Mortgage-Title Fraud: A National Catastrophe


Wall Street has rendered much of the U.S. real estate market radioactive. And like radiation, these “toxic titles” are invisible – and can only be discovered through specialized detection. For anyone in the U.S. considering purchasing any U.S. home with an outstanding mortgage, the words “caveat emptor” have never been more applicable.

by Jeff Nielson

It is impossible to overstate the severity of the real estate crisis in the United States which has been caused entirely by the reckless fraud of the nation’s largest banks – the Wall Street Oligarchs. We now have mortgage-fraud being openly acknowledged by the banksters, and on a scale never before seen in human history.

We have a single individual with JP Morgan (JPM) openly admitting that she and her team committed more than 18,000 acts of fraud per MONTH, while one Bank of America official admitted that she personally committed 7,000 to 8,000 acts of fraud monthly. Regular readers will recall that in a recent commentary I reported on two, separate anecdotes where the Bank of America attempted to foreclose on properties which did not even have mortgages.

In that same commentary, there was also an anecdotal report from a Florida lawyer who specializes in foreclosure proceedings, who stated that he regularly encountered (so-called) judges who were rubber-stamping these foreclosures without even looking at the documents. The lawyer also reported that one particular judge had already written her judgments (confirming foreclosure) before the foreclosure trial started.

We thus have the following chain of events, a Wall Street bank pushes a stack of 18,000 foreclosures in front of a small group of clerks (who make convenient patsies), and tells them they have to clear this many documents every month – knowing that it is impossible to process that volume and still follow mandatory legal procedures.

Stacks of these foreclosures are then pushed before judges. In the case of Florida, they are being processed by judges called out of retirement. Many of these people are likely no longer allowed to operate motor vehicles. These past-their-prime judges then rubber-stamp these fraudulent foreclosure documents, without even looking at them – effectively stealing the home from the homeowner through the coordinated fraud being committed by Wall Street banks and the U.S. government.

This is the sort of systemic horror-story which we would expect to hear coming out of some tiny, Third World country, with a ‘two-bit’ legal system – not from the Leader of the Free World. The crime-waves being confessed to by JP Morgan and Bank of America follow similar (if not worse) admissions by Ally Financial (GMAC’s mortgage subsidiary).

Naturally, the U.S. propaganda-machine isn’t reporting this mass-fraud as a crime-wave, but merely as “mistakes”. Let me make things clear. Doing something once is a “mistake”. Doing something 10 times is a pattern. Doing something 100 times is serial fraud. Doing something at least 7,000 times a month is a crime-wave. Obviously the banks themselves must have understood they were engaging in fraud.

In the case of JP Morgan, we have the largest, and one of the oldest banks in the United States. It has been processing foreclosures in the U.S. for more than a century. It clearly has an intimate, administrative understanding of how long it takes to process a foreclosure. When its largest mortgage-processing unit started reporting (month after month) a rate of productivity which was utterly impossible (while following mandatory legal procedures), it obviously should have put a stop to these mistakes at a much, much earlier time.

How much earlier? That is the unknown question. We already know that Ally Financial had already been sanctioned for such mortgage-fraud by a Florida judge as far back as 2006. But that was only the first time it was caught. With courts in many U.S. states severely clogged with enormous backlogs of foreclosures (more than 500,000 in Florida alone), we have no way of knowing how many foreclosure-judges are also rubber-stamping everything that is put before them.

Tragically, as despicable and inexcusable as this bankster crime-wave has been, these past horrors pale into insignificance when stacked-up against the future problems which have been created by Wall Street greed. A Bloomberg article begins to explore this legal nightmare.

Defective documentation has created millions of blighted titles that will plague the nation for the next decade,” said Richard Kessler, a Sarasota, Florida attorney. Kessler conducted a study which found defects in approximately 75% of all court filings.

Let me expand upon this horror. For any and every U.S. residential property which has a mortgage that has come within reach of the large U.S. banks over (at least) the last four years, it now has a title which cannot be relied upon by any potential buyer. And as the Florida lawyer states, this is not just going to be a problem for one year, or five years, but roughly a decade (if not longer).

Readers must understand how our legal systems operate. A party which has defective title to a property (i.e. the Wall Street banks) can never pass “good title” to any buyer. From the time that defect is created, no subsequent buyer can ever own that home, legally. Should that defect be discovered – several years later – by the original owner, that owner then has several more years in which to file a claim (based upon our limitations statutes).

If the original owner can demonstrate that he was stripped of his title through one of these millions of acts of Wall Street fraud, the original owner must and will be awarded clear title to that property, without one penny of compensation to the new owner.

To be more specific, any U.S. home which has been bought / sold more than once in the last five years, and any / every home with a mortgage tied to one of these fraud-factories cannot be trusted when it comes to being able to purchase clear title.

This means that any prospective buyer of a U.S. home must do extensive research on that property before ever making an offer, especially if they are considering making a purchase in the fraud-capitals of the U.S. housing market: Florida, California, Arizona, and Nevada. In the case of any home which has been tainted by Wall Street fraud, any sane buyer will simply walk away.

For those who decide they must buy a particular home, at the very least you will have to hire a lawyer to do a detailed analysis of the title. Given how complicated these Wall Street webs of fraud are, hiring a lawyer won’t guarantee good title, but it will give you someone to sue, if your home is later taken from you (by the rightful owner).

The most-obvious warning siren applies to foreclosure sales. Previously seen as a way to get a cheap home, it now appears more like a way to buy a home with a ticking-bomb inside it. No one in the U.S. should consider purchasing a foreclosed property without conducting extensive research on its title.

Keep in mind that this foreclosure-fraud is also only one way in which title to U.S. residential property is now seriously in question. Court cases to date have only dealt with defective titles in foreclosure proceedings – in other words the defect is discovered at that point in time.

The yet-unanswered question is what about the tens of millions of other securitized mortgages which have been “sliced-and-diced” by the Wall Street banks to the point where it is unclear whether any homeowner with one of these tainted-titles is capable of passing good title to a prospective buyer? I first brought up this bigger legal-nightmare roughly a year ago, in a two-part series titled “Who Owns Foreclosed U.S. Properties?”.

In other words, even if a homeowner remains current on their payments, as long as there is an outstanding mortgage on that property, title rests with the mortgage-holder – and thus title must be conveyed from the genuine holder of that mortgage to any prospective buyer. If the bank which is servicing the mortgage does not hold full-and-clear title, and cannot locate / identify a single holder of clear title, then it becomes impossible to legally convey title of the property from one homeowner to another.

Much of this additional uncertainty can be attributed to the Wall Street creation known as “MERS”. This private company was created by Wall Street to attempt to bypass established legal procedures for financial companies to hold and transfer mortgages. The Wall Street fantasy was that any one of the Oligarchs could submit a file to MERS, claiming rightful title to a particular property, and have MERS rubber-stamp that title.

When the housing-bubble created by Wall Street imploded (and the real fun began for the Oligarchs), they expected to be able to waltz into foreclosure courts, show the judge their rubber-stamp from MERS, and then have the judge, in turn, rubber-stamp the foreclosure. This problem will last for much longer than ten years – since MERS has not yet been entirely wiped-out by court judgments finding against it.

Only after MERS and that entire registry system is abolished will the ten-year countdown (described by the Florida attorney) begin. Similarly, with respect to the millions of acts of foreclosure fraud now being admitted by Wall Street, this will be a problem for ten years only if U.S. regulators and law enforcement authorities put a total stop to such fraud immediately. If this national disgrace is allowed to persist, then that must extend the previous ten-year estimate for this catastrophe.

When I first began to refer to Wall Street banks as “fraud-factories” more than two years ago, some people found the term offensive. It has now been openly confessed by at least two of these companies that this is exactly what they are.

First they destroyed much of their own sector, through their multi-trillion dollar Ponzi-schemes based upon the housing-bubble these fraud-factories created. Now they have destroyed much of (if not most of) the U.S. residential real-estate market. Nothing but a complete national audit of the titles of all U.S. residential real estate can restore full trust to this market.

Unless / until that should occur, Wall Street has rendered much of the U.S. real estate market radioactive. And like radiation, these “toxic titles” are invisible – and can only be discovered through specialized detection. For anyone in the U.S. considering purchasing any U.S. home with an outstanding mortgage, the words “caveat emptor” have never been more applicable.

Disclosure: I hold no position in JP Morgan, Bank of America, or GMAC.

About the author: Jeff Nielson

28 Responses

  1. Orange jumpsuits:

    I’ve ordered two one has ALL the bank names. And the second has the Trustee companies on it.

    I wear it every Friday for the sales. And I wear it to every demonstration, political rally, home foreclosure workshop, etc.

  2. I plan on posting this WSJ viewpoint every week until the genocide stops.

    ~~Talk about a financial scandal. A consumer borrows money to buy a house, doesn’t make the mortgage
    payments, and then loses the house in foreclosure—only to learn that the wrong guy at the bank signed the
    foreclosure paperwork. Can you imagine? The affidavit was supposed to be signed by the nameless, faceless employee in the back office who reviewed the file, not the other nameless, faceless employee who sits in the front. The result is the same, but politicians understand the pain that results when the anonymous paper pusher who kicks you out of your home is not the anonymous paper pusher who is supposed to kick you out of your home. Welcome to Washington’s financial crisis of the week.~~

  3. When can we place the order for the orange jump suits ?
    So far the need is for a minimum of 5. The list for each as follows:

    QTY (1) – Wells Fargo – Extra Large
    QTY (1) – Chase – Large
    QTY (1) – Bank of America – Medium Large
    QTY (1) – Citi Bank – Extra Large
    QTY (1) – US Bank – Large



    THe Banksters are making Obama Look Bad and are causing the Democrats to have trouble with this November Elections. And some heavy hitters are up for election and the Banksters are making them look bad.
    Reid Boxer Pelosi even the Republican McCain.

    The Banksters also made President George W. Bush look bad. Their is an article I read today that George W.wont leave the house.
    People remember Bush for the last Six month of his Presidency. The Start of the Big Rescession. The Big bank Bailout.

    So to the Banksters History repeats itself and Enron and The City of Bell check mated you.

    We must be diligent and on the guard to make sure the Politicians remember we are watching.

    to the Banksters


  5. ~~Washington 10/10/2010 (CNN) — The Obama administration opposes a moratorium on home
    foreclosures, but wants problems involving improper paperwork resolved as quickly as possible, senior
    adviser David Axelrod said Sunday.~~

    Improper paperwork? Do you mean fraudulently prepared documents and total lies? OMG! What are they smoking in that house?

    ~~On Sunday, Democratic Rep. Debbie Wasserman Schultz of Florida echoed Reid’s call, telling “FOX
    News Sunday” that halting foreclosures should be accompanied by efforts to get the problem fixed. “Ithink
    we need a combination of a freeze, potentially, and also we need to sit down with the banking industry and talk to them about ways in which we can help them be able to work those mortgages out, because it’s absolutely imperative that we keep people in their homes,” Wasserman Schultz said.~~

    I think we need to get with the banking industry and measure them for orange jumpsuits! By the thousands! The only thing we should be helping them with is not hitting their heads on the way into the backseats of cruisers!

    ~~”If you impose a moratorium on foreclosures, what you’re telling people and institutions that lend money
    is they do not have the protection to take the risk they need to, to extend credit so people can get a
    mortgage,” Cantor said. “You’re going to shut down the housing industry if that’s the case.”~~

    Just exactly how many times do we have to be threatened with credit tightening, shut downs, etc? Hey Eric! I was in the housing industry for 35 years….THERE IS NO MORE HOUSING INDUSTRY! Thanks to you and yours! I honestly can’t believe what I’m reading here….that anybody in their right mind would say that the banksters “don’t have the protection to take the risks that they need to….” OMG again! How dare this fool Eric Cantor to bring up risk, protection, and banks in the same sentence! We’ve already protected their risks to the tune of trillions
    of taxpayer dollars. What’s next? Believe me, it won’t be TARP II while I’m still upright!

    ~~The government is looking into allegations that mortgage lenders in the foreclosure crisis have been
    evicting homeowners using flawed court papers, Attorney General Eric Holder said Wednesday. Recent
    reports in the news media are raising concerns….~~

    OMG again! The AG of the US is just now getting around to reading the papers about this? This is so
    reminiscent of Bush continuing to read to the little children while the twin towers were crashing to the
    ground. I’m sorry folks, I’m pissed! Now, read this next piece from the WSJ today:

    ~~Talk about a financial scandal. A consumer borrows money to buy a house, doesn’t make the mortgage
    payments, and then loses the house in foreclosure—only to learn that the wrong guy at the bank signed the
    foreclosure paperwork. Can you imagine? The affidavit was supposed to be signed by the nameless, faceless employee in the back office who reviewed the file, not the other nameless, faceless employee who sits in the front. The result is the same, but politicians understand the pain that results when the anonymous paper pusher who kicks you out of your home is not the anonymous paper pusher who is supposed to kick you out of your home. Welcome to Washington’s financial crisis of the week.~~

    Is there any way possible to alert the staff at the WSJ that there’s a crisis of biblical proportion’s going on out here in the REAL world? Are their collective heads so far up the bankers butts that they can’t smell the fraud? LIMIT UP! Could they at the same time inform Axelrod and the white house that this isn’t exactly how it’s going down? These technicalities are a bit more like FRAUD so big, as to be capable of taking out our entire financial system?

    “Blaming borrowers for this crisis, is like blaming the passengers of a discount airline after the plane crashes and it comes out that it was being flown by a monkey. Didn’t those people know they should have paid more for their tickets?”

    From The Great American Stick Up, by Robert Sheer

  6. Bob G.

    One other thought – Neil is right. They DO NOT want to go to appellate court. They do not want to go Federal Circuit Courts, they do not want to go to the Supreme Court of the US – their own “law” is so flawed.

    Reading today an old case law – Massachusetts Bankruptcy Court – Sima Schwartz v Ocwen – 2006. The court knew something was very wrong back then. Hope the Landmark judges review this case.

    Here is the problem why they do not want to go – THEY ARE AFRAID.

  7. Bob G

    Not if they were never negotiable to begin with – i.e. – conditional. No e- signing can make a non-negotiable note – negotiable. Feel there are real flaws with negotiability – thank the investor lawsuits for the (repurchase) insight to this. Contractual means actual and real assignments – including when in default. And, cannot hide behind Mortgage Loan Purchase Agreements in securitization – IF the loans were conditional and, therefore, never negotiable from the onset!! And, may I remind everyone, mortgages were never assigned to trusts – they were JUST transferred – only loans themselves were instrument of question – and question there is. Uncompleted/Invalid assignment/chain of loan – is the norm..


    Disturbing about Pres. Obama – tried to give him some credit for the current fall-out. Guess he is not on the same boat. Hope The A MAN is right.
    Keep writing the President. Do not let the banks keep control. Do not – for one minute- think all will be okay. Tricksters always out there – and too close to Halloween!! HA!!


    Exactly – as to MERS. Have never placed any power is MERS. Really think – with good lawyer – MERS is just easily beatable. MERS is nothing. Any legitimate court should recognize this. MERS is rampant with fraud. And, if you can contact them – they will refer you to servicer – AND, THAT IS REAL COMFORTING.


    Yeah – but then they always bring up the mortgage follows the note and vice versa argument.
    Look – these guys (attorneys) do nothing but sit around and try to figure out loopholes in the law. Have to catch them off- guard. Hit him where they are not expecting it.
    NEED THOSE DARN TRUSTEE LEDGERS!!! Know no proceeds are going to trustee – have to prove it!!! Come a long way with issues – but cannot stay fixated – have to move along to new issues. New ways to continue to prove the fraud.

  8. To: the a man.. I realize what you are saying, after reading headlines like this in a Yahoo article tonite, it makes one wonder..WILL THE COURTS FOLLOW THE LAW & PUNISH FOR FRAUD? They haven’t in the past. Now read the Yahoo article tonite.
    “President Barack Obama, however, opposes a national foreclosure moratorium, though he wants a quick resolution to any foreclosures that might have questionable paperwork, top White House adviser David Axelrod signaled on Sunday.

    Oppose it? Why? I guarantee, nothing will change and BIG BANKS will rule!~ Sounds like to me..everything will be as it was. BIG MONEY RULES! Such injustice!

  9. ANON – Just thinking about declaring notes nonnegotiable. If they were nonnegotiable, UCC Art. 3 would not apply, but E-sign/E-notes would under
    15 USC 7003

  10. To M Turner I saw the article on the Huffington Post.
    The top aide is David Axelrod who is leaving the White House He is probably just throwing out Politcal Verbage.

    The Genie is out of the Bottle and the Foreclosures are pretty much doomed.

    Regarding the economy, it is not only houses it is also commercial real estate and nobody can rent or lease at realistic prices because of the high Mortgage rate. So if they abide by the law and stop foreclosures than the economy will start again. We will all have money to spend. We dont manufacture anything anyways. So we need to empty the Debt and start spending again.
    This is the only way out. And start the balloon all over again.

  11. NEIL…

    On many occasions you have said that the banks don’t want to go to appellate divisions because they fear that if they lose one case, they will lose them all.

    For the life of me, I don’t see this. These guys are in appellate courts throughout the nation.

    So what gives?

  12. Here we go.*Sunday’s* –TV today…WHAT a JOKE!!!~

    WASHINGTON – A top White House adviser questioned the need Sunday for a blanket stoppage of all home foreclosures, even as pressure grows on the Obama administration to do something about mounting evidence that banks have used inaccurate documents to evict homeowners.

    “It is a serious problem,” said David Axelrod, who contended that the flawed paperwork is hurting the nation’s housing market as well as lending institutions. But he added, “I’m not sure about a national moratorium because there are in fact valid foreclosures that probably should go forward” because their documents are accurate.

  13. Oh, everything’s fine…. just a ‘technical glitch.’

    So after paying on your home for 30 years exactly WHO is going to issue your discharge of Mortgage?

    See SGW’s guide to TOXIC DISCHARGE here;

  14. ANONYMOUS: With regards to note negotiability and holder in due course, thin about this: most notes (with no mention of MERS) refer to a security instrument that names MERS as a “nominee” with purported independent authority to act for “others” (successors and assigns of “lender,” successors and assigns of MERS) – could this be construed as “an impermissible “other power” within the meaning of the statute?”

    The notes refer to the security instruments which add MERS to the mix, and MERS brings with it all the “baggage” of MERS’ membership rules, etc., which are undisclosed to borrowers at the time that both the note and security instrument were placed in front of them for signing (undisclosed to borrower EVER, in fact).

    Could the nontransparent and conditional presence of MERS on the security instruments effect the negotiability of notes? MERS could be a house of cards if there started appearing court rulings on this.

  15. Excellent article. Here’s another great one that kind of rolls everything up that has been going on & makes it easier for the common folk (me) to understand.

  16. Great article–very straightfoward and pulling no punches.

  17. I want to extend special thank you to two fellow Californians and the Rest of the California Crew. We are in the most difficult State.

    Brian Davies
    Dan Edstrom

    for the commendable job they have done for all of us





  20. The “documentation” only refered to “the Mortgage” not the note in this case. So there is no note or it was separated,destroyed whatever. I thought this makes it like a big bougus credit card debt.

  21. come on Obama you can clean it up (eventually!)

  22. Someone would have to show up and prove that they have a contractual right to enforce the note, no? So how do they do that, and what does this mean in the context of where we are now?

  23. Bob G

    Want to add – “produce the original note” defense would not be relevant if not negotiable. Plaintiff would have to show contractual right to foreclosure. This is what many courts have ignored. And, therefore, no one has to show that they have contractual right to foreclose.

    What is your opinion about this?

  24. I have a similar situation with evidence that the Title Policy was sold to another “lender’ 3 months after the “close” there was never an assigment on record and I was never made aware. The “trust” that made claim in forclouser refered to an agreement that started after the close and did not include the original”lender”. I belive the agreement does not hold in this case as you say you can not have the egg before the chicken. That is why everyone must read the dates on everything they have. It is not only the robo-signers. It is the whole “document” being false.

  25. Bob G.,

    We looked at the Pepperdine journal article awhile ago. As I recall, a student pointed out to the professor/author that the note referred to other additional documents that were not attached to the note. Thus, could be one way that negotiability was questionable. As you point out, negotiability is important. Could toss out whole “Holder in Due Course” – if not actually negotiable.

    I have been looking at the Mortgage Loan Purchase Agreements (MLPA). The MLPA always included Repurchase conditions – very detailed criteria for mandated repurchase. If loans were not repurchased by the originator – they should have been – according to the criteria. The fact that, even today, investors, the Federal Reserve, and Fannie/Freddie are looking to force repurchases – means conditions were not met in origination. All the MLPAs contained conditional repurchase agreement – with repurchase conditions either determined and executed – or ignored.

    Posted a case that discussed that “conditional terms’ render note not negotiable. Not going to cite the whole case but some quotes below from 11th Circuit Case 1996 decision
    “Any writing to be a negotiable instrument within this article must:  ․ (b) Contain an unconditional promise or order to pay a sum certain in money and no other promise, order, obligation, or power given by the The court maker or drawer except as authorized by this article.” found that the forfeiture clause was an impermissible “other power” within the meaning of the statute.

    We agree with the reasoning of the district court in Signet Bank and To be negotiable, a note must be a the district court in this case. courier without luggage;  it must move unencumbered.

    11-3-104(1)(b):  “Any writing to be a negotiable O.C.G.A. § instrument within this article must:  ․ (b) contain an unconditional promise or order to pay a sum certain in money and no other promise, order, obligation, or power given by the maker or drawer except as authorized by this article.”
    NIL 14-201:  Required a negotiable instrument to “contain an unconditional promise to pay a sum certain.”
    NIL 14-205:  Provided that a negotiable instrument could not contain “an order or promise to do any act in addition to the payment of the money.”

  26. HOW- after a short sale to track the money from the payoff?

    I had two partners and they out voted to take a short sale. Wells fargo service, for XYZ trust. The assignement was a lie and thye recorded post foreclosure and it was not even accurate, stating the XYZ trust owned the loan in July 2005, when the Pooling and Service agreement started Sept 2005. You can not have an egg before the chicken?

    any thoughts on how to githt this one?


    What is the practical import of declaring all mortgage notes to be “Non-negotiable instruments,” and thus removed from the purview of the UCC.

    Please see this very important paper:

    Also, can this be done so as to have retroactive effect, or must it be prospective. And would this mean that notes could not be sold multiple times in the secondary markets. One thing for sure is that the “produce the original note” defense would go away.

  28. This is what we’ve said all along. Now, it seems other people are understanding 2+2=4.

    The fraud and the resulting cover-up is making things pretty sticky in our real estate market. Pretty scary stuff.

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