid-rigging scheme from April 2009 until October 2009.

Ghio is charged with bid rigging, a violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million fine. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victim of the crime, if either of those amounts is greater than the statutory maximum fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables.

The investigation is continuing. Anyone with information concerning bid rigging or fraud related to real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-436-6660 or visit http://www.justice.gov/atr/contact/newcase.htm, or the FBI’s Sacramento Division at 916-481-9110, or the U.S. Attorneys Office for the Eastern District of California at 916-554-2900.

Media inquiries to the U.S. Attorney’s Office should be directed to Lauren Horwood at 916-554-2706. Media inquiries regarding the department’s Antitrust Division should be directed to Gina Talamona at 202-514-2007.

This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force.

President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

One component of the FFETF is the national Mortgage Fraud Working Group, co-chaired by U.S. Attorney Wagner.

Dan Edstrom

37 Responses

  1. If there was bid rigging at the foreclosure sale of my home, stealing my equity, and it was sold within the group as outlined in many stories of this practice, the trustee’s deed is issued and filed in the name of the first buyer at foreclosure. Can the second buyer then file unlawful detainer in the name of that first buyer? If the attorney knows his client is not the name on the docs, is he guilty of fraud on the court? I keep hearing from workers at the property that they are working for “Jane” and wont’ give a last name and claim she is the owner. But the owner of record is an LLC. I think this is further proof of bid rigging. How do I get it investigated? How do I get someone with authority to “raid” the atty’s office to see if his records show he knew he was bringing action in a name not that of his client? If given a chance, he will just get them to phony documents…

  2. ANONYMOUS, on May 3, 2010 at 5:41 am Said:

    Just want to say that loans are not sold into trust. the loans are sold to a depositor who then assigns (deposits) future cash flows into a trust.

    MSOLIMAN – -Wrong sire – you’re giving the lender a sorely needed break here. pOOR rAJA! Derecognition is a valueless transfer to and fro designed to dupe regulators .and accounting professionals. I give no value to the initial transfer separating the seller from the depositor.

    wHo benefits from the return of the consideration subsequent the sale?

    Careful…..they want you to believe what you’re telling us…..

  3. Fannie Mae Loan Buyback Requests Up More Than 60% Year Over Year While many expected the disturbingly high number of GSE directed repurchase demands to mortgage lenders on nonperforming loans to crescendo in 2009 – 2010… – Voice of Housing

    see what I mean . . . .msoliman


    Thanks a lot for the response. We had our hearing in the court. The arguments were heard and the Judge will rule in a week or so. If possible You can send me some stuff on my email Once again thanks for the help.

  5. Raja

    Cannot discuss certain circumstances as yet. But, you have to focus on the note – the note has the original loan number. Note cannot be canceled or discharged or sold, when the account number has been changed. Any assignments that do not exactly state the original loan number are invalid. Believe that loan numbers that were changed may really have been a modification of the prior mortgage – and not a new loan refinance. There can never be valid tracing of the loan when the loan number has been changed. Further, when loans are charged-off, and “collection rights” sold, it is only then when an account number is changed – because you cannot sell an account that has been charged off (you can only sell collection rights). Thus, loan was likely classified as a default debt before you even defaulted – and, subsequently charged-off with collection rights (not the account) sold to a third party.

    Any changing of account numbers is a red flag. How can anyone pay the original loan number – when it no longer exists?????

    Would like to disclose more – but I cannot. Trust me – account numbers cannot be changed – and are only changed if the loan (account) was placed in default. In this case, the loan is extinguished and only collection rights (to the debt) with some bogus new loan number – are sold to third party.

  6. ANONYMOUS, on May 2, 2010 at 5:06 pm Said:


    Thank you so much for your post. I have evidence that supports the scheme you describe. And I am not in foreclosure – but I think I was fraudulently placed in default. What a mess we are battling.

    Account number fraud goes into title and homeowners insurance fraud.

    Your post is extremely informative. Thank you, again. Everyone, listen to what Raja is saying.

    If possible can you tell or send me the evidence in having two loan numbers( I have objected this second loan # since day one and assumed nothing )as on 95/07/2010 I have hearing on the “Demurrer by the Title Company, who is also Trustee on Deed of Trust” I already submitted the “Motion in opposition to Demurrer”
    We had a 04 hrs hearing on the following, on 05/04/2010
    a.) Motion to Craving O yer by the Deutsche Bank, One West and MERS
    b.) Motion to Demurrer by the Deutsche Bank, One West and MERS
    c) Motion to Plea in Bar by the Deutsche Bank, One West and MERS
    The judge has not ruled yet, but it appears that we have succeeded from the judge’s remarks during the hearing.
    I have an injunction without Bond since 06/03/2009. They oppose this after one year and judge said that equity is there in the house and litigation may take 06 months or more.

    Please advise and send me the evidence.
    (Note) The loan was rescinded timely and they did not response. This was also discussed during the hearing because we ask the court for Quite Title and other counts

    Thanks and Be Safe

  7. To; ANONYMOUS & SF Dan- thanks for taking the time to respond to my query- I just posted another one here over the lunch hour. Thanks again

  8. Ian

    Agree – only servicer cannot be named as Lender/Mortgagee on title or insurance documents. At the most – documents can state the mortgagee/lender and care/of the servicer.

  9. DyingTruth

    i just read your scribe docs….how nauseating?! i feel4ya ; [
    i am in bed with the same dogs as you, omg are they ever flea infested!
    in order of infestation
    3-quality [ironic name huh?] everyone involved with Quality [the weasel tribe – Quality Loan Service (AKA McCarthy & Holthus LLP, LSI, LPS, Fidelity National, Fidelity ASAP, etc) has major problems AND infestation.

    did you get my email? if not email me [we need to talk]
    freak 4 u at comcastdotnet

    re; THE A MAN,… on April 30, 2010 at 1:54 pm Said:
    in ca? yea!

  10. angry & NOT TAKING IT! are you having problems with Quality too?

  11. Anonymous- while you had inquired of Pat as to the beneficiary of her home imsurance policy, it would be a good time to urge homeowners to request a copy of the “lender’s” (servicer in most cases) title insurance policy. The named beneficiary will be the key to understanding who gets paid if your loan is paid off or defaults. If it hasn’t been whited out, or cut & pasted with a bogus name. I got mine by mistake, I am sure. The named beneficiary is a out-of-business Bear Stearns entity. They appear nowhere else on no other documentation filed in the courthouse or on any other documentation in my possession. On top of that, I had never heard of them, had to search them out and study them. But in a homeowner’s policy? Somehow this would seem to be an ideal time to take the servicer to task on who, if anyone, should be listed as beneficiary- “Say, FNMA, if my house burns down, since you aren’t the investor due payment, who should I list on here? I don’t want to be an accomplice in insurance fraud, furnishing false information- why don’t I just list myself as the beneficiary and I’ll send your cut along if the house goes up in flames?”

  12. Pat

    I would also like to hear any answers to your question –

    Who should be the beneficiary on the home owners insurance policy if you do not know who the true party of interest is?

  13. This may not be the right place to ask but here goes.

    A Substitute Trustee document saying MERS to US BANK, NA Trustee for CCB LIBOR SERIES 2007-2 Trust. was filed at my county clerks office in mid Feb,2010 This is the start of foreclosure of my home( non-judicial state). Specialized Loan Servicing say they are my new servicer as of March 1st 2010 I am assuming they are a debt buyer of NPL’s since my original servicer started refusing payments in 2/09 after accepting a lump sum payment and filing a NOD in April 09. SPL has assigned my account a a new loan number and sent a letter last week saying I needed to provide my homeowners policy with them as beneficiary. My home was filed and discharge in Chapter 7 in 8/08 I never reaffirmed but did make three lump sum payments as income would allow while trying to modify. ( we all know how that worked out!) I am still in the house thanks to this web site and I have learned.

    Who should be the beneficiary on the home owners insurance policy if you do not know who the true party of interest is?

  14. Lisa D

    I have been through this – believe me. But, just looking at mortgage loan notes – any changed account number is a serious problem. Assume you never defaulted – and wanted to refinance. Well, your original mortgage loan note has your original mortgage loan number. When you refinance, the mortgage note must be marked “PAID” – and if the note cannot be found – affidavit must be submitted that your loan is under the original mortgage loan note. Thus, if neither can be provided – according to your original mortgage loan note account number – your original loan number can never be canceled (satisfied) and never capable of being marked “PAID”.

    Account numbers are usually changed when loan has already been charged-off and and a new number is assigned by the debt buyer of the charged-off account. Any change of your original mortgage loan number is a serious problem and indicates your loan was charged-off by the original mortgage owner and sold to a debt buyer. Such changing of account numbers carries with it violations of FCRA credit reporting and FDCPA debt collection. Further, any SPV has specific account numbers – any changes are not part of the original SPV “Mortgage Loan Schedule.”

    Finally, according to the NorthEastern Law Journal article – I cited on this blog – foreclosures and REO properties cannot be assigned to SPV Trust if “improper knowledge” as to default was used or unless foreclosure property was actually acquired by the party in interest. Thus, assignment to US Bank, NA, as trustee, was bogus unless US Bank, NA actually purchased the property at foreclosure – and if purchased before foreclosure – US Bank, NA , as trustee. could have no knowledge of any default. Big problem for assignments.

    Certificate Holders – as I have stated many times, are just the security underwriters to the Trust – this is clearly outlined in SEC 8-K. There are no other certificate holders to the original SPV Trust, which converted pooled receivables into security pass-throughs of current cash payments. Securities must be current for valid pass-through. Any non-current loans are removed from “securitized trusts”. I believe the time period for removal is 180 days. Any mortgages in default are no longer a mortgage contract, but instead a default debt. – and subject to the law as to collection.

    Unless US Bank, NA, purchased your default debt – they are not the mortgagee, not the creditor, and not the owner of your loan. And, US Bank, NA, if it purchased your default debt, must account for the purchase on it’s accounting financial statements- and the timing of the purchase. Most likely, US Bank, NA is simply an agent (if they are even that) for undisclosed debt buyer – who is subject to the FDCPA and law for fraud.

    I am not attorney and this is not meant to be construed as legal advise but only for educational purposes.

    Can you elaborate/explain why duplicate account numbers is an indicator of fraud – “by many parties”. I have an original loan number, a 2nd loan number for servicer, and a 3rd loan number listed in the Trust statements/reports (???).

    Also, I am interested in your opinion as to why my loan is listed as REO on the US Bank NA (Trustee) website in Statements to Certificate Holders.

  16. Msoliman

    Just want to say that loans are not sold into Trust. The loans are sold to a depositor who then assigns (deposits) future cash flows into a Trust. A trust is simply a vehicle owned by the depositor to pass-through payments. A trust has no balance sheet to account for anything – including a “sale” of loans. Original state of loan remains despite securitization of mortgage loan cash payments. The note ownership remains with the bank that purchased the loan from originator (until they dispose of). This has been confirmed to me by top authority – and is clear by close examination of the securitization documents.

    Do not want to get between you and Raja – but duplicate account numbers is fertile ground for fraud – by many parties.

  17. Raja said:
    They do not know who owns the loan and do not care. They only care that two people do not make claim to do that at the same time on the same property.

    MSoliman: The loan was collateralized as part of a single asset consisting of mortgages pooled as collateral for a failed stock offering.

    Its not possible to pick out a single asset unknown to the master servicer and trustee. The asset was delisted as a registration with the SEC and charged to zero.

    “Charged” means to write down to a loss.

    The trust cannot hold any hard assets and can only buy and sell assets by way or arms length third parties. So who is it your facing in court?

    So why are consumers fighting this difficult fight a year later and still facing the parties in court who are lacking standing? Consider where the claims to a beneficial interest have (1) charged the assets (2) Can only own Passive investments (3) are delisted. (4) foreclose on nothing – before they reestablish basis.

    That’s what Brother Dan is talking about with the AG’s office and FBI. They are going to sale by credit bid to reestablish basis in the assets.

    The Lender and orginal HOLDER failed to repurchase the loan. It could not even if it tried. Look and you will see original assignor is an FDIC MEMBER BANK.

    Its called derecognition under GAAP and looks to be all but dead going forward.

    You cannot unscamble this egg. FAS 140 will not allow the servicer or seller control an asset, especially by tendering stock back for assets. The parties lost the loan to derecognition and sale. Now the SEC has spoken.


    So do you have an attorney yet ? Did we not go over this last year in February?


  18. MoSoliman

    The true chronology of events differs substantially from the apparent chronology, starting with the fact that the mortgage backed securities were sold prior to the funding of the loan, the assignment and assumption agreement was executed prior to the borrower being known, and the pooling and service agreement also executed prior to any transaction with the borrower. True chronology of events is explained as under in brief:-
    They created SPV (Special Purpose Vehicle), Issued Certificates, Got the certificate rated, Bought the Credit Default Swaps (30 bets on each loan) and Sold Certificates to Investors (CREDITORS) who ARE SPREAD OUT ACROSS THE WORLD, Collected/aggregated the money from the investors (Money went to the aggregator), Aggregator placed demand down line on the Securitization Chain to Mortgage Brokers that he needs 100 million dollars loans or so and here are the terms of the loans in category ( At this point they did not have any loan, so they created TRANCHES A,B,C etc. without the loan). In other words they were selling forward which means they were selling what they did not have. They attached the Spread sheets and bogus data with the documents, referred them as populated data by sample data, which was false and said will be replaced with the actual loans, which were fictional at this time. So they placed the demand to the brokers, who could not satisfy the demand then the aggregator created different companies to originate loans in mass production without caring about any criteria whether the borrowers qualify for loan or not. At this point the money is still with the aggregator. Now they signed Pooling and Servicing Agreement(PSA) and Assignment Assumption Agreements. Now the Aggregator funds the loan from the money he received from the investor by selling the certificates (They sold forward and sold a thing which they did not own). The aggregator sent the various false dubious reports and the accuracy of those dubious reports is questionable. He filled some false data and said will be replaced or changed later, which they did as they have the passwords and can log in any time and the change the data as per their fraudulent wishes and requirements using MERS or internal devices. They have MERS and a Shadow MERS, whether you have MERS or not still you have effects of MERS. They replaced the data with the false information as per their own wishes. These Trustees(Deutsche et al) and Service Companies or others is just a need to funnel them to make sure that it rarely happens that the same property or the same borrower have been foreclosed upon at same time by more than one supposed lender. They do not know who owns the loan and do not care. They only care that two people do not make claim to do that at the same time on the same property. Then they created these outsourcing companies for foreclosure services (LPS, FIS, DOCEX etc.) to fabricate the documents to show that Deutsche Bank is the Owner of the loan, when in fact way before when Deutsche Bank entered into the picture, the security was sold to the investor thereby locking in all rights under the Assignment and Assumption Agreement and Pooling and Servicing Agreement, before even the loan took place or the borrower signed the settlement papers and borrowers did not know this and none of these entities disclosed this to the borrower, which gives the borrowers extended rights for rescission. By operation of law these already existed and money changed hands. When borrowers signed the loan papers, the borrowers signed with the investor and this was not disclosed to the borrowers. You cannot execute any other document after the sale to investor, every other document in place is fixed and no one has authority without going to all the investors for permission and none of these thieves went to the investors and many of these thieves do not know the whereabouts of the investors. Deutsche Bank was so down and dirty as to be lying directly for their position.

  19. Raja

    The breach is they sold and then dissolved what the deed or mortgage intended. Your loan was sold into a trust. It’s gone forever from its original state it was represented to you as. It is no longer recognizable as you bargained and signed for.

    STOP with the criminal stuff and culprits!

    Your lender sold the loan and holds a passive investment understand! These loans are SOLD on a forward commitment long before you knew you were getting a loan. Your loan replaced another loan that paid off in a game of securitization recycling.

    Bifurcation, derecognition, a nominee, fractionalized interests and equity in the form of stock traded at multiples of ten times the value of your note.

    A Borrower loan is subject to four prepayment speeds.

    (1) Reversion
    (2) Refinance
    (3) Delinquency
    (4) Default

    The first two are subject to the market place and normal course of buyers and sellers and good credit. The latter two require the registrant and sponsoring lender REPURCHASE.

    But repo and repurchase mean two things entirely different.
    Repurchase – Lender buys it back
    REPO – Lender replaces the “Deleted asset

    In a REPO the over collateralization and other MI pays down the asset to some number the registrant can afford to make up and to settle their recourse.


    But they cannot foreclose and must return the collateral to the pool. So they do it as an REO marketed to another party.

    It’s what KP called the Lazarus Loan. It rises again and again from the dead.

    I heard from the horse’s mouth that Countrywide securities offerings subject to the NIM were worthless. I will testify to this. The controversy about Lehman Bros and Goldman Sachs trading toxic assets is still misunderstood by the press.

    Ask yourself…How would this Wall Street Stooge know these were toxic assets? Is he an underwriter or did someone tell him that?

    Hell no! The bad paper written over the last two years were not for greed but to satisfy lender recourse provisions. Got it! They took street sweepers (God Bless them) and seniors in high school and manufactured credit scores and used their DU to approve these faux borrowers.

    All to replace the onset of loans going bad where loans cold not be otherwise replaced or where the cost of recourse would bury the lenders long before they buried themselves….and they did it for two years raking in billions paid out from underwriting and delivering these toxic assets to supplement future losses.

    You want the real crooks Raja. Look for any high paid executives who quit the business about a year before it crashed.

    My favorite quote from MSNBC –

    Announcer : “Today, the one year anniversary of the sub prime markets crash and Lehman Bros. bankruptcy. We have with us today senior analyst Bob Dumbsheet.

    Announcer: “Good morning Bob”
    Analyst: “Yes Mike”
    Announcer:”Bob, who do we blame for this entire mess if there is one person or entity we can point too?”

    Analyst: “FDIC Baby . . . FDIC”

    These loans were nothing more than another means to raise capital the banks sorely need and boy did they raise capital and earn fees doing it.

    Forget CDs and savings passbooks insured up to $100,000. That capital base they raise on the homeowners dime was solely to allow these banks to loan money in other more desirable sectors of the world’s economy.

    And get this….the homeowners PAID the major banks combined COST OF FUNDS!




    Thanks a lot for your remarks.

    Thanks and Be Safe

  21. Good pick up here Dan.

    I see this at least once a week. The introduction of a broker who shows up to court to testify is an indication something is wrong. A broker is introduced to the REO at the time of possession and offers nothing to the matter in an unlawful detainer.

    Once again the Deed upon Sale and your ability to depose the broker are lost to the homeowners that file suit to stop a trustee’s sale. That is a tough call where parties after sale seem to carry an edge.

    It’s circumstantial and hears say evidence versus practical conclusive evidence that is proven after the fact by fraudulent recorded instruments and by condition subsequent.

    At trial Wells Fargo made a huge embarrassing effort to cross examine a broker subject to hearsay evidence.

    Counsel for the plaintiff (email for name) repeatedly objected and the Wells attorney was good…he knew better.

    Wells attorney “What day did the sale take place

    Our Counsel…”Objection Public information, your honor”.
    Judge “Sustained”

    Wells attorney “Can you state for the record if Wells, the beneficiary is entitled to take the property to sale?

    Our Counsel…”… Objection your honor …Hear Say “
    Judge Sustained

    Wells attorney “Do you know if the trustor and previous owner were in foreclosure?”
    Our Counsel…”……Objection your Honor….hear say

    Judge- Sustained! “That’s it, I’ve heard enough!
    Counsel and the witness will take a seat.

    The judge ruled in our favor and the homeowner is in the house as we speak after six months of nothing.

    Comments: The broker’s eyes were popping out of his head and he looked like he wanted to go home. Behind me was a criminal attorney who dropped in from another department and trial recess.

    He recognized me and introduced himself. He explained what I just saw was a criminal matter that is being lost in the civil courts. That’s where I got the saying; “you do not need case law for a bank robbery. The rules of sentencing prevail.”

    Look, I have a theory that goes beyond the press and (as usual I ill take flack here) have been correct on everything to date 100%…

    Here goes:
    The willingness for a servicing agent to disappear for months and even years has nothing to do with backlog. These loans are not secured and that is why you’re contacted by a debt collector. Debt collectors only work with charged off assets they purchased at discount in the secondary markets for orphaned and charged consumer debt.

    The home is acquired back by the originating lender using MERS or third parties as debt collectors enforcing their right to as security before they are entitled to such. The do so on behalf of the trust. This they believe satisfies FAS 140 by way of open market bid, at trustee’s sale. Therein is way they try to unscramble the egg as attorney Karl Kop brilliantly put it.


    The credit bid has nothing to do with California State laws. People, a credit bid are used by a lender to raise the bid price in an escalating market where the bid is set to low. It was never intended to be the opening bid, only bid and alternative consideration.

    Look at the title reports three months after the sale. You will see the transfer is not a foreclosure. In the matter of Lacayo Vs. First Franklin (CA Sup Ct -Sacramento) her access to title filings showed her husband and her SOLD the home to Duetsche Bank.

    They bid your home to win it back and satisfy GAAP accounting rules. If this is the case and you likely received a debt collection letter from a false trustee. That served to satisfy the acceleration notice.

    Wrong and no can do! It’s a breach of the deed of trust you signed.

    I cannot disclose all the cases I testify in or have been deposed for obvious reasons and the fact they are often times still open. But when asked under oath if I though the client (for the attorney deposing me) had committed a fraud …I said I did not know.

    He then repeated the question and said ANSWER IT – YES OR NO!
    Mistake counselor – I said YES!

    Counsel said then show me – where?
    ….it took all but 30 seconds to see the notary pens ink and hand writing style seemed to carry the same stroke of the brush . . . . On different documents alleged to be endorsed nine months apart from one another.

    Counsel said – are you kidding me? You really believe what your seeing and telling me?
    Yes I do!

    Based on what . . . the penmanship and ink?
    No…the fact the date on the document in question falls in sequence now as it precedes the notice of default by one day.

    And the Notice of default has a computer generated date that has been replaced by white out and pen scribble. That date was written in by the same person signing the jurat for the notice of sale likely so everything can be in sequential order.
    No offense counsel but I see it about two to three times a week.

    There is another one of the many instances of verifiable breach of trust and material misrepresentations you’re signed in good faith affecting title. It’s a defect in title that demands the sale must fail if the deed is defect.

    This is not about a note it’s about a deed that no longer exists. There is no remedy for bringing a securitized loan out of trust GOT IT! You cannot bring a securitized loan out of trust got it! Read the psa and see the description given to a “deleted” loan and replacement value. Got it.
    The attorneys are not picking up on any of this in their defenses.

    MERS is not a perpetrator …got it! They need to be compelled “join” you’re lawsuit. If the debt collectors acting as a trustee want to stay out of trouble for criminal implications they too must join the lawsuit and not be opposed. Forget the latter because they wont.

    Counsel – you’re not listening here and some will continue to get in and get out of the business with each case and another loss.

    There more, lots more. It’s frustrating.


  22. Raja

    Thank you so much for your post. I have evidence that supports the scheme you describe. And I am not in foreclosure – but I think I was fraudulently placed in default. What a mess we are battling.

    Account number fraud goes into title and homeowners insurance fraud.

    Your post is extremely informative. Thank you, again. Everyone, listen to what Raja is saying.


    I am fighting with these thieves since 2007 as Pro Se. I have also different loan # which I have disputed and they do not have any answer.I ask them about “A” and they reply “B”

    On my search for my stolen identity, I discovered a ‘ring of fraud’ involving several reputable companies who I discover all are under the umbrella of Wells Fargo Bank. If the bank owns the mortgage company (Wells Fargo Home Mortgage) and is also the trustee for the loan (American Securities Company of Nevada) and the title companies (pick one), and the insurance company, the only thing they need to make a deal is the consumer. They issue one loan to the consumer and one to themselves. One is recorded in the county the property is located with the lender as the beneficiary; one is recorded with MERS with MERS as the beneficiary. Since the consumer only pays on the loan he signed up for, the second loan eventually goes into default because of non-payment, which activates the foreclosure process by the trustee. These non-judicial foreclosures are kept in-house and are only known about by the insiders (the MERS network). This includes the lenders, real estate brokers, lawyers and title companies and other criminals, all of whom are breaking the law. Three months later the non-judicial foreclosure takes place without public knowing about it. The trustee for the lender adds the outstanding debt on the second bogus loan to the bid price for the property. Since the bid is now 80% +(typical value of second loan) of the original appraisal, the lender is able to clear the first and second loan off their books and now owns the property. The owner never knows what has happened but technically, the real first loan and bogus second loan is cleared by right of the non-judicial foreclosure, the lender now owns the property free and clear and the owner becomes a renter. If someone other than the lender buys the foreclosure, they are issued a Substitution of Trustee and a Deed of Reconveyance from MERS (Mortgage Electronic Recording System). The payment for the foreclosure (generally the amount of the borrowers loan balance at the time) is the price of admission into the loan pool of funds. Instead of getting to take ownership of the foreclosure property, they now have an investor number and an investor loan number which puts them in the real estate investment trust and secures there position in line to collect. It’s a pyramid. First in………First Out……….There is always the title policy that is often time collected on by the group as well since most of the title policies issued pay the lender for the property because of unmarketable title either because of easements, restrictions or other title flaws that are placed on the property using DMS Order Management Software. The title company can pick a start date and a plant date to insert negative history on the property that never really happened but clouding the title so they can collect once the home has closed. These encumbrances are added to the property history after the preliminary title report is issued but before the property closes escrow. The public doesn’t know about any of this or else it would be anarchy. To add injury to insult, the government ends up paying for the fraud as well through RESPA, HUD claims and through a Federal Reserve bank account held by Wells Fargo unbeknownst to the Federal Government. The RESPA and HUD claims are made possible by keeping the limit of the transactions below the HUD insured thresholds. The Federal Reserve account is an retired payroll withholding account Wells Fargo was supposed to close.

  25. dny

    Usually says originator or ACQUIRED by the originator.

    Also, want to point out that in rare cases – the Depositor was a subsidiary of the originator and seller. But this kind of set up was violation of “true sale’ form the onset – and therefore nothing but concealment of purchase by Wall Street bank and security underwriters – a “shell” to conceal transactions..

  26. ANONYMOUS: Thanks. Howeer, when you say, “The seller is the originator and the Depositor is a subsidiary of the parent Wall Street bank – as is the security underwriter.”

    I have seen plenty of SEC filings where the “seller” is NOT the “originator,” which is perhaps an admission of table funding of the loans. At least evidence of break in chain of title (what little chain of title there ever is anymore.)

  27. Angry and Not Taking it

    Thank you regarding loan number change info – does anyone else have information on this?


    Yes, I know – and there are many aspects of the fraud. Wall Street banks purchased the loans before they securitize them, securitization is the removal of receivables from the balance sheet to off-balance sheet conduit for pass-through of mortgage cash payments only. Wall Street commercial banks and investment banks were the perpetrators with many accomplices.


    Trusts are just holding places. And although courts tend to view assignments and “sales” as the same thing – they are not. If you examine “Mortgage Loan Purchase Agreements” carefully, and in conjunction with securities law, the loans must be sold to security underwriter’s parent corporation before securitization (conversion of receivables). Purchase Agreements show a sale from “Seller” to the Purchaser – who is also the “Depositor”. The seller is the originator and the Depositor is a subsidiary of the parent Wall Street bank – as is the security underwriter. The Depositor then deposits a “pool” of loans (removed from parent’s balance sheet) into a off-balance sheet “Trust”. The Depositor owns the loans and assigns rights to the trustee for the benefit of certificate holders to the Trust. All the Depositor can assign is current cash payment right pass-through – since the Trust is set up for securities – which can only be “liquid” and “current receivables”. THEN THE CERTIFICATES to Trust (now securities for pass-through) are sold to Wall Street Bank’s other subsidiary – the security underwriter – who now owns the securities. Thus, the parent Wall Street bank has used accounting gimmick to convert loan ownership into security ownership (all by them). I have said over and over that the certificates to the Trust are sold to the security underwriter – they are the only “beneficiary” of rights (Goldman admitted in hearings that they purchased the loans and converted to securities)

    Once a loan is in default, it must be removed from the “pool” since the loan is no longer current – and, therefore, as security pass-through. Also posted here – law journal article from Northeastern. Both law journal articles and federal reserve opinions have great weight in court.

    The Federal Reserve’s Interim Opinion for May 2009 TILA Amendment clearly states that pass-through “investors” are not the “creditor” (as the Fed defines as “covered person.” Quote

    “Accordingly, an investor who purchases an interest in a pool of loans (such as mortgage-backed securities, pass-through certificates, participation interests, or real estate mortgage investment conduits) but does not
    directly acquire legal title in the underlying mortgage loan, is not covered by Sec. 226.39.”


    “Under TILA section 131(f)(2), a party servicing the mortgage loan is not treated as the owner of the obligation if the obligation was assigned to the servicer solely for the administrative convenience of the servicer in servicing the obligation. Accordingly, the requirements of Sec. 226.39 do not apply to a loan servicer in this circumstance, even if the servicer holds legal title to the loan.”

    Northeastern article – again is at

    Read through carefully and especially as to REMICs and foreclosure assignment and “improper knowledge.”

    Also see Mr. Garfield’s new post regarding sale of non-performing loans (NPL).

  28. Neil You gotta help stop Quality Loan Service, they’re working their way heavy into AZ.


    REMIC supposedly requires “true sales” of the underlying “loans.” If what you are saying (that the “investment bank” or SPV still “owns” the loans) is true, then why the alleged “Trusts?” Why the “Trustee” ruse? Why are “Trustees” for “XYZ Certificate holders” filing hundreds, if not thousands of foreclosures all over the country? If you read any “Trust indenture” or PSA, it’s pretty clear that the scheme purports to establish that the “certificate holders” (the “investors”) own a pro-rata share of the “assets” of the “Trust” (the “loans”)as “beneficiaries.” And the “loans” are said to have been “assigned” “all right, title and interest” to the “Trusts” (that were not really “trusts”) held (implicitly but not really) for the “beneficiaries of that “trust.” Yet, oddly, they (the certificate holders) are only entitled to a “pass thru interest rate.” This latter part, in conflict with the offering documents seems to be what you say is the rule, and I would say is the deviation from what the clear language of the documents purport to establish about the “securitizations.”

  30. ANONYMOUS, you are reliving my nightmare! please don’t tell me you live in california, and please don’t tell me you have litton loan. the loan number thing change happened with me too. you could actually use it to your benefit, but you have to be smart about it first thing DO NOT SIGN ANYTHING WITH YOUR NEW LOAN SERVICER especially a modification or forebearance, if they send you a debt validation letter dispute it. what happened was they paid off your loan, but now they are going to do anything and everything they can to get you to affirm that you owe the debt. check your local county recorder’s office to see what documents might be affecting your home. and remember DON”T SIGN ANYTHING WITH THE SERVICER IT’S ALL A TRAP.

  31. To Anonymous,
    I was given to loans at closing and both loan numbers are on on my deed of trust (2). Before I sold the house I received a packet from HomeQ Servicing that contained info with those two loan numbers I mentioned above PLUS another loan number that I guess I completely forgot about because the number was never on either of my deed of trust. When I looked back through my paperwork I noticed that mysterious 3rd number was actually on my invoices from New Century Mortgage. My husband remembers asking HomeQ about the loan number change and they said it was because we now own the loan. It was just part of the process. When we sold the house we received our “paid in full” notes, I noticed that other account number is not recorded on my notes (2) either. Do you know why that is? Is there another deed of trust out there somewhere with this 3rd account number?
    Thank you!
    Heather Hess


    Good point, investors never own any part of the loan, if so how can investors object to a loan modification ? I can imagine that a change of payment[s] amounts may be a claim that these investors my raise as yey or ney ,but my guess is that they invested in a silent share , or lacking any decision making voice. Can anyone address this please?

    I know that when a loan servicer changes as mine did [ my loan # changed also ]. This happened with 2 different loans . servicer changed from Fremont to Litton – with both loans.

  33. Anonymous,
    I was just helping out as much as I can by forwarding Neil’s premise of fraud to the SEC.

    Tell me, where do you think fraud occurred by the investment banks?

  34. Simon

    Well, I guess my “question” period did not last too long – because now, as always, I am answering.

    1) Investment banks must purchase the loans before they securitize. Securitization is simply a conversion of owned receivables (current) into pass-through securities. It never passes through DIRECT mortgage loan ownership.

    2) Investors never own the loans – they own a pro-rata share to “pooled” receivable mortgage cash payments pass-throughs. Investors can never “discharge” a mortgage for a refinance, and while they may “object” to modification of the receivable pass-through which may limit their cash flows, they cannot “modify” a mortgage – and any objections is to the security underwriter and it’s servicer – and not DIRECTLY to the borrower..

    3) Conveyance in security pass-through is not for sale of mortgage loan ownership – but only for pass-through of mortgage cash payments received (Receivables) for the “pool” of securitized accounts receivable pass-throughs. Investors are never the creditor or lender or mortgagee – not ever.

    4) Whether or not the “investors” were paid for cash receivables defaults, or the trustee paid for cash receivables defaults, or any other party – is a good argument – but irrelevant as to mortgage loan (note) ownership. Investors are NOT the owners of your mortgage loan/note, and have no right to foreclose, to discharge, or to grant a refinance or modification. They do not hold your mortgage loan on their balance sheet – and, very likely – they do not even have a balance sheet.

    Time to regroup to incorporate ALL aspects of the fraud. And, as case law is demonstrating, investors only have a right to cash flows – any action for failure to pass-through the cash flows is against the security underwriters – and never the borrower. Why?? because investors do not own your loan.

  35. Know I am usually on the other end, but I have question for anyone that can answer – Why, and under what circumstances is a mortgage loan account number changed?? And, what if someone else has your original account number??

    Finally, are account loan numbers relevant in SPVs – or can loan numbers be changed and still refer to the original SPV Mortgage Schedule??

    Appreciate any answer.

  36. I just sent this to the SEC on their online fraud complaint form:

    Just so you know, Goldman Sachs testimony to the Senate committee was fraught with lies. Here are a few:

    1. There were no losses. They were making money hand over fist.
    The senate focused only on a single topic — some of the credit default swaps — those that Goldman had bought in its own name, leaving out all the other swaps bought by Goldman using “other banks and entities” as cover for their horrendous behavior. They also left out all the other swaps bought by all the other investment banking houses. But most of all it leaves out the fact that at no time did the investment banking firms actually own the mortgages that the world thinks caused enormous losses requiring the infamous bailout. It’s a fiction.

    2. In nearly all cases they sold the securities “forward” which means they sold the securities first, collected the money second and then went looking for hapless consumers to sign documents that were called “loans.”

    3. The securities created the intended chain of securitization wherein first the investors “owned” the loans (before they existed and before the first application was signed) and then the “loans” were “assigned” into the pool.

    4. The pool was assigned into a Special Purpose Vehicle that issued “shares” (certificates, bonds, whatever you want to call them) to investors.
    Those shares conveyed OWNERSHIP of the loan pool. Each share OWNED a percentage of the loans.

    5. The so-called “trust” was merely an operating agreement between the investors that was controlled by the investment banking house through an entity called a “trustee.” All of it was a sham.

    6. There was no trust, no trustee, no lending except from the investors, and no losses from mortgage defaults, because even with a steep default rate of 16% reported by some organizations, the insurance, swaps, and other guarantees and third party payments more than covered mortgage defaults.

    7. The default that was not covered was the default in payment of principal to investors, which investors will never see, because they never were actually given the dollar amount of mortgages they thought they were buying.

    8. The entire crisis was and remains a computer enhanced hallucination that was used as a vehicle to keep stealing from investors, borrowers, taxpayers and anyone else they thought had money.

    9. The “profits” made by NOT using the all of investor money to fund mortgages are sitting off shore in structured investment vehicles. The actual funds, first sent to Bermuda and the caymans was then cycled around the world. The Ponzi scheme became a giant check- kiting scheme that hid the true nature of what they were doing.

    This is the fraud trail that the SEC and the Justice Dept needs to consider as they dig in to these criminal organizations. This IS what happened.



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