David Stern Was Known to Fannie and Freddie as a Bad Actor 11 Years Ago

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

EDITOR’S COMMENT: While this “revelation” may stun some people, others will see it merely as confirmation of what they knew all along. A fraudulent scheme of this dimension couldn’t have been achieved without the cooperation and active complicity of lots of people whose job it was to act in the interest of our government, our society and our legal system. So David Stern was already a known quantity 11 years ago having been involved in some shady stuff and we know that Fannie and Freddie knew about it. And they let their employees and officers be wined and dined and gifted by Stern.

All of that is important, and these people should be brought to task and to justice. But don’t let it distract you, don’t take your eye off the ball because now the game is on — “Fannie Made Me Do It.”

There are all levels of culpability at all levels of government and all levels of the finance, mortgage and banking industries. That is true. But the ball we need to keep our eye on is what happens to the homeowners, what happens FOR the homeowners who were duped into this scheme, who are underwater because they believed a fraudulent appraisal from a party acting as though it were performing bank functions and loan underwriting, people who lost their homes or are in the process of battling that out, and people who are going to lose their homes if we don’t stop this incalculable drag on our nation’s economy.

There are causes of action for damages and fees, costs and even punitive damages. But the real story, the one that needs to be healed is the gaping wound left in the skin of our total society by a scheme so large that for ten years it defied understanding. You practically had to step back to another planet to gain perspective on what Wall Street did here. You can blame anyone you want but the ones who ended up with the money are the ones who pulled the strings — Wall Street.



Another BOMBSHELL piece of Reporting- Wash Post On David J. Stern

Today, problems with documents handled by firms on Fannie’s list – and a similar one created by its smaller rival Freddie Mac – are at the heart of federal and state probes over faulty foreclosure practices that now threaten to further undermine the housing market.

Fannie and Freddie, the largest mortgage companies, shaped the practices being challenged in courtrooms around the country. They picked law firms that could foreclose fast and paid them based on how many foreclosures they could process. Speed was essential because delays cost the companies money – and, after they were taken over by the government two years ago, meant losses for taxpayers, too.

Not only did the companies urge swift foreclosures, but in at least one case Fannie executives also greenlighted working with a firm that they knew firsthand had engaged in legally questionable practices, according to documents and interviews with lawyers and industry officials.

That firm was the Law Offices of David J. Stern in Florida, which built a hundred-million-dollar-plus business foreclosing on the tens of thousands of borrowers who lost their homes in the housing crash.

In 2000, the Fannie executive responsible for overseeing outside law firms in Florida was questioned about Stern’s firm in connection with a class-action lawsuit alleging it had charged borrowers bogus fees based on fraudulent paperwork.

In a deposition, Susan Reid, an associate general counsel who oversaw Stern’s firm for Fannie until two months ago, was asked by a lawyer representing borrowers why her company hired law firms such as Stern’s to handle foreclosures.
“We felt that timelines and the time it took to foreclose on a piece of property . . . could be improved,” she responded. She explained that with “every month” that passed, “we’re losing money.”

Did Fannie, she was then asked, have any safeguards to ensure that law firms, rushing to foreclosure, followed the law? “I don’t know of any policies and procedures,” she answered.

To the contrary: Fannie and Freddie over the years have prodded law firms and mortgage servicers that collect payments to move even faster.

When law firms or servicers have taken too long to foreclose, Fannie and Freddie have threatened to charge them a penalty fee, according to industry sources and documents. And every few months, the two mortgage companies have sent servicers report cards ranking them on how rapidly they completed foreclosures compared with their peers.

A giant footprint

Fannie and Freddie occupy a unique place in the mortgage world. They are the biggest buyers of pools of home loans, accounting for trillions of dollars of mortgages. These purchases provide an essential source of funding to lenders to make more loans.

Since September 2008, Fannie, based in the District, and Freddie, based in McLean, have also been government-run, seized by federal officials as the financial crisis threatened to topple them. They have cost taxpayers more than $130 billion.

As wards of the state, they have competing imperatives. One is to help borrowers – and the housing market – by modifying the terms of home loans to make them more affordable. The aim is to reduce foreclosures. Another is to protect taxpayer dollars by ensuring that foreclosures don’t drag on, causing additional losses.

Both before the government takeover and after, Fannie and Freddie have pressured the outside mortgage servicers they use to work with specific law firms. Although Fannie required servicers to use specific firms, Freddie urged them to do so but didn’t demand it.

Florida Attorney General Bill McCollum is examining the relationship between law firms and Fannie and Freddie as part of a broad probe into possible illegalities in the foreclosure process. Other law firms on Fannie’s list – in Maryland, New York, Pennsylvania and Texas – have been criticized by judges for their handling of foreclosures, investigated by federal and state authorities for potential wrongdoing or sued by borrowers for mistreating them.

“Given that just a handful of law firms are handling foreclosures for over half the nation’s mortgages, it’s no wonder this paperwork problem has spread so widely,” said Rep. Judy Biggert (R-Ill.), who raised questions about Fannie and Freddie’s lawyers a year before the concerns over foreclosure practices broke into public view. “Many Americans may be losing their homes because of a system that was set up to send foreclosures through law firms that were the quickest cheapest and least reliable.”

Only in recent months did Fannie and Freddie sever ties with Stern, after reports of abusive foreclosure practices started to surface nationally. The two companies stopped referring new business to the firm in October and started removing cases from it last month.

Stern’s attorney, Jeffrey Tew, declined to comment for this article. Stern and his lawyers have said previously that the firm has done nothing improper.


Spokesmen for Fannie and Freddie said the companies have worked to ensure that servicers and law firms have enough time to conduct the foreclosure process properly. The spokesmen say protracted foreclosures not only cost taxpayers but also lead to vacant homes, which degrade the housing stock and nearby home values, and prolong the real estate crisis. They say they tell their law firms and servicers to focus on modifying mortgages for troubled borrowers when possible and to foreclose in a timely fashion when it’s not.

“At all times, Fannie Mae has had a reasonable expectation that our servicers and the law firms adhere to proper procedures and conduct under the law,” said Amy Bonitatibus, a Fannie Mae spokeswoman. “When allegations regarding the Stern firm came to our attention, we promptly investigated and took appropriate responsive action.”

Prompted by the surge of foreclosures in Florida, Fannie Mae hired a consultant this year to audit Florida law firms. These examinations did not discover evidence of abuses in the foreclosure process.

Sharon McHale, a Freddie Mac spokeswoman, said there is no rush to foreclose when homeowners default on its loans, noting that borrowers must be delinquent for at least 300 days before a foreclosure sale can take place.

“We incent our servicers to find ways to help borrowers avoid foreclosure and give them ample time to do so,” she said. “Servicers have the authority to stop the process anytime there is a viable alternative to foreclosure.”

Early warning signs

During the housing boom, millions of homeowners got easy access to mortgages. Now, some mortgage lenders and government officials have taken action after discovering that many mortgage documents were mishandled.

But Fannie’s relationship with Stern, in particular, highlights the mortgage giant’s complicated role in the foreclosure crisis.

Florida homeowners first raised a red flag about Stern in their 1998 class-action lawsuit.

Claude Walker, a lawyer who represented them, said Fannie ignored their complaints. “They wanted to get these foreclosures through the process as fast as possible. That was their goal.”

Fannie officials held an internal discussion in 1999 about the issues posed by the lawsuit, Reid said in the deposition. As Fannie’s in-house lawyer, Reid said she was primarily concerned with whether Fannie might also be sued. She said neither she nor anyone else at Fannie investigated the allegations made in the lawsuit.

Reid declined to comment on the deposition for this article.

Still impressed with Stern, Fannie named Stern its “lawyer of the year” in 1998 and 1999, according to the law firm’s filings with the Securities and Exchange Commission. A Fannie spokeswoman said she had no details but did not dispute the account.

In 2000, Stern paid $2.2 million to settle the class-action lawsuit. He was also reprimanded by the Florida Bar in 2002 for his firm’s questionable conduct.

For a time, according to one industry source, Fannie distanced itself from Stern, concerned about whether it would face legal liabilities. But Stern continued to work to nurture his relationship with Fannie, Freddie and the servicers who managed loans for the companies.

And when the mortgage crisis struck, Stern was well placed to get a spot on Fannie Mae’s coveted list of lawyers that servicers must use to foreclose.

Stern’s foreclosure caseloads jumped from nearly 15,000 in 2006 to 70,400 last year. Total firm revenue, which included foreclosures and related work, swelled from $41 million to $260 million annually by the end of last year, according to a filing made in connection with an effort to raise money from investors.

Stern focused on tending to the needs of Fannie and Freddie, depositions with Stern’s former employees show.

“Freddie Mac and Fannie Mae were number one for his firm,” Kelly Scott, a former Stern employee, said in a deposition with the Florida attorney general. “David Stern had a very close relationship with Freddie Mac and Fannie Mae.”

Seven or eight times in 2008, Fannie and Freddie employees came to Stern’s firm to review the files. Stern arranged for their hotels, catered lunches and chauffeuring, and picked up some of those expenses, according to Scott.

Fannie and Freddie had a singular message for Stern’s firm, Scott said: “Pick up the speed.” She said Stern told his employees working on Fannie and Freddie cases “they need to pump out as much as they can for the month so they can meet the quota.” She said that she didn’t know what the quota was but that it was clear that Fannie and Freddie “weren’t happy” with the progress.

Fannie and Freddie officials said in interviews that they did not pressure Stern to rush foreclosures and in fact imposed a general freeze on foreclosures in late 2008 through early 2009. The officials also said employees covered their own expenses when visiting Stern’s firm and went there every few months, at most.

Still, though, through this year Fannie continued pressing firms to foreclose. In a memo dated Aug. 31, Fannie Mae warned mortgage servicers that fees may be imposed based on “the length of the delay and any costs that are directly attributable to the delay.”

But Freddie was having second thoughts. It was hearing from one of its loan servicers, Ally Financial, that there were problems in the paperwork Stern’s firm was using to foreclose on loans Freddie owned. So Freddie urged Ally Financial and other servicers to suspend all foreclosures being handled by Stern.

On Sept. 20, Ally Financial suspended foreclosures in about half the states, with Stern’s firm and others. Other major mortgage companies soon followed suit.

A few days later, Rep. Alan Grayson (D-Fla.) wrote to Fannie, asking, “Why is Fannie Mae using lawyers that are accused of regularly engaging in fraud to kick people out of their homes?”

About two weeks after that, Fannie stopped sending new cases to Stern.

goldfarbz@washpost.com chaa@washpost.com

stern-bryant-caseHat tip to my old friend attorney Claude Walker for “breaking” the Stern story ELEVEN YEARS AGO!  Click on the attachment below for a dusty old deposition taken from that case a long, long, long time ago.  There’s much more to the story that is reported here in the Washington Post.  Among the most profound things to consider is the fact that the catastrophes that exist in courtrooms all across the state in the form of files from the Law Offices of David J. Stern should have been predicted given the revelations contained within the prior case and the issues that are discussed in the attached deposition.

…..and now, from the Washington Post…

Fannie and Freddie, the largest mortgage companies, shaped the practices being challenged in courtrooms around the country. They picked law firms that could foreclose fast and paid them based on how many foreclosures they could process. Speed was essential because delays cost the companies money – and, after they were taken over by the government two years ago, meant losses for taxpayers, too.

Not only did the companies urge swift foreclosures, but in at least one case Fannie executives also greenlighted working with a firm that they knew firsthand had engaged in legally questionable practices, according to documents and interviews with lawyers and industry officials.

That firm was the Law Offices of David J. Stern in Florida, which built a hundred-million-dollar-plus business foreclosing on the tens of thousands of borrowers who lost their homes in the housing crash.

Washington Post


Read: David-Stern-Bryant-Case

31 Responses

  1. I lost my posting.

    IF anyone can save this Constitutional Republic it is the Judges.
    I had paper dealings with Chief Judge Jonathan Lippman and he seems like a decent guy but he is so bullied by the New York City judges and them wanting raises he is ignoring the issue that is destroying this nation. FRAUD FRAUD FRAUD

    He must proclaim that all of the 2500 hundred or so judges in the New York courts must follow the US Constitution and the Law of the Land. The Judge Spinners and the Judge Schacks are doing that. They must all follow the Supremacy Clause.

    Their raises won’t get them a better life in a Banana Republic. .

  2. Regarding Marillynhelyn’s post and her last statement: “there just wasn’t enough pie.” Seems that TPTB were inspired by one of their sage supporters, one G.W. Bush when he observed that what was needed was to “make the pie higher” and, so they did.

    Thanks to the script provided to the coporo-news muppets and their mindless drone in hourly newscast, it’s true that the meme propounded is that banksters lose money on foreclosures. It’s just too confusing for the great unwashed to get their head around the fact that not only do the banks get the building and then the dough from the resale, they’re also “made whole” by Fannie and Freddie for the face value of the loan. And…..let’s not forget the monthly payments that all of those “deadbeats” sent in to keep their homes whilst they still had jobs. In many instances these monthly payments were made, dependably for many years. That’s a significant pile or “pie” that’s rarely mentioned when describing all of the “liars” who got loans. What government agency is there that makes those homeowners whole? How do they recoup all of the years of dependable payments to the banks for their bogus mortgages?

    Good old American ingenuity at work here. One must marvel. They create the money out of the ether, invent a non-existent trust to hold the documents that are bogus at their instant, create a paper trail without paper courtesy of MERS which is essentially a coalition of “foxes” salivating over the multitude of chickens naively approaching the chopping block and…..paying for the privilege.

    As for banks NEEDING bailouts…..it stands to reason that if a major portion of the receipts taken were appropriated to line the pockets of the miscreants who ran the scam then, indeed, they would NEED to be bailed out. If a retail owner opened each day and rather than using the day’s receipts to restock and maintain the business, emptied the till and went to Vegas, he would soon NEED more cash to keep his tab up at the tables. The only difference is that a retailer who does this is soon revealed as a scammer and stopped whilst the financial wizards are enabled and encouraged by the very mechanism in place to prevent this.

    Madoff ran this scam for years with no one the wiser. He too needed vast cash inflow to maintain his multiple mansions, his boat, his charge accounts and catering expenses. And he too managed it by being a clever “farmer” and successfully seducing his eager “chickens” with promises of doubling their money in record time. And the dissolution of investor pools, pension funds and various other groups who bought into Madoff’s scheme, like the investors in the bogus mortgage trusts are now left ruined or, at best, chastened, in their desire to amass unrealistic gains, by the exposure of his fraud.

    Madoff was a bellwether; a signal to all of us that went un-heeded. No one could imagine that whilst we watched with a soupcon of schaudenfreude as the celebrities and other glitterati admitted being hoodwinked, that he was a bit-player in the vast scheme that would soon be exposed. How many of us imagined that an entire nation would be vulnerable to foreclosure, eviction, and a government that stands mute whilst the financial juggernaut runs amok?

    Well, some imagined it. And they acted on it and they’re still working it. The extent of the criminal infrastructure that maintains this carnage has yet to be exposed. As long as the Fed, the Treasury, the multiple agencies responsible for oversight and enforcement collude with the actors involved we will continue to be observers at the exsanguination of our once free and fair republic.

  3. Unlike what most of us are led to believe foreclosures are very profitable to a bank.

    They pay no interest for their use of the money the bank creates (their credit loans) and yet they charge their customers the same high interest rates as if they lent out lawful money. Racketeers know you can’t collect interest on money that doesn’t exist.

    When the bank accelerates to foreclose, they demand real money in return for the banks created fake money. Under what law were they given the right to demand lawful money in return for their fake money. What in our US Constitution says a bank does not have to comply with Article1 Section 10 Clause 1?

    The banks were unjustlly enriching themselves for years and yet they still needed bailouts. They pulled the wool over everyones eyes and conned a nation.

    Crooks beget crooks and with everyone wanting a share of the pie- wall street , some attorneys, some judges , straw buyers, property flippers etc – there just wasn’t enough pie.

  4. India, it’s me and you. I like the sound of crickets :’)

    Who is to blame here?

    Appraisers who did bogus appraisals…..? Of course.

    Originators who approved 100% of the loans on property because they knew that they would pass the risk off to others downstream? And because they were told to deliver, or else? Yes please.

    So-called lenders who approved 100% of loans without any verification of the borrowers ability to pay? Exactly where do underwriters come into question here? Should they be fitted for matching bracelets and metal beds and stainless steel toilets as furniture? They’ve been quietly hiding behind the scenes during this whole debacle. I’d like to see some perp walks here.

    A real estate industry that knew full well what was going down and aided and abetted, profiting by that knowledge? I was once licensed in this trade and know the rules. You can’t do what they did…
    FULL STOP…. FRAUD AHEAD! (Titanic comes to mind).

    The truth is, if appraisals and inflated income levels (85% due to mortgage lender fraud as stated by the FBI), had not been ignored as matters of conscience and regular due diligent business practice, the bubble would never have grown into the life altering debacle we see now.

    Conscientiousness and morality can be taught, but need to be taken to heart. The lack of both are traits worthy of ****slapping and incarceration, plain and simple.

    Who ultimately owns or is legal heir to these mortgages is simply part of the problem of cleanup and legal sleuthery, nothing more. Damage control. Like after a tsunami, only of financial origins.

    Figuring out which concrete block or wall belongs to this house or building, tetrus style. And I’m doubting that many blocks will be able to be re-assembled. Free houses? You betcha’! But not by bankers lacking standing, capacity, or agency. The houses in these cases should go back to the middle class Americans that were duped from the outset. Void Ab Initio!

    Oh, and the good professors need not worry. Foreclosures will continue to go forward. The banking industry will ensure that that angle is pursued. Even if they have to pay-off a few university profs in large figures to prove their point. After all, it’s only our Monopoly money.

    But I can guarantee you that they will not win in the end. America will wake up at some point, and there will be hell to pay when that happens. All it takes is a little pain, hunger, and a realization of the fraud on a bigger scale, and these banksters will be running for their lives. It won’t be pretty, and it doesn’t need to be. Instant karma. Bam! The Hamptons can’t build gates high enough. The elite will shout all of the way down. And all of us will be better off without them. Like India said, the Dude abides, and this is his biding.

  5. Well! That Star Tribune article is the ultimate Christmas Present……for Wall Street. It’s pretty likely that Professors Cox and Prentiss are tenured; thus not in the least conversant with nor particularly interested in comprehending the travails of the majority who have either no job security or, just as likely, no job. And I”d place a bet that neither have a home mortgage that flys the Mers flag.

    So, one wonders, what impetus impelled these two “observers” from academia to opine on the current strife of those who are experiencing “continued sluggish and restricted investment in real estate and the broader economy “.

    Real concern here, for investors, bankers and others who will be slightly inconvenienced by the annoying facts of slandered and clouded titles and the associated irritations of getting it all cleared up.

    Just let’s set aside the lives of the families who are destitute and homeless due to the current efficiency of these same banks that these two morons want to bail out. The only bail they should be considering is the amount required to gain their temporary freedom after indictment.

  6. Poor pitiful Minnesota, where “all the women are strong, all the men are good looking, all the children are above average, and at least two University of Minnesota law professors prove that common sense is very uncommon.

    Claire Hill is a professor of law and the Solly Robins Distinguished Research Fellow at the University of Minnesota Law School. Prentiss Cox is a professor of clinical law at the same school and is a former Minnesota assistant attorney general who led cases against subprime mortgage lenders.

    From their article, here:


    If nothing is done, we could face continued sluggish and restricted investment in real estate and the broader economy if the titles to foreclosed properties are seen as tainted. We could even see a second financial implosion if the scope of the problem appears large enough and uncertain enough to potentially overwhelm fragile bank balance sheets.

    One solution is to stop foreclosures until ownership records can be sorted out. But while we may not know precisely who the homeowners being foreclosed on owe money to, we know that they owe it to someone. Distressed homeowners should not be able to avoid foreclosure simply because the right party to foreclose cannot easily prove that it is the right party.

    More important, we can find a better solution. We can provide an impetus for mutually beneficial loan modifications, thereby helping get the housing recovery back on track.

    Let’s bail the banks out of their self-inflicted wounds one more time, but this time extract a serious price that helps address the underlying problems.


    The new rescue for the financial industry would involve simplifying the proof required to foreclose on a property. If a bank could certify ownership based on electronic records, and if the property were listed for a reasonable period of time (e.g., 60 days) on an easily accessed public Internet site to allow for objections, the mere fact that the bank could not provide the usually required evidence of its claims would not prevent it from being able to foreclose.

    The price banks would pay for these loosened procedures is that they would be required, in some cases, to modify homeowner loans.


    Actors in our current system face uncertainty that results in paralysis and resources spent fighting one another. Having clear rules swiftly administered is more fair and effective for everyone — homeowners and markets alike.

    It’s the prudent thing to do, even if it means swallowing once again the bitter pill of saving banks from their own incompetence.

    No wonder the state’s supreme court gave a big 10 thumbs up to Mers. With professors like this teaching our kids, we’ll be lucky if civilization endures another decade. Just more insanity.

  7. do you think a big time rally against the government is the answer to our suffering? the government knew it, the bank knew it, the wall st. knew it, the media knew it, the people knew it , the lawyer knew it, the politician knew it, the justice dept. knew it, the court knew it, who else doesn’t know about this foreclosure fraud?, we have to stop thinking that we are deadbeats homeowners and cause this foreclosure mess. STOP, LOOK AND LISTEN we already did that. we are arms by this website enough knowledge to fight ( thanks neil) back, a battle that we could only win if we are all
    united, united in a way we have the same common ground in defeating the motives of our enemies. we should walk hand in hands in washington by number of thousands or millions of homeowners to protest against our enemies in a peaceful way. hope, someone would lead us the way. is there any anyone there? what about india?.

  8. To E. Tolle:

    Thank you, so much for the support. I had begun to think I’m a “thread killer” due to the fact that on the rare occasions that I do post, my screeds are frequently the last posted…. then?……..”crickets”…….

    I concur with your succinct analysis. One is sorely tempted to just say “it’s over”. It is indeed apparent that whilst “we were sleeping”, a silent coup was worked upon us. It’s significant that all of the identified “actors” in this Shakespearian drama are psychopaths and, to a great degree, extremely transparent. Thus, we rail and howl at the telly or the clips on blogs that present these cheap guys in expensive suits. Essentially, the “advance men” or shills for the snake oil salesman who is following close behind.

    It does seem a “done deal” don’t it? F*ck ’em. I’ll continue to squawk and do all I can to push them away, even though, in a non-judicial state (isn’t that an appropriate appellation ?) it’s much harder to manage an extended fight against foreclosure and their nastiest method of grabbing assets; forced sale.

    On occasion, i’ll still post if I think my wee bits of wisdom are helpful to anyone. As for revolution, sad to say those folk you refer as having been asleep are still in “dreamland” watching Dancing with the “Stars” and playing online poker. The entire landscape of America seems destined to be set aside with a eulogy from the T.S. Eliot’s “The Wasteland”. Dreadful thoughts on what should be a day of peace and gladdening. I’d rather a rallying cry borrowed from “The Big Lebowski”: “The dude abides”. Have a good holiday, everyone.

  9. Add Randa Azzam of Samuel I White in Maryland, a state where affidavit fraud was once considered a “technicality”.
    Fannie Mae must be asked to reveal their underwriting software, however, we already know that there was minimal concern for risk, by design. Criminal Intent?

  10. David J Stern should be hung he ran his office
    like a prison the emails received emails of being fired everyday if they did not meet quotas now
    Promiss Solutions opened in Florida and is hiring
    all the old employees from Stern’s office so it is a
    vicious cycle . We need to start OVER this Stern guy
    is a greedy animal and no one respects him
    Now he is defaulting on his bills he has money of his own the money should be taken from him to pay
    people oh this is America I forgot you can earn money the way this creep did. If Fannie knew about
    The Stern Law Offices they just enabled this to happen people look at how the government does not have the peoples interest they knew and looked the other way Stern is an animal it takes more to obtain a renewal for your drivers license then to be
    chosen to represent Fannie Mae The government
    failed its people Stern wanted to keep the cash cow happy and if it meant kicking the wrong parties out and forging documents well so be it Look into who
    Promiss hires here in FL all ex Stern people ring
    around the rosy …you cannot change the system if you do not change it at the core WAKEUP when are we going ot WAKEUP we have no say




  12. Well said India. I too have written countless letters that have gone unanswered. Politicians, regulatory agencies…. my state AG actually had the nerve to call me recently in answer to my accusation of servicer fraud explaining that my state was involved in the now notorious settlement with CW that basically just brushed everyone under the carpet. Out of sight, out of mind.

    And speaking of out of mind, one would have to be out of his or her mind to sign such an agreement. Here’s a check for $1000, sign here agreeing that you’ll never sue CW again for any reason whatsoever! Yeah right….that’s a win for whom?

    So I agree with your every comment. There’s a huge hole in the roof, we have a very small bucket on the floor, and the rain is picking up seriously outside. Hurricane. What can we do about it? I have no clue.

    My plan has been to fight them off long enough for the courts to come around. The new year will start my 4th year of fighting this battle. That’s a hell of a way to live your life. Especially considering that every single avenue that used to aid the consumer has been stripped to the bone or captured entirely by the enemy.

    The legal aid society in my town offers free advice. I fell for that a few years ago. Their free advice cost me a $30 admin fee. Go figure. Then I got 30 minutes with two attorneys who, after hearing my accusations of fraud by the broker and in the loan, talked amongst themselves and then declared that the advice they’d offer me would probably be of little use, as they represent most of the bigger banks (including the two I have mtges with) as their legal reps. After they discussed recusing themselves, they ended up telling me that I had little hope in winning against “them”, and wished me well. I at least expected a ham sandwich after a knobjob like that.

    The reason there are no good answers is due to the fact that few, if any, are admitting what the true problems are. Foreclosures are simply an effect, admittedly dire ones, but an effect nonetheless. They are not a cause. False affidavits are an effect as well. Stern is an effect. Job loss is an effect. Our shredded economy is an effect.

    It’s almost as if the world is awakening from a long sleep. But significant changes occurred during the 30 year shuteye. The cause of all of the above effects is that while we awere all snoozing, Wall Street got together and decided they would game the system entirely in their favor. How in the world did they get away with creating Mers without a roll call vote? Without regulatory approval? Without congressional hearings? And, according to some sources I’ve read, against their own attorneys who warned them at the outset that Mers would eventually blow itself up?

    How in the world did state governments simply allow the loss of billions-o-dollars in much needed income from recording fee losses, without so much as a peep from legislators?

    How did Wall Street suddenly get the OK to securitize our mortgages, and sell them over and over again, without informing us? Without spelling out possible negative outcomes? I can assure you that I would have found a local bank or credit union in a heartbeat if I had known prior to signing my mortgage that it was going to be diced into a million bite sized pieces for Wall Street to gorge and purge to infinite.

    The problem here is that our entire culture has been captured. Greenspan and Bernanke no longer operate like the fed chiefs of old, instead they manipulate the markets on a whim. It’s insanity to let these bankers get by with what they’ve done. They should both be in rubbing elbows with Madoff.

    It’s a much published theory that Geithner and OUR treasury, in concert with JP Morgan Chase, are manipulating the metals markets in an illegal attempt at propping the dollar. This widely circulated rumor should be investigated and if proven true, all of the players should be in with Madoff as well. Posthaste. More insanity.

    Over 40% of every tax dollar we send in goes to pay these same bad actors in interest payments on our national debt. More rampant insanity.

    This is the problem as I see it. The whole ****ing thing is FRAUD! Everyone who is anyone can see it perfectly clearly! While we were napping, Wall Street set up a casino, and our entire government, all three branches are the main players at the slots.

    The entire system is rigged to transfer the finances of the lower and middle class to the top 1%, and it’s working flawlessly. Like a well oiled machine. And there’s not a damned thing we can do about it, save for a new revolution. Harsh words on a Christmas day, I know. But there simply is no alternative in my mind. Without putting our boots on the necks of these thugs, they will never change their ways.

    Please prove me wrong on this, anyone? Can this new pardigm we’ve awakened to allow us to support ourselves and our families the way our parents did? Will our children be able to support themsleves at all under this new set of game changing rules, rules that say they can and we can’t? They have and we have not?

    I liked the old rules better. It’s impossible to play on a severely tilted field. The last few years or so have proven that fact. And our future is one of extreme bleakness without massive changes . They must be taken down.

  13. http://www.scribd.com/doc/45896314/Amicus-Curiae-Nj-Court-Hearing-on-Foreclosures-JAN-2011


  14. http://www.scribd.com/doc/45809710/Amended-and-Restated-Loan-Agreement-UAMC-2006-as-BORROWER-AND-SERVICER-UAMCC-AND-UAMC-LLC-AS-ORIGINATORS










  16. Regarding this topic describing the “enabling” by GSEs of shysters like David Stern, et al: I’ve come to the conclusion that further revelations regarding “outed” crooks and their stooges provides no element of real relief to those of us who are currently existing in a state that is akin to being beneath “the sword of Damocles”.

    To some degree it comforts all of us to know that “some” of these low-lifes are now exposed but, it’s small comfort. Yes, one can assume that we’re all relieved to know that a sparel few of the millions of people now terrified of losing their home, their LIFE, have been helped and are managing to continue the struggle with some support and actual evidence of the injustice done to them.

    But, what does this actually do for the majority of us who, in many cases, have only the web as a legal aid, haven’t located an attorney “who gets it” or who has the time or interest to get up to speed? What of the millions of folks who research, read, study all there is to know and somehow find an attorney who will represent them and then get slammed by a local, ignorant “appointed” jurist who’s either late for his golf game or has warm memories of his latest ABA dinner where this topic is essentially tossed off as “the latest nuisance”.

    We all need to consider avoiding, to some degree, the distraction of news reports and blog columns that describe in gory detail the dispossession of our fellow countrymen and, instead, focus! Find a better way to bring some serious pressure on our local A.G. Demand that investigation that they promised months ago and, to date, with the exception of two or three A.G.s, haven’t done a f*cking thing. Haven’t released a report or an opinion. What is their position regarding state’s rights as it applies to local property law? What is their opinion with regard to the, likely, millions of tax dollars owed by the banks to the state recording offices? How many pension funds in these states are dissolving due to their bogus investments in these empty box trusts? Why aren’t the state legislatures addressing these issues as an emergency budget issue as well as a scandalous and criminal act committed upon their constituents? How many of us have contacted their congressman, their senator and their state legislators? I have written to my state A.G. and demanded his response to these questions. I’ve contacted my congressman, senators and have written to my state legislators. They’re all hiding under their desks and taking calls from Wall Street lobbyists whilst we wring our hands in impotence. None of them are in fear of their elected positions because few, if any, have been warned that if they don’t act they’ll be tossed.

    We need to concentrate on bringing this fight to them and providing a more comprehensive method of locating attorneys; bringing the state’s free law support to bear on this situation. Most of all, all of us need to consider the best methods of demanding that the judges who are, in a great degree, the most critical failure in this entire attempt at resolution, are forced to address the fraud both in their courts and in the country as a whole.

    Most of us on hrere are “preaching to the choir”, saying the same thing in different ways. It’s not making an appreciable difference. Wall Street has hijacked this government and is continuing to write the narrative. The executive branch, the cabinet, is essentially an annex of that same RICO group that is working the scheme in New York and on Capital Hill.

    The hearings are kabuki theatre; providing great “sound bites” for MSM and “talking points” for the meat puppets on the Sunday “snooze” shows. It’s all a sham and we know it. If we continue to concentrate on the history of the fraud and the main players rather than focus on the few options we have to try to effect a significant change, we’ll be here, reading more “exposes” and wringing our hands whilst millions more get tossed and no appreciable correction is made.

    I don’t have an answer. Just a question? What actual steps do we take NOW to change this situation? How can we get real resolution via the courts and its officers, the attorneys? What are the main points that all of us who read and comment on this blog should be working on, together? How can we pro-actively move this effort forward to a real, effective force that makes a significant difference? Suggestions?





    From approximately March 2002 through August 2009, Defendant Lee B. Farkas (“Farkas”) engaged in a pattern of fraudulent conduct for the purpose of selling at least $1.5 billion of fictitious and impaired residential mortgage loans from Defendant Farkas’ company, Taylor, Bean and Whitaker Mortgage Corp. (“TBW”) to Colonial Bank, and for Colonial Bank,
    and its publicly traded parent company, The Colonial BancGroup, Inc. (“BancGroup”), to falsely record these fictitious and impaired mortgage loans as high quality assets.

    Lee B. Farkas is 57 years of age and is a resident of Ocala, Florida. Until August 2009, Farkas was the chairman and majority owner of TBW Taylor, Bean & Whitaker Mortgage Corp., is a privately-held Florida
    corporation organized in 1982 and headquartered in Ocala, Florida. TBW expanded rapidly, and by 2008, was the largest non-depository mortgage lender in the United States. On August 24, 2009, TBW filed a voluntary Chapter 11 bankruptcy petition, operating as a debtor-in-possession.

    The Colonial BancGroup, Inc., is a Delaware corporation organized in 1974 as a bank holding company and is currently head-quartered in Montgomery, Alabama. Colonial Bank is a wholly-owned subsidiary of BancGroup and was its primary operating division. As of August 14, 2009, Colonial Bank had approximately 350 bank branches, located in Alabama, Florida, Georgia, Texas and Nevada, customer deposits of approximately $18 billion, and total assets of approximately $23 billion – making it one of the fifty largest banks in the United States.
    On August 14, 2009, the Alabama State Banking Department seized Colonial Bank and appointed the Federal Deposit Insurance Corp. (the “FDIC”) as receiver.

    Subsequent to the closure, an unrelated financial holding company assumed substantially all of Colonial Bank’s deposits and purchased approximately $22 billion of Colonial Bank’s assets in a transaction facilitated by the FDIC. Colonial Bank’s Relationship with TBW Colonial Bank’s operating divisions consisted of its regional banking groups and

    the Mortgage Warehouse Lending Division (the “MWLD”). The MWLD provided short-term
    funding to residential mortgage originators, who typically lacked sufficient assets of their own to
    fund the mortgage loans they originated.

    The MWLD has historically been a major income
    source for BancGroup, and between 2005 and 2009, accounted for no less than 21% of BancGroup’s reported net income

    The MWLD’s largest customer was TBW, a privately-held mortgage company based in Ocala, Florida and controlled by its majority owner and chairman, Farkas. In 2008, TBW was the nation’s largest non-depository mortgage lender, originating more than $30 billion
    in loans. TBW’s primary business operations included the origination, acquisition, sale and servicing of residential mortgages. The bulk of the residential mortgage loans that TBW originated flowed from its contracted network of small, local mortgage brokers and banks.

    In order to act as a loan servicer for the Agencies and to retain the servicing fees, however, TBW was still contractually obligated to make all required payments to the ultimate investors until an event of default.
    TBW generally did not have sufficient capital to internally fund the mortgage loans it originated. TBW thus relied on various financing arrangements, primarily with Colonial Bank’s MWLD, to fund such mortgage loans.

    Pursuant to one of these financing arrangements, referred to as the “COLB” Agreement, Colonial Bank purchased a 99% interest in certain residential mortgage loans originated by TBW. When TBW sold these loans to Colonial Bank, it represented that they were of a certain quality and that there was a commitment from a third-party investor to ultimately
    purchase the loan. When that investor purchased the loan, the proceeds would be used to repay
    Colonial Bank for the funding advance. TBW represented that it typically re-sold loans financed
    under the COLB Agreement to a third-party within 90 days after the loan was originated.

    Another financing arrangement was referred to as the Assignment of Trade or “AOT” Agreement. Pursuant to this arrangement, Colonial Bank purchased a 99% participation interest in a bundled group of mortgage loans, referred to as a “trade,” that had been pre-certified as mortgage-backed securities that TBW would issue, market and re-sell to a third-party. These participation interests under the AOT Agreement constituted securities under the Securities Act and the Exchange Act.

    TBW certified each trade as either an “Agency” trade (i.e., to be purchased by Fannie Mae or Freddie Mac) or a “private label” trade (i.e., to be purchased by a nongovernment-related institution). To sell a trade to Colonial Bank under the AOT Agreement, TBW had to provide evidence of a binding commitment from a third-party investor to purchase the trade from Colonial Bank within a specified period of time, usually between 30 days (if certified as an Agency trade) or 60 days (if certified as a private label trade).

    When Colonial Bank purchased a trade from TBW pursuant to the AOT Agreement, Colonial Bank’s accounting systems no longer tracked or identified the individual mortgage loans that comprised that trade

    Trades purchased under the AOT Agreement were recorded in Colonial Bank’s internal accounting records in the “AOT Account” and ultimately reflected as assets on BancGroup’s balance sheet as “Securities Purchased under Agreements to Resell.”

    TBW was the only MWLD customer that utilized an AOT arrangement and, as a result, all of the assets
    listed in the AOT Account originated from TBW.
    27. By 2007, the total amount of financing that Colonial Bank had outstanding to TBW, primarily under the COLB and AOT arrangements, was approximately $3.5 billion, almost 82% of the $4.3 billion in total MLWD assets that Colonial reported in its 2007 Form 10-
    Defendant Farkas, with the assistance of the Colonial Bank Officer, thereafter began a pattern of “kiting” in TBW’s accounts at Colonial Bank, whereby certain debits to TBW’s warehouse line of credit were not entered until after credits due to the warehouse line of
    credit for the following day were entered. This kiting activity increased in scope such that by December 2003, TBW was overdrawing its accounts with Colonial Bank by approximately $150 million on a nearly daily basis.

    Recognizing the continued difficulty in concealing this initial fraudulent conduct, Defendant Farkas, with the assistance of the Colonial Bank Officer, devised a plan whereby TBW would create and submit fictitious loan information to Colonial under the COLB


  18. Boots,

    Regarding you statement in the first comment here:

    “Pite Duncan is also affiliated with Promiss Solution, Inc. One of their big clients are Fannie & Freddie. These attorneys are famous in filing fabricated documents in bankruptcy court.”

    Do you or anyone else have source material on the fraudulent practices of Pite Duncan? I’m in a chapter 13 battle alleging lack of constitutional and prudential standing, and would like to get to know my opponent better.


  19. I figured through my own research that the Foreclosure Mills were chosen because they had a history of breaking the rules…The Government/Banks funded these operations to carry out the FRAUD. I have reaserched many “mills” and they all have a peppered history…

  20. They became GSE’s because they were failures. They were failures because of the governments way of getting things done. Once a part of the government, they followed no law and wrote their own.

    From failure to criminal enterprise.

  21. The Bankers dont care about friendship , the talk about money : A CHASE STORY :


  22. in 2008, my loan was listed on Fannies website as owned by them, and yet B of A told me that the investors weren’t willing to even discuss a modification.

    Although supposedly purchased and held by Fannie, I have my doubts….I would suspect my loan is still being sold out in the nether regions, and Fannie is holding an empty box.

  23. David J Stern wasn’t the only fraudulent forecloser that the government ignored in the 90’s.
    After Fedelity NY FSB a federal bank hid four of my mortgage checks (two each on two NYC condos)
    I went to a Raymond Coons, Complaince manager
    of the NY/NJ Office of Thrift Supervision. He went into the bank with federal bank examiners. He saw my four checks came in, were posted to the banks ledger and the checks disappeared and Coons saw nothing wrong with that. (Along the way Fidelity NY FSB went under and Astoria Federal S & L became Succesor
    in Interest)
    I have letters and answers going back ten years to federal and state agencys, Judith Kaye etc telling them about the foreclosure fraud going on in the courts and they ignored my pleas to stop what was going on.

    Only DA Morganthals office and Elliot Spitzer offered any guidance but since these were federal banks, the states had no jurisdiction. Three o’clock one morining I drove to Washington to Janet Renos office, they didn’t care either. .

    I filed a chapter 13 to stop them from stealing my two condos When the corrupt attorneys Mulllooly, Rooney Jeffrey and Flynn the banks then attorneys were about to lift the stay. the Hon. Cornelius Blackshear (the first judge I came across that understood the banking system) told me to file a secus Federal Petition.
    On May 8 1997 xxxxxx&xxxxx (consolid. by NY Appellate Div) I filed a Fed. Pet under Federal Questions 1. The newly discovered evidence that Fidelity created money in direct prohibition to the United States Constitiution. 2 The Federal Statute of 30 day notice.

    The Hon Louis L Stanton read my petition, accepted it for filing and sent me to the federal cleck to pay my fee (including demand for a jury trial) and get a docket number CIVxxxxx and I also filed a copy of the record of the case. May 9 1997 a filed a copy of the Pet. in the County Clerk of NY .and the case ML v. AF S & L was in Federal Court. On May 13 I sent a copy to the corrupt attorneys MJRF.

    The case was now in Federal Court.

    Judge Stanton issued his first order on June 11/97 and a directive that I made a money settlement demand upon the bank.

    On June 30 1997 while the case was under federal jurisdiction MJRF got the state judge to sign two judgements of foreclosure. On July 23 1997 MJRF spoke to the Judge Stanton and apparently conned him into remanding the case and on July 29 1997 the Federal Clerk sent the certfied letter to the State clerk remanding the case.

    In MJRF’s rush to foreclose they advertised the sale and auctioned off my two properties on the authority of the June 30 1997 void judgments ab initio.

    At the sale I handed out papers warning them of the fraud and I told corrupt Timothy Rooney and corrupt referee Penny Stark this is illegal you cannot do this and Timothy Rooney replied “who is going to stop us?”

    The attorneys who came to bid left and straw buyers
    won the properties. Penny Stark wrote the forged deeds and Timothy Rooney notarized them.

    When I was ousted, I went to Florida, wrote a little book and sent it to Federal Senators, Federal Judges etc and in September 2008 filed two orders to show cause to mark vacated two judgments void ab initio of June 30 1997 pursuant to Elliot v. Piersol. Void Judgments being a nullity , have no latches.

    The bank now had new attorneys and stated in court in front of Judge Alice Schlesinger it’s Indemnify Indemnify Indemnify -We are stepping aside and the title companies are stepping in.

    The corrupt attorney Thomas Malone of Fidelity National Title and the corrupt attorney David K Fiveson of Coronet Title did not want to indemnify but wanted to be Intervenors instead and be heard and what they told Judge Alice Schlesinger of NY Supreme
    is time makes a forgery good. besides they told Judge Schlesinger “we have equity”
    Forged deeds have no Equity and the only equity they spoke of was Equity for the Judge and noticably absent from her decision was the United States case of Elliot vs. Piersol and she ruled against the law and gave possession of my two properties to the title companies insuring the forged deeds.

    The Appellate court said I abused the system. and I told them they abused me..

    I am the legal owner of these two condos. How do I get back possession of my two condos , other than becoming Spiderman and climb the walls of a highrise.

  24. Add Law Offices of James H. Woodall in Salt Lake City to Fannie’s list of foreclosure rats.
    BOA / BAC / Fannie Mae / in Utah.

    Even with QWR and injunction in Utah, they foreclosed anyway.

    Our home is sitting empty for six months now and subject to vandalism.

    We are tempted to move back in !

    Any thoughts on that are appreciated.
    We were not evicted, only foreclosed.

  25. When are we going to have a change of guards rather than continuing to talk about all the stuff that created this mess. We now have such experts on how the mess was created yet no one is suggesting that we get started now with a viable program.

    I understand the White House wants to know what to do with Fannie and Freddie. I just told you and them. Use them for Mop Up Duty. Listening to their attorneys was a joke. Obviously as mentioned, it took a lot of people to make this happen. STOP – IF THE GOOD ATTORNEYS WANT SOMETHING TO DO, THEN LET THEM GO AFTER THEM. BUT SOMEBODY BETTER START COMING UP WITH A WAY TO CLEAN THIS UP BEFORE THE WHOLE COUNTRY GOES DOWN. haven’t we embarrassed ourselves enough. I don’t care what other countries do or that they had this problem, this is America, we are not allowed!!!!!

  26. This is not the Fannie and Freddie that I knew IN THE THE 1980’S.. In one particular instance in the l980’s while attempting to defend a mortgage banker who had moved away from proper underwriting and servicing technique, they gave that mortgage banker a report card and when the Pres and VP OF THE BANKER sat there while being raked over the coals, I did unto them what they were doing to my client. I gave them a report card and asked them, when was the last time you were in this company’s shop. The President OF fnma after sitting there listening to the tongue lashing I was able to give to them, sat up and said, okay, XX, when was the last time we were in their shop? After a long silence he said, never. S0 the decision was made to take away the Company’s right to continue their underwriting but they were able to keep their servicing contract by which we used to repay Fannie and Freddie for the wrong doing. After that, it seemed they were able to introduce a better quality control system and did indeed attempt systematic changes to it. In fact, mortgage bankers and servicers did not want loans to go delinquent in that first 24 months or Fannie was going to be on their back and they knew it. After1997, I think they were beginning to lose market share when oversight of Fannie and Freddie was dropped completely after 1998, everything went south.

    Indeed, Fannie and Freddie were the leaders and to me that is where it should have come from with rrespect to the mortgage industry. But they got lost after 1997 with greed and very ambitious Presidents and leaders, rather than those from the old school.

    What is needed here and now and this is just a simple guess, is that all Loan Servicing Managers, at the top, along with their Presidents, need to have a huge Pow Wow and revamp their instructions to their personnel and I mean big time. They have the control over what can be done to halt the foreclosure process, clean up the loan chain, etc., and how the plan should be implemented.

    The investors need to do what they want to do with respect to their investments in those securitized loans, but the Loan Managers need to understand that the contract the homeowner signed on to, is the one that counts, you know, homeowner’s own Deed of Trust and Note. Fannie and Freddie were doing the same thing in the very early 80;’s and we begged them to stop then: Foreclose, foreclose and foreclose, that was the name of the game.

    We need to separate the two: Homeowner and Investors. And don’t say it can’t be done because it can.

    The trustees weren’t overseeing anything, especially the loan servicers, were they? And why did I read that the SEC was wanting to investigate the mortgage servicers who were supposedly selecting the loans that went into the investor pools? I did not know that. What did servicers have to do with selection?. Those decisions had to have been made by the Wall Street boys that sold their dangerous loan programs and then bet on them. Like I said, what a mess.

    Investors made their choices and like any other investment, if they don’t agree with what happen, then take it up with the Dealer. But as far as the homeowners are concerned, somehow, those PSA’s are going to have to be dealt with on another level separate and apart.

    The country is needs some real true loan servicing experts to get behind the program that can address this corrputed servicing of the homeowners. The only reason we need FNMA AND FHLMC now is FOR MOP UP DUTY. The smaller community banks can put some decent loan programs out there to the general public and/or the big 5 banks can allocate a pool of money (50 billion) to be allocated for a new program (Startup 2011 for loan creation, and that agency sure won’t entertain special interest). Get back to basics is clearly the way to go. The PRESIDENTs of FNMA AND FHLMC, HUD AND FHA AND NOW THE VA, PROBABLY NEED TO BE REPLACED FOR ALLOWING SUCH EVENTS TO TAKE PLACE AND A NEW MAN IN CHARGE TO OVERSEE PERSONALLY THE LOAN SERVICERS AND ISSUE A MORATORIUM ON WHAT POLICY WILL NOW BE FOLLOWED. OTHER SERVICERS OF OTHER INVESTOR LOANS WILL FOLLOW.

    NOW CALL IN THE PROS THAT KNOW HOW TO CLEAN UP THE MESS AND KICK THE REST OF THE FELLOWS OUT. How about the likes of General George Patton (Army) and General Curtis LeMay in the Air Force. I am not trying to be ridiculous here, but we obviously need someone to protect us on the home front now that things have so been escalated to this degree. Can anyone straighten this mess out.

    For all of the servicers that participated in this wrongdoing by the banks, Wall Street, etc., they are out.. Just where did they get off making such a damaging decision to join in the corrpuption that has ruined this economy. All they had to do was rewrite their contracts once they found out they would be servicing loans that could never be repaid. But they didn’t. They wanted to capitalize off of it, get the government to pay for the expense of servicing the loan for as long as they could and now they find, that they too will suffer the consequences of that decision.

  27. What’s the matter with having a guy like Tony Soprano collecting the money??????????????????????????????

    The next question would be why????????????????????????

  28. Everyone and I mean everyone who is FIGHTING for their Home or has been done wrong by the Banks should…:LEAVE A COMMENT in that : WASHINGTON POST ..linkl!! Let the WORLD HEAR OUR STORIES NOW! DO IT EVERYONE PLEASE!!! MERRY CHRISTMAS & MAY GOD BLESS US ALL! M.T.

  29. There’s a huge list of law firms retained by Fannie and Freddie.one such firm, Interestingly enough, sits right there same offices as attorney for indymac same offices one west otherwise stated mtc financial dba trustee corps foreclosure mill they have a website and a nice collection if homes for sale too! And they have a cost relationship with lender processing services…
    The more you stir this pot of sh….. The more it stinks

  30. the biggest scam by this law firm has been exposed in Florida. what about other state? in california , i would add the list of McCarthy & holthus law firm and Pite duncan law firm in san diego, california. McCarthy & Holthus is affiliated with Quality loan Services. Pite Duncan is also affiliated with Promiss Solution, Inc. One of their big clients are Fannie & Freddie. These attorneys are famous in filing fabricated documents in bankruptcy court. these attorneys are also a debt collectors, Hopefully, the Ca Attorney General would investigate this law firm for misconduct who abuses the bankruptcy court by filing fraudulent documents in order to obtained relief from stay. these law firm are ” david Stern” of Ca.

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