Investors Class Action Against Securitizers

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As Weidner points out, these cases are well worth your time in research. With their minions of lawyers, they have more information that is industry specific than you can accumulate or absorb.

Investors are aligning themselves with the interests of the borrowers. Here they are attacking the false representations of underwriting standards, but more importantly, they are confirming what we have been saying all along: the loan originator (who is really a mortgage broker) was named as Lender in the closing documents but had nothing to do with underwriting or funding the loan. They were an agent working for an undisclosed principal.

7 Responses

  1. David,

    Read Ken Harvey’s story in the Washington Post today.

    Seems Bank Of America feels they have found a way to avoid foreclosure and get those bad loans off the books faster by offering home owners Deed in Lieu. Sadly many home owners will not even realize they are still being take advantage of by the pretender lender!

    http://www.washingtonpost.com/wp-dyn/content/article/2010/06/25/AR2010062500200.html?sub=AR

  2. @ David

    You are the freakin man!!!

    We need more people like you, enough of us outlandish people and we can get some damn exposure and bring these bastards down!

  3. Richard S

    Here is a copy of the complaint filed…

    http://www.scribd.com/doc/33508547/Lawsuit-Brought-Against-CWALT-Amended

    There are several others I’ll dig-out and upload so folks can snag them. I also found that if you go to the websites of the law firms filing – these investor law firms usually have UPDATED filings right on their websites. This is GOOD STUFF – let these freaking Titan law firms duke it out – I’ll hangout long enough to pick up the scraps left behind because those little scraps can produce some serious questions for a judge…

    Consider the dilemma this one lawsuit puts on any foreclosure court… If Countrywide KNOWING sold 965,986 illegal mortgages to borrowers they knew could NOT repay – then deliberately hid that fact from the borrowers – how is it even conceivable for a damn judge in good conscience going to permit a foreclosure mill to continue foreclosing on ANY Countrywide Mortgage Loan?

    How could that judge possible know if that loan was legal? How could a judge issue a sale of a property knowing that lender deliberately set the trap – was paid from the insurances – never risked a nickel of their own funds – and now have the audacity to throw the people to the streets… if that doesn’t open up the biggest can of whop-ass, then we should all drink from the cups of Jones Town and take our medicine with complaining…

    If it were some sort-of computer glitch – mistaken error of some-type, then they would at least have a BAD EXCUSE. But to foreclose anyway – someone needs to change their freaking bong-water more often – that is going to create a freak revolution…

    Keep in mind – this evidence is already in the courts – much of it is testimony from Countrywide’s own employees during depositions… So, how can any judge rely on the documentation provided by the foreclosure mills – where in the hell did the foreclosure mill get their documentation?

    If that is NOT the definition of “ILLEGAL SEIZURE” of our property, then I’d like to know what the hell is?

    I didn’t even get into the depositions of Appraisers being threatened of their jobs – if they did NOT produce the “AMOUNT” necessary in their appraisals Countrywide made sure they knew they’d never work again…

    I think the next big issue we must DEMAND regardless what it takes – threaten the bastards if necessary – but I want to see the damn insurance claims. That’s what makes this SO FREAKING HEINOUS – not only have they lied schemed and stolen money from decent hard working citizens – they have the arrogance to commit insurance fraud, securities fraud, mortgage fraud, and betray the trust of these people – then come back – throw the moms & dads and kids to the damn streets and take their freaking house…? Have they started using peyote mushrooms on their salads or something? They’ve been paid multiple times by their insurance schemes – and they have the audacity to throw people to the street too… Ya know – the only thing worse than a freaking liar & thief are those who defend them… I told the FBI that I’ll rent a damn U-Haul truck – paint a big-ass sign on the top and sides – McVeigh’s U-Hauler – Special Deliver and park that damn thing right in front of the 5-story building where that foreclosure mill is working with their 24-attorneys, 4-parnters, 15 managers, 65 paralegals, 113-other employees, and HOPE it’s a damn family day – bring their kid to work-day… I was warned – I better NOT… but that’ll get the someone’s attention…

    As far as I am concerned – these freaking people are worse than the terrorist insurgents our brothers & sisters are fighting in the Middle East. They are actively manipulating our laws & courts to fill their greedy freaking pockets at the expense of folks who actually don’t know… Most of these folks have no idea this was done to them… but I intend to make sure EVERYONE finds out. Once I get my hands on the insurance claims proving these lenders have cashed in on these loans… Katie-bar-the-door – all hell is going to break loose – this is as un-American and despicable as it gets.

  4. @ David

    Can you please post links to those court cases you talk from, i could really use them for my potential case.

  5. While researching the cesspool where our loan was blended & sold I came across several investor lawsuits against Countrywide/BoA. The investors won the lawsuit and within their complaint was tons of GOLDEN NUGGETS throughout.

    These lawsuits are based upon the FRAUDS committed by the Countrywide. IMHO – ALL of these FRAUDS are directly & indirectly related to our causes against these lenders. This information was specific to Countrywide BUT is applicable to the others as well. As several have posted these are treasure-troves of valuable information that homeowners could never afford to produce. Below are direct copy-paste snips from their lawsuit.

    Here’s my summary – This sampling from the investor’s research submitted as Material Evidence for their lawsuit was from Mortgage Loans produced between 2005-2006 –

    Countrywide sold approx 142-Billion Dollars worth of Mortgage Loans to consumers that Countrywide KNEW could NOT REPAY. Countrywide not only KNEW these borrowers could NOT REPAY – they HID it from the borrowers using various schemes. During this same time Countrywide had approx 14,905 foreclosures on their books. The average foreclosure amount was approx 147k. So, here’s a little math…

    14,905 x 147k = 2,191,035,000 – OR – approx 2.2 Billion Dollars – round numbers… However, Countrywide wrote 142-Billion Dollars worth of (illegal) Mortgages… So, using their own numbers…

    142-Billion ÷ 147-thousand = 965,986 Mortgage Loans were theoretically sold to consumers. Equaling 19,320 illegal loans per state – OR – an approx average of 2.8 Billion Dollars PER STATE – and keep in mind – this is only ONE SMALL SLIVER from a section of Countrywide’s Mortgage loans and by Countrywide’s own admission – they KNEW these borrowers COULD NOT REPAY THE LOANS!

    Question – how many of those 14,905 foreclosure families were tossed in the streets? How many of those loans were illegal? How many families have lost everything because they trusted the loan agent – broker – mortgage lender – and to this day still have no idea they were given an (illegal) loan they could have never afforded – and it was deliberately HID from them. Banking 101 – it is illegal for a federally insured institution to approve a loan the borrower cannot repay…

    Countrywide used teaser-rates to calculate these loans and qualify borrowers. Then if the borrowers still did not qualify they re-amortized their loans using 40 and sometimes 50-year tables… WHILE giving the borrowers 30yr paper – or – worse a “summarized” amortization without showing the increases or potential increases customary with these loans.

    Here are the snips from this lawsuit… (and note this is directly from the lawsuit)

    …Indeed, Countrywide issued mortgages to borrowers that did not satisfy the requisite eligibility criteria

    • …Countrywide employees did not properly ascertain whether a potential borrower could afford the offered loan, and many of Countrywide’s stated income loans were based on inflated estimates of borrowers’ income. For example, (1) a Countrywide employee estimated that approximately 90% of all reduced documentation loans sold… had inflated incomes; and (2) one of Countrywide’s mortgage brokers, One Source Mortgage Inc., routinely doubled the amount of the potential borrower’s income on stated income mortgage applications.

    • …a review of 100 stated income loans by the Mortgage Asset Research Institute revealed that 60% of the income amounts were inflated by more than 50% and that 90% of the loans had inflated income of at least 5%.

    • …Countrywide also originated and sold adjustable rate mortgages (“ARMs”) to borrowers who could not afford the ARMs … the company admitted in a May 7, 2007 letter to the Office of Thrift Supervision that in the fourth quarter of 2006 alone “almost 60% of the borrowers who obtained subprime hybrid ARMs [from Countrywide] would not have qualified at the fully indexed rate” and that “25% of the borrowers would not have qualified for any other [Countrywide] product.”

    • …The fully indexed rate is calculated by adding the current value of the rate index (which fluctuates monthly) and adding the margin agreed to by the borrower. The margin remains static for the life of the loan. The margin on Countrywide loans could be as high as 4%. Thus, if the Countrywide ARM identifies the rate index as COFI (which was at 2.8% in July 2008) and the margin as 4%, then once the cap or “teaser rate” has expired, the borrower will be subject to an interest rate equal to the fully indexed rate (“FIR”) or 6.8% for that month.

    • …most of those who had Countrywide ARMs paid only the “minimum” payment – a payment that is based on the teaser rate of 1% to 1.25% as opposed to the FIR of 6.8%, meaning that borrowers were making payments that were less than the amount of interest accruing on the loan after the teaser rate expired. The unpaid interest that accrues while the borrower is making the payment based on the teaser rate is tacked on to the principal. Once the principal is 115% of the original loan, then the borrower’s monthly payment immediately is raised in order to a level that will pay off the new balance (original principal plus the unpaid interest) of the loan.

    • …Countrywide thus admitted to the Office of Thrift Supervision that even though 60% of its potential borrowers would not have qualified for a Countrywide loan with an interest rate of 6.8%, they were qualified for the same loan with a teaser rate of 1.25%, even though that borrower would likely experience “payment shock” and be unable to pay off the loan in the near future. Even when Countrywide employees received proper income documentation (i.e., a W-2 form) demonstrating that the borrower did not qualify for a loan, the loan was submitted as a stated income loan so as to obtain approval of the loan.

    • …employees were pressured to issue loans to unqualified borrowers by permitting exceptions to underwriting standards, incentivizing employees to extend more loans without regard to the underwriting standards for such loans, and failing to verify documentation and information provided by borrowers that allowed them to qualify for loans.

    • …According to the California AG, Countrywide used a system called CLUES or Countrywide Loan Underwriting Expert System. A Countrywide underwriter would enter the borrower’s financial and credit information and the terms of the loan into CLUES, which would then provide a loan analysis report that indicated whether the loan was within Countrywide’s underwriting guidelines. CLUES reports stating that a borrower was not within Countrywide’s underwriting guidelines often were ignored in order to effectuate the loan.

    • …former California loan officer for Countrywide further explained that its loan officers typically explained to potential borrowers that “with your credit score of X, for this house, and to make X payment, X is the income that you need to make”; after which the borrower would state the he or she made X amount of income.

    • …The California AG Complaint alleged that Countrywide’s practice of approving loans based on the borrower’s ability to pay the teaser rate (as opposed to the fully indexed rate), as admitted to by the company in the May 7, 2007 letter to the Office of Thrift Supervision, commenced in 2005.

    • the company [Countrywide] admitted that had those guidelines been in effect during the relevant time period, “it would have rejected 89% of the option ARM loans it made in 2006, amounting to $64 billion, and $74 billion, or 83%, of those it made in 2005.”

    I have written our AG and the Attorney Grievance Commission because this is an absolute disgrace to our legal system. The foreclosure mills KNOW what their clients have done and this is why they are attempting to foreclosure at such a frenzied pace. They deliberately denying citizens their civil rights and due process. This is especially so in non-judicial states.

    My question to the FBI was – what happens when a MILLION homeless families finally figures out they were ripped – and our LEGAL system did not protect them – NOR – does it have any intention to do so…? Their response was – “what do ya-mean…?” My response – how many McVeigh U-Hauler’s will we see before someone starts getting the message? One or two loons going postal on these foreclosure mills & lenders is easily dismissed – ONE MILLION will NOT be so damn easy? The agent was silent?

    ENRON burnt how many people 15-yrs ago – then the Technology Bubbled busted – then the Housing Bubble popped – and how many TRILLIONS of DOLLARS have evaporated – WHY did they evaporate? Who kept all that money? NOW – families are losing everything they own and having their properties unconstitutionally seized without due process – while mom & dad and their children are tossed to the streets living in shelters, cars, and drug infested section-8 housing projects? What happens when they find out it was ILLEGAL – the mortgage lender was paid via the Mortgage Insurance 100% of the unpaid balance for an ILLEGAL LOAN – then was paid again filing bond insurance claims – security insurance – separate mortgage insurance – default insurance and special hazard insurance – while these families are left in the streets? The liars & thieves who scammed & bilked these families for all they had – stole their futures – left a mark on their foreheads & scars upon their families – then the families learn the courts gave their homes to the foreclosure mills that had no right to even foreclose?

    The longer our courts turn a blind-eye, give a wink & nod, to the foreclosure mills – the greater this nightmare will explode across this nation. Thomas Jefferson penned it best – “…But when a long train of abuses and usurpations, pursuing invariably the same object evinces a design to reduce them under absolute despotism, it is their right, it is their duty, to throw off such government, and to provide new guards for their future security…”

    IMHO – the TRAIN has already left the station – I am not advocating violence. All I am stating is the obvious – sooner or later the AMERICAN FAMILY bubble is going to BURST and there will be consequences. This has already gone WAY-BEYOND any monetary value. This is now heading for a face to face confrontation with the fundamental TRUTHS we hold to be self-evident – all men are created equal – that they are ENDOWED by their CREATOR with certain unalienable RIGHTS… those RIGHTS are NOT given to us by the government! As long as they keep each family fending for itself the foreclosure mills will continue trampling due process. Class Action is a lawyer’s paradise and the borrowers will still lose everything pay the lawyers. Class Action is not the answer – but somehow the PEOPLE must start making their voices heard – and demanding civil rights or civil unrest = chaos.

    As the old adage says – keep the powder dry…

  6. Well it’s about f*****ing time!!!!

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