Don’t Spook the Banks?

COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary

see also Fraud or Inaccuracies? VIDEO

OK, let’s assume that the “paperwork mess” can be seen as isolated in a vacuum — that it wasn’t caused by the absence of assets conforming to the requirements of the securitization documents. Let’s further assume that we waive a magic wand and allow the assignments and endorsements to be done now. The empty pools fill with all the notes and mortgages that were ever represented or claimed to be there (or are we just picking the ones that are performing?).  Let’s even assume that the magic of the wand extends back for 5 years. Does that fix the problem?

Unfortunately not. Here are the problems that would still remain:

  • What do we say to investors who purchased mortgage bonds that NOW the empty pools are filled and the “assets” from which their mortgage bonds allegedly derived their value are filled with receivables from mortgages, many of which have no value or are in default and have far less value than what was offered in the prospectus?
  • What do we do with property laws that require recording transfers in the public records of the county in which the property is located?
  • What will be the effective date of this magical fix? What happens to transactions before and after that?
  • What happens to the taxes, fees, interest and penalties that are now due from the REMICS, securitization players and investors which remain uncollected and if collected would substantially reduce or eliminate most federal and state deficits?
  • How will anyone identify the creditor on the obligations to investors?
  • How will anyone identify the creditor on the obligations from borrowers?
  • What do we do with people who already have had foreclosures dismissed and judgments entered in their favor?
  • What happens to all the cases that were based upon documents previously submitted under the old regime, whether they are concluded or not?
  • How do we account for the bailouts and insurance payments?
  • What do we do with the people who made money on the bets they made having seen the defects that existed?
  • How do we cover the people who will now lose money having made the bets based upon the defects?
  • What do we do with all those assets whose value derived from the bets (i.e., credit default swaps etc.)?
  • How do the banks avoid liability to the mortgage bond investors for violating basic underwriting standards?
  • How do the banks avoid liability to the homeowner borrowers for violating basic underwriting standards?
  • What do we do about the massive appraisal fraud that occurred when the securities were given AAA ratings?
  • What do we do about the massive appraisal fraud that occurred when the property was dishonestly valued higher than the loan principal?
  • Who is liable for predatory lending practices?
  • Even assuming all 50 states want to pass laws that would retroactively and prospectively change the property and contract laws of the state to accommodate the “needs” of the securitization players, under what theory of law, constitutional or otherwise, can that be validated?

The truth is that when fraud is committed, regardless of the scale of the fraud, there is no way out. When forgery is committed, there is no way out. When documents are counterfeited, there is no way out. These illegal things were and are being done because the fundamentals of the assets were defective in addition to the procedural aspects of processing them. It’s painful. But unless you are going down the rabbit hole, you can’t start saying lead is now gold, or that nothing is something. The capital structure of the mega banks is fatally flawed by the inclusion of illusory assets and like the emperor’s new clothes, everyone seems to know it but few are willing to say anything about it for fear of sparking a panic. I hold no illusion of the chaotic implications of accepting the truth here, but we have made it through such periods before and we can do it again.

10 Responses

  1. dont spook the banks is actually kind of funny but man what a mess and then all those that lost their homes most of these banks have really been a little on a high horse as the rest of america has been limping along trying to get back on thier feet.
    improve credit score

  2. There are corrupt documents even in files that aren’t in default.

    I suggest everyone make this a personal issue with their legislators…..look up their documents and call them/send them/email them so that they cannot look away.

    I just found illegal Sheriff’s Sale documents showing Reichert’s department signing documents for sales of homes whereby NO NOTARY PRESENT!!! I hope this will take him asshole down.

  3. Deb Wynn,
    Regarding your comment: “Total transparency is the only way to regain any ioata of trust. Trust is funny thing”

    YEP, I’m “laughing all the way to the bank!” NOT!!!!!!!!!

  4. Total transparency is the only way to regain any ioata of trust. Tryst us s funny thing

  5. what are the penalties for attorneys that use fraudultent documents to advance their clients interest?
    now that the robosigner reality is on the open, should a foreclosure attorney at least do some digging, or they just keep going and they are stopped later they just pay the ticket and keep going?

  6. In response to Neil’s comments which are very valid, I see that quite some time ago, the banks began their giant mergers with each other into giant corporate monsters destroying America. I worked in a law firm where we worked on the mergers. One of the laws to be passed should be about keeping banks (and other corporate monsters) from these mega mergers. How about we get the Glass-Steagall Act back and add more restraints against the banks in it. We are looking down the tunnel to a nation that is a mere ghost of its former self. Our existence as a nation is at stake. One of the great things about America is its optimism, resilience and innovative thinking. We can get ourself out of this, but we cannot expect the banks to do it. We must exert pressure on our government to fix this mess in a way that is positive for the middle class. Way too much corporate welfare. Does anybody have any ideas how to make the government do what they should do? Do we need to march on Washington with the proverbial pitchforks and torches?

  7. The truth is that when fraud is committed, regardless of the scale of the fraud, there is no way out.
    A BIG Law firm entered “Exhibit C” in it’s final attempt to sway the U.S.D.C in Atlanta, Ga.
    It is dated X days before closing, I did not sign the Document and the dates do not correspond with the closing or the (loan’s) actual loan that I ended up with. I tell you all prior Doc’s submitted to the Court, had the correct closing date. I guess CW (atty’s) can sway a Clerk in a Court, only based on the evidence presented to them in their Final attempt to accomplish a “Motion to dismiss” and a summary Judgement.
    “Case Dismissed with Prejudice” Although I was learning as fast as I could starting in JAN. 2009 I was not able to follow all of “NIEL”S” advice about finding an ATTORNEY WHO GET’S IT in ATLANTA, (please step forward!)
    I believe that the decision was good and left enough, enough of an issue to have survived motion’s and pleading’s in a “TILA” case. So all in all the ORDER was entered into court records on 10/06/20##. My Attorney did not even call or send word that anything had happened and I can’t believe that I had to go to “Pacer” to find anything about my case. In Aug. pacer upgraded their system and I had been locked out from being able to log in for 8 weeks of hell, I almost gave up, something made me try again, it was simple to fix, the system would not accept a key stroke temp. password, copy and paste, BINGO I was in.
    from !0/01/20##, to today, all of this fraud stuff has the boy’s in the big time town a bit anxious, %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
    “Thomas Jefferson” wrote about a time such like we are experiencing now. 1802, “bank’s ARE MORE DANGEROUS THAN STANDING ARMIES”, Google T.J. quotes

  8. The banksters will probably again try to bypass getting the laws changed. They will just look to a new sweetheart deal from the FDIC/Treasury etc and expect the good ole taxpayers to hand over their wallets. The banksters and wall street cronies have already stripped the value from the homes and the retirement funds of the middle class.

    Even for those who are current on their mortgages or have no mortgage are affected. If they take stock of their current personal net worth, they will see it has diminished substantially in the last few years, probably to a level lower than in 2000. If it has not, then they were not a member of the middle class most likely, or got extremely lucky.

    There may be a hodge-podge of attempts to push state-level, pro-banking bills in certain states such as CA, which is a banksters-haven, especially with Jerry Brown the current Attorney General in the Banksters hip pocket (his sister is in management at Goldman-Sachs, remember?)

    Hopefully, any additional laws will be quickly overturned, along with correcting the case law that is currently incorrectly used by many judges in dismissing foreclosure-defense lawsuits.

  9. Congress will not be able to pass any retroactive legislation without interfering with the 9th Amendment to the Constitution and anything put out there to interfere with state’s rights will obviously be challenged.

    In the meantime, the assessments I’m doing for homeowners is revealing more than just robosigning, it’s revealing flawed recordation procedures (putting the cart before the horse) …
    find out more at

    In the meantime, understand that securitization will come into play at some point in your suit, AFTER you have disconnected the chain of title in court and get a decree quieting title. They will continue to play the note argument.
    If you’re going after MERS, remember they own nothing. MERSCORP does though.

  10. THIS IS A GREAT POST! The problem is beyond the “paperwork” which is just being used by the banks as a “diversion”. The real problem is that the notes have been paid off and the investors and the borrowers have been defrauded–that should not go away–BOTH the investors and the borrowers should get the advantage of all the monies the banks took in from varius sources. Also, you can’t waive a magic wand over the courthouses and somehow magically “fix” broken titles. HOW DO YOU DO THAT? No this must be played out in some fashon and to let the banks off the hooks is really just asking for this o be played out again and again. FIX IT NOW by letting the banks get sued–

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