FED BANS YIELD SPREAD PREMIUMS

A YIELD SPREAD PREMIUM IS A FEE PAID TO A BROKER FOR CREATING A FRAUDULENT PROFIT BY LYING TO THE CUSTOMER WHO BUYS A FINANCIAL PRODUCT. This particular lie would be about the rate on the loan.

One would think this was already illegal and one would be right. Not only is it specified in the Truth in Lending Act and other state and federal laws governing deceptive lending practices, it is also covered by RICO and common law actions for fraud. YSP fees and other forms of undisclosed compensation, of which there were many, are all illegal. These fees are illegal and are all due back to the borrower, along with attorney fees, interest, and potential treble damages. And states and federal government agencies that collect revenue should be interested in all this undeclared income “earned” tax-free.

Up until the era of securitization, YSP fees were limited to those situations addressed by this “new” FED ban — where a mortgage broker convinced a borrower to take a higher interest rate in exchange for some perceived advantage that was in fact disadvantageous to the customer — like coming to the table with less money in exchange for a virtual guarantee of foreclosure down the road. But what this ban does not address directly is the the “tier 2” YSP, in which the second broker was the investment bank. Nor does it take a shot at the trillions in YSP fees ripped out of our economy up until now, which the taxpayers have guaranteed thanks to the TARP, US Treasury and Federal Reserve programs in the fall of 2008. In a hot election year, government and Wall Street guessed correctly that nobody would realize what hit them until long after the deed was done.

While the first YSP was abhorrent, paying brokers thousands of dollars for each bad loan, the second one, also undisclosed, paid investment bankers a profit that sometimes exceeded the loan itself. In the first instance the lie was that this loan is better for you because your initial payment is less, your down payment is less or whatever. In the first instance the lie was first to the prospective borrower, and second to the investor who was advancing money under the supposition that the money would be used to fund loans that had the usual risk of non-payment — which is to say that the odds were in their favor that on balance they would get the return they were looking for, get their principal back and minimize the small balance of defaults with proceeds of foreclosures.

The first lie was predicated on an even bigger lie to both the borrower and the lender (investor): that the property was worth more than the loan, so it was covered by a security interest that would minimize or eliminate the risk of an actual loss. This lie was compounded by the lie that housing prices never go down and they had the appraisals and ratings form official rating agencies to prove that these were transactions whose value was the highest grade available in the marketplace.

The compounded lie was used to convince borrowers that the fact that they knew they could not afford the loan payments when the loan reset to its real terms was “offset” by the “fact” that the broker “guaranteed” the house would later be refinanced at a higher value in which the payment would again be reduced and the borrower would actually receive extra cash. This passive return on an investment meets the definition of the sale of a security, qualifies as a fraudulent unregistered securities transaction, and should land some people in jail. So far, though, the bulk of public opinion continues to blame the victim. The fact that in a transparent transaction where the real facts were disclosed most borrowers would never have signed and no investor would have advanced money is still mysteriously being ignored by policy makers and the courts. Yet it is as plain as day.

This brings us to the second BIG LIE which was that the loan met underwriting standards for the industry, was verified in all the appropriate ways, and the money advanced by the investors was being used to fund loans, not illicit profits. All the lies overlap. The worse the loan the higher the “yield spread premium” to the broker and the higher the yield premium to the investment banker. If the lender (investor) and the borrower knew that the actual amount funded by the lender was $450,000 but the loan was only $300,000, how many people do you think would have allowed or completed that transaction. If they knew that a $150,000 yield spread premium was kept by the investment banker  on a $300,000 loan, how many readers think that NOBODY would have asked “hey! Where is the other $150,000?” How many readers think that ANYONE would say that 50% of the loan amount is a reasonable fee for the investment banker to keep?

Although they make it sound complicated the method was conventional and simple: keep the borrower and lender far away from each other so that neither one actual knew the true facts of the transaction. In other words, your standard con game.

This is why the securitization searches are SO important in confronting your adversary in a mortgage dispute. The title search is important, but the securitization search is what really traces the money. And NOBODY in the financial industry wants you to be able to trace the money because if you do, then investors and borrowers who are suing in greater and greater numbers are going to know where the money went, who got it, and they are going to want it back because it was procured by outright lies.

NOTE: The tier 2 YSP runs counter-intuitive to most people so they keep putting it aside. But it lies at the heart of the mortgage crisis. So I’ll explain it AGAIN here. I’ll use a brand new example taken from the above. It is oversimplified to make the point, but it makes the double point that every financial transaction should be allocated to every loan where it is appropriate to do so, which is why your action for ACCOUNTING and DISCOVERY is so important.

  1. Teachers Pension Fund of Arizona is limited to AAA rated investments, which means the equivalent of U.S. Treasury obligations. They seek the highest possible return without going outside the lines of the primary restriction: NO RISK. They understand that in a market where AAA returns are running at 4% they are not going to get 8% without substantially increasing their risk, which is not allowed. The fund managers basically have the job of making sure that investments stay within guidelines, and that liquidity is maintained to pay the benefits to retired Arizona teachers. The fund managers generally rely upon the rating agencies (Moody’s, Standard and Poor’s, Fitch etc.) but they also “peek under the hood” now and then to make sure everything is OK. Generally they rely upon 2 or 3 investment brokerage houses that have world wide reputations to “protect” and whose objective is to keep the pension fund as a long-term client. It’s been like this for decades, so the hum drum of daily activity lulls everyone into a semi-comatose state.
  2. So when Merrill Lynch tells them they have this “innovative financial product” that “everyone” is buying and that has the AAA rating but provides a higher return of say 5% AND is further insured by AIG and/or AMBAC, the fund managers, wanting to look pretty to management of the fund, buy some of these exotic creatures. In our case we will say for example that the fund invested $450,000 in exchange for a promised return on investment of 5%.
  3. Thus our pension fund managers have partied with $450,000 and they are expecting 5% interest (RISK-FREE) which is, in dollars, $22,500 per year. And they expect the investment bank to pick up a few basis points as their fee on this no-brainer risk free investment transaction.
  4. The investment bank goes to its mortgage aggregator, let’s say Countrywide (now Bank of America/BAC), and says give me a $300,000 loan on which the borrower has agreed to pay $22,500 in interest. CW does a quick calculation and arrives at the obvious result: Merrill Lynch is asking them for a $300,000 mortgage loan whose stated rate of interest is 7.5%. Just to check their math they multiply $300,000 times the 7.5% rate and sure enough, it is $22,500 annual interest.
  5. CW goes to its loan originator, and asks for a $300,000 loan with a nominal rate of 9%, with a teaser payment of only 1%, because they want to make sure there is plenty of money to pay the yield spread premium to the mortgage broker, and to collect service fees, transaction fees etc.
  6. The loan originator goes to the prospective borrower who qualifies for a 5 1/2% loan fixed rate for 30 years and can easily pay that. But that is not what Merrill Lynch, CW, or the loan originator want in order to earn their ridiculous fees.
  7. The loan originator assigns a “loan specialist” who has received been certified as a mortgage analyst after a total of 7 seconds of training on his way up the elevator to the 13th floor where his cubicle is filled with prospective deals. His conviction for mail fraud, wire fraud, and prison sentence is behind him now because this new company doesn’t care about his past.
  8. The loan specialist is given a script to convince the borrower against paying 20% down payment, and to take a loan that allows them to pay only 1% interest only for two years. At $250 per month payment, the savings per month is enormous and the loan specialist further entices them with the fact that this is a bona fide transaction backed up by Quicken Loans or some other originator who has done the math and they have figured out that this works best for the customer.  Not only that, home prices are forecasted to continue rising by 20% per month, so in a year they will able to refinance and take out an extra $100,000 with even Lower payments.
  9. If the borrower takes the bait, everyone gets what they want except the borrower who is in for some nasty surprises down the road when the payments rise substantially above anything the borrower can pay. This loan is identified as being in the junior tranches of a securitized pool, but subject to a credit default swap which was sold by the senior tranche thus contains toxic waste loans without anyone being the wiser. [This “sale” initially shows MORE INCOME in the senior tranche but creates an enormous liability — the equivalent of having purchased the worst of the toxic waste loans. Thus the senior tranche “safe” asset was converted into a horrendous liability that was as guaranteed to fail as the lowest tranches. The trick on the secondary transaction was that the investment banking firm had the proceeds of the credit default swaps payable to themselves instead of the investors, by labeling the transaction as a proprietary trade instead of a fiduciary transaction].
  10. If the borrower doesn’t take the bait, then the loan is done at 5 1/2% and is identified as being in the senior tranches of a securitized pool by virtue of a spreadsheet without any assignment, indorsement or delivery of or recording of actual documents.
  11. So to summarize, on a $300,000 loan, the investment bank made $150,000 which was used to fund the outsized and illegal yield spread premiums to the mortgage brokers, who were incentivized to make the worst loans possible because the investment bank’s spread increases exponentially every time they get a bad loan. The Arizona Pension Fund is not wise to the fact that only $300,000 of their money was actually invested in a mortgage. Nor do they know the quality of the mortgage is virtually ‘guaranteed to fail” much less AAA.
  12. Once the loan fails, the Pension Fund does not in theory ask any questions about what happened to all the money — except now, many investors ARE asking that that question and I encourage readers to keep track of those cases, since the discovery responses and pleadings will be very revealing regarding your own actions as borrowers to recover damages, interest, attorney fees etc for TILA, RICO and other violations.

——————————————

August 16, 2010

Fed Adopts Rules Meant to Protect Home Buyer

By DAVID STREITFELD

The Federal Reserve on Monday moved to end a controversial lending practice that had helped propel the housing boom to unsustainable heights and then accelerated its collapse.

The Fed announced that it was adopting new rules banning yield spread premiums, which allowed mortgage brokers and lenders to gain additional profit from loans by charging borrowers higher-than-market interest rates.

Reaction to the change was muted. For one thing, the recent package of financial reforms passed by Congress this summer already addressed the issue. And some thought a ban should have been imposed long ago, at a time when it could have directly affected loan quality.

Michael D. Calhoun, president of the Center for Responsible Lending, described the action as “a real milestone,” but he said that he had been trying to convince regulators for at least 15 years that yield spread premiums were no more than illegal kickbacks.

Many borrowers had little idea of what a yield spread premium was, even when it was costing them money.

Traditionally, mortgage brokers were paid directly by the home buyer. The rise of the premium allowed the brokers to be compensated by the lender as well. Lenders in effect started paying bonuses to brokers who brought them high-interest loans that were naturally coveted by mortgage investors.

From there, critics said, it was a short step for some brokers to put unsuspecting buyers into these loans and tell them it was the best deal they could get. Subprime lenders in particular often used yield spread premiums.

“People didn’t just happen to end up in risky loans,” Mr. Calhoun said. “Mortgage brokers and other people on the frontlines were getting two to three times as much money to push buyers into those loans than they were into 30-year fixed-rate loans. So what do you think happened?”

Brokers argued that it was frequently in the interest of the borrower, especially a low-income buyer, to pay a higher rate in exchange for bringing less cash to closing.

Attempts at reform achieved little, and during the housing boom the yield spread premiums became ever more prevalent. In many cases, groups like the Center for Responsible Lending found, borrowers never realized they were paying both higher fees and a higher rate.

While the new rules prohibit payments to a lender or broker based on the loan’s interest rate, they do allow for compensation based on a fixed percentage of the loan amount.

To avoid steering the buyer into a loan that is offering less favorable terms, the rules now say that the borrower must be provided with competing options, including the lowest qualifying interest rate, the lowest points and origination fees, and the lowest qualifying rate without risky features like prepayment penalties.

The National Association of Mortgage Brokers, which had long argued that efforts to reform the premium unfairly singled out its members, pronounced itself satisfied with the new rules.

The Fed rules “put everybody on the same footing,” including brokers and banks, said Roy DeLoach, executive vice president for the brokers’ association.

The rules take effect in April. Similar, and in some ways broader, rules in the financial reform bill will take effect later.

33 Responses

  1. […] FED BANS YIELD SPREAD PREMIUMS […]

  2. neidermeyer
    ” but it would be such a help to have an annotated flowchart so people can “fill in the blanks”

    i thought the same thing till i saw this flow chart.
    this is sick, the entire MSB scheme was a planned death by a 1,000lb paper
    [ trail to untangle ] per loan
    http://www.newyorkfed.org/research/staff_reports/sr458.pdf

  3. […] This post was mentioned on Twitter by AL Preneur, Courtney Lawson. Courtney Lawson said: A YIELD SPREAD PREMIUM IS A FEE PAID TO A BROKER FOR CREATING A FRAUDULENT PROFIT BY LYING TO THE CUSTOMER WHO BU… http://bit.ly/bjWGIF […]

  4. ANONYMOUS ,

    Thanks for the clarification .. I have a fairly good understanding of the process but it would be such a help to have an annotated flowchart so people can “fill in the blanks” and help a real pro to help them by making it easier to provide useful information.

    I’ve seen “intake” forms from a few foreclosure attorneys and for the most part they seem to have been written for conditions prior to what we now have. The real problem is the lack of information .. I know my loan was packaged/securitized (and necessarily bifurcated), placed in a trust (which may not have actually existed despite the handful or quarterly reports filed before it went dark.. since everything was internal/vertically integrated within WF/Deutsche I’m thinking the accounting dept just prepared the necessary reports and legal dropped the ball on actually creating the trusts) , and the trust immediately (3 months) went CCC from AAA ,, according to the servicer it is still owned by Wells but most of their stuff has changed hands a few times and WF retains servicing so I have no idea if what I’ve been told in response to QWR’s is true (a change in servicer would have been a clue)… WF didn’t use MERS but they do the same thing within WF and assignments/ xfers/sales are not public records.

    What a kluge. I’m wondering if their bank accounts are in the Bahamas or in the Caymens…

  5. neidermeyer

    They did not “sell your tranche” – your mortgage loan was part of pool – that pool was allocated to all the tranches – by a proportion allocated to particular tranches.

    Your loan must be reflected in all tranches created by the original SPV. This is not the case for CDO – that were derived from the original SPV pool “tranches”. The CDO derivatives combined many different tranches from many different SPV original pools. There was only one pool for the original SPV. That one pool was was contained in all the tranches. Certificate holderes (security underwriters) were only entitled to a fractional pro-rata share in the entire pool – that pro-rata share was determined by the proportional allocation of the ENTIRE pool to the all the tranches. Tranches were just set up for priority order of receivable payments – nothing more.

  6. MSOLIMAN ,

    I should have said YSP2 (not the YSP the broker/originator took) , the rip off amount the real lender (in my case Deutsche) took from whoever they sold my tranche to as they no doubt priced it at the full appraisal amount.

  7. Gregg Christoff: See the post I have written on this subject responding to your comments.

  8. Thank YOU – PJ –

    Lots of “proprietary” relationships going on!!!

  9. Thanks’ Anonymous… it has also been explained to my simple brain that some of the top “PL” aggregators, not banks per-say have direct affiliation with some of the largest real estate conglomerates… Caldwell Banker for example… and builder/developers such as KB Homes where do they fit in… the builders & the real estate brokers fit into all of this?

  10. PJ

    “Private label” mortgages were mortgages securitized by Wall Street Investment banks. Some will claim that the “private label” was entities such as “Countrywide”, “Ameriquest”, etc., but, this is incorrect. As Goldman Sachs testified in Congressional hearings, the mortgages were sold by originators to Wall Street (Goldman in this case) before they were securitized. Many prospectus clearly state the sale a an investment bank subsidiary (Depositor) (such as many Credit Suisse issues), others do not. Nevertheless, securitization is the removal of receivables from balance sheets – the originators sold in entirety – and it was the Wall Street bank that securitized their own receivables after the purchase of the loans. Every Wall Street bank was competing for likes of Countrywide, Ameriquest, New Century, etc. mortgage origination.

    These private label mortgage issues were not purchased and guaranteed by Fannie/Freddie. However, later, Fannie and Freddie started purchasing some of the MBS.

    Know you said Fannie/Freddie own/guarantee 95% of mortgages out there – but that is now. This was not the case in the mortgage heyday. Wall Street (private label) directly competed with Fannie/Freddie.

  11. Arizona uses illegal from Mexico to avoid and distract from the real issues. If it were not for Mexico the banksters would have not made their trillions. Further, McCian and Brewer would not be in office. But yet they want to spend billions on a fence rather than resolve the immediate foreclosure crisis. These guys are nothing but hand picked puppets that participate in the Obama cover up. Problem, Reaction, Solution, creates the distraction.

  12. Ok, no offense but this Garfield has no clue what he is talking about in this article. Let me tell you how YSP actually work. Typically banks send mortgage originators (lender) rates every day. The lender then chooses which rate he is going to offer the client. Frankly the higher the rate above the raw rate the higher the yield spread premium. (Which translates to higher commission paid to the lender.) Obviously, the lender cannot offer the raw rate to the client because no profit will be reckonized unless the lender can charge for numerous fees. Normally, charging additional fees is challenging due to the competitive nature of mortgage lending. Therefore, most lenders make thier income from YSP.

    When it comes to charging YSP frankly it depends on how much time is spent preparing the loan. If it is a quick and easy loan a minimum YSP can be “charged”. Therefore the loan rate should be close to the raw rate for that loan product. On the other hand, some loans can take months even up to a year to close. So obviously the YSP has to be higher to offset the time and overhead needed to prepare that loan.

    The bottom line is no one can stay in business without collecting some type of profitibility. Do you know of any business that can survive without any income?

    Like any business, there are always ones that act responsible and with integrity and those that don’t. There are a number of cases where people abused the mortgage industry as it was originally intended. These people have created a black eye for the industry.

    But to say that YSP is used to lie to clients claimed by Garfield is utterly ridiculous. If it wasn’t for YSP, how was a mortgage company to stay in business?? Answer that Garfield………..

  13. Can somebody please translate the below passage from the WSJ article cited by PJ:

    “The banks are marshaling lawyers and auditors to challenge loan put-backs and issue repurchase requests of their own.

    “They are also resolving disputes with mortgage insurers, which could help limit repurchase exposure. Mortgage insurers can rescind insurance coverage on loans, which typically prompts Fannie and Freddie to kick back loans. But some banks have begun paying insurers lump sums to avoid dealing with rescissions and triggering repurchase requests. Fannie warned it could face higher losses if insurers aren’t rescinding loans, because that might yield fewer buyback opportunities for Fannie.”

    Does this indicate that Fannie and Freddie, in addition to themselves “guarantying” payments from securitized loans, have also purchased mortgage insurance on same, in effect covering their own bad bets? What entity is buying the coverage on the loan – the GSE or “the bank?” Or both?

  14. Never can really understand M Soilman… but perhaps this is what he is talking about… also anyone out there why do they keep referring to “private label” mortgages and who are the top aggregators of them? Thanks

    http://online.wsj.com/article/SB10001424052748703824304575435690444377332.html?mod=WSJ_RealEstate_LeftTopNews

  15. Tom Leykis ….I met him…had a drink…..good man…NOTHING LIKE WHAT YOU HEAR …when you talk to him one on one…class guy…really.

    msoliman

  16. I know my YSP was a minimum of $128,000 as that was my down payment amount.

    WHAT ZAAAAAA…..How much was your loan?

    One hundred million two hundred and eighty thousand???

    Kaa – Boing [slow it down people please…slow it down]

    MSoliman

  17. Riddle me this “That Man”

    Why did the lender push NINJA ‘s or No Income No Job and Assets verification loans?

    They let the borrowers APPEAR to screw themselves and could remain non culpable while sitting back through all of this as the victims.

    Whats a whistle blower?

    Someone who knonws first hand how to design a program that let the borrowers screw themselves and allow lenders to remain non culpable while sitting back through all of this as the victims.

    Remember….only a select few will prevail here….and their cases shall be sealed….Hmmmmm! Its none the less sad to watch these consumers lose their homes.

  18. HOW DUMB ARE WE?

    Ah….you said it best ….hmmmmm?

    Okay!

  19. THERE NOT CALLED A REBATE ANYMORE. THE PAYMENT MADE TO A THIRD PARTY MUST BE DISCLOSED. DISCLOSURE OF A YSP IS DISCLOSURE AND IT DEFEATS THE PURPOSE OF THE BACK PAYMENT ALLEGED TO BE EARNED BY YIELD MANIPULATION.

    THEY USED TO BE CALCULATED, FOR EXAMPLE .125 :.250 OR AN EIGTH EQUALS A QUARTER POINT BACK TO THIRD PARTY BROKER.

    ITS DISCLOSED ON THE HUD ONE SO COURTS ESPECIALLY APPELLATES SAY …”SUCKERS”. WHY DID YOU SIGN THE DOCUMENTS?

    BUT, BECAUSE THE CASH IN THE DEALS WERE SO TIGHT THEY BECAME INSTUMENTATAL FOR INCENTIVES $$$ TO KEEP BROKERS IN THE DEAL.

    NOW THERE IS A FRAUD BUBBA…..FRAUD- U- LICIOUS …..IT ALSO SHEDS LIGHT ON WHO TO DEPOSE….SOURCE OF FUNDS AND ORGINATION…TABLE FUNDING ETC ETC ….

    DAN…YOUR DEAL WAS RIFTED WITH THIS STUFF…DID YOU EVER PRESS IT?

  20. Regarding the first paragraph of this article:

    I strongly believe this was a problem in the past however new rules went into affect Jan 1 2010 that prevent this from happening. YSP and lender fees are disclosed on the original GFE. The title company compares the original GFE and the final version before closing the loan. If the fees and/or YSP have risen the lender MUST lower to match the first GFE. There is no work around for this. SO…there is no lie to the borrower. If the lender closes a loan and the GFEs dont match the investor will make them buy it back and issue the borrower a check for the difference.

    What most consumers don’t understand is….

    1. YSP affects Brokers/Bankers who’s rates are much lower than Bank rate sheets. For example Wells Fargo will offer 4.75% to a retail customer with 20% down. A Broker/Banker has the same rate with 5% down OR can offer 4.375% with 20% down. YES….the lender makes a profit but what do you expect? Don’t all companies make a profit? For every penny in YSP the small lender makes the big bank makes much more.

    What if the Gov told Wal Mart they can only have a 5% profit margin as opposed to 7%? What if WMs 7% margin still delivered you the cheapest groceries? Would you still complain about their profit or just buy their products because they are the cheapest?

    2. How will everyone respond if the small/middle size mortgage lenders are gone? Do you think big banks care about YSP? They will always find a way around whatever laws/regulations are passed. This only hurts the consumer.

    3. YSP averages less than1.5% per loan if that. I see the numbers. Rate sheets are already capped to prevent excessive profit. If the lender is overcharging the borrower can go somewhere else.

    What do Realtors make per loan?

    4. Where does this end? Will the Gov start telling other businesses what a reasonable profit is? Doesn’t this scare anyone?

    The bigger Gov gets the poorer we become.

  21. usedkarguy

    Dam good idea..I think I will pepper Rush Limbaugh
    with some questions ..What time ? Maybe I should get Tom Leykis involved on this one ( just for some back ground animation sounds )

  22. Got this off of DS News

    Judge Rejects $75M SEC, Citigroup Deal

    A judge has reportedly refused to sign off on the U.S. Securities and Exchange Commission’s $75 million settlement with Citigroup Inc. over the bank’s alleged failure to fully disclose the extent of its subprime mortgage-related asset exposure in 2007.
    He doesn’t think the penalty fits the crime. I would concur. Just another example of the SEC dropping the soap, I mean the ball.

    Douglas (neidermeyer), send me an e-mail with a phone number so we can talk. usedkarguy@yahoo.com

    BSE PhD, I’m just as mad as you. Maybe I’m MADDER than you. I think that once you hit a certain “temperature”, YOU’RE DONE!! I’m thinking we need to go at the media directly. They provided the blackout on the truth. Let’s take the truth to them. To their studios. Start picketing newsrooms like WLS TV ABC7 Chicago. They have the nice picture window on Michigan Avenue. Bring some signs, bring some anger, make some news; BE THE NEWS. I’m available on Fridays.

    And my pal Rush Limbaugh let it go that Wells Fargo is HIS BANK. We should make a point of calling this Friday, 1-800-282-2882, and take him to task. Now we know why he continues to defend the banks, they are an advertiser of his, and he’s probably a big stockholder. All the affilliate channels, these guys get LOTS of advertising dollars from Wells Fargo, CHASE, all those fu#&ers. Let’s start dumping some mail on them, like court pleadings, news reports of case victories in other states, especially MERS. Send them a 20 pound box of legal stuff you printed off the internet over the last year or two. They won’t read the e-mails, so fill their dumpsters!

    You know, 20 years from now they’ll all be talking about how those people got their houses for free because the mortgages and loans were “no good”, as in illegal. It’s here, it’s now.

    Back to the post. The bad mortgages were needed for all the CDO-squared transactions they were crafting to sell long to their customers and buy short on their own. Yes, it should be illegal. Oh, it was? Nevermind.

  23. BSE IT IS FAR WORSE, THAT WE CAN ALL IMAGINE.

  24. WATCHING A GREAT MOVIE TONIGHT

    FBI= FRAUD BEING IGNORED

    WERE ARE THEY, OH YA THEY ARE PROTECTING THE INTEREST’S OF THE BANKSTA’S AND ACCORDING TO THE FED ONCE YOUR ARE ON THE SECOND FLOOR OR ABOVE YOU ARE LITERALLY ABOVE THE LAW. THE LAW OF THE LAND IS TO MAKE IT WHILE YOU GO AND SCREW EVERY ONE IN THE PROCESS. DISTRACT THE WE THE PEOPLE WITH MADOFF KIND OF SHIT, OIL SPILLS, AND WIRE THE MONEY AT EXACTLY MIDNIGHT IN WHAT EVER TIME ZONE THEY ARE. KEEP UP THE GREAT WORK AND THEY WILL COMFISCATE YOUR HOMES AS WELL, WHILE YOU ARE AT “DUNKIN DO NUTS”

  25. Great explanation, this something anyone of us with some minor refinements tell the judge, to eductae him as to how we really need to follow the money and why compelling discovery regardless of how many times the crooks and the corrupt lawyers try to evade their duties in front of the court. FOLLOW THE MONEY!! and get very positively angry as well!!!

  26. Problem, Reaction Solution. Now that it is too late, the government steps in so to change the rules..But nothing to help the current situation…I bet these bastards are holding a party tonight and laughing their A$$ off thinking they once again fooled the US taxpayer. Just tell me when I can participate in the round up so I can personally jail these santanic S.O.Bs.

  27. THE A MAN,

    We are not dumb..Just some one needs to go to jail.. The regulations were removed by this government so the real criminals were set free. It was calculated deceit. I was only trying to buy a home. Little did I know I executed a mortgage back security and then sent the offspring from this santanic society to college so they can later pull off the same crime. A fine is nothing but a slap on the wrist, these bastards need to jailed now. This includes several C.E.O.s and members of Congress. Work hard and save your money so someday Wall Street and this government can steal your money..I have seen enough B.S, in the last 50 yrs of my life. My powder is dry, tell me when I can load both barrels.

  28. THE AMERICAN HOUSING HOLOCAUST

    HOW ABOUT THIS ONE. WE PAID TAXES TO THE GOVERNMENT. THE GOVERNMENT GAVE OUR MONEY TO THE BANKS, SO THEY CAN FORECLOSE ON OUR HOUSES AND PROPERTIES.

    HOW DUMB ARE WE?

    NEVER AGAIN.
    CITY OF BELL CASE STUDY + NEIL GARFIELD AND CO.

  29. Thank you Neil for such an educational post.

    Geithner must go! As Pres of the NY Fed, wasn’t it his duty to disallow these practices, knowing full well that they were being perpetrated on an unsuspecting public? But wait! There’s more! What about the thousands of others in positions of regulatory power such as congressional finance committees, senate panels, etc,. Were they all out to lunch?

    And then, when Geithner became sec. of the treasury, did he jump in to quell these unlawful and exceedingly dangerous practices? No. Instead, after the meltdown, he wrote blank checks to all of the offending criminals, with totally opaque terms, terms of endearment between he and his fellow criminals on Wall street.

    Although a measly 75 billion dollars of TARP monies eventually became available for millions and millions of affected homeowners, affected by their criminal behavior, we know how that’s panned out. $75 billion sounds like a lot of money. But I can’t help remembering Chair Elizabeth Warren’s testimony to the congressional oversight committee concerning TARP, when she fingered Geithner for overpayment on assets to his friends the bankers (using the term assets exceedingly lightly here) to the tune of $78 billion dollars. And he wouldn’t return her calls to explain why. Not only did he pay 100 cents on the dollar, but he overpaid by $78 billion bucks. And he did it all the while refusing to talk about it.

    No wonder he doesn’t like Warren. No wonder he’s behind the scenes explaining why she shouldn’t be allowed to police him and his buddies. This guy disgusts me, along with all of his corrupt pals.

  30. Great post , this will resonate when it becomes widespread knowledge.

    I know my YSP was a minimum of $128,000 as that was my down payment amount. I am 99.9% sure “my” trust no longer exists (I am 100% sure it was never created in Delaware as the prospectus and PSA state). I would have been in a retained tranch for Wells Fargo or Deutsche and not in a lower tranche. Servicer (AHMSI) states WF is still the loan owner. I am not paying but no delinquency has appeared on by credit bureau and I have not been foreclosed upon. I am in Florida and with 4 of the big firms being investigated for forging ownership docs I don’t see it happening anytime soon.

    I have representation but it is a big firm that basically negotiates a modification and creates delays … in other words I bought time. I have instructed them to verify the true lender before I would even look at any mod paperwork…. I don’t think they heard me although I have stated that at every meeting…

    I want to get agressive before the federal gov’t codifies and whitewashes the bad paper through some new act or edict… I see it as inevitable as they own so much of it now.

    What is my roadmap? I want the YSP & YSP2 refunded with penalties and interest, I want a quiet title action,,, I want to take the fight to them… Neal , I need a cookbook (flowchart) approach.. Thanks..

  31. Great post, Neil- it sounds as if you are getting angry! I think that is good. I am starting to get angry myself. Keep ’em coming.

  32. This is the best and simplest explanation on the subject so far. Thank you so much.

  33. I once heard you dont need new laws. you need honest bankers.

    that is why they need to be removed from our communities.

Leave a Reply

%d bloggers like this: