Even the FED is Making Money Off Bogus Mortgage Loans

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EDITOR’S NOTE: A “windfall for taxpayers” — REALLY? The hype doesn’t match the facts. While the Fed and large financial institutions trade paper instead of solving our problems they are giving credibility to the so-called mortgage bonds based upon bogus mortgages that would receive a grade of “F” in 1st year law school. They are substituting spin for law and PR for policy. This is no windfall for taxpayers, quite the opposite. They are REPORTING a profit on money they sent to Wall Street instead of injecting it into the economy where it was needed. Look around you. Do you see that money doing YOU or your community any good?

The reality is that as long as there is an incentive to pretend that the mortgages and mortgage bonds were truly valid instruments reflecting real transactions, our economy, our children, and our citizens will suffer for generations. The entire edifice was constructed on fraud and deceit. The mortgage documents did not recite the terms of the transaction nor identify the correct parties. The transaction was based upon false inflated appraisals that neither the investors nor the borrowers knew about. BOTH sides of the transaction lost big money and the taxpayers kicked in trillions of dollars on top of that.

Yes there is a windfall. Because the people who lost no money on bad mortgages collected huge fees in closing undocumented transactions and now they are ending up with the homes, while society, local, state and federal governments suffer the worst budget disaster since the Great Depression. And every time there is another “trade” and someone is jumping for joy over the profit they can report, the identity of the creditor becomes increasingly obscured. So in the courts, they pretend that the paperwork tells everything and the Judge should look only at what is proffered by the pretender lenders while the REAL action is happening behind the scene making everything represented in court a complete farce.

Fed Had Profit From Investments of $82 Billion Last Year


WASHINGTON — Profits at the Federal Reserve banks rose to a record $82 billion last year, a windfall for taxpayers that also underscores the depth of the Fed’s continued involvement in the nation’s financial markets.

The 12 regional banks that make up the Federal Reserve system held $2.4 trillion in government debt, mortgage-backed securities and other investments at the end of 2010, mostly amassed in an effort to backstop the financial system, according to a combined financial statement the Fed published Tuesday.

The banks transfer almost all of their profits to the Treasury Department. The $79 billion received by the government this year is a 66 percent increase over last year’s payment of $47.5 million, the previous high-water mark.

The Fed transferred an average of $25 billion a year in the decade before the crisis.

“It’s interest that the Treasury didn’t have to pay the Chinese,” the Federal Reserve chairman, Ben S. Bernanke, told Congress in January, after the central bank released a preliminary estimate of the annual transfer.

It is also the product of a series of unprecedented emergency aid programs initiated since the financial crisis in the fall of 2008.

The financial statements show that the Fed earned about $3.5 billion last year from the Maiden Lane subsidiaries it created to buy assets from the investment bank Bear Stearns and the insurance company, American International Group.

The Fed also made $45 billion from its portfolio of roughly $1 trillion in mortgage-backed securities, which it amassed to help maintain the availability of mortgage loans.

And it made $26 billion from its portfolio of $1.1 trillion in government debt, acquired as part of a continuing effort to stimulate economic growth.

19 Responses

  1. dito

    Rarely go off-line — but provide your email.

  2. ANON – I’d like to go off line to ask you more about this refi BK argument.

  3. Ian,

    Yep — all a front — but, more importantly, loan dischargeable in BK, — as unsecured — nothing more that a credit card debt –(actually just reaffirmation of an already default debt).

    FN 35 – from TARP — “without the mortgage, a note is simply an unsecured debt obligation, no different from credit card debt.”

    There can be no new mortgage if the prior mortgage/note was not paid by you!!! All that it is — is sale of collection rights — mortgagee never changed!!!!!! And, refinance is just addition to the default debt!! – which was never a default debt to begin with!!!


    THANK YOU!!!! Your input is AMAZING!!!

  4. Thank you “A”

  5. So please… What do we ask for in court … The discovery of the ” real underwriting” the real sales the ledgers / accounting of all who received on the loan transaction? We face the iqbal twombly defence and my opposition cite this

  6. ANONYMOUS- you and I have discussed this from differing angles over the past months. If there was not an antual refinance in the traditional sense of the term, including payoff of the existing mortgage, then what of the charges paid or incurred by the borrower? Points, origination fee,broker blah blah fee, yield spread premium, the fees were 12-20k per loan. They were all illegal then, and are due and owing to the borrower, as there was no origination of a loan, no broker involved, no this no that. Again, the note evidences the obligation. It is not THE obligation. There were numerous obligations by numerous entities, the hapless “borrower” didn’t have any idea what they were signing. Even if they thought they did. Sort of defeats the purpose of RESPA and TILA. So in summary, all the fees paid during a “refinance” are due back to the borrower in a court of law.

  7. Mary and usedkarguy

    “Deutsche Bank Trust Americas” acts in a trustee capacity. I have seen other “proof” of transfer funds – in which the party supposedly transferring funds before settlement — is a trustee (including JP Morgan Chase, as trustee).

    It is not likely that this party actually transferred any funds — but name was used as it is similarly used in foreclosure actions.

    What this indicates is that the your prior loan was likely bumped out of a prior trust – just before refinance. These “trustees” also act as swap administrator. Thus, collection rights on loan are swapped out of the trust — in the name of trustee.
    As Mary states — the (default debt) loans are then sold a discounted basis.

    This also means that the prior trust was not paid off by YOU – as it should have been — by your refinance. Loan is falsely placed in default — and prior trust is “satisfied” by insurance. As a result, you are in default before you even refinance.

    This also means the “mortgage” on refinance is false. You cannot have a new mortgagee — without YOU paying the prior mortgagee (cannot have insurance “satisfy” the loan for YOU). Technically, you owe two loans!!!!!

    As to actual funding — it is not necessary — you already (falsely) owe a default debt. All that is “funded” is any cash-out added to the default debt.

    If your loan was within Freddie/Fannie limits — the prior trust was likely a F/F Remic — this means your original creditor was F/F — and your current creditor — is whoever the discounted “default” debt was sold to.

    I suspect that almost every subprime loan was falsely “funded” this way. Remember — nearly 100% of subprime loans were refinances. The trusts set up as “shell” to absorb the (false) default subprime refinances. The banks kept the senior tranches supposed pass-through securities— and the mezzanine subordinate tranches were sold (first) to hedge funds/debt buyers. Those M tranches have a form of swap derivative against them — which swap the collection rights out of the “shell” trust.

  8. For every discounted loan sold by Wells Fargo there is a buyer. The BUYER used the Loan# to reference not the property but the loan#. That is the biggest fraud upon the USA!

    Banks can do what they want as a superior class of consumer.

    Congress allows breaking laws when commerce is involved. Congress oversteps limited powers preventing enforcement of laws. Congress created FRB, SEC, FTC, OCC, OTS, FDIC, HUD…. and the rule of SANCTIONS. The foreign organizations who own the Real Estate Industry of the USA spit upon the Federal Republic and over and over again.

    MERS is an organized group whose owners require members to not follow the law.

  9. I went to the ‘Settlement Agent’ also and found Deutsche Bank Trust Americas check (3) days prior to actual mortgage first review = Account Holder. The important part of the check is the copy of the statement. Your loan# is there along with who ordered the transaction and the deposit you must now realize is inside of the SELLER’s Corporate Securities Treasury of Wells Fargo. The Settlement Agent is from Wells Fargo and responsible for distributing funding from his own accounts.

  10. Went to the title agency today to get the proof of transfer of funds for my Wells Fargo Home Mortgage transaction. Check was from DEUTSCHE BANK. 3 DAYS BEFORE CLOSING. Now I know.

  11. […] Link: Even the FED is Making Money Off Bogus Mortgage Loans … […]

  12. Has anybody considered that some of the information coming out of the Federal Reserve is bogus? I am very sceptical of what is reported by the mainstream media. You have to look at some foreign news media outlets to give you a more rounded viewpoint. Of course, the Federal Reserve should be investigated. However, people have died when that was put forward.

    Take a look at Louis T. McFadden on the Federal Reserve Corporation. That was back in the thirties. He exposed the Federal Reserve board and all its crimes. First, they tried to shoot him, they missed. Then, they poisoned him, but he lived. Third, he had a heary attack which was supposedly from a bout of intestinal flu. What do you think? Burmese8@yahoo.com

    Education »
    Foreclosure Laws by State »
    LPS 101
    MERS 101
    Securitization 101
    The Federal Reserve made $82 billion last year, mostly from securities it bought during financial crisis
    Posted on22 March 2011. Tags: bailout, balance sheet, Federal Reserve, federal reserve board, foreclosure fraud, securities, Treasury

    From the Wall Street Journal:
    The Federal Reserve‘s net income surged 53% to $81.74 billion last year from 2009 mainly due to higher earnings from securities the central bank bought to counter the financial crisis, according to final audited results released Tuesday.
    Almost all of that income — $79.27 billion — will be sent back to the U.S. Treasury. The record transfer marks a 68% increase from the $47.43 billion the Fed sent back to Treasury in 2009. The figures were slightly higher than preliminary results published in January.
    To fight the financial crisis, the Fed bought securities whose value had collapsed due to fear and uncertainty in markets and set up emergency lending programs for banks and firms, thus boosting its balance sheet. The central bank came under attack for taking too many risk with taxpayers money and putting itself in a position to suffer losses.

  14. Do not let the name fool you.
    The Federal Reserve Bank of New York located on Liberty Street is a Trojan Horse, the “World’s largest accumulation of gold.” The gold bullion in New York’s vault is part of the monetary reserves of foreign governments, central banks, and official international organizations around the globe. What is the U.S. government going to do when the foreign organizations call in the notes and want delivered to Liberty street the reserves held by the Treasury Department at Fort Knox, Kentucky and West Point, New York, Denver and Philadelphia Mints and San Francisco Assay Office?
    The Currency managed not in the best interest of the Real Estate Industry of the United States of America. Rather foreign organizations and private family’s trusts, 1970’s organization charge of FRB NY reveals Rothschild’s & John Rockefeller. In agreements with SunTrust & Lehman Brothers, Bear Stearns. What are the gold reserves worth today? In 2008 $236 billion. What will happen when the foreign organizations call in the notes?
    The money laundered out of the nation one mortgage at a time over the private financial exchanges harmed the economy of the nation, third element of our national security.
    In 1992/1993 The Foothill Group Inc, and its subsidiary Foothill Capital, Group and new Parent, Pacific Crest, acquired control of the real estate industry of the United States of America.

    The deals that went down created the virtual pipeline through which Norwest Corp dba Wells Fargo & Co/MN sold discounted loans wholesale. The foreign organization’s owners successfully married Norwest and former Wells Fargo Company survived acquiring the valuable American trade name ‘Wells Fargo & Company.’ The storefronts operating in 50 states and US Territories throughout the USA took in residential property , and laundered money out of the nation one mortgage at a time. The foreign organization operating as the largest producer of non-conforming mortgage products right here inside the USA.
    . Norwest Corporation already in deals and agreements with, Chase Manhattan Mortgage Group, GMAC-RFC Wells Fargo, HSBC Global plc, Deutsche Bank, Lehman Brothers, Bear Stearns were all private members of financial exchanges. Each re-engineered roles and responsibilities worked in collaboration did take residential properties one mortgage at a time into their pipelines dba Wells Fargo.
    The state set on 3/13/2000 the new Wells Fargo & Co. parent operating as a financial holding company, was responsible for being in the USA the #1 virtual bank, #1 Originator and #1 Servicer. July 2003, it’s no accident that Wells Fargo & Bank of America were responsible for consummating and promoting the first virtual no-documentation electronic exchange using the commercial services and commercial products they required the United States of America Real Estate Industry to utilize in order to get a chunk of business.

    2000 Financial Holding Companies – Clinton apologized he made a big mistake trusting the lobbyists. Congress provided pass for no-documentation for financial holding companies May 2003 via SEC money thereafter laundered out of nation one mortgage at a time.
    Real Estate Industry controlled by foreign organizations using ‘Wells Fargo’ and ‘Norwest’ to bring to mama properties selling discounted loans.
    July 2003 Wells Fargo, & Agent Bank of America demonstrated the new ‘MERS’ vehicle to conduct business selling loans without having to worry about ‘securitization’ free to create loan#’s over and over and over again!
    No documentation for sales of non-conforming mortgage products, loans endorsed in blank alike bearer bonds!
    Is the majority of Congress ignorant in financial matters and ‘trust’ as consumers the inferior class of consumer trusted employees of the banks their only asset was safe in the hands of Wells Fargo?

  15. Give them all what Bernie Maddoff got.

  16. The concern we have — is the first one —“The financial statements show that the Fed earned about $3.5 billion last year from the Maiden Lane subsidiaries it created to buy assets from the investment bank Bear Stearns and the insurance company, American International Group.”

    Maiden Lane holds numerous toxic asset tranches from many different trusts. Included in portfolio are subordinate tranches – which are not pass-through tranches because nothing is left to pass-through given swap bailout on senior tranches — and also holding credit default swaps themselves. Also, Fed intention was to sell these toxic assets to distressed debt buyers — is that where profit came from?

    Or, are foreclosure proceeds being passed on the US Government???

  17. The roar of criminality from Wall Street and D.C. is deafening. There seems no end to the corruption. From the WSJ:

    Even as governments freeze assets tied to regimes in Libya, Egypt and Tunisia, U.S. banks are resisting efforts to tighten international rules to prevent the flow of money from corrupt politicians.

    The Financial Action Task Force, part of the Organization for Economic Co-operation and Development that sets international standards for money-laundering laws, is conducting a review of its guidelines aimed at closing loopholes.

    The review, due to be completed later this year, comes amid criticism of banks for holding billions of dollars in assets allegedly belonging to regimes in Libya, Egypt and Tunisia.

    Criticism? Criticism is what you do to a school bully. These are high crimes that deserve something a wee bit more harsh than criticism…say maybe….twenty years in small rooms for all involved?

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