BOA’s Moynihan Gets $20 Billion Warning Letter From Insurance Industry

Letter from Insurance Industry [1]

On September 2, 2010 Bank of America was warned about their liability in shady securitizations, mortgages and foreclosures. The letter states directly that some 50% of all loans including HELOCS “qualify for repurchase by BOA in the securitizations insured by them.” It estimates liability of at least $10-$20 Billion just for members of AFGI (Association of Financial Guaranty Insurers).

“While BOA has publicly announced its intention to contest its representation and warranty obligations on a “loan by loan” basis, AFGI submits that this defensive posture will soon prove ineffective in shielding BOA from the financial, accounting, legal and other implications of its massive obligations to our industry members.”

The implications of that statement are enormous. The insurers are saying that BOA has liabilities far in excess of what BOA has publicly disclosed and that the AFGI members intend to collect. The implications regarding “ownership of the loan” are even more dire for pretender lenders like BOA. This letter clearly provides corroboration of the fact that the receivables were securitized and not the actual notes or mortgages.

AFGI goes further. It claims that BOA knows these facts and has not been honest in its disclosures to anyone. They want to know why the disclosures have not been made. “A number of our industry members have pursued laborious loan by loan representation and warranty put back process. The thousands of loans already repurchased by BOA in this process provide a statistically significant indication of the magnitude of the BOA liability to our industry members.”

With the waivers of subrogation contained in those insurance contracts and the obvious peddling and piecing of loans into multiple tranches and bonds, it is difficult to imagine a scenario wherein a judge, applying black letter law, will conclude that the identity of the creditor can be determined, or that the amount of the borrower’s obligation can be determined, or that the obligation, even if determined, is actually secured by a valid mortgage or deed of trust. The die is cast. The only way the pretender lenders can come up with legal foreclosures is if the law is actually changed retroactively. Politically and constitutionally, that doesn’t seem possible.

The failure of BOA and the other mega banks to come clean on this is what lies at the heart of our economic morass. It CAN be cleaned up and with some degree of fairness to ALL stakeholders — but not by bullying.

The only way this is going to get cleaned up is loan by loan settlements in which we do the best we can to provide the right incentives for all stakeholders to agree or be forced to comply with an equitable solution. Anything one-sided will not work.

Principal correction (that is what it is, not “reduction”) is the only impediment to getting this process rolling. Investors can strive for full par value with put-backs but we all know that the cases will be settled for less. Homeowners can strive for full ownership of their homes and that is exactly what will happen if the banks continue to insist on digging their heals in issues for which they have no legal support. Homeowners will leap at the chance to straighten this out WITH mortgages and enforceable notes and encumbrances, but only if the incentive is there for them to do so.

45 Responses

  1. PJ

    Contact me off forum re NY posters.
    Bob1365@gmail.com

  2. kac

    Started talking to someone I did not know – and we talked about foreclosures. Same thing happened to him – loan mod was denied – and just before foreclosure went through it was stopped – he gets a call that a loan mod is now available.

  3. they’re jerks! god damn

  4. PJ,
    I am from NY. You can e-mail me directly @ onemorexx@yahoo.com.

  5. Can we get some NY poster’s here, with some meat in case law?

  6. Angelo,

    I sent an email yesterday evening.

  7. Today, after not paying my loan for over 24 months, having been denied a modification by CW/BoA twice, all of a sudden today I receive a fed ex package from BoA telling me I might be eligible for the Making Home Affordable program–HA–then I received a visit from a long haired graying man in a junky car who said he worked for some property appraisal company and had a message from the lender that they would like me to call them–HA HA–and would I mind if he took some pictures. Odd timing I think!

    Way back when in my naivete, I tried to do what needed to be done after I found out a year after making the loan that instead of having $47K in equity, I had none and could not refi into a fixed conforming loan as I was assured by CW I would be able to (it’s worse now as far as equity goes)…and after trying to modify the loan with CW directly, then with Making Home Affordable, I was told I didn’t qualify. I resigned myself to foreclosure–in desperation I looked at the mortgage deed recorded at the county to see if it would tell me the investor’s name, but low and behold, nothing is recorded—furthermore, a lien held by my former mother in law recorded two years before the CW mortgage was never released–so CW/BoA is not in a primary position in the first place! Maine is a race state–snooze you lose

    I believe their friendly packet to apply for a modification is simply psychological warfare–if they could foreclose, they would. Since they do nothing, I assume they can’t! My loan is amongst the CWALT 2007 junk that is on the list of ones trying to be forced back onto BoA! I think I’ll bide my time and see what else they can come up with–I live in Maine so even if they could find the original note, and the original mortgage deed complete with it’s error filled legal description, it will still take over a year to get me out of here! So as for the modification they so nicely sent me today, I’m not biting!

  8. To Head Scratcher; You have some very funky stuff going on in your case. I would suggest (I am not a lawyer) that you write to the bankruptcy court and to your specific judge and tell them about these “discrepancies”. Something is definitely rotten in Denmark. http://www.challengingforeclosure.com
    Sirak@challengingforeclosure.com.

  9. With Securitization and the break in the Chain of Title. Our loans were sold to multiple investors. So We dont owe the money anymore plain and simple.

    Co Mingling of funds.

    The Judges know it the Attorney Generals know it but they for some reason can not or will not follow the minimal rule of law.

    Banana Republic.

  10. This is a huge mess. But the bottom line is
    We are fighting for the heart and soul of the United States

    Are we gonna become a Banana Republic with no respect for the Law. Or are we gonna be the United States of Law and Order.

    The Banking crisis is only the tip of the iceberg.

  11. Yes, and that explains it all in a nutshell….securitization is the root of our problems. Securitization is simply a gaming of the system, at the expense of the masses. Wall street can easily explain how it diverts monies from the populace and from the government.

    They’re idiots.

    They attempt to explain away MERS, as if it’s something that we should all see the incredible benefit therein. There’s no merit whatsoever in MERS, save for a very effective vehicle for robbing our municipalities and attempting to rob us individually. And they act as if it’s a given that it should be commonly accepted as the status quo.

    They’re jerks.

    I got bad news for you, there can be no fixes that will work for the citizenry, as the power brokers, the elite, have done a major over-reach this time. They’ve been stealing from us for several decades, but like the lobster slowly brought to a boil, we’ve just been eeking along quasi-noticing that things are getting harder…two jobs are not to pay for trips abroad or for a lakeshore retreat, they’re to stave off financial disaster. That ten year old car will need brakes soon. Oh my. Something will have to give.

    They’re fools.

    And now comes the great land grab, just like the conestogas of old rushing across the prairie in search of a square of land. Only this time, it’s the very land and house underneath of American citizens that are being grabbed. And all the while the POTUS and his cabinet heads deliberate not how to help the citizens, but how to further preserve the financial community.

    They’re all assholes.

    And the sooner the demise of Wall street, the better off we’ll all be. And it can’t come soon enough.

  12. pelucheven,

    Securitization is just an accounting conversion. After the mortgage loans are purchased from originators, the receivables are removed from balance sheet to off-balance sheet conduit for securitization – pass-through of receivables. Most of these conduits have been brought back onto balance sheet – with the securities – as a receivable – written off. All that now remains is collection rights – which may or may not be passed onto credit insurers via default swaps.

    Thus, the “put back” is a forced repurchase of the mortgage loan – and the security that once was backed by the loan receivable. Accounting conversion – does not change the fact that the banks own the mortgage and mortgage loans – until collection rights are disposed of. And, the banks also owned the “Trusts” – not the derivative security investors in pass-throughs. The big piece missing in the securization chain – is the sale of the mortgage and mortgage loan to the banks. All in violation of RESPA – as table-funded loans because the purchase by banks was – prearranged.

    Although M Soliman is correct that MERS is a vanilla wrapper – it is a vanilla wrapper for many entities and not just the FDIC. MERS is never the lender and never the current creditor. MERS conceals the “big missing piece” in the securitization chain.

    M. Soliman is also correct that the courts have no sympathy – but this is because they understand nothing except that the media calls you – a “deadbeat” – which is outrageous. The fact that congress twice voted down bankruptcy reform (at banks urging) – means they need the homes to go into foreclosure to cover all derivatives derived from the securitization. They had no choice but to present this as the borrowers fault in order to save a system that was procured by fraud – and still exists by numerous contracts. And, that is why our struggle is so difficult. Once the administration made their determination on how to save the banks – there was no turning back for them.

    But – we are onto it – and that is biggest step forward.

    Neil is right – there should be a principal “correction” – not a “reduction.”

  13. Collateralized debt obligations are securitized interests in pools of—generally non-mortgage—assets. Assets—called collateral—usually comprise loans or debt instruments. A CDO may be called a collateralized loan obligation (CLO) or collateralized bond obligation (CBO) if it holds only loans or bonds, respectively. Investors bear the credit risk of the collateral. Multiple tranches of securities are issued by the CDO, offering investors various maturity and credit risk characteristics. Tranches are categorized as senior, mezzanine, and subordinated/equity, according to their degree of credit risk. If there are defaults or the CDO’s collateral otherwise underperforms, scheduled payments to senior tranches take precedence over those of mezzanine tranches, and scheduled payments to mezzanine tranches take precedence over those to subordinated/equity tranches. Senior and mezzanine tranches are typically rated, with the former receiving ratings of A to AAA and the latter receiving ratings of B to BBB. The ratings reflect both the credit quality of underlying collateral as well as how much protection a given tranch is afforded by tranches that are subordinate to it.

    A CDO has a sponsoring organization, which establishes a special purpose vehicle to hold collateral and issue securities. Sponsors can include banks, other financial institutions or investment managers, as described below. Expenses associated with running the special purpose vehicle are subtracted from cash flows to investors. Often, the sponsoring organization retains the most subordinate equity tranch of a CDO.

    Ads by Contingency Analysis

    For someone who is new to CDOs, the instruments can seem difficult to understand. This is because there are actually a variety of different instruments that are all lumped together under the moniker “CDO.” Some of the different structures are detailed below.

    One important distinction is that between static and managed deals. With the former, collateral is fixed through the life of the CDO. Investors can assess the various tranches of the CDO with full knowledge of what the collateral will be. The primary risk they face is credit risk. With a managed CDO, a portfolio manager is appointed to actively manage the collateral of the CDO. The life of a managed deal can be divided into three phases:

    Ramp-up lasts about a year, during which the portfolio manager initially invests the proceeds from sales of the CDO’s securities.

    The reinvestment or revolver period lasts five or more years. The manager actively manages the CDO’s collateral, reinvesting cash flows as well as buying and selling assets.

    In the final period, collateral matures or is sold. Investors are paid off.

    At the time they purchase the CDO’s securities, investors in a managed deal do not know what specific assets the CDO will invest in, and those assets will change over time. All investors know is the identity of the portfolio manger and the investment guidelines that he will work under. Accordingly, investors in managed CDOs face both credit risk as well as the risk of poor management. Investors have the added burden of paying portfolio management fees. Today, most CDOs are managed deals. In many cases, the portfolio manager is the sponsor.

    CDOs can be structured as cash-flow or market-value deals. The former is analogous to a CMO. Cash flows from collateral are used to pay principal and interest to investors. If such cash flows prove inadequate, principal and interest is paid to tranches according to seniority. At any point in time, all immediate obligations to a given tranch are met before any payments are made to less senior tranches.

    With a market value deal, principal and interest payments to investors come from both collateral cash flows as well as sales of collateral. Payments to tranches are not contingent on the adequacy of the collateral’s cash flows, but rather the adequacy of its market value. Should the market value of collateral drop below a certain level, payments are suspended to the equity tranch. If it falls even further, more senior tranches are impacted. An advantage of a market value CDO is the added flexibility they afford the portfolio manager. She is not constrained by a need to match the cash flows of collateral to those of the various tranches.

    Another distinction is that between balance-sheet CDOs and arbitrage CDOs. These names correspond to respective motivations of the sponsoring organization. With a balance sheet deal, the sponsoring organization is a bank or other institution that holds—or anticipates acquiring—loans or debt that it wants to remove from its balance sheet. Similar to a traditional ABS, the CDO is a vehicle for it to do so. Arbitrage deals are motivated by the opportunity to add value by repackaging collateral into tranches. This is the same motivation for most CMOs. In finance, the law of one price suggests that the securities of a CDO should have the same market value as its underlying collateral. In practice, this is often not the case. Accordingly, a CDO can represent a theoretical arbitrage. In addition to balance-sheet and arbitrage CDOs, TruPS CDOs represent a third, smaller segment of the market.

    Much of the “arbitrage” in an arbitrage CDO arises from a persistent market imperfection related to the somewhat arbitrary distinction between investment grade and junk debt. Many institutional investors face limits on their ability to hold below-investment-grade debt. This can take the form of regulations, capital requirements, and investment restrictions imposed by management. Insurance companies, pension plans, banks and mutual funds can all face some sorts of limitations. As a result, junk often trades at spreads to investment grade debt that are wider than might be explained purely by credit considerations. With a CDO, a portfolio of below-investment-grade debt can be repackaged into tranches, some of which receive investment grade—and even AAA—ratings.

    Ads by Contingency Analysis

    CDOs are mostly about repackaging and transferring credit risk. While it is possible to issue a CDO backed entirely by high-quality bonds, the structure is more relevant for collateral comprised partially or entirely of marginal obligations.

    This leads us to another important distinction: that between cash and synthetic CDOs. So far, we have been discussing cash CDOs. These expose investors to credit risk by actually holding collateral that is subject to default. By comparison, a synthetic deal holds high quality or cash collateral that has little or no default risk. It exposes investors to credit risk by adding credit default swaps (CDSs) to the collateral. Synthetic CDOs can be static or managed. They can be balance-sheet or arbitrage deals.

    Arbitrage synthetic deals are motivated by regulatory or practical considerations that might make a bank want to retain ownership of debt while achieving capital relief through CDSs. In this case, the sponsoring bank has a portfolio of obligations, called the reference portfolio. It retains that portfolio, but offloads its credit risk by transacting CDSs with the CDO.

    For arbitrage synthetic deals, two advantages are

    an abbreviated ramp-up period (for managed deals), and

    the possibility that selling protection through CDSs can be less expensive than directly buying the underlying bonds. This is often true at the lower end of the credit spectrum.

    The biggest advantage to (balance sheet or arbitrage) synthetic CDOs often is the fact that they don’t have to be fully funded. For a cash CDO to have credit exposure to USD 100MM of bonds, it must attract USD 100MM in investments so it can buy those bonds. With a synthetic deal, credit exposure to USD 1000MM in obligations might be supported by just USD 150MM in high-quality collateral. In such a partially-funded deal, the entire USD 1000MM reference portfolio is tranched, but only the lower-rated tranches are funded. In this example, the most senior USD 850MM tranch would be called a super senior tranch. It might be retained by the sponsor or sold off as a CDS. The funded piece might comprise USD 100MM of investment grade tranches and USD 50MM of mezzanine and unrated tranches.

    In arbitrage deals, partial funding offers higher capital relief than does full funding under the Basel capital requirements. For synthetic deals, it is generally less expensive to sell the super senior tranch as a CDS than it would be to fund that tranch.

    Analyzing CDOs is difficult. Not only is there an entire portfolio of credits to analyze, in managed deals, an investor won’t know what collateral will be purchased. On top of this is the added complexity of the tranching, which must also be analyzed. Sophisticated portfolio credit risk models should be used. Needless to say, there is much potential for manipulation or abuse by sponsors. CDOs are appealing to investors because of the attractive yields they offer, but this market, more than most, is one of caveat emptor.

  14. an explanation of off balance sheeting

    On-balance sheet financing is any form of direct debt or equity funding of a firm. If the funding is equity, it appears on the firm’s balance sheet as owners equity. If it is debt, it appears on the balance sheet as a liability. Any asset the firm acquires with the funding also appears on the balance sheet.

    Off-balance sheet financing, by comparison, is any form of funding that avoids placing owners’ equity, liabilities or assets on a firm’s balance sheet. This is generally accomplished by placing those items on some other entity’s balance sheet.

    A standard approach is to form a special purpose vehicle (SPV) and place assets and liabilities on its balance sheet. Also called a special purpose entity (SPE), an SPV is a firm or legal entity established to perform some narrowly-defined or temporary purpose. The sponsoring firm accomplishes that purpose without having to carry any of the associated assets or liabilities on its own balance sheet. The purpose is achieved “off-balance sheet.”

    Under most accounting regimes, if a sponsoring firm wholly owns an SPV, the SPV’s balance sheets is consolidated into its own. Rather than have the SPV appear on its balance sheet as an asset, the sponsoring firm has all the SPV’s individual assets and liabilities appear on its balance sheet just as if they were the sponsoring firm’s assets and liabilities. This is on-balance sheet financing, which largely defeats the purpose of the SPV. For this reason, a sponsoring firm typically takes only a partial ownership position in the SPV. In other arrangements, it takes no ownership interest in the SPV whatsoever.

    SPVs are used in a variety of transactions, including securitizations, project finance, and leasing. An SPV can take various legal forms, including corporations, US-style trusts or partnerships.

    Off-balance sheet financing is attractive from a risk management standpoint. When assets and liabilities are moved from one balance sheet to another, the risks associated with those assets and liabilities go with them. For example, if a firm transfers credit risky assets to an SPV, the credit risk goes with those assets.

    Off-balance sheet financing also affords considerable flexibility in financing. An SPV doesn’t utilize the sponsoring firm’s credit lines or other financing channels. It is presented to financiers as a stand-alone entity with its own risk-reward characteristics. It can issue its own debt or establish its own lines of credit. Often, a sponsoring firm overcapitalizes an SPV or supplies it with credit enhancement. In this circumstance, the SPV may have a higher credit rating than the sponsoring firm, and it will achieve a lower cost of funding. A BBB-rated firm can achieve AAA-rated financing costs if it arranges that financing through a sufficiently capitalized SPV.

    Off-balance sheet financing is often employed as a means of asset-liability management. Obviously, if assets and liabilities are never placed on the balance sheet, they don’t have to be matched! They do need to be matched on the SPV’s balance sheet, but the SPV can be structured in a way that facilitates this. A pass-through is a security issued by a special purpose vehicle. The SPV holds assets and pays the pass-through’s investors whatever net cash flows those assets generate. In this way, the SPV’s assets and liabilities are automatically cash matched, so there is no asset-liability risk. Many securitizations are structured as pass-throughs. See, for example, the discussion of mortgage pass-throughs.

    Off-balance sheet financing has other applications. SPVs can be used in tax avoidance. Banks use off-balance sheet financing to achieve reductions in their regulatory capital requirements. This is a compelling reason for many securitizations. It is also the purpose of trust preferred securities.

    While SPVs and off-balance sheet financing have many legitimate purposes, they can also be used to misrepresent a firm’s financial condition. Prior to its bankruptcy, Enron created numerous SPVs and used them to hide billions of dollars in debt. That abuse, as well as other scandals during 2001-2002, prompted a reexamination of SPVs. Laws, regulations and accounting rules were tightened as a result.

  15. BofA SMOKE SCREENS

    BofA claims CIG HFI 1st Lien Mortgage is my Creditor on the default notice and when i call in and talk to them they say my BofA loans was sold to the investor CIG HFI 1st Lien Mortgage, but n BK court docs BofA say the loan was not sold and CIG HFI is an internal department within BofA.

    HOW CAN BofA mail default notices, letters, and phone representattions stating the Creditor is CIG HFI 1st Lien Mortgage and later claim in BK court that BofA owns the loan and is the creditor….one big smoke screen that i do not understand.

  16. I’ll comment on a few of M. Soliman’s points:

    1. MERS is not the lender. Impossible.

    2. B of A might very well be more government-owned/controlled than most of us think….but as long as it is a “National Association” (the equivalent of a corporation filed with the country instead of a state) it exists and can be sued as a private entity.

    3. Defective title can void a sale….but someone (us) has to raise that challenge in court. Otherwise, the constable will force the family out of the house on bad information from the foreclosing parties or the “new” owners.

    4. FDIC foreclosing? Through MERS? I don’t think so. MERS is barely hanging on to its existence, and probably should be shut down. MERS (by its own admission) never has any interest in the loan, the payments, the properties, and certainly not the Note. Once this gets established as “self-evident” MERS will never commence another foreclosure in its own name….and since it cannot foreclose in any other party’s name, I think all its members will eventually pull out of the “system.”

    As far as the original article and the warning from the insurance industry to B of A, we should watch that very closely as information discovered in that matter should help us in our cases. As usual, Neil’s comments are right on point and consistent, in that there is really only one solution to this mess…..but the banks and our public servants simply want to keep milking the cow first…..or should that be “bilking” the cow?

  17. Anyone care to refute M. Soliman? I mean, does the FDIC actually have legal title to anything? I can understand the bank not being solvent, but my brother has a BoA foreclosure case and MERS is not listed anywhere on his note or mortgage or in any docs. Not sure how MERS and FDIC figures in this stuff.

  18. Anyone care to refute/agree with M. Soliman’s perspective?

  19. Okay….hmmmm.

    * * Homeowners can strive for full ownership . . . if the banks continue to insist on digging their heals in issues . . .

    Lets do this again. Let’s change the channel and adjust our picture. Now tweak the sound a bit…hows that? Okay! Here is the scoop title holders:

    1) The is no BofA – Its over and they are gone. Bye Bye .
    2) The BofA you may Bank with is government owned.
    3) The Bank would , could, may, can’t , won’t …STOP! There is no bank here to help you.

    4) Your lender is MERS —(ACCEPT IT PLEASE [I AM TELLING YOU THIS FROM FIRST HAND KNOWLEDGE]).
    5. MERS is the vanilla wrapper for the FDIC

    6. The FDIC will foreclose through a debt collector managed by past foreclosure mills.
    7. The sale of a home is done as a purchase for all credit for accounting purposes.”Read IRS Code Basis Accounting”

    8. The real lender is a subrogee who is fighting you for the right to title. (and you don’t knonw it).

    Damn it people. NO CONDITION PRECEDENT!

    LOOK – Its your title to realty and fee title is absolute. The deed is disturbed as it rests in foreclosure and a notice of sale causes it to lay defect.

    You cannot tranfer real property having defect title. Where the deed is defect the sale must fail.

    The court may not appear sympathetic to you; but look what your arguing? I’ll tell you this. The court will have no repsect for any one who is a title holder who dosent defend their title!

    M. Soliman
    expert.witness@live.com

    The opinions and views expressed herein are offered from expert knowledge and informational sources. Opinions offered from research and first hand sector knowledge is not a legal opinion. Only a licensed attorney can advise you of your legal rights. Call your local bar for a referral or ask this site for a competant attorney in your area.

  20. Solomon vs Eloan et al

    Case: Civ.S-10-2565-JAM KJM

    BK Case. 10-37438-E-13L
    Adv. No. 10-02479-E

  21. concerned
    Drop me an email off-site vee4links@aol.com, lets talk more. Do you have an attorney? what state are you in?

  22. Angelo,

    Another parallel, I supposedly had a mod from CW (per the CA AG mod stipulated agreement. That was supposed to take effect (signed permanent mod already acknowledged by CW in 2009) but the loan was suddenly transferred to Litton for “servicing”.

    In fighting for the signed mod, Litton claimed the investor was the CWABS 2005-10 with BoNY-M as the trustee.

    A substitution of trustee was done in 2009 by Litton (using MERS). Now in 2010, Litton again uses MERS to do the assignment to the CLOSED CWABS pool.

    Loans in default can’t be placed into the pool and they can’t be placed into a CLOSED pool. It is contrary to the PSA AND it is contrary to IRS regulations of REMICs.

    I find it strange that the MERS handbook tells the members to do things in this order. Isn’t that TELLING the members to LIE?

  23. Concerned

    I would love to compare notes, I also have a loan with Litton and a plaintiff of BONY mellon for CWABS certificate holders. My assignment was done 12/09 for a trust that closed in 2002. The assignment was from MERS and done by the plaintiffs attorney, its was recorded in 3/10 some 3 months after the assignment was done.

    Furthermore, I also have a Mod. from litton for the 2002 trust, that was done in 3/08, but they didnt take assignment until 12/09. How is that possible?

    How did you find out if your loan was in the alleged pool?

  24. A must read….some quotes…..

    http://www.playboy.com/articles/how-to-destroy-a-bank/

    “Eddie told me why he believed financial mass destruction was coming. As he talked, something happened to him that happened to almost every other person I interviewed for this article. It was as though he went into a trance, listing example after example of why finance was fundamentally unstable. For instance, he spent 20 minutes explaining how synthetic derivatives allowed banks to take out insurance on property or assets they had no vested interest in. The facts he listed were arcane but public knowledge, albeit to a public without the ability to digest such knowledge. It was dark before he finished. I got the sense the only reason he had stopped was the time; for Eddie, there are more reasons to be scared about what is happening in finance than there are minutes in the day.”

    “The idea of shame seemed alien. [Yves] Smith agreed. “Wall Street has become profoundly narcissistic,” she said. “Entitlement isn’t a strong enough word to capture the preening self-regard of the industry. Look at what they have accomplished: the greatest looting of the public purse in history, with no one held to account, no one in authority putting in place measures to prevent it from happening again. The success of this heist, if anything, confirms Wall Street’s exaggerated sense of self-worth. It was such a profitable exercise that the industry has every reason to repeat it.”

    “….investment banks, moving in sync to attack their own. “The current institutions—the banks and broker-dealers and hedge funds and shadow-banking people—already move as organized mobs to take billions of dollars out of institutions in minutes.” [Prof William] Black was referring to the rapid trillion-dollar movements out of Long-Term Capital Management, Bear Stearns and Lehman Brothers, movements that occurred when it was rumored these institutions were unstable. “The banks will inevitably do it to each other again,” said Black.

    “I asked Yves Smith why people would ever consider using Eddie’s plan, human shields or not. “A lot of people are extremely angry,” she said. “They cannot necessarily explain the mechanisms that produced the financial crisis, but they know they’ve been screwed. They know Wall Street got bailouts, yet no one has been held accountable. If you’re not angry about what’s going on, you’re either not paying attention, deluded or you’re part of the problem.”

  25. To ‘help’: Have you had anyone try to trace your mortgage into any ‘pool’?

    It sure looks like BofA has a the note that CW typically KEPT instead of transferring to the Trustee for the pool. I have seen multiple articles about CountryWide KEEPING the notes even though the mortgage was supposedly transferred into a securitizsed pool.

    In my own case it is just fine if CW still has that note. The BK court has what Litton produced to validate the debt: a copy of the note from the title company and a copy of the original deed. That copy of the note from the title company does not even have the ‘endorsed in blank’ crap. It only has the ‘verified copy’ stamp from the title company. So they are trying to ‘flim-flam’ the BK trustee and judge with what would be viewed as a copy of a copy of the original before anything was done with transfers after the note was originated.

    I do not believe they will want to provide a copy of that assignment of the deed to the BK court. They should not have filed such a document while the BK is active! In fact, they probably decided to do the standard ‘MERS’ filing of that assignment this year without regard to the BK court, just to keep in step with the MERS guidelines.

  26. Banks could lend at 125% of value! They were betting on the defaults. Now they want the fed’s to pay back with TARP or fed insured mortgage program money. Our elected officials voted for this.

    ANSWER vote any incumbent canidate out on Nov. 2.
    Lose their jobs-see what it’s like-oh, they could still get pentions and benefits. Pure craziness!

  27. What a mess

    Humpty Dumpty sat on a wall,
    Humpty Dumpty had a great fall.
    All the king’s horses and all the king’s men
    Couldn’t put Humpty together again

    It is so sad what these Banksters are doing to our Society.

    So Sad

  28. So there will be little left for homeowners who have already been suing…??? And so Monyihan is warned…. big deal.. the bank should have been STOPPED years ago back when it was countrywide.

    @usedkarguy I am wondering why any bank would offer to take even 1 payment AFTER a trustee sale? hmmm more collection of interest perhaps or just stealing funds?

  29. If BofA is going to contest everything loan by loan, it is going to get even more expensive in legal fees. They will have to pay some very expensive lawyers in very expensive law firms. http://www.challengingforecloosure.com

  30. BofA and production of the NOTE during discovery; BofA supplies a NOTE endorsed in blank, BUT claims it owns the note and never sold it! hummm! Makes u wonder!

  31. “For those who are concerned that somehow there’s something morally suspect about restructuring loans, I should note that every day on Wall Street the people of power and privilege in this society restructure their debt,” Silvers said. “It is commonplace for everyone but the poor.”

    http://www.huffingtonpost.com/2010/10/29/money-first-questions-later_n_776135.html

  32. Hey Tracey,

    My assignment (via Litton’s use of MERS) has Debra Lyman (a Litton Attorney) signing for “America’s Wholesale Lender – A Corporation” and dating it in July 2010.

    Well as I referenced earlier, AWL is a D/B/A of CountryWide. It never was even a corporation. So I have MERS hiding the actors AND the usage of a fictitious business on the original DOT and Note.

    CountryWide was bought by Shank America in 2008.

    I filed suit in 2009 over a modification. Litton claimed at that time the investor was CWABS 2005-10. Shank America claimed, simultaneously, to be the beneficiary.

    So Litton was already working at the supposed behest of the ‘investor’ in 2009 but in 2010 actually generated the assignment to transfer the loan to the party they were working for as of the prior YEAR?

    Also, with the loan ‘owned’ by CWABS, which is NOT a member of MERS, (if the loan had been transferred before the suit in 2009), then how does Litton use MERS to do ANY of the fillings they did in EITHER 2009 or 2010?

    [In 2009 Litton generated the substitution of Trustee, also using MERS.]

  33. Thanks for the affirmation pelucheven. My attorney filed suit on BOA for fraud. Within the 1 year statute to sue for fraud. FYI – The house sold by bank for approx 50K less than we brought bank in short sale offer. Perhaps there will be a title problem now for new owners!

  34. yes that is a robosigner and a fraudulent assignment and affidavit, they are counting on you not to do anything

  35. does any one has any idea of how to locate First Magnus Financial Corporation securitization pools?

    any whistle blowers out there?

  36. Assignment of mortgage dated 3/19/09 for us was signed by foreclosure mill attorney as Attorney In Fact for Countrywide Home Loans Inc to Countrywide Home Loans Serving LP. Didn’t the BOA purchase of Countrywide get done long before 3/19/09.

    I think it is robo signature – fraud?

  37. Zoe:

    You need to check whether the assignment is putting the deed into a CLOSED pool. If it is dated such that the assignment is after the pool closed, there is a BIG problem for the defense of that assignment. The pools were only open for a 90 day period in the year the pool was created. Late transfers should trigger a BIG penalty from the IRS for the investors.

    ALSO, what investor wants to take ownership of a mortgage that is already in default?

    Now IF your mortgage was assigned into one of these securitized pools, then the PSA agreement ALSO states that such a mortgage is NOT to be ‘sold’ to the pool.

    In fact, yours and mine would be ones that the investors would be demanding the ‘originators’ REMOVE from the pool.

    So, even if the assignment can be filed after the start of foreclosure, it is very likely that your attorney should have looked at things more closely unless your mortgage is not securitized. If he missed something this important, you may need a different attorney.

  38. In my own case, Litton used MERS to sign an assignment of the Deed of Trust dated and recorded in the year 2010. The pool had closed in 2005.

    Regardless of ‘IF’ the note was indeed transferred, the title is CLOUDED. That assignment was done way too late but since it was RECORDED with the County, it supposedly puts the Deed into the Trust. (Oh, yeah, they also skipped over the intervening assignments that SHOULD have happened, just jumping from CountryWide’s AWL (a DBA) directly to the CWABS 2005-10 certificate-holders.)

    I wonder if these loans that are getting late assignments filed are even in those that the investors are fighting? Will the CWABS 2005-10 Trustee provide the ‘investors’ with the information on loans such as mine that have late recording of assignments that should be grounds for the IRS and the Trustee to claim they are not in the pool?

    How can the CWABS Trustee, to comply with the investors, now demand the loan be removed from the pool when BoNY-Mellon as Trustee were SUPPOSEDLY the entity that Litton was representing when they started foreclosure in the PRECEDING YEAR (2009)?

    Even if both the note and the DOT were to land back with Shank America’s CountryWide division, there are questions of the perfection of the loan, the clouded Title and who really should be paid. With any loan forced back, will there be any credit for any insurance or TARP funds?

  39. My lawyer just told me that assignments can be recorded after notice of default in my state. Perhaps states differ on this, I don’t know. The only hope for fellow homeowners is that attorneys in my state will go after the lenders if they don’t have originals.

  40. Yes that is the new elephant in the room . If the banks are forced to repurchase MBS are they now enforceable if they have the wet note. I say no as they only buying back bonds not mortgages. In the end this is a State by State rights issue. It’s going to make strange bedfellows , in the follow the money.

  41. I contacted no less than 10 bond insurers trying to find the one involoved in my securitization. Anybody know where they would record that info? Who bought the insurance? If it was the depositor/sponsor/custodian/servicer who had direct knowledge of the defective loans, they are culpable for the buyback. How about the credit default swaps? What reps and warranties apply there?

    A bigger point is that the loan is forced into default, the borrowers kept on paying (thinking they were only late and not in default) and the servicer files and collects insurance payments while collecting borrower payments, too. Yes, my friends, that’s happening , too.

    Now try to find that insurer. They would like to hear from you.

  42. what is at issue here is the repurchase or put back of the securities? not the loans thenselves?

    what happens to all those loans where the motes were never assigned or transferred to the pools with blank assignments that are being brouhht into the court houses?

  43. ONEWEST GETS POSSIBLE SERVICING DOWNGRADE–MOODY’S. IN MY EXPERIENCE WITH THEM I WOULD TEND TO AGREE

    http://www.scribd.com/doc/40427311/ONEWEST-BANK-FORECLOSURE-IRREGULARITIES-OneWest%E2%80%99s-Servicer-Rating-May-Be-Downgraded-on-Foreclosures-BusinessWeek

    i THOUGHT THAT I SHOULD AGAIN ADD TO MY OCC COMPLAINT ON THE TRUSTEE DEUSCHE BANK. THIS ONE IS FUNNY.

    http://www.scribd.com/doc/40429637/Occ-Complaint-Amended-Addition-Information-10-29-10

    WE NEED TO SHINE THE LIGHT ON THIS CRIMINAL BEHAVIOR WHILE WE STILL HAVE THE ENERGY TO SHINE.

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