Well you have to give credit to Sheila Baer> She gets it. Here she is going after the IndyMac executives for making loans to developers that they knew would not be repaid. It is the first time that an important agency has recognized the link between the malfeasance of the originating lenders, the securitization intermediaries and the developers.

It is central to the issue of appraisal fraud. Anyone who moved into a new development knows that the developer was raising prices like crazy to create a a sense of urgency on the part of borrowers. Those prices from the developers were used an excuse to inflate the appraisals ona continual basis, so that a house of exactly the same model and features would be appraised one month for $350,000 and then a month later for $375,000 or more.

The developers knew they could do this because they knew the “lender” would approve it. It was a classic dysfunctional dance in which everyone was lying to everyone else. And everyone, except the borrower and the investor-lender knew it. Thus suits against the developer, especially those with mortgage offices on premises, can be expected to rise by both private actions and public actions from regulatory agencies and law enforcement. It was fraud.

Posted on July 13, 2010 by Foreclosureblues,0,4893259.story
FDIC sues four former IndyMac executives
The agency accuses the managers of the defunct bank’s Homebuilder
Division of acting negligently by granting loans to developers who
were unlikely to repay the debts.
By E. Scott Reckard, Los Angeles Times

July 14, 2010

Launching a new offensive against leaders of failed financial
institutions, federal regulators are accusing four former executives
of Pasadena’s defunct IndyMac Bank of granting loans to developers and
home builders who were unlikely to repay the debts.

The lawsuit by the Federal Deposit Insurance Corp. alleges that the
IndyMac executives acted negligently and seeks $300 million in

It is the first suit of its kind brought by the FDIC in connection
with the spate of more than 250 bank failures that began in 2008.
Regulators said it wouldn’t be the last.

“Clearly we’ll have more of these cases,” said Rick Osterman, the
deputy general counsel who oversees litigation at the agency.

The FDIC has sent letters warning hundreds of top managers and
directors at failed banks — and the insurers who provided them with
liability coverage — of possible civil lawsuits, Osterman said. The
letters go out early in investigations of failed banks, he added, to
ensure that the insurers will later provide coverage even if the
policy expires.

The four defendants in the FDIC lending negligence case, who operated
the Homebuilder Division at IndyMac, collectively approved 64 loans
that are described in the 309-page lawsuit.

They are:

•Scott Van Dellen, the division’s president and chief executive during
six years ending in its seizure;

•Richard Koon, its chief lending officer for five years ending in July 2006;

•Kenneth Shellem, its chief credit officer for five years ending in
November 2006;

•William Rothman, its chief lending officer during the two years
before the seizure.

Through their attorneys, they vigorously denied the allegations.

“The FDIC has unfairly selected four hard-working executives of a
small division of the bank … to blame for the failure of IndyMac,”
said defense attorney Kirby Behre, who represents Shellem and Koon.
“We intend to show that these loans were done at all times with a
great deal of care and prudence.”

Defense attorney Michael Fitzgerald, who represents Van Dellen and
Rothman, said no one at the company or its regulators foresaw the
severity of the housing crash before it struck, and that IndyMac was
one of the first construction lenders to pull back when trouble struck
the industry in 2007.

Fitzgerald added that the FDIC thought Van Dellen trustworthy enough
that it kept him on to run the division after the bank was seized.

The suit naming the IndyMac executives was filed this month in federal
court in Los Angeles, two years after the July 2008 failure of the
Pasadena savings and loan. The bank is now operated under new
ownership as OneWest Bank.

IndyMac, principally a maker of adjustable-rate mortgages, was among a
series of high-profile bank failures early in the financial crisis
that were blamed on defaults on high-risk home loans and the
securities linked to them.

But the majority of failures since then have been at banks hammered by
losses on commercial real estate, particularly loans to residential
developers and builders — and IndyMac had a sideline in that business
as well through its Homebuilder Division.

The suit alleges that IndyMac’s compensation policies prompted the
home-building division to increase lending to developers and builders
with little regard for the quality of the loans.

“HBD’s management pushed to grow loan production despite their
awareness that a significant downturn in the market was imminent and
despite warnings from IndyMac’s upper management about the likelihood
of a market decline,” the FDIC said in its complaint.

An investigation of IndyMac’s residential mortgage lending practices
could lead to another civil suit, potentially naming higher-up
executives, attorneys involved in the case said.

Separately, a criminal grand jury investigation into the actions of
IndyMac executives continues, according to a knowledgeable federal
official who was not authorized to publicly discuss the investigation.

The bank, known mostly for providing home loans without requiring
proof of income from borrowers, had operated its builder-loan division
since 1994.

The lawsuit said IndyMac had about $900 million in land acquisition,
development and construction loans on its books when the bank
collapsed. Losses on the portfolio are expected to total $500 million
— minus whatever the FDIC can recover through litigation.

The FDIC’s Osterman said the government recovered about $5.1 billion
from former bank and thrift executives and their outside professional
advisors after the last major financial crisis devastated the savings
and loan industry in the 1980s. Most of the money came from insurers
that had written policies covering bank directors and officers against
negligence or other misdeeds.

Because the warnings of possible lawsuits are mailed out during the
early stages of investigations, it’s frequently decided later that the
cases aren’t strong enough to bring or aren’t likely to be
cost-effective and so are dropped, Osterman said.

FDIC spokesman David Barr said the agency generally had three years
from the date of a failure to file civil cases.

34 Responses

  1. Hi; does anybody knows whow to get the cusip number from indymac /onewest bank my home was foreclosure….thank you

  2. Daniella- two additional possible sources on the internet-(i think that the perpetrators of this massive modern day holocaust are intentionally deleting info from the net to throw us off) These two, in addition to SEC EDGAR, are; ABSNET (subscription required, but not always, and THE CONSUS GROUP( $75-850 per document, with a free preview). Also try docstoc. You may find, like I did, that the underlying pool which purportedly holds your note(MERS holds the mortgage, by assignment) has been paid off, also, the denomination, USD (us dollars, yen, deutschmarks, etc), the last reporting date, the date of the sale, the amount of the pool, etc. Then you have to find out what constitutes a default under the PSA, (90 days late, 120,etc) which will tell you whether your loan was/is legally in default as per the PSA. Remember, the PSA is the controlling document for a securitized loan in a court of law. Tell the judge this. If he doesn’t get it, tell him that this is important so that he can determine if the people trying to foreclose on you have any rights to the action. Sue them for millions. (sorry, got off track there) If your loan defaults from the trust, then it becomes an unsecured debt- check with ANONYMOUS or Jan VanEck on this, I am running out of memory, Good luck.

  3. Alina- in the prospectus for each XYZW-0000-0 trust or pool, there is a MORTGAGE LOAN schedule, as well as a generic breakdown of mortgages by state, by dwelling type, by value, etc. In my (one of 3) prospectuses, the MORTGAGE LOAN SCHEDULE pages were “intentionally left blank”. IF the mortgages in the pool were actually identified by loan number, this would have prevented the sponsor from selling the same loans over, and over, and over, and over again to persons at opposite ends of the globe, who would then have no idea that the same loans were sold to dozens if not hundreds of different retirement portfolios, municipalities, union pension funds, etc. The ensuing credit default swaps, which magnified the losses by the number of contracts sold,are what nearly sunk the global economy. Take a 1 Billion Dollar pool of mortgages, and then sell 2000 CDS contracts on it, when the $1billion pool tanks,(but not really), the payout on the CDS contracts is 2 trillion dollars, and that is just 1 pool. Moodys rated 43, 400 different pools, and they are just one of 4 ratings agencies. Take it from there.

  4. To Daniella Mars- you are asking ,in essence if there is any proof that the foreclosing entity even has the right to foreclose, is the mortgage even in that trust, does the trust still exist, did it ever exist, where is the proof? There isn’t any. Under the 2009 Federal Reserve interim opinion, the borrower was in effect guaranteed in writing that they could find the identity of their creditor, (the covered person, who could account for your loan on their balance sheet.) Well the entire financial industry has ignored that directive, just as they ignored the mandatory modification process. If going pro se, you have to tell the judge that in a securitized loan, the PSA is the controlling document. You can’t breath without it. You can’t speak without it. Whatever the opposition says is completely irrelevant if it does not comport to the PSA. The next item is the chain of assignment to insure a perfected title. You are no doubt, like everyone else here, holding assignments from originator(lender) to MERS, and from MERS to the Trust. This is A>D>E. You are missing , at the very least , the sponsor and the depositor, the mortgage went from the originator(lender) to the sponsor, and from the sponsor to MERS, and from MERS to the trust. These extra entities were thrown in to make the trust a BRE, (bankrupt-remote entity to allegedly protect the debenture holders. This falls under the REMIC provisions of the IRS code(forget the no.) Without this, the whole charade collapses even worse than it has, with the sponsor liable for a 100% tax on all revenue. This should keep you in the right direction, I can tell by your posts that you are trying to understand all this. Best of luck and fire away with any questions, I have about an 80% accuracy level, sorry to all readers if I have muffed up any details, PLEASE CORRECT ME!

  5. Thanks Daniela,

    I do have the CUSIP and have discovered amazing info regarding the trust.

    Problem is that none of the info has the loan files or individual loan info attached so I I do not know in which tranche my loan is. The invostor lawsuits state they were provided with “loan tapes.” This is something I believe we should be able to get.

    Not sure if anyone has addressed this issue yet, but what about identity theft. They gave countless unknown persons access to our personal info and used that personal info to sell the tranches.

  6. Alina,

    If you have the CUSIP number just google it – amazing what you can find. If you don’t have on the “homeowners”section here i place the link of a lot of Trusts and their Cusip and Insurance company.

    thanks guys

  7. Alina, Deontos,

    What if on the lawsuit they just “picked”a Trust and stated that our loan belongs to that trust ? I mean, aren’t they perpetrating all kinds of fraud ?

    Can’t I just dismiss the lawsuit for lack of them being the right part to foreclose ? They CAN’T prove that my loan belongs to that one security !!!

    Can I go to the FBI with the printed Sec fillings and file a claim for fraud ? It is US BAnk stating they are the trustee of the trust that does not have my loan! It is like trying to still my home !.

  8. Daniela

    You said: …”Do you know if when they went “dark” they could have added my loan to the pool ? What should I do ? ….”

    Not sure how to go from there. They may not be in the SEC’s “domain”. But they MUST be overseen
    by someone? Perhaps a NY regulator or these folks seem to LOVE Delaware. Got to find where they ‘live” after the SEC and then carry on the hunt there. Jan, UKG, Neidermeyer? Any ideas on this?

    I am not sure the author would volunteer ANYTHING. But the person who wrote the article I sourced in the previous post seems to be “in the know”.

  9. Deontos,

    Very interesting reading. My trust “went black” in January 2006. It is now private, however, nothing was filed with the SEC. Not sure when it went private. Not sure how it can go private after it went dark.

    Additionally, I was able to locate several tranches from the trust as part of several CDOs owned by Citigroup, Deutsche, Credit Suisse, FDIC, and Goldman. I have not yet been able to actually locate the tranche that holds my loan, however.

  10. Deotons,

    Thank you so much ! Thanks everybody ! Soon I will become an expert in securities…

    Do you know if when they went “dark” they could have added my loan to the pool ? I red all the Sec docs my loan is not listed on the Trust that they allege we are in the foreclosure.

    What should I do ?


    +++ Getting Out of the SEC System +++

    Many BHC’s that registered their shares under the ’33 Act in connection with an initial public offering and wound up with less than 300 shareholders of record when the offering was completed, elected to suspend further reporting obligations by filing a Form 15 with the SEC at the beginning of the next fiscal year. Exiting the SEC reporting system in this way is often referred to as “going dark.” In most instances, this requires little more than filing a Form 15 with the SEC, and it does not involve shareholder approval. “Going dark” is distinguished from “going private,” which is discussed below. BHC’s that “go dark” will realize substantial cost savings (generally well in excess of $100,000 annually) when they are relieved from SEC reporting and SarBox compliance rules. In addition, management of these BHC’s will have greater flexibility in administering their companies’ business.


  12. usedkarguy and neidermeyer,

    again thank you for using your time with me. I can’t say how much i appreciate you both. When this nightmare ends i want you guys to come for a barbecue.

    On form 8K/A they list a lot of loans. My number is not there, also the amounts do not match my loan amount.

    on form 15-15D – they mention “less than 300 holders”.
    do you know what it means ? Would all this holders have to assign the note ?

  13. Daniela Mars ,

    Wells Fargo tried to “vertically integrate” everything through wholly owned subsidiaries ,, Norwest is one of them as was/is AHM ,, Norwest is listed as “depositor” which means nothing ,, they look like they might have marketed shares in the trust?? do a google search on norwest asset security corp and the 4th hit should be an edgar page .. it is very long , I didn’t read it but Norwest is there..

    You really need to read the whole PSA and the prospectus (usually a short version and a full version) ,, Wells was recently found to have NOT CREATED 7 of 12 trusts for 2006 … because they kept everything inhouse through it seems they got very sloppy ,, they might have done the calculations and produced the filing docs but that doesn’t mean that they ever created the trust they were reporting on. My trust was never created as described in the prospectus.

  14. Goldman settled the case and is willing to pay $550 million. Someone let these criminals off easy..
    The cover up continues.

  15. Daniela, those old Norwest Asset Securities Corp Trusts are the repositories for the bad bonds and such (Bucket #3) of uncollectable and written off loans that they still carry as assets. My certificates are in a WF 1999 Trust (Formerly Norwest Asset Securities Corp.). Your actual loan number will show up in one of the “recent filings” sometime after the closing date of the trust (10k). Also, look at the “EX-99’s”, these will have mortgage schedules.

  16. Goldman settled the case and is willing to pay $550 million.

  17. i hope she digs into all those builder, brokers, and lenders agreements with indymac.

    they paid kick backs like crazy
    to the point that the checks the mortgage brokers got 30 days after settlements were bigger than the YSP’S they levied on the Hud 1’s

    the loan officers did not even know their brokers were getting this kick back

    financial geniuses? common crimminals that is what they are

  18. neidermeyer thank you so much ! I have Cusip number, I have the Trust number I found all the Sec documents, I just can find my loan number. If they say that your loan is in a trust, your loan number has to be somewhere in the documents of that trust right ?

    Second question : there is an “agent” on the Sec fillings for AHM someone called – Norwest Asset Sec Corp Mort Ps Thr Cert Ser 1998-1 Trust. Do you know what this agent is about ?

  19. Daniela Mars …

    Try the easy way first ,, using Google search for the loan number on your closing docs and the number assigned by AHMSI (they issued their own numbers just as MERS does/did) … if you get any results from a site like the SEC , EDGAR or any WF subsidiary you’ve found it … otherwise you just need to find everything related to the cusip assigned to your “trust” and go through them.

  20. We can all relate to this story. Read below:

    The kids filed back into class Monday morning. They were very excited. Their weekend assignment was to sell something, then give a talk on productive salesmanship.

    Little Sally led off: “I sold girl scout cookies and I made $30,” she said proudly, “My sales approach was to appeal to the customer’s civil spirit and I credit that approach for my obvious success.”

    “Very good,” said the teacher.

    Little Jenny was next:

    “I sold magazines,” she said, “I made $45 and I explained to everyone that magazines would keep them up on current events.”

    “Very good, Jenny,” said the teacher..

    Eventually, it was Little Johnny’s turn.

    The teacher held her breath …

    Little Johnny walked to the front of the classroom and dumped a box full of cash on the teacher’s desk. “$2,467,” he said.

    “$2,467!” cried the teacher, “What in the world were you selling?”

    “Toothbrushes,” said Little Johnny.

    “Toothbrushes!” echoed the teacher, “How could you possibly sell enough tooth brushes to make that much money?”

    “I found the busiest corner in town,” said Little Johnny, “I set up a Dip & Chip stand and gave everybody who walked by a free sample.”

    They all said the same thing, “Hey, this tastes like dog $hit!”

    Then I would say, it is dog $hit. Wanna buy a toothbrush?”

    “I used the governmental approach of giving you something $hitty for free, and then making you pay to get the taste out of your mouth.”

    Exactly what the government promoted…Free money with $hit terms that went into default..Now we are standing in our neighborhoods surrounded by foreclosures and we have to pay to get the $hit out our yards.


  21. Can someone help me: on the zillioons of papers filled by American Home Mortgage with the Sec, where exactly do I find if my loan belongs to that specific MBS like they are saying.
    Thank you !

  22. Better yet maybe we should move to Mexico and take our jobs and tax payments with us…

  23. AZs ILLEGAL IMMIGRANTS Law is just a way to divert your attention from the real crisis. These Judges, Senators, and Governor are in bed together or better yet have their heads up each others A$$. They could care less to tackle the real issues because it was Wall Street and the Bank that put them in office. They continue the cover up and could care less about protecting homeowners who are now in a position of usury because of the number of foreclosures in each neighborhood. Somebody needs to gets theses idiots out of office.

  24. bird
    good call., what does the “old fox” out of the henhouse matter if the new fox is busy with biz as usual…stealing homes!? wtf ! WTF!!!

    what about suing “indymac” excecs that are in place now?

    I say Sheila- you go Girl !!! but please start with the guys @ the
    “robbery in progress ” 1st!

  25. why not subpoena MERS executives for their crimes committed against the homeowners? MERS executed millions of fabricated assignment of deeds and substitution of trustees in order to foreclosed and allowed the loan servicer to do did under MERS name because MERS has no responsibility or liability if damages awarded against MERS as a Defendant. you know what? it was the responsibility of each members like the loan servicer to provide legal representation or pay any damages for MERS in a legal battles if MERS will be named as a defendant. Imagine a big corporation like toyota telling the injured victims that they are not responsible for any mechanical failure because it was the responsibility of a car dealer who sold the car? it was this MERS thats say ok fabricate all the assignment of deed and substitution of trustee then if we got sued you have to pay. got it.

  26. Need help from a GREAT ATTY in FL or CA?
    check out;

    …tell em’ T-Dub sent you!

  27. yeah in Arizona the politicians stooped so low as to blame the Illegal Immigrants for all their problems.






  28. Is it me, or is the action against former employees of a defunct bank an example of diversion in its classic definition?
    Don’t pay any attention to the man behind the curtain

  29. The A Man

    Nothing seems to work in AZ.


  30. MERS on Mortgage and also INSURED AS LENDER on the Title Insurance Policy – while the note goes a totally separate direction AT CLOSING!

    BUILDER SALES REP: “We own the mortgage and title company so it will be smooth sailing for you – relax, let us take care of all the details for you <>”


    My case in the 18th Circuit of Florida;

    *go to – then select “court case search”

    *select “public information” – then “search by case number”

    1st case number 05-2008-CA-046054-XXXX-XX
    2nd case number 05-2009-CA-074735-XXXX-XX

    Once you are at the case information screen select “register of actions” to download the complaint and all subsequent filings.

    Some interesting facts; 1st complaint has an exhibit of the note with 3 endorsements… 2nd complaint has an exhibit of the note with only 2 endorsement. Magical time machine?

    Fake AOM (not appearing in the docket) from employees of Chase as VP’s of MERS to Chase in book 5885 page 976

    Affidavit notarized by ERIN CULLARO (Asst. AG in the Economic Crimes Division of the FL ATTY GENERALS OFFICE) for her sister-in-law LISA CULLARO on Sunday February 14th – Valentine’s day. Is this some kind of joke? She is a former employee of FL DEFAULT LAW GROUP & was approved to moonlight three days a week (Monday, Wednesday & Friday from 7:00 to 7:15pm) – who in their right mind would cross out Friday the 12th and put Sunday the 14th. My divorce has been excruciating and painful… is this funny to you Mrs. Cullaro? HAHA – real funny.

    Also – look at how many different names appear BURIED in the address lines of “party information” – none of which appear on the complaint. Notice the play on words with defendant named in the complaint “MERS as nominee for EMC Mortgage” – but defendant # 3 is MERS and defendant # 4 is EMC Mortgage Corp.


    What a mess! And it’s a total shame that “We the People” have to fight to get the judges to even read these complaints – I went to sit & observe public foreclosure hearings here in the 18th Circuit and was told NO. Foreclosure hearings are held in Judges Chambers and NOT in the courtrooms where there are audio & video recording devices, Hmmmm…..

    Good thing I was able to hold them at bay until I could afford a GREAT ATTORNEY!!! Gingolaw dot com

  31. Yes, Sheila Bair is a fighter for The Cause and a nice
    lady in-person. Saddled with a tough job, as chair of the Congressional Oversight Committee, it was very saddening to learn from her in January that she was only then given powers to “ask questions” … and great to see that she is progressing forward in taking these bad-seed to task. We can all support a true American!







  34. The International Bank Activities Reform Commission is charging Wells Fargo, partly owned by Warren Buffet and the Gates Foundation with fraud in their global involvement with the mortgage morass which continues impacting the global economy.
    In a complaint filed with the European Monetary Commission and the World Court in the Hague, Gabor S.Acs. one of the founders of IBARC stated, “Wells should get a Wells Notice from the United States Securities and Exchange Commission soon if they are on top of this investigation at the Justice Department.”
    The complaint alleges that Wells Fargo, their Directors, Officers and Major Institutional Stockholders including Goldman Sachs knew or should have known that billions of dollars in first and second mortgages originated, packaged and sold as securities by Wells Fargo contained false financial information provided by real estate brokers. And mortgage brokers making it impossible for the borrowers to pay back the loans or to be qualified to even make the monthly payments without refinancing over and over during a 30 year period that falsely inflated the cost of housing in the United States and the world over as a result, causing serious economic damage to hundreds of millions of humans around the world.

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