BOA/Countrywide Demands “BuyBack” from Originators They Created

EDITOR’S NOTE: The finger pointing and ankle-biting is a sign of the times — all pointing to the fact that there WAS fraud, and that some corporation (other than the one making the allegation) is at fault. BOTTOM LINE: There was fraud and none of these corporations making the allegations as pretender lenders are victims. They are perpetrators. The victims are and always will be the investors who were sold bogus mortgage bonds, and the homeowners who bought bogus loan products based upon stupidly  inflated ratings and appraisals of the value and quality of the property and the “securities” that were sold.

The Give and Take of Liar Loans


Did you hear the one about Countrywide Financial demanding that mortgage originators buy back many of the so-called stated-income loans that it had purchased from them during the late great housing bubble?

It boggles the mind. This, after all, is Countrywide we’re talking about: Countrywide, which came to represent, in the public mind, the dirtiest of all the subprime lenders. Countrywide, which handed out fraudulent stated-income loans — they were often called “liar loans” — like candy. Countrywide, whose former chief executive, the disgraced Angelo Mozilo, once actually admitted to analysts, “I believe there is a lot of fraud in stated-income loans.”

This same company is now insisting that other lenders that made stated-income loans — loans that Countrywide eagerly bought to fatten its balance sheet — must repurchase them on the grounds that, golly, the loans turned out to be fraudulent. The hypocrisy is breathtaking.

At least, it is until you realize one other salient fact: since early 2008, Countrywide has been owned by Bank of America. Then it all starts to make some perverse sense.

You know what a stated-income loan is, don’t you? It is — or, rather, it was — a loan in which the borrower doesn’t have to verify his or her income, but simply states it. (Not surprisingly, since the subprime bubble ended, stated-income loans have become pretty much extinct.) On the face of it, you would think that no lender in his or her right mind would accept an income figure based solely on the borrower’s word. But you would be very, very wrong.

There actually is a tiny group of borrowers for whom a stated-income loan makes sense, and for whom the product was originally intended: someone with a large amount of income, but whose tax returns are so complex that it is difficult to calculate the person’s effective income. A borrower who can make a down payment of, say, 35 or 40 percent, has a large stock portfolio and has a high credit score — that person is a good lending risk no matter his or her actual income.

But whenever lenders have stretched these loans beyond that very narrow category, bad things have resulted. In the 1980s, for instance, Citibank took a stated-income loan product that had had some moderate success in New York City and offered it to the rest of the country — then watched its default rate explode. It wound up not only withdrawing the product, but also indemnifying Fannie Mae and Freddie Mac, which had guaranteed many of the loans.

During the subprime madness earlier this decade, stated-income loans became the dominant feature of most subprime loans. Documenting income, after all, took time and effort, and who had time for it when everyone in the business was making subprime loans as fast as humanly possible? “Stated-income loans were viewed as relief from documentation,” said Lou Barnes, the founder of Boulder West Financial Services. (Boulder West is now owned by the Premier Mortgage Group.)

Competitive pressures also prompted the growth of stated-income loans. With such loans so easy to get, mortgage originators that refused to make them began losing business to those, like Countrywide, that were only too happy to make them.

Finally — and perhaps most important — stated-income loans became a means for both borrowers and lenders to commit fraud. That may have been their greatest appeal. Real estate speculators used stated-income loans to buy properties that would otherwise have been out of reach, hoping to flip them quickly, before their lack of income caught up with them. Far more frequently, however, mortgage originators used stated-income loans to put people into homes that were far beyond their means, knowing full well that the chance of the borrower ever paying back the loan was practically nil.

As I mentioned in a column a few months ago, the Mortgage Guaranty Insurance Corporation — which is embroiled in litigation with (who else?) Countrywide over whether Mortgage Guaranty has to pay off insurance on stated-income loans that went bad — hired investigators to root out some examples of fraud. To take just one example alleged in the document: a self-described dairy foreman who listed his monthly income as $10,500 was actually a dairy milker making a tenth of that amount. The mortgage broker was completely aware of this fraud, according to the complaint. Nonetheless, the borrower got a $350,000 mortgage.

The complaint by Mortgage Guaranty reads: “By about 2006, Countrywide’s internal risk assessors knew that in a substantial number of its stated-income loans — fully a third — borrowers overstated income by more than 50 percent.” The complaint adds, “Countrywide deliberately disregarded these and other signs of fraud in order to increase its market share.”

Today, the drunken revelry that was the subprime mortgage bubble has resulted in billions of dollars in losses from all those fraudulent loans. Fannie Mae and Freddie Mac both bought and guaranteed stated-income loans. Wall Street underwrote mortgage-backed securities and collateralized debt obligations stuffed with stated-income loans. Investors bought those securities because they were promised high yields and, thanks to the absurd triple-A ratings on the securities, very little risk. Insurance companies like M.G.I.C. insured stated-income loans. And big banks and mortgage originators — Countrywide, especially — kept at least some stated-income loans on their books in an effort to bolster their own yields.

For the country, the impact of stated-income loans has been terrible. Now, with the memory of their lax underwriting still fresh in their minds, bankers have been demanding document upon document, proof upon proof, for anybody wanting to buy a home. People who would have been considered perfectly acceptable borrowers before the bubble can’t get a loan in this new world. It is one of the big reasons the housing market remains depressed.

For the companies involved, the overhang from stated-income loans has resulted in an enormous catfight, as each participant tries to force someone else to absorb the majority of the losses. Hence the squabbling over something called “reps and warranties.” As the loans were sold from one entity to another during the bubble, contractual language was written that allowed the buyer to force the seller to repurchase the loan under certain conditions. Evidence of fraud is one such condition. Now, every participant in the marketplace is trying to use that contractual language to force another of the participants to swallow losses.

Take, for instance, that litigation between Countrywide and the Mortgage Guaranty Insurance Corporation. For some time now, the mortgage insurer has refused to pay claims on thousands of stated-income loans it insured, on the unsurprising grounds that the loans were fraudulent at their inception and thus violated the terms under which the company insured them. In December, Bank of America filed suit on behalf of its Countrywide unit, arguing, in effect, that it doesn’t matter whether the loans were fraudulent. Since the insurer never asked for income verification — and accepted the fact they were stated-income loans — it has to pay up. (Nearly a year later, the litigation is just getting started.)

Now contrast that stance with Countrywide’s effort to force smaller mortgage originators to buy back loans it had purchased. In these cases, Countrywide makes the exact opposite argument: because the loans were made fraudulently, the smaller companies have an obligation to buy them back. Never mind that Countrywide, just like Mortgage Guaranty, made no effort to verify the income and undoubtedly knew the loans were fraudulent. Heck, everybody knew that many of these loans were fraudulent.

Thus, when it serves Countrywide’s purposes to argue that everyone knew the loans were fraudulent, it happily makes that case. But when it is better served by arguing that it is shocked — shocked! — to discover gambling in the casino, it makes that opposing argument with similar ease. Isn’t that the dictionary definition of hypocrisy?

When I brought this up with several Bank of America spokesmen this week, they were offended at my characterization. “We have bought back billions of loans that we found justified,” said James Mahoney, a company spokesman. “We will continue to buy back loans when justified.” He pointed, for instance, to the more than $5 billion in bad loans the bank had repurchased from Fannie Mae and Freddie Mac.

The bank is right, up to a point. It is repurchasing many of the loans Fannie and Freddie guaranteed for Countrywide. But that is in part because not even Bank of America can afford to anger Fannie and Freddie, which are the lifeblood of the mortgage industry right now. (It is also because Fannie and Freddie have much tougher contractual language than most private underwriters use.) If Fannie and Freddie were to, say, stop guaranteeing Bank of America’s mortgages, the bank would be out of the mortgage business.

In the cases of investors and insurers like Mortgage Guaranty, Bank of America is taking a much tougher line. Yes, it is buying back loans, but it is also engaged in something more akin to hand-to-hand combat, fighting over each and every loan, and repurchasing them only when the evidence of fraud is so strong that it has no other choice but to take them back.

As for those smaller mortgage originators I began this column with, they are in the opposite position from Fannie and Freddie. They need Bank of America a lot more than Bank of America needs them. So they are swallowing hard and buying back the loans they once sold to Countrywide. They don’t have a lot of choice.

So I take it back. “Hypocrisy” is probably the wrong word. All Bank of America is really doing is talking out of both sides of its mouth, using whichever argument it finds most convenient. So maybe a better word to describe the bank’s actions would be “chutzpah.”

46 Responses

  1. Anonymous – Re Ameriquest lawsuit. This lawsuit was filed by 49 State Attorney Generals. Now you may see why I worry that we do not know what the 50 attorney generals are doing now with this fraud mess. You just never know and they have’nt as far as I know, said how that is going. WE have needed a plan and a strategy to protect our positions, but I am not sure that can be done at this time. Maybe they will come up with something good for the homeowners. We will see.

  2. Anonymous – you must look at the Ameriquest MDL Settlement – It is going to be of great help to my client and possibly others who had Ameriquest loans, that were securitized, but opted out, of the settlement.

    Under the Release Section, it details certain companies that were released of the liability, etc. and also I believe, other companies created to process securitizations. I haven’t had time to put that information up on this site since 3:00 this morning.

    The suit was setttled for $350 million dollars and it list the complete family of the Ameriquest, Argent and others. I thought it interesting that they put the depositor that they used, Park Place, in the release section, but did not name them as a defendant. Would you know why? I think I do, but cannot be sure. I also see where Park Place is on the same floor near their suite where Ameriquest was located. What a set up. Let me know. Thanks so much. You are really good at this stuff as is Neil.

  3. Joyce Louise

    Can you explain what happened with Ameriquest settlement??


    Do not always understand what you are saying – but, that is a shame because think you have a lot to say.

    You say – “it is about to get worse” —- and, can we ask – whose fault is this???? — in your opinion???.


    By M.Soliman

    Your effort to stay a sale or even begin to contemplate an action is going from Very bad to Horrific.

    And it’s about to gets worse.

    There is
    1) the FDIC Repudiatory powers to rescind any and all contracts,
    2) Jurisdiction over a courts decision,
    3) Risk, Loss Share liquidation format,
    4) the FDIC subrogation claims program,
    5) and now Hold Co.

    Hold Co, its a failed banks rights in receivership under a Conservators Master Purchase Agreement.

    It’s a sad sad situation…and it’s getting more and more absurd.


  5. If you are having problems with Bank of America & live in GEORGIA, please contact me. I may be able to help you. Sonya


    By M.Soliman

    Mortgage lending shifts the servicing opportunity to and from “SRP” servicing release premiums to retaining servicing or Servicing Retained transacting “SRT”.

    Most banks and credit unions that originate mortgages the last decade clearly did not have sufficient economic incentives for servicing retained “SRT” secondary market execution.

    The origination platform became market controlled by the dominant players like BofA and Citi Financial Group.

    Markets appear to be nationalized long before the crisis. It is thought therefore the market was open to and benefited from a corrupt and ingeniously constructed fraudulent set of economic irregularities.

    The preference for execution should always be determined by risk to reward factors and market driven conditions i.e.”servicing”!

    Independent mortgage bankers “IMB” have always pursued the appropriate markets condition and felt there were sufficient invecntives to accrue servicing rights over time — versus a onetime gain on sale under servicing released “SRL” transacting.

    For mortgage lending firms that are offered direct agency relationships, they retain servicing on cash-window executions for a significant portion of their production.

    Servicing accrues over time and is booked as an asset carries on the books of the originator. The growth of correspondent lending, and the advent of the large regionals “servicers” generated higher valuations tied to asset classes and quality.

    The higher prices in 2000 afforded quality assets value , agency or sub prime, that could calculate the servicing-released premium (“SRP”) up to 20 times the value of a “SRT” execution.

    So, servicing-released premiums (“SRP”) from 1998 through 2000 made it a significantly market driven reality for regional lender’s customers to pursue an SRT.

    That all ended in 2000. Thereafter the market paid little if any premium. Yet the market was driven by SRT premiums paid to banks and credit unions from 2000 through 2007. Those premiums were calculated anywhere from par to -1.000.

    SRT price levels dramatically fell after 2001 while the secondary markets “SRT” prices for government “agency” classes of “Fannie Mae” mortgages paid greater than non-agency private label vintage loans.

    Factor contributing to the diminished price levels for non-government endorsed “Fannie Mae” mortgages receivables are apparent in thousands of client files we review.

    Private loans are backed by Wall Street and huge demand for “ad hoc” underwriting anyone could qualify for stimulated constand demand.

    Mortgage companies, banks and credit unions would far do worse to revert or continue on with non-agency “SRT” thru later years for new originations. The objective in the latter years should have been on retaining servicing versus making loans at par or a loss. And while servicing rights would be valued on the better loan quality agency loans.

    Yet, the better quality government backed programs to afford home ownership and affordable refinancing were only in line with the national cost of funds and bestefforts pricing for “locked” pricing by sub prime crime particpants.

    Non agency loans were (1) always in demand due to moronic underwting, (2) fraud and (3) unlawful underwriting at higher advances (4) for purposes of making the loan and nothing else.

    Look – in plain english – “Bad loans were gobbled up at zero cost or discounts to the majors who originated these loans for tainted securities purposes.

    The value of a “SRT” was an economic disincentive and “SRP” were at zero pointsexecution. Yet the smaller fry’s collected their “blood money” at the closing table and the SRP’s paid to larger aggregators at the close of a trade did not reward the delivery with anything close to sufficent priced executions.

    These loans should never have funded. The sub-prime crime is that loans these players originated violated the agencies guidelines and stimulated artificial market conditions.

    My point is the value of the servicing aggregated or accrued over time is discarded at the closing table in exchange for a fast few thousand dollars. smaller companies feed larger regional mortgage buyers and their execution can earn a few hundred thousdand on bllions of dollars of volume …and that’s a no brainer.

    Its volume for volume sake and riding the wave as if it will never end.

    Survey say’s FRAUD!


  7. To David,
    Thanks for the info on the SISA/NINA. I was sent some copies of faxes after our loan closed. I never could figure out those faxes…they were from impac lending to the broker and it has “loan is now SISA” we had to supply all income info. And now CW/BAC-bank of america does not have the signed application. And in with those faxes the broker sent are even more loan app’s..all different, as well as GFE, TILA..all different. I think the broker may have sent me all those because the office was shut down, and the brokers were not getting paid anymore..trying to get even with the boss???LOL

  8. Deb:

    Thank you, most of us do what we can to see you get as much info as possible in the way of accurate info you can count on.

  9. Joyce louise your contribution on this blogg is very generous thankyou and everyone of you strong hearts, you inspire me.

  10. Litton was purchsed by Goldman Sachs and Litton is not an originator of loans. They were the first in the country to set up a servicing operation without having a mortgage company in place. In 1984 or thereabouts, when loans were going bad and Fannie had to transfer servicing because the servicers were not performing adeqately, they sent their loans to Litton. It was a great time for us here in Houston and we sent them the loans thinking we were teaching loan servicers to either follow the rules or Fannie would cut them off. Too bad they did not stay with that mindset and too bad Litton has also changed from the very good servicers that they used to be. Now they are following the instrucitons of Goldman Sachs just like the others who were owned by investment bankers, EMC was owned by Bear Stearns, now Chase, and so forth.

  11. Deb:

    I think your case is typical of the going’s on and your originating lender may very well have to buy the loan back. Homeowners across this nation are proving to the world that so many of their applications have been mishandled in order to produce a product that could be sold fast and quick to the dealers who purchased them for the PSA. We only have to look at the Ameriquest suits and others that have already been in court for these various acts. It is in my mind no question that perhaps 20% of the loans foreclosed would result in homes that were financed as new construction and when those notes were funded and the loan set up, in order to make sure the homeowner could make the payment for at least the first 10 to 12 months, they collected on the basis of unimproved taxes. Then when the adjustable rate kicked in and 18 months had passed, the loan payment was increased 1)rate change 2) escrow shortage and increased payment. There was not a way in XXXX these homeowners could stand such an adjustment. We tried desperately as long as 15 years ago to set the payments for escrow realisticly so there would not be payment shock. But with the loans they were producing like hot cakes, they didn’t want them to go delinquent too quick otherwise, the buyer of their loans might decide to take a look. There was and like Deb said, the houses weren’t even worth it. This is just one little example of what caused the melt down. This was not the borrowers faught and I don’t think borrowers will have an issue with fraud. I hope not. Each and every case is different and needs to be looked at and I mean a good hard look. At any rate, this was an example that I believe Fannie should have been on top of. I argued it until I was blue in the face, but I knew their day was coming.

  12. Neil has a good handle on this. I would like to say however that companies must stop cow towing to Fannie and Freddie. I have had an opportunity over the years to work with homeowners and what was done to them by the servicer only to find out that Fannie has not stood the test as well as it should have and some of those loans were not serviced properly and they stood by the servicer. It will be interesting to see them make demands for repurchase when they themselves should have had a system in place to detect such fraud within the minimum of time. They had the system but someone needs to ask them why they didn’t do something and put those brokers and mortgage bankers on notice early on. This is why we have so many bad loans on the books. I have already been down that road back in the 80’s and again, we talked about it and it looked as though that could not be a problem in the future. Guess what? If I were an originator of loans and selling them to Fannie, I think I would argue this issue if asked to repurchase. Maybe they already have. I still say they began missing out on market share in the late 1990’s after dergulation came into play and it appears that they turned what used to be an “a” paper loan to an A- which they got a tab bit higher interest rate, but could still give a rate lower than the subprimers.. I know they want the world to think the Congress “made them make those loans” but hey, I am not sure about just how much force the Congress did put on them after all is said and done. Fannie always knows exactly what they are buying, who did it and what they think the risk will be. They can always look to find a reason to ask for repurchase in case that loan goes south. But in the 80’s Fannie was the best of the best and we could deal with them. Not so easy now.

  13. If there is fraud at origionation which there was and a hyperinflated appraisal this giving risr to false ratings of a huge pool of loans the mortgage pools which is what the investors bought a bond secured by a POOL xnd then they did nit know which loans were going to go into default but they knew a percentage would then those who qualified people such ad myself and knew they could make that application look good are to blame since thst entity took my signature to commit s fraud that’s where the nightmare began because I signed in good faith and put down all o had on the world believing my investment was a reasonable risk. So if they must buy back because of fraud then my case this prooves thr case but I dong believe for one second the origionators did this without having an intimate relationship with the Bank or would be servicer there had to be incentives and an organized selling ” forward” since developers were filling slots created by wall street selling bonds thst were backed by collateral not yet in existence. Do I have thst right? those crappily built new homes thst will probably fall down all by themselves then they can reclaim the land, they probably planned that too.

  14. concerned:

    There is no telling what mind set B of A will have once it repurchases the loan. It is anybody’s guess. If I had to repurchase a loan, which I have not, I would have complete control over the loan and then I would do what I could to try to work with the homeowner to come up with a viable plan for him and the bank. Remember, the fraud they are talking about I believe is the fraud that was committed during the origination of the loan, not the fraud that the servicer may have committed when they frabricated the assignments. There is a difference but if the loan is repurchased, then they can make a better choice of what to do rather than follow the provisions of the pool agreement since the they were not a party to it either and the loan has since been removed. I am not sure how the final numbers work out when the money is paid back at the time of repurcahse if a securitized loan was involved. This is a complex issue and others on the site may know. All I know is the note and the mortgage loan documents together with the file are returned to the company having to repurchase.

  15. As an originator of mortgage loans from 1992 throu 2002, we had wholesalers like Countrywide, Wells Fargo, etc. that we sold loans to once we originated them. The wholesaler requires us to sign an agreement to repurchase the loans if they were originated under certain circumstances, fraud being one of them. In this case, If Fannie purchased the Countrywide loans, and fraud was committed to originate that loan, then Fannie will require that Countrywide buy it back. It is not a matter of what Countrywide/BofA would do with it after that, it is simply a matter of repurchasing bad paper which they sold to another party. Since we are tlaking about loans that may be in the billions, BofA is going to have to cough up a lot of dough and you know how hard it is to cough up dough, they may not be able to. They have already started on some, but they have a long ways to go. Also, I believe Fannie repurchased one trillion in mbs certificates so now they have control of those loans. Those are the ones I believe, I may be wrong, whereby they will get their money back when B of A repurchases some of those loans. I cannot be sure. It is a simple matter of an originator agreeing to repurchase a loan from the party they sold it to under what we call “reprsentations and warranties”. As an auditor under one agency that had oversight of a bank that had purchased a portfolio of loans, l/3 of those loans had an issue under the representations and warranties and were preventing them from the yield they were to get off of the banks investment. I required the seller to repurchase everyone of them and the new bank that came out of the merger had one of the cleanest portfolios this side of the Mississippi. Thank you for asking.

    To the second part of your question, it just isn’t possible for all of these loans to be repurchased by their originators if indeed the kind of fraud which we now feel may have gone on really does. So why spend the money repurchasing and not use that money to keep the individual loans performing by compensating the homeowner for the damage their unlawful bank practices may have caused. The administrations have already thrown the money away on the wrong places and look what we have – nothing. People are still losing their homes to foreclosure.

  16. Joyce,

    So you think CountryWIde/BofA will attempt to buy back the mortgage that Litton personnel just attempted to assign into the CWABS 2005-10 pool this past summer?

    The assignment is a fraud. You really think they will now ‘buy it back’ to try to ‘un-do’ the fraud?

    Gee, if that is how justice is supposed to work, the only ones in prison would be murders and rapists. Anyone else would just pay off the crime.

  17. b davies

    Great post – insurance fraud was rampant. And, those that benefited are now retired with fat bank accounts. This is up to state Banking Commissions to investigate – will they join the AGs – or continue to hide in a cubby???

    Insurance fraud will be the next investigation – but, those that are investigating must first understand what they are investigating. That will take awhile.


    Motion to compel. MBIA regards to loan level files and how incomplete they are in regard to an insurance company looking into the compliance with the PSA.

    This is why the psa and loan files are important to your case.

  19. As atrouble shooter for the mortgage banking groups in the 80’s, no one had the money to repurchase the loans and they sure had no recourse against the small broker operations that assisted them in putting the lousy loans on the books in the first place. Leave everything where it is right now and turn that non performing loan into a performing loan and let the regulatory set the 12 month limit for performance which will wipe out the scheduled item portion of the reserves which the banks have to set aside.. There are ways to address the issues, why isn’t it b eing done?

  20. What is there such a focus on repurchase. There is still a note out there that the borrower has signed and someone is going to insist that he pay it or go to foreclosure. Why not focus on “getting money to the homeowner so he can make the payment” and let the effects of a performing loan trickle down to all of the other players, as sad as that might be after they did what they did, but at least the homeowner, the #1 guy in this, should get satisfaction and justice. So the builder repurchases the loan, they don’t have all the money they need, they will just go bankrupt and God knows what will happen to that note that you signed.

  21. he Data Explorers numbers focus on D.R. Horton Inc., which has just under 10% of its shares borrowed by investors with short positions, Lennar Corp. (13%), Beazer Homes USA (15%), KB Home (16%) and Standard Pacific Corp. (8%). Two companies in the sector–luxury builder Toll Brothers Inc. and the nation’s largest home builder by volume, PulteGroup–were at the low end of percentage of borrowed shares, at 6% and 9% respectively. The report’s authors write:

    These builders were originators and will be liable to take back loans they manufactured to steer and sell their inflated priced homes.

  22. […] This post was mentioned on Twitter by LaCasa Pros, kim thomas. kim thomas said: BOA/Countrywide Demands "BuyBack" from Originators They Created: […]

  23. Well people…

    There are the liar loans and there are the sensless loans.

    Check this out:

    My mortgage brokers told me to put $1.00 (yes one dollar) as my annual income on 4 (thats right four separate loans).

    All of these loans were originated by the same small bank in Wisconsin.

    I am getting all of my information ready to send to Elzabeth Warren, Sheila Bair, Matt Taibi, Grethechen Morgensen and about 500 additional recepients.

    Unless this bank steps up and remedies the losses we have suffered, all of you will see this in the headlines around the holidays.

    Now, the $1.00 income is just the beginning. I am nearly done with complaint and so far have about 14 valid causes of action.

    I get somewhat irritated by this liar loan claims. If anything, my income was grossly understated.

    The bottom line is that the bank did not care. None of the banks cared. All they wanted was the proceeds of the CDS.

    Well, we all soon enough will see how it all works out.

    By the way the bank has $2.8B market cap and still owes the taxpayers $1.7B in tarp money. The bank has been steadily loosing about $200-300M quarterly on the bad loans.

    They are the epitomy of a zombie institution. The charts show them to be only .35% of the systemic risk.

    This type of government supported zombies have prevented Japan from a recovery and how it is coming to a town near you.

    I welcome your comments at:

  24. Greg Bryl, Esq. I agree with you but their is enough blame to go around. Including lawyers who did nothing. Or helped the Corporation make these ludicrous contracts, which took the risk out.

    The Politicians tried to make affordable housing for the masses with all do respect. Hitler fooled the Germans, that does not make every German a Nazi. Maybe and anti semite or anti immigrant but not a Nazi.

    We need not judge we need practical solution.

    Be Strong and Couragous

  25. Well I guess that busts the term” loyalty amongst thieves”.

  26. title insurance claims on lennar title.
    interesting this is the address for lennar.


  28. Anonymous Atlanta – that is WHY the banks are paying HUGE FEES to lobbyists as we speak to RE-WRITE our LAWS about that very issue. There is NO-DOUBT they are re-writing those laws as we blog.

    I am convinced that is the ONLY “real” reason the lenders decided to withhold foreclosures. Why risk it when they can wait a few months for Congress to pass legislation attached to some healthcare or military bill that NO ONE will ever even think to look for stuffed down inside…

    You can believe the highest paid hardcore players are actively bribing as many as possible to make sure their scum-bucket legislation slides through un-announced so NO-ONE has an opportunity to drop the bomb. This is probably ESPECIALLY-so to keep it hidden from Elizabeth Warren. They won’t chance her trying to thwart their holy-grail from becoming law.

  29. The A Man,
    the government may well have gotten fooled, but that does not absolve it from the responsibility it should carry for undermining one of the biggest natural checks on the free market system: the risk of failure.

    When you create a system with perverted incentives (e.g., incentives to generate stated-income loans regardless of quality) and fail to see it, or fail to see that some incentives are so strong as to defy any regulation, you must be held accountable for it, fooled or not fooled.

  30. Regarding Countrywide – BofA and SISA & NINA Loans…

    You download these two cases…

    Countrywide used and Underwriting ADD-ON Software program – that automatically changed a borrowers application from conventional to a NINA or SISA loan app. This was done WITHOUT a borrower knowing it. In fact, this Underwriting program was specifically designed to capture a REJECTED LOAN APP – change it to fit the criteria – return it to the Originator APPROVED… If you read these and other lawsuits against Countrywide – it is evident that Countrywide DEFRAUDED at least – 3.5 MILLION BORROWERS.

    IMHO – there is absolutely NO-WAY a judge can determine if borrowers were properly disclosed. The loan docs will NOT tell the story because most folks have NO IDEA what they were handed. They were given a fist-full-of documents and usually SEVERAL times. The more I talk with folks about how many times they signed docs for different loans or supposed “Good Faith” estimates it is blatantly clear what they were doing was gather signatures on DIFFERENT loan pkgs to sell the borrower WHATEVER paid the agent the MOST.

    Specifically about UNDERWRITING – the big-dog LENDERS ALWAY controlled the UNDERWRITING standards – no matter WHAT bank – agent-broker – whatever – the Underwriting was always controlled by a select FEW big lenders. If the loan ended up with Countrywide – it was their underwriting – BofA – then BofA – no-matter who wrote the loan – the standards were from the party that was SOLD the Note – at least, that’s my experience thus far…

    “Mortgage Electronic Registry System”
    THE TITLES clouded even on a sunny day!
    62,000,000,00 VOTES TO REMOVE THE BIG BANKS AND CORPORATIONS THAT HAVE GROWN UP AND AROUND US SO THAT THEY CAN CARRY ON THEIR CRIMINAL AGENDA. THEIR FINANCIAL TERRORISM will not be tolerated anymore. Can 60 million people be stopped, there is no law that makes it a crime to speak with your money, the lobbyist do it every week and frankly I am tired of this system, we demand redress of our property rights. Try to evict 60 million home owners. We have our backs to the wall and I think about the banksters that are going to pay “PORNOGRAPHIC BONUSES to the people who need it the least, we should stop right now and not continue to allow them to destroy one more American Family. NO Mortgage payments to MERS holders of worthless notes and worthless security’s?

    All “MERS” mortgage loan holders are invalidated by us and we should make our vote with the DECEMBER PAYMENT send them zero$denero
    [this is only an opinion but a powerful one] if the American people where to speak with there wallets this war would be over and our economy would go ballistic overnight. Shore we would lose some jobs but we would gain control and then jobs will reappear, then we demand a work out of a 65% reduction on all loans across the board period. 2% interest and dissolution of all the mega banks in the United States. The other loans not on mers would have to follow suit to protect the unharmed while being fare to them as well. This will be a new deal and never again will any bank be allowed to do what they have done ever again. Mortgage business cannot be mixed with any other product, “We could call it the Banking Reform Act of 2010. (not legal advice either) this is huge and it won’t change until we force it…..

  32. I am not sure the stated income falls onto the borrower in all cases. I had a full stated income application, the broker and orig. turned it into a stated income. I didn’t know this until after 14 QWR I find the application we signed is gone. here is what we got from CW/BAC; one unsigned application that is true, one unsigned by borrowers HUD-1 but it has a forged escrow officer signature, one deed of trust that is missing ALL of the borrowers initials(per closing inst. ALL pages MUST be initialed at the bottom of each page by the borrowers) and the signature and notary pages are stapled at the upper right corner, and the rest of the pages are not. The NOTE…initials also missing, the signature page has no endorsement even though there is 1/2 left blank, but another page of different type and size of paper has one endorsement in blank, nothing else, no date, nothing! there is 2 hole punches at the top of the pages, no staple marks on any page. BofA stated that is all they have. They also said in 3 letters they have sent, that CW/BofA bought the closed loan on page one and page two states that BONY owns the note. I have not even one assignment recorded that anyone other tha the orig. owns the DT or Note..not even an assignment to MERS. and the note sure does not state anything. BAC has placed on all 3 of my credit reports that I have made 2 payments each summer for the past 2 years…I have not, and I pay as agreed, good for me, but that seems like placing a false claim on ones credit report??. The balances are always different, they go up and then they go down??? I am now in my second NOD, because of the AG in Ca sent a request for BofA to look into the loan again. They sent a letter, I replied, certified of course. Then a second letter stating since I did not respond they would close the case. I called and sent another letter, and they in turn recorded a NOD with bony as trustee and bac as servicer and recontrust as the acting agent. Now how can they say that all the fraud should go back onto the orig. when they are just as bad.

  33. Zoe

    They did it to almost everybody. Find a few neighbors who are making payments to testify (maybe that will help). But it is definitely rigged game, The bankster shave the Dice not in our favor.

    The Trustee is even owned by the banksters. Recontrustco is owned by BofA
    In Vegas or at least in the Stock market you knew you were going to a rigged game. Or in the Stock Market you go to a Broker. In our case the Bankster was really a broker and not a real “lender” as written on the contract (Assuming you went straight to a Bank “Pretender Lender”).

    The alleged corrupt or ignorant Judge will say did you take the money?

    Your Answer Yes.

    Oh judge forgot to ask you? Do you or any member of your family or co Workers have a Mortgage or refinance taken out in the last 10 years. Or is your pension tied in anyway to the Big Banks or their Investors?

    Judge why do you think they broke chain of title? Faulty paperwork or giving them the ability to sell the same loan multiple times. Or maybe to chop up the loan and make the Securitized Pool look less risky to the inverstor?

    Alleged Corrupt Judge: One more word out of you and I will hold you in contempt of Court.

    Watch the Movie Hang ’em high with Clint Eastwood we havent evolved much.

    Now we have the backing we needed of Elizabeth Warren Maxine Waters probably Nancy Pelosi etc…
    The Banksters crossed the line they screwed with the Politicians getting elected again. We also have major media on our side now.

    I am not blaming the judges now as much as I blame the Attorneys in America. The Judges in all fairness rely on Attorneys. Not One Big major Law Firm has taken a case.


  34. It should be a big-concern for us all that the originators may repurchase these loans. The additional verbiage “forced” is what’d call “crowd appeal”. It’s simple there to blow the smoke in another direction. Everything we’re seeing in the media is meant to preoccupy us while they continue manipulating the courts and bribing the legislators to rewrite our laws. IMHO – these delays are not caused by document “snafus” but rather postponements while legislation is tweaked to limit liability.

    This was evident when the AG heading up the state lawsuits told the senate hearing committee their findings would still be many months away. How is that possible? How does that make any sense whatsoever? Get an auditing team together and go into the state’s land records and find the recordation files. How hard can it be? It’s all a farce. ALL are LYING to the People.

    Back to the “repurchasing ordeal” – Most courts are refusing even to consider Lack of Standing as an issue. So, “if” pretender-lenders are able to repurchase these loans – that would take away a big argument we have. What’s wrong with that picture? I believe the PSA’s have a time limit as do their Repurchasing Causes – most are limited to the first 1-2 yrs

    As Greg points out – the Banks could not accomplish what they have without the Fed in their back-pocket. With each article like this we should realize they are actively reaching into every corner to make sure they shut us down from winning.

    Some economists claim we have not yet reached 25% of the predicted foreclosures lurking. Those have not defaulted – but as the resets kick-in the “PAYMENT SHOCK” will TRIGGER another wave of foreclosures.

    I was able to download a HUGE file of internal documents. Some files have over 1700 pgs in pdf file format. The documents are from all sorts of places BofA, ABN-AMRO, Bank of Canada, Barclays, Barra, Bear Sterns, Bloomberg, BNP Paribas, Bond Market Association, Booz Allen Hamilton, Borovkova, CARR, Carr Futures Bughardt, CBOT, Center for Futures, Education, FCA Institute, Citibank, DerivativeFitch, Federal Reserve Structured Notes, etc, and tons more… Some docs explain how they DESIGNED these loans.

    Frankly, they are above my head but I’m trying to force my self to read them. For example one document is 14-pgs from BANC of America Securities – RMBS TRADING DESK STRATEGY – FIXED-RATE IO MORTGAGES – April 17, 2006
    ———docx snip——–
    • Agency pools collateralized by fixed-rate IO mortgages have seen a dramatic increase in issuance over the past few months. Most of the issuance has been concentrated in FNNP pools, which are collateralized by 10/20 mortgages.
    • The choice of 10/20 loans from the menu of mortgage products suggests that the borrower base for this loan has a tenure horizon that is similar to a 10/1 borrower but shorter than a 30-year borrower. Also, the choice of an IO product with its associated lower monthly payments suggests that these borrowers will be concentrated in high cost areas and may tend to be more affluent and financially sophisticated than the average borrower.
    • Although limited, the prepayment data show that the seasoning ramps on Agency 10/20 pools dominate those on 30-years and 10/1 non-IOs. The somewhat surprising result vis-à-vis 10/1 non-IOs is probably due to the fact that 10/20 borrowers appear to have been concentrated in areas that have seen higher home price appreciation over the past few years.
    • While FNNP pools have been prepaying fast, we suspect that over the long-term they will prepay much closer to 10/1s as home prices start to mean revert and the 10/20 mortgage becomes a more established product.
    • At even OAS, our models suggest that the fair value of FNNP 5.5s is 4 ticks behind FNCL 5.5s and that of FNNP 6s is 1+ ticks behind FNCL 6s. FNNP pools are currently trading 16-20 ticks behind their amortizing 30-year counterparts.

    Within the plethora of alternative mortgage types that have been introduced over the past few years, one product that has attracted a fair amount of attention in recent months is a fixed-rate interest-only (IO) mortgage. Borrowers make only interest payments over the IO term of the loan, after which the loan switches to being fully amortizing for the remainder of the mortgage term. For example, one of the most popular types of IO mortgages is a 10/20 mortgage: these are 30- year fixed-rate loans with an IO term of 10 years followed by a fully amortizing term of 20 years. Note that the lack of principal amortization over the IO term results in a spike in scheduled payments at the end of the IO term thus subjecting borrowers to a payment shock.
    ———end docx snip——–

    What I find so interesting about these documents, (which is only glimpse above) is that these docs show (IMHO) a very direct & demographically honed target. In-other-words, these loans were NOT merely created as universal products to reach the masses. Their targets were selected using sophisticated profiling software that was tweaked with all the nuances. Some might argue that is simply smart business management – yep, I agree.

    However, this is way-beyond typical demographics – traffic-flow patterns – etc. These documents express a degree of psychological profiling that reaches into the “discrimination” realm. Again, being self-employed most of my life – I understand this is smart business practices of knowing the customer base for a given business. There isn’t a product made that doesn’t have a targeted clientele in mind, even before it was created, that’s good business. BUT – IMHO – what it actually shows is that the massive amount of FAILURES (defaults & foreclosures) were NOT caused by borrowers defaulting – in fact, it PROVES the OPPOSITE because it exposes the depth & degree of detail they used to create a product that did EXACTLY as they designed.

    Meaning, when NASA designed those robots to land on MARS – they used enough detail to MAKE SURE those puppies LANDED ON MARS and NOT Pluto… If one would have missed it’s target, they would have compensated – THEN adjusted for the next. The only reason they would have missed was because someone FAILED to PERFORM as designed – thus missed Mars…

    These LOANS were designed with such precision & detail – from what I’m reading in these documents is that it was NOT possible they could have such a MASSIVE amount of FAILURES. A few sure – 40-60% – NO FREAKING WAY… – which is essentially what Neil has been saying since I’ve been on this website – over 2-yrs now.

    I doubt these docs are any “smoking gun” or anything like that but they do expose the depth & detail that went into these loans. What I find puzzling is these documents cover a significant amount of time going back to 1999 and 2002-2003 etc.

    Even the above doc is April 2006 and they are discussing a loan specifically to GIVE the consumer PAYMENT SHOCK… What part of PAYMENT SHOCK fits into the American Dream concept of helping every American citizen to achieve the American Dream…? That’s my point – these docs expose the fact they NEVER intended to FOLLOW Congressional intent when creating these loans. It appears they did quite the opposite and created these loans with a vengeful attitude to PROVE congress wrong. Or put another way – we were “pawned”…

    If anyone wants them I can email the docs but some are HUGE so I’ll have to upload them to a server like Scribe…

    Sorry for the length…


  35. December 2, 2010 NM Bernalillo County Second Judicial District Court, Rm 616, 2:00pm, Honorable Judge Clay Campbell. CitMortgage vs Estate of Jim F Flynt and Mary E Flynt, Mary Sue Flynt, Individually,Foreclosure Complaint.

    I have filed a Counterclaim against Citi for lack of proable cause and malicious abuse of the judicial system to commit from upon the Court, FHA, and Ms. Flynt.
    The motive is to avoid penalities and sanctions for conspiring to commit fraud, in order to keep FHA from knowing that Mr. Barbone and his attorney, Karen Howden Weaver never negoiated the terms of escrow, required to offer the assumption to me..

    CitMortgage and I signed a settlement agreement in a foreclosure complaint in 2008. The settlement agreement dictated the termsof the Assumption in order to make the payments on the property, the property was intestate.

    The “person of authority” Mr. Barbone, Irving,Texas;
    represented CitiMortgage. He neogiated the terms but forgot the term of escrow. I read and understood the “lack of” escrow provision but when questioned before signing the contract, the attorney was arrognant and said “the terms are final”!

    Then Mr. Barbone modified the loan modification loan agreement to include the escrow, without mutual assent. After 5 months and a hearing to reopen the case, Mr. Barbone had hisattorney swear the account was non escrowed and out of default.

    Never happen! The account was nonescrowed but never cleared of the default at CitiMortgage. They filed a Foreclosure Complaint against me and I filed a $250,000,000.000 Counterclaim against them.

    Please join me in my “pro se” litigation on December 2, 2010. CitiMortgage also hired a “super” lawyer from Castle and Stawiarski.

    They have lied over and over in their responses to my responses. Each time I produce evidence that they sent to me, and it proves fraud, among other charges I have brought against them.

    This is the first case of counter suing for the lack of probable cause, as was my original “produce the note” I submitted as my defense in 2008.

    Two years and yes even in the most recent case they filed the same “lost of assignment” the Judge originally ruled insufficent in proving CitiMortgage was the “holder in due course”. That is why we ended up at a Settlement Facilitation Conference and settled.

    They offered me $10,000.00 undocumented to sign a “new” non-litigated settlement agreement, but I said “no” and then they filed a bogus foreclosure complaint.

    Tis the season to WIN!!!!!!

  36. @ The A Man, my husband filled out his own application, but it was a full-doc loan. The rest is true as you said. Their appraiser, for sure. In my case, we got a certified appraisal $100K more than contracted sales price. Maybe that was the figure needed to make the 80/20 loan work somehow, I don’t know. At the time, we thought we had found an unbelievable investment, but now I believe it was simply a fraudulent appraisal. No way to prove it, I suppose.

    Also, I just saw the bank copy of the loan application and someone crossed out and lowered the original stated payment on a rental property. The original amount was correct. My husband did not initial any changes, so I’m not sure what that was all about.

    Question. Even if the broker did fill out the application, how would a borrower prove that if they signed the application saying all information was true?

  37. Legal hand-to-hand combat can put you out of business if you run out of money. I am hoping that enough people sue these mega banks to put them out of business. No more qualitative easing from the Federal Reserve. Let them go down.






  40. I keep expecting the next move to be threats of charging liar loan applicants with mortgage fraud, a serious offense with possibility of large fines and jail time (at least for the borrower).

    The “deadbeats” mantra wore out its usefulness, after common sense insisted that millions of borrowers didn’t become deadbeats overnight and decide willy-nilly to defraud the banking system.

    Suing tens of thousands of “liars” for mortgage fraud could be the next attempt to diffuse borrower outrage and activism, while reiterating that the poor, well-meaning banks are the victims.

  41. Would they also call their own loans fraudulent?

    But when you sue them , they come to court claiming everything was done by the book and we the ones who had no freaking idea of what they were doing behind doors, are the ones to blame.




  44. Greg Bryl, Esq. Maybe the Government got fooled?
    Or maybe the Government officials or Politicians finally understand that their job is on the line.

    Enron is a good example. They let them get away with their scam until Governor Gray Davis of California got Terminated (recalled) because of High energy prices and then Shwarzenegger became Governor.

    The Genie is out of he bottle and their are enough Politicians who are mad at the Banksters.


  45. A point is made repeatedly on this blog that the banksters caused all the misery of the financial crisis. I would like to point out that they could not have done it without the help of the federal government, as explained here:

    So the continued failure of the government, now including the judicial system, to address the problem should really surprise no one. Why should the entity that cause the problem all of a sudden become different and start to address the problem?

  46. Foreclosure Starts limp out of the gates

    The can’t find Attorneys who want to go to jail for them?
    The economy is so good that they cant find employees?



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