“U.S. regulators have opened a new line of inquiry in their mortgage foreclosure probe and are asking big Wall Street banks about the beginning stages of mortgage securitization,”
EDITOR’S ANALYSIS: THIS IS THE NUCLEAR OPTION AND IT IS UNAVOIDABLE: The pools were empty, the mortgages invalid, the title chain is corrupted, the foreclosure sales were fraudulent, the declarations of default were fraudulent, and the homes — millions of them — are still legally owned by people who had given up the fight. This is why you need to do a thorough analysis of the title chain COMBINED with the analysis of the securitization of the receivables. Just a few months ago, these thoughts were considered on the fringe. Now they are the content of SEC subpoenas. Lawyers and homeowners and “former” homeowners (who might still own the house they thought they lost in foreclosure) should take note: file for information under the Freedom of Information Act, get your case analyzed, you DO have a chance to restore your life and your home. THERE IS HOPE

Big Banks Get More Subpoenas in Mortgage Probe

Friday, 17 Dec 2010 12:08 PM
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U.S. regulators have opened a new line of inquiry in their mortgage foreclosure probe and are asking big Wall Street banks about the beginning stages of mortgage securitization, two sources familiar with the probe said.

The Securities and Exchange Commission launched the new phase of its investigation by sending out a fresh round of subpoenas last week to big banks like Bank of America, Citigroup, JPMorgan Chase, Goldman Sachs and Wells Fargo, the sources said.

The subpoenas focus on the earliest stage of the mortgage securitization process, said the sources, who requested anonymity because the probe is not public.

The sources said the SEC is asking for information about the role of so-called master servicers — specialized firms that oversee the selection and maintenance of the large pool of home loans that go into every mortgage-backed bond.

In many cases, Wall Street banks that underwrite mortgage-backed securities either own their own master servicing firms or are closely aligned with one.

In the fall, the SEC began looking into the banks’ foreclosure practices following allegations that mortgage servicers like Bank of America were using shoddy paperwork to evict delinquent borrowers from their homes.

The Justice Department, banking regulators and the attorneys general in all 50 U.S. states are also probing potential wrongdoing.

One of the sources said the SEC is seeking information about the role banks had in mortgage securitization. The regulator is also looking at the role trustees for the trusts that issued the mortgage-backed securities had in monitoring the performance of the underlying loans.

The SEC is looking at whether loans were properly transferred to the trusts that issued the securities, the source said.

The renewed look at the securitization process is an extension of the SEC’s preliminary probe into the mortgage mess. The SEC’s regional offices are all looking at some aspect of the foreclosure crisis.

The SEC had no comment.

Separately, the SEC is still investigating banks, credit rating agencies and individuals in connection with the 2007-09 subprime crisis. Those investigations center on potential misrepresentations to investors about the value of the mortgage-backed securities that helped fuel the crisis.

The agency has filed some high-profile cases, including one against former Countrywide Financial chief Angelo Mozilo and another against Goldman Sachs.

Banking regulators, including the Federal Reserve, are feverishly reviewing lenders’ foreclosure practices and are expected to reveal their findings in January.

In particular, the Fed is concerned about investors accusing lenders of misrepresenting the loans that underpin mortgage securities, and demanding repayment.

That has already happened with Bank of America, which has started negotiating with a group of angry mortgage investors, including BlackRock.

Bank of America, Citigroup, JPMorgan and Goldman had no comment. Wells Fargo said it is “always working with regulators and others who are interested in its servicing business” but declined to comment on whether the bank had received a subpoena.

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14 Responses

  1. Lookie here!!! Deutsche Bank has been caught with their hands in the cookie jar!!!!

  2. For anyone who has never watched “The Trial” produced by and starring Orson Welles and Anthony Perkins, you should really watch it before you make any more commentary on this Kafka-esque pickle we all find ourselves in. Just go to and watch the damn thing. I am not a reseller; I’m telling you right here and now you watch this movie and “Metropolis Revisited” and you’ll have an entirely different view of what’s going on — and both movies were made based on past history meaning the Great Depression of the 20th Century, not unlike the Global Depression we find ourselves in today. For those who choose to ignore history are doomed to repeat it — apparently at our own personal peril.

  3. The true egregiousness of the bank’s practices is only limited to the depth and breadth of the investigative forces.

  4. Stay positive keep chippin
    away putting one foot infront of the other pray for the rule of law and wish for thr cloning of judge shack lol. It may sound silly but I keep hoping obama has something up his sleeve. Anyway the fat lady hasn’t sung yet. Not yet

  5. For what it’s worth, I now have an SEC certified copy of a Merscorp, Inc. doc which shows beneficial ownership as to April 2003. I have no idea what happened after that, but I do have an SEC document which shows a snapshot of Merscorp, Inc. in terms of the private placement of securities and beneficial ownership from 2003. If you don’t have it, please let me know and I’ll send it to you. I find it to be quite revealing abou the early years.

  6. the SEC will continue to do the same as they have done all along NOTHING..Sheesh,,,this is all for show.The AG’s will sell out the borrowers rights, the rest of the alphabet stoop crew will continue working on their knees [this is their only function]…SO if your waiting for the Gov to do SOMETHING re;mortgage & property rights, you can STOP waiting .Wake the FUKup they already did it when the Gov sold you & I out. All of the US not in the club will only have the restraints on us tightened till you all submit.

    “Yes, we must, indeed, all hang together, or most assuredly we shall all hang individually as a group.

  7. Ate I mean are. Sorry I type badly on I phone . There is some hope Eric holder and now Terry Goddard( though only in office till Jan) have risen to the plate and believe me I have sent information to their offices and I did spell check ! Lol

  8. Deb wynn,

    What is the best hope the AGs ate??

  9. The AG,s ate the best hope

  10. Well, we have seen lately that the SEC has been rather toothless–look at the Bernie Madoff Ponzi scheme. It was obvious for years that Madoff was up to no good, but the SEC turned a blind eye. Can we assume that now the SEC has beefed up its presence and will actually do an in-depth investigation and put some of these crooks in jail? I hope so. It is all taking too long. We could get to the end of the economic crises faster if we really start to prosecute the banksters and pretender/lenders. We should all keep in mind that the servicers are connected directly to the mega banks. We need to investigate how that connection works.

  11. Neil,
    In the Dodd-Frank Bill, the SEC was taken out of the FOIA. Interesting, isn’t it?

  12. Re: Banks Get More Subpoenas in Mortgage Probe
    Comments by M.Soliman

    Nearly every bank foreclosure is subject to FDIC conservatorship meaning the asset follows supervision of the bank’s primary regulator. Each of these defaulted loans is held in receivership and the Federal Deposits Insurance Corporation “FDIC” is the conservator running the show. The receivership or “Hold-Co” is what folks are calling a “pretender lender “

    Two roles emerge for the FDIC handling of your loan and defenses offered in the controversy. The consequence of each demonstrate the FDIC may be adverse in litigation to a receivership in its corporate capacity and two receiverships may be adverse to one another.

    Your counsel or defenses need offer an extremely focused view on the aspects and rights of the receivership and conservatorship authority of the Federal Deposit Insurance Corporation (the “FDIC”).

    Particular reference is required to anticipate counterparty questions of assets and rights of a significant regional bank. The judicial components of the inner workings constitute a framework which greatly detour from a traditional corporate bankruptcy.

    These issues center on the legal framework governing FDIC resolutions and the framework for the FDIC’s methods for handling each liquidation through a receivership.

    As an expert and witness to controversy affecting your realty and transferring of title we are comparing various angles or judicial aspects of the FDIC approach for comparison with US bankruptcy rules and guidelines.

    Be cognizant of the rights and remedies of the parties identified as creditors, debtors and for treatment of loan securitizations (including the effect of claims brought under participations, and credit guarantees and or assurances).

    Our concerns are for the rights to entitlements and claims brought for assets referred to by the FDIC as “unassigned”.

    Relevant to this endeavor are applicable provisions of the Federal Deposit Insurance (the “FDI”) Act [1] and comprehensive FDIC rules [2], statements of policy [3] and to include advisory opinions.

    We assert the matter of claims against debtors and borrowers assets, seizure of unassigned receivables and fractionalized assets are subject to the Repudiatory rights of the agency in a held subject to FDIC and roles of the receivership.

    Understand the importance of establishing appropriate credit analysis and the rigor of requesting documentation and rights in a legal risk mitigation in connection with potentially troubled financial institution counterparties.
    Expert testimony is not for purposes of practicing law and only a licensed practitioner can guide you through the legal process, claims and rights you may be afforded by law.


    But the SEC is there for investors — not the borrowers.
    Need to have AGs open up the same investigation.

  14. It’s set up that way there was always blatant conflict of interest and no regulators who gave a crap what these schiasters were up to mu guess us just like the appraisers their pockets were lined. In m case we have deutsche depositor hsbc trustee for the invstors then wells Fargo master servicer and the infamous indymac sub servicer sold to one west ( ex Goldman sacs…. How convienient and the FDIC in the mix telling me I have no claim and it’s a futile exercise be ause it has Bern decided by us that there’s nothing for the likes of me now one west collected my home via wild deed to their buddy hsbc at ” public auction” that was a secret from me! Nowthen at the time if notice if trustee sale back in feb 09 the tibo signer Roget stott and Scott Walter were all over my docs with indymac az” beneficiary. I had been in purported default since sept08 and as tricked into thinking I as gettin a loan mod but that obviously started to stink that’s when I found livinglie and the rest is history. Wow how far we have travelled…. Any I consider allthat is shared o. Here and I believe anonymous is right on the thoery thst my loan was ” modified” on origionation. It was a jumbo loan I put 20 percent down gave documented income but truth as it now has Been revealed was I couldn’t truely afford that home it was based on loan to value so if I did not meet Fannie n Freddie underwriting standards then a little ” talloting” and voilà a newly packaged credit default obligation hence loan never went anywhere else tbough on paper ( fraudulent paper) looks like it did. So track the money. Yep they will volunteer that when he’ll freezes over! this is a thoery until I get nto discovery …. God willing but it’s looking more likely every day…. Anonymous what do ya think?

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