Subpoenas Withdrawn: Ally (GMAC, owned by USA) to Pay Fannie (owned by USA) $462 Million for “BuyBacks”

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COVER-UP CONTINUES

EDITOR’S COMMENT: Confused? Ally, wholly owed by GMAC, which is 80% owed by our Federal government has agreed to pay $462 MILLION on “repurchase demands” (i.e. legal damages) to Fannie Mae (FNMA, wholly owned by our Federal Government) for losses attributable to $292 BILLION in “home loans.” There, that settles it. Any questions?

And by the way, those subpoenas that were issued last July, they are withdrawn because of this “settlement.” So any answers to the inside workings of Fannie or the transactions with Ally and “related parties” will forever be buried unless you know enough to subpoena them yourself. Find the subpoenas on the internet and plagiarize them to your heart’s content, there being no copyright protection on legal filings.

Are they kidding? That payment is 2 tenths of 1% of the home loans. Are we to suppose that those loans were 99.8% “OK”? SO here is a very good example why both lawyers and homeowners need litigation support in the form of analysis of title and securitization. Otherwise you are up against representations from the Federal government that ring with a presumption of truth instead of stinking with the mess of a lie. Pretender lenders will use it at leisure to smoothly show that your allegations simply have no merit and that you are wasting the court’s time on a  foreclosure that is right and justified and should not wait because creditors have a right to protection in the courts from unscrupulous homeowners who are out to undermine the system. Most judges WANT to believe that anyway because it seems like the fastest way to clean out their docket.

The government has settled with itself. It has taken the trouble to announce the settlement so presumably they are trying to make a point. I think the point is to minimize the financial crisis and hide the scope of crises that have not yet occurred but look like they are virtually assured. Because it isn’t just that all the mortgages are of dubious origin and authenticity, it isn’t just that the notes that are described in the mortgages fail to describe the actual obligation that arose, and it isn’t just that Fannie’s claim of ownership is based upon self-serving proclamations; no, the point here is that the mortgages are very probably unsecured, and the mortgage bonds based upon allegations of ownership of these loans are very probably worthless or nearly so.

Speaking to the traders out there who are not interested in any of the policy issues, some of us know that there is a hedge or bet here that is going to surface and sink this ship once and for all, while you guys make all the money AGAIN. And because nobody is looking, you can probably do so without fear of legal intervention or regulation because the old rules and laws probably exempt you and your trade as not subject to securities laws. At worst they will shut the barn door after the building is completely evacuated of all sign of life. I really can’t blame you for being so cynical. The only people who have a clue about what you are doing are not in any position to do anything about it except write lame duck articles like this one.

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“Ally Financial Inc., the auto and home lender majority-owned by the U.S. government, agreed to pay $462 million to settle repurchase demands from Fannie Mae linked to $292 billion in home loans.”

Bloomberg:

By Hugh Son and Lorraine Woellert – Dec 27, 2010 10:00 PM MT Tue Dec 28 05:00:03 GMT 2010

Ally Financial Inc., the auto and home lender majority-owned by the U.S. government, agreed to pay $462 million to settle repurchase demands from Fannie Mae linked to $292 billion in home loans.

Ally, formerly known as GMAC Inc., said the deal covers loans serviced by GMAC Mortgage unit for Fannie Mae before June 30 and mortgage-backed securities purchased by the Washington- based loan-funding firm. The accord was reached on behalf of Ally’s Residential Capital unit and subsidiaries, the Detroit- based company said yesterday in a statement.

Chief Executive Officer Michael Carpenter is seeking to resolve claims tied to faulty mortgages as he prepares Ally for a public offering to repay U.S. bailout funds. Mortgage lenders typically promise to buy back loans sold to investors or cover losses if information about the borrowers or property later proves to be incorrect.

“At the start of 2010, we set a goal to substantially reduce risk in our mortgage operation,” Carpenter, 63, said in the statement. “We have successfully completed a series of steps toward that objective and are largely complete.”

The government took an almost 80 percent stake in Fannie Mae after it seized the firm in 2008.

Ally had settled buyback claims with six counterparties, the largest being government-owned finance company Freddie Mac, according to a November presentation. It agreed in May to make a one-time payment to Freddie Mac, without disclosing the amount.

Ally’s Reserves

Ally increased reserves for buybacks to $1.1 billion in the third quarter, from $855 million in the prior period. The original unpaid principal on loans involved in the Fannie Mae settlement announced yesterday was $292 billion, a figure that narrowed to $84 billion, Ally said.

Chris Katopis, executive director of the Association of Mortgage Investors, said his members are worried the Ally settlement might be too low.

The deal “may set a harmful precedent for mortgage investors and the public,” Katopis said in an interview. The Washington-based trade association represents state pension funds and other investors in mortgage-backed securities.

The agreement “modestly” exceeds prior reserves, Ally said. ResCap and Fannie Mae also reached an accord regarding ResCap’s payment of mortgage-insurance proceeds where coverage is rescinded or canceled.

“ResCap does not expect this exposure to be material,” Ally said.

Subpoenas Issued

In July, Fannie Mae’s regulator, the Federal Housing Finance Agency, said it issued subpoenas for documents related to private-label mortgage-backed securities in which Fannie Mae and Freddie Mac had invested. The agency, under pressure from lawmakers to stem losses to the two companies, is trying to determine whether misrepresentations or omissions might require lenders to repurchase failed loans.

The FHFA will withdraw subpoenas to “certain ResCap parties” that relate to Fannie Mae, Ally said today in a filing to the Securities and Exchange Commission. FHFA spokeswoman Stefanie Johnson declined to comment.

With more than $150 billion in taxpayer funds spent on bailing out Fannie Mae and McLean, Virginia-based Freddie Mac, lawmakers are pressing them to shift more of the burden back to the banks that created defective loans.

In an August letter to President Barack Obama, Representative Barney Frank, the Massachusetts Democrat who leads the House Financial Services Committee, said the battle to get refunds “should be fought with every tool.”

“We are pleased to have reached an agreement with Ally Financial Inc. and related entities which addresses our exposure on a portfolio of loans sold to Fannie Mae by GMAC Mortgage or serviced by GMAC Mortgage,” Janis Smith, a spokeswoman for Fannie Mae, said in an e-mailed statement. “The agreement also addresses Fannie Mae’s potential claims for losses on certain private label securities issued by GMAC entities.”

To contact the reporters on this story: Hugh Son in New York at hson1@bloomberg.net; Lorraine Woellert in Washington at lwoellert@bloomberg.net.

12 Responses

  1. rI am filing involuntary bankruptcy petition, SIPA litigation, nun pro tunc quiet title action against Ally Financial and requesting that the SEC and FTC deny Ally Financial and all its alias’ from trading on the stock exchange.

    Many of the borrowers that purchased during these years have been given bad repres.  But having been in my residence on March 2, 2011 with the RE-MAX realtors parked in his black mercedes and the alameda county sheriffs showing up un-announced at the request of the alameda county counsel Raymond Lara with an old writ of possession “No cash for keys stipulation that has come up missing.  the law firm of Schultz stated at the courthouse that the judge Clay was not going to change his mind so sign this paperwork that you will walk away from the property.  We obtained from Judge John True III by paying cash to the clerk of court an extension to find out what happened to two hundred thousand purchase money paid.  Then found out that world bank had closed and was bought by wachovia.  
    The biggest news that I have personally found out which effects many cases is that Ally bank owns 10 percent of MERSCORPS, Inc and they are being sued by the United States chapter thirteen trustee locke barkley which I personally flew to jackson mississippi on way to aberdeen to give all the documents of the fee spliting and substitution of trustee between cal-western reconveyance previously known as cal western trust deeds, inc in the same physical office at 525 E. Main Street el cajon california as PITE DUNCAN & MELMET since 1987.
    When you appear in bankruptcy court you are required to tell the parent corporation and state of incorporation.  Wells fargo according to the california secretary of state records where I personally appeared and paid 60  dollars for the secretary of state to serve Wells Fargo N.A.  the secretary of state came back stating that i was required to get a order from the Judge allowing substitution of service on a foreign corporation as wells fargo [6745 locations] is not a california corporation since 1923 it has continuosly filed as Delaware corporation.  This has been brought to the attention of FBI Mortgage-Sec Division at 4400 Orange Grove, Sacramento California.  There was no mention that the loans afforded to the borrowers were not money owned by the bank.  had the delicate time sensititive pay back arrangements that the banks as servicers as in the decisions in bankruptcy cases recently will support been explained the borrowers and occupants would had taken the course of study i have been flung into open book how to track title and note and checked the business licenses and parent corporations and their aliases before signing the notes.
    The banks and especially the media give the OBAMA Bailout very very very bad press when in fact he did just what he was elected to do protect the constitution and our rights to property.  By this bailout they bought the lending portfolio of the failed Parent Company that filed bankruptcy in 2008 but had applied to become a holding company to qualify for the bailout money.  The deeds of trust were given as security to the trusts that gave the banks the FISA Fixed Interim Sales Agreement, and agreements to buy the mortgage portfolio that the bankruptcy judge told Wells Fargo they had 15 worthless mortgages and FMI filed bankruptcy.  
    you ask what is the connector.  I Say why is it necessary for substitution of trustee prior to alleged default of borrower while the bank selling prommis solutions holdings, inc bought the mortgage portfolios under 20 year contracts with pite and duncan, mccallyer raymer, and they through power of attorney filed in Buffalo Bankruptcy case 11-10516 and powers of attorney from HSBC Bank Shanghai Banking Corporation to michael d webb & associates whom have a office a 1853 9th avenue, oakland california according to their REO Harold Jospeh Hutchens affilated brokers; he waited 28 months on these locations and when keys for rental payments to the pite and duncan trusts not to the banks on the mortgage statements he brings portable dumpsters and files unlawful detainers and the borrowers file bankruptcy case their attorneys file chapter sevens as opposed to chapter fifteens because foreign banks have bought corporation in the state and the clerks of the courts do not require their business license attached to the court filings.  so the PRESIDENT did great when he enacted that bailout because these banks had they been factual we would not have pulled our money out we saw it is a wonderful life.  

  2. Sex by one’s own hand is always best!

  3. very disheartening indeed. nothing else to be said. the borrowers have been sold out at the expense of the….of the….. IPO purchasers? WTF, really……

  4. Settlements — no admission of guilt — is why we have no precedent setting law.

    Large settlements — bribes??

  5. I sure expected a lot more people to be upset about this. Are we going full circle or what? I think I will just drop from the site.

    This is just outrageous. It was the same thing when Bush Administration gave the $200 billion to Bear Stearns and then $150 B to Fannie and gave the homeowners a ridiculous modification program that was nothing but a ploy all at the same time so we would feel like we were getting something while they fed our blood to Bear and Fannie. I almost want to just give it up. When I say nobody cares, that is the way everyone is coming across and Neil is doing is damnest to get something out there for us along with a few good fellas who have contributed so much to it. Thanks to them for their effort, but I think I am done.

    They had to waive the subpoenas if they were going to settle. Of course that was the reason for the settlement. Now the gov can say, look how much we got away with of giving so little of “our money”. Right!

    Obama Adm comes up with a replay of that plus added a few crummy enchancers which were not of course to the thing. What is it with everyone.

    I see no agency answering to the people, but I sure a lot of their money being used to pay the bills.

    Like I said, why, as stockholders of GMAC, do we not have the right to vote. I guess that right was taken away when the gov bought and paid for them with our money.

  6. Big Business usually operates by carefully considering what they can get away with, taking into account minor fines and such, accepting them as a controlled cost of doing business or in this case committing massive fraud.

    It looks like there is limited separation between government and private as both Fannie/Ally are in receivership which means that this release from Bloomberg about a “BuyBack” is about as valuable as an abandoned, looted cape cod from the WW II era, that temporarily belonged to a victimized, ripped off borrower.

  7. I think withdrawal of the subpoenas was a major part of this settlement. Keep it all from the public eye.

  8. OK, Say a loan is in the buy backs from Fannie to Ally? Now Ally is going to try to forelcsoe saying they own the loan? right…the cricle of BS continues.

    So are these loans being plucked out of the Trusts? Since Fannie holds no loans?

  9. Not sure, but as a majority stockholder (the government managing taxpayer money) should we not have had a vote on whether or not to settle with Fannie and Freddie. Something wrong here with this picture.

    So I guess the government (administration wins again). They use our money to bailout Fannie and Freddie and leave the taxpayers (majority holders in GMAC) with the toxic – no valued properties). Are they masters or what? I hope I am wrong about this.

    It appears that the government has once again sold the taxpayers out. Guess it was to be more of the bailouts as so many of you have said were coming.

  10. I have noticed lately that subpoenas related to government entities or quasi-governmental entities do not work–remember the DOJ scandal and firing all the DOJ AG’s? Subpoenas start flying around and, then, suddenly, they settle. This is total BS, and we are getting nowhere. We will have to represent ourselves and take the power back one US citizen at a time. http://www.challengingforeclosure.com Sirak@challengingforeclosure.com

  11. My late husband used to say some people would climb a tree to tell a lie, when they could stand on the ground and tell the truth. They sure have gone to a lot of extremes to perpetuate the living lies.

    What a farce! I know this has to be disgusting to you, Neil, and to others who have devoted the past several years to seeking justice and transparency in this matter. For what it’s worth, I am extremely grateful to you for your tenacity and good heart. You gave me the strength to fight, even if I lose. Thank you.

  12. Sounds smells and walks like alleged bribery cover up.

    But all this wont help them. The economy is drained. Homeprices down. Consumer confidence down. Unemployment up.

    NEVER AGAIN

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