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It is interesting how the same allegations made by an institution are taken more seriously. In fact, the Court leaves in the prayer for punitive, consequential and future damages. Here MBIA is suing Morgan Stanley for lying about the risks and the nature of what they were buying. It’s all about the mortgages. Below I’ve selected some of the more interesting passages from the order denying Morgan Stanley’s Motion to Dismiss. While Judges routinely dismiss or otherwise are dismissive of homeowner complaints about the exact same thing by the exact same parties, they tend to take it more seriously when another institution says the same thing.

I remind the readers that we have repeatedly predicted the ankle-biting complaints amongst the giants that participated in the Ponzi scheme, whether knowingly or not. The obvious move by MBIA raises the question of why the same move has not been vigorously prosecuted by AIG, which played such a central role in funding the ill-gotten escape hatch for bankers.

“a vast number of of mortgage loans were made to borrowers who could not reasonably be expected to be able to repay their mortgage debt.”

As to MBIA Third PArty Guarantee and Payment: “This guarantee of repayment of principal and interest for the RMBS notes increased their marketability.”

“MBIA contends that these misrepresentations and failures ‘fundamentally distorted the risk profile represented to MBIA and raised the likelihood of losses’. Had MBIA known the truth it would not have issued the certificate insurance policy.” [Editor’s Note: Had ANYONE known the truth there would have been no mortgage bonds to  sell, no loans to make, no borrowers signing on the dotted line. Even here, the Judge assumes the Morgan acquired the loans when all indications are that it never did so. The Judge’s assumption is most likely the result of a bad assumption by the writer’s of the complaint for MBIA. The truth is that the loans never made it into the pools, there was nothing to insure, and the entire proposition is “all or nothing” with the emphasis on the NOTHING.]

“Morgan Stanley argues in essence that MBIA’s fraud claim must be dismissed because it is duplicative of the breach of contract claim. It is not. A fraudulent inducement claim may be sustained when it is alleged that misrepresentations contained in documents collateral to the contract were made to induce the Plaintiff to enter into the contract in the first place…” [Editor’s comment: Applying exactly this logic to the borrower, the “contract” was fraudulently induced by misrepresenting the appraised value of the property, misrepresenting the underwriting of the loan including parties and terms and viability, and misrepresenting the risk that the “lender” was taking (none). Thus our assertion on these pages that the primary claim is fraud in the inducement, as to damages, and quiet title, as to the lien, is corroborated by these simple statement of obvious black letter law by this Judge.]

47 Responses

  1. Carie,

    I sent QWR and finally a CEASE AND DESIST letter and then they finally stopped calling! Since I had filed BK 7 years earlier I reopened my BK case and the judge agreed they went against a discharge order and sanctioned them!

    Keep Fighting and use FCPA and FDCPA to haul them in to court and make their life miserable and make them them prove they have the right to collect.

    Keep Fighting its not just about the house anymore the more folks that haul them into court the sooner they will stop.

  2. yes, carrie, a “cease and desist” can be sent via fax and CMRRR directing the servicer to contact you by mail only. No phone calls.

    Just sent mine.

    Silence is golden.

  3. Dear carrie,

    ‘debt collectors may not harass consumers’ and
    Consumer complaints should be filed with your State Attorney General as related to your state’s fair debt and credit collection acts.

    Debt Collectors as Servicers may or may not be the ‘owner of the debt’ and may be using fictitious names. You have every right to secure proof first from Agency by disputing they have the right to even contact you and demand proof by what ‘rights’ do they demand currency from you?

    Qualified Written Request, Complaint, Dispute of DEBT and Validation of Debt Letter, TILA Request, appears on

    Congress sought to partially regulate the field of debt collection by passing Fair Debt Collection Practices Act. 15 U.S.C. § 1692 et seq. Guess what federal admin agency CONGRESS vested limited powers placing horse blinders on the very employees of the FTC who represent the consumer as an individual, only means ‘collecting consumer complaints’.

    FTC. CONGERSS vested limited powers for them to collect and submit an annual report to Congress about debt collection complaints. Don’t belive what this following implies:

    The Federal Trade Commission (FTC),
    the nation’s consumer protection agency, enforces the Fair Debt Collection Practices Act (FDCPA)

    Sadly you will find that the FTC and Attorney General of Consumer Affairs under the ‘State Attorney General’ will write back not my jurisdiction when a national bank’s name is affixed to debt.

    What is sad about the number of complaints is referenced below is how low and too few!

    I got no satisfaction …but I did make CONGRESS aware as a statistic and gathered facts of how CONGRESS does not protect consumers has only partial interest in making it look like they have an interest for the facts speak for themselves.

    Please do file your complaints against the SERVICERS as often as you can:

    USA TODAY source by Christine Dugas 3/21/2011: “Despite federal efforts to protect Americans from debt-collection abuses, the number of consumer debt-collection complaints filed with the government last year reached 140,036 up 17% from 2009, according to a Federal Trade Commission annual report.”

    I use to believe FTC to be a meaningful consumer protection agency.

    That was until after month’s of faxing directly to an attorney in CA inside the FTC, who kindly, in turn would see that the complaint was recorded, and I would receive letters with FTC Complaint # thanking me in generic form.

    With intent I would submit updated complaints and new complaints in order to find otu if anyone at the FTC would respondand do what I perceived to be their duty.

    Finally, someone with a title wrote back advising that there was nothing the FTC could do other than suggest an attorney be contacted in in the state who would know the laws regarding the matters related to (SERVICER) deceptive acts, deceptive advertising, bank allowing third parties to use name of national bank on third party transactions, falsified documents, fraud, etc.

    IMPORTANT for all of those receiving new CREDITOR LETTERS from BONY for example.

    Send your qualified written requests immediately disputing the CREDITOR and SERVICER and make them document how they are the CREDITOR and SERVICER.

    Good thought to share with all of those who may receive new CREDITOR notices like from BONY and BOA recently discussed1 You can’t assume the CREDITOR to be the lawful creditor or lawful servicer There is an issue of 30 days notice to dispute the transfer and demand information or the debt sold to the third party stays and they will claim you did not send your request within the 30 days!

    Good habit to dispute within first 30 days all debt (medical bill balance for example) dispute debt transfer to secure ‘evidence’ always the goal’ and make them prove they are the ‘owners’ of the debt and owner of rights to servie debt.

    Dispute the transfer and make the new CREDITORS and SERVICERS provide evidence of how they have the right to collect the debt, what said debt is, be very specific to request data to secure specific results and secure ‘good evidence’ regarding servicer, transfers of servicing rights, to incorporate at the right time into the foreclosue proceeding.

    California ‘DCA’ Fair Debt Collection Practices Statutes as of 2003 under Former AG Brown
    Fair Debt Collection Act ‘Cease & Decsist’ template

    Customize with very specific information, do you want to C&D first or first submit the qualified written request?

    Pursuant to my rights under federal debt collection laws governed by Fair Debt Collection Practices Act. 15 U.S.C. § 1692 et seq, I am requesting that you cease and desist communication with me, as well as my family and friends, in relation to this and all other alleged debts you claim I owe.

    You are hereby notified that if you do not comply with this request, I will immediately file a complaint with the Federal Trade Commission and the [your state here] Attorney General’s office. Civil and criminal claims will be pursued.

  4. We started an online petition drive here in California..

    Please sign our petition, and Spread the word!

  5. When a bogus mortgage assignment is recorded against your property, that’s slander of title which is bad enough. But the moment your a loan servicer initiates a foreclosure based upon that bogus assignment it’s a whole new ballgame. It then becomes a in violation of the Racketeer Influenced and Corrupt Organization Act by the mob which consists of your loan servicer and all of its associates. There are civil penalties for that as well as criminal.

    “RICO has significantly dented the operations of organized crime. But Notre Dame law professor G. Robert Blakey, one of its main drafters, insists that Congress never intended to restrict its application to the Mob. ‘We don’t want one set of rules for people whose collars are blue or whose names end in vowels, and another set for those whose collars are white and have Ivy League diplomas,’ he says.”¹

    Source: ¹Time Magazine. Law: Showdown At Gucci by Alain L. Sanders; Priscilla Painton / New York Monday, Aug. 21, 1989

  6. Do you agree that the right “to Petition the Government for a Redress of Grievances” means the People, with evidence that the government is abusing its constitutionally …

    Founding Fathers inheritence right to compell the offending government (all congressional and state representatives) to stop and provide prayerful injunctive releif reamins an essential individual right acknowledged and guaranteed to every resident and lawful citizen under the First Amendment of the Constitution of the United States. The US Government having placed us all in harms way must be addressed to those under OATH to protect the welfare of the nation.

    Why does not WaMu Homeowners sign the global rolling petition and send each compelling individual requests (and copy to the website the request) in addition to signing the rolling petition of those who will claim their rights? Surely compelling and newsworthy and set the model for others to follow.

    A qualified writtten Petiton To Redress must contain the resident’s name and addres where they reside, phone and fax and eamil minimally along with their real signature and/or electronic /s/ signature through both the United States Postal Mail, Electronic Mail, antiquated fax machines of the US Government (appears they don’t know what efax is) and conveniently run out of paper. The only time I ever received a response from Senator Dodd’s office was from his staffers complaining I was forcing their fax machine to run out of paper. How Congressman Frelinghuysen’s office dealt with that dilemma was to remove their fax# from publication and change the fax#.

    Insure your voice is heard and all of your fellow consumers and send to your individual congressional represetnative, two senators, state assemby, etc., are called forth under OATH to protect welfare of the nation. And copy your Petitions to the Public Domain!

    Remember regarding property all matters must be in writing.

  7. To anyone here who may know:

    Since my “servicer” statement has “this company is a debt collector” all over it—can I send a CEASE AND DESIST letter so they will back off while I get my ducks in a row???

    Thanks—keep fighting!!

  8. Dear uprootedone, Cause of actions ‘discriminations’ and ‘court of equity’ non-issue over thing for the facts remain the focus of the transactions was based on goverment programs funding the approvals of the loans and Wells Fargo Home Mortgage, Chase Manhatttan Mortgage Corp, GMAC Mortgage of Iowa, GMAC Mortgage of PA, Norwest Mortgage, BANCO Mortgage, Countrywide Funding….. getting ‘attaboys and attagirls’ for brining to papa the US Goverment the loans.


    Below is an email sent today to the California Office of the Attorney General requesting an immediate cessation of all foreclosure activity and new foreclosure filings in California while the OAG’s Mortgage Fraud Task Force does its work. Join me in writing letters to California Attorney General Kamala D. Harris and the AGs in your states.

    Dear California Deputies Attorney General (Kathrin Sears, Benjamin Diehl, Joseph Ragazzo):

    Again the members of the National WAMU Homeowners Support Group thank you for your efforts on behalf of homeowners in California.

    While the latest efforts by the OAG are deeply appreciated, more must be done to protect the rights of homeowners in California where homeowners are effectively denied the right of due process. Some states’ Supreme Courts have taken tough stances against the banks while California has not. There exists a disparity in the understanding of the massive mortgage fraud by judges throughout our state. Equally the California courts appear to be biased in favor of the banks with a plethora of judges effectively saying to the homeowner “Well you got the loan and you didn’t make your payments – you lose; get out of my courtroom.”

    Homeowners are NOT doing well in the California courts while the banks are allowed to obfuscate, delay, and refuse to comply with court orders.

    Chase bank attorneys are notorious for refusing to produce documents and witnesses; they waste the court’s valuable time and are notorious for stringing cases along so the homeowner runs out of time, energy, patience, and money. They are creating a fraud on the court and are allowed to get away with this immoral reprehensible behavior. Sanctions are seldom imposed on the banks while the hapless homeowner must jump through hoops. The judges are not educated as to the level of bank fraud. Bank attorneys are not required to show up for court proceedings but can appear by telephone which is unreliable at best. There is nothing right or ethical about this behavior. Frankly due process is a joke for any California homeowner fighting a foreclosure or fraud.

    No bank and no attorney should be permitted by any judge to thumb his nose at the court.

    More importantly, no homeowner should be at risk of losing his or her home while the OAG Mortgage Fraud Task Force is conducting its investigations. California should and must take a greater leadership roll. The NWHSG requests that the OAG shut down all pending foreclosures and prevent the banks from filing new foreclosure actions during the investigations. Homeowners must be protected, especially in a non-judicial foreclosure state.

    California Chapter
    National WAMU Homeowners Support Group

  10. If you want to get a feel for what they were thinking while putting this all together, take a read…..from the 424B5 for “Wells Fargo Home Equity Trust 2005-2”

    A “Trigger Event” has occurred on a Distribution Date if (i) the three-month rolling average of 60+ Day Delinquent Loans equals or exceeds 36.00% of the Senior Enhancement Percentage or (ii) the aggregate amount of Realized Losses incurred since the Cut-off Date through the last day of the related Collection Period (reduced by the aggregate amount of Subsequent Recoveries received since the Cut-off Date through the last day of the related Collection Period) divided by the Pool Balance …(comment…triggers the dissolution of the trust)

    Forfeiture for Drug, RICO and Money Laundering Violations
    Federal law provides that property purchased or improved with assets derived from criminal activity or otherwise tainted, or used in the commission of certain offenses, can be seized and ordered forfeited to the United States of America. The offenses which can trigger such a seizure and forfeiture include, among others, violations of the Racketeer Influenced and Corrupt Organizations Act, the Bank Secrecy Act, the anti-money laundering laws and regulations, including the USA Patriot Act of 2001 and the regulations issued thereunder, as well as the narcotic drug laws. In many instances, the United States may seize the property even before a conviction occurs.

    In the event of a forfeiture proceeding, a lender may be able to establish its interest in the property by proving that (i) its mortgage was executed and recorded before the commission of the illegal conduct from which the assets used to purchase or improve the property were derived or before the commission of any other crime upon which the forfeiture is based, or (2) the lender, at the time of the execution of the mortgage, “did not know or was reasonably without cause to believe that the property was subject to forfeiture.” However, there can be no assurance that such a defense will be successful.

    (comment) I don’t think they ever contemplated the laws being used against THEMSELVES.

  11. WE all know what is going on. The problem is the general public is unaware of the fraud. The media is not going to share this info so it is up to all of us individually to get the message out there in our communities.
    I have made t-shirts that I wear shopping ,walking where ever that read- HOMEOWNERS FIGHTING BACK
    This is to get the conversation going with those that would otherwise never know all this stuff. I made this an investment in my future. We will have more power for change if more people know what is going on.
    We need to spread the knowledge.

  12. Folks,

    Start by taking your frustration with this mess to your local land recorders office and pull all documents relative to your loan.


    Trust laws are succinct and well established, get educated …..Please get involved with RESEARCH that can be posted to this site that can help all of us fight this scourge of inequity by the servicing banks.

    I’m done with bitching and complaining, “# 9 needs more info”. Thanks Neil.

  13. If you wish to use race card, do it. Each individual needs to use the deck of cards that will help them the most. Every win is a win for America no matter what deck of cards you need to use. The bank uses every card it has. To many diverse Americans have been effected to call a race card. The bank does not care what color you are, they just use every card they can to find a way to con and scam Americans. Poor black Americans are just one card out of there deck. We all need to try every means available to stop these SOB’s. No one deserves this NO ONE. Not any race not any religion not any class of people. These banks have touched every American in some way and are not finished with their destruction. We all have to become one family of victims calling them out and sending a message to our representatives. I don’t check out the color or the religion of who I am helping. We are all victims of the hugest bank heist in history. Start becoming informed. Read all of livinglies articles, and letters and get a forensic audit to be informed of exactly how the bank screwed you. You can not fight this with out organizing together and being informed. If you only know you are hurt and betrayed and you know this is not your fault, you will get no where if you are not informed and know just how they hurt you and why you have a reason to fight. Type in “mortgage servicing fraud and pull the article that says forum in it. Read every article. It will take days and it is worth it. Pull up “Wall Street and the Financial Crisis; anatomy of a financial collapse. Pull up your mortgage docs and see if MERS is obvious on them. If it is not does not mean your mortgage is not fraud. Most of them are. I pulled up MERS in the King County Records and Pierce County records and cross referenced them to each other and found fraud on my sons doc’s. Type in Mers Robo signers and get list to compare with. Join Class action lawsuits if you can not find an attorney. Pro Se’s have been successful. It is not an easy thing to do. Find out if there are attorneys that will help you in your state. I may have found one through Pam Edwards in the Seattle area. My case is Pro Se. AND I AM SCARED! I refuse to let the bus run over me and I care about every American family being betrayed by these criminals.

  14. uprootedone:

    I see that we are almost on the same page. When you replace your frustration with determination, then we will be.

  15. Jim,

    It’s not about winning, right now the only ones who seem to be winning are the lying Banksters, and thats gotta Stop!

    I just wanted to share the story about Wells Fargo because I found it completely outrageous, especially in this day and time.

    However I do share your frustration, with this whole foreclosure mess.

  16. uprootedone:

    OK you win, racism is a factor. I’m Scotch-Irish, in foreclosure and just as pissed as you. Are we on the same page now?

  17. A-Man:

    Buzz words = Talk. Each individual with a passion about this thing needs to take action in an individual way. Buzz is for sales guys.

  18. Jim,

    We all know their is a common enemy here.

    In this case it’s not that racism May have been a factor. it was Clearly a factor, Wells Fargo targeted people because of the color of their skin. And I thought change had come to America.

    This maybe grounds for a civil right law suit. God knows the DOJ isn’t listening to the millions of homeowners facing foreclosure!

    I’ve heard every foreclosure story except this one.

    I do agree, Banksters will screw anyone, any color any, age etc.

  19. We need to find buzz words to get our point across.




  21. Shelley:

    Excellent. Keep it going. This is the kind of necessary action that Neil has been clamoring for.
    Peaceful disobedience if at all possible.

  22. This is not just about me and my son. I spread the word also. I am mailing copies of the Robo signed doc’s to the people I have discovered to be Robo signed docs to give them heads up to help themselves also. It is easy to find the doc’s just type in MERS and you pull up all the MERS docs.

  23. Jim, this is awesome. Pam Edwards look up the doc. Jim just had me look up. We must do this immediately! I have sent the letters of dispute, over a year ago and have it filed in the department of recordsa for my son and myself and we just sent out the letter of Objection, and have the letter of dishonor ready to send and I will prepare this tonight.

  24. Shelley:

    Howdy neighbor. Research this:

    Snohomish County recording # 2011 0516 0044

  25. I am fighting the banks Pro Se and trying to let others know it is not just a few Americans in this boat. It is massive Americans. Not just a few selected ones.I have searched the County Records departments and proven Robo Signing in King County WA and Pierce County WA.. I am trying to get as many homeowners as I can locally through my business and client contacts to file or at least join a class action, and to send e-mails to every representative there is. I have done all this. and continue to e-mail them constantly. I have my documents into livinglies as we speak for a forenzic audit and am having my sons done soon. I have already put the puzzel pieces together to prove G.Hernadez is a ROBO signer on my sons mortgage. He was unknown and is listed on the web now as a ROBO signer. He claims to be assist secretary of MERS, then assistant Sec of RECONTRUST, AND ALSO IS A NOTARY witnessing a transfer of Liticis Quintana another Robo signer already on the web, transfering an assignment from MERS as assistant sec of MERS to RECONTRUST. Both G. Hernandez and Leticial Quintana are employees of RECONTRUST. I AM VENTING FOR RIGHT NOW. I have pulled stacks of Linda Green and Chrystal Moore docs from the King County and Pierce County Records and both e-mailed and mailed them to the Attorney Gernerals office and many other government agenciesa and to Governor Chris Greguiore. I am still digging for more and am very brain dead right now.

  26. Another reason for the servicers to get away with fraud modifications: See the recent Freddie Mac “imminent Default Indicator doc. and Announcement SVC-2011-06; “Updates to Imminent Default Definition and Determining Market Value for Preforeclosures” from Stopforeclosurefraud. web site: Freddie Mac diredted its servicers to disqualify any borrower over 60 days late and additionally the borrower was to have over at least $25,000.00 cash in reserves unless they could qualify a hardship. The only acceptable hardships were as follows: Death of a borrower or co-borrower, long-term or permanent illness or disability of member, or third, divorce or legal separation of a borrower or co-borrower. This about disqualifies us all , especially since the servicer’s told everyone to get three months behind,and if they didn’t they gave them approval by phone of the modification loan, then let them pay over three months payments ( they let me pay five months of modification payments) then disqualify you telling you the mod payments are considered partial payments so now you are over ninety days in the rears so you are in foreclosure. I guess if we had all known, we could have divorced our spouses. For most of us killing our spouses is not an option. However the stress could have given us the opportunity to claim we went mental and are disabled mentally and incapable of working anymore. What a joke. And not a very funny one! However the banks have caused the death of some homeowners, maybe their spouse qualifies now. We can not let these SOB’S get away with this.

  27. A-Man, Shelley:

    Yeah, we’re all tired and typos happen. Point is: what are you doing other than complaining? Seriously.

  28. Join the club I am making multiple typo’s also. I alsom deleted : the banks claim we are behind on our mortgage so we deserve foreclosure, when they are the reason we are behind.

  29. I don’t know how apparent got in there i meant appalled.

  30. Jim, that is exactly why the banksters need to pay it all back. plus triple not five billion of the twenty billion stolen and go directly to jail Makes since to us! The government can not be that stupid. They are that crooked. I know way to many hard working Americans that are not dead beats that have been drug into foreclosure and bankruptcy. I dont now who these banksters and politicians think they are kidding. I am apparent the banks think sucking the blood out of the poor with fraud predatory loans was ok. Using the “Dead beat” stigma to validate the fraud. How dare they! Just like so we deserve foreclosure. We tax payers bailed them out and we are dead beats? We need to score them as Zeros for their FICA score. Another joke is “its imoral to give the homeowners a reduction on their loans.” It is immoral to steal houses for free. It is immoral to steal from the poor. It is immoral to defraud and commit crimes. It is immoral to victimize your victims over and over and over and over. It is immoral the homeowners and all American victims are not compensated triple for these crimes.

  31. I must be really pissed or tired or both. I am making too many typos.

  32. uprootedone:

    Please understand that there is a common enemy here. Racism may be a factor in this racketeering enterprise but we must look past that. We must agree to be color blind if we are to have any hope of fighting back against the common enemy in an organized manner. Same is true of age, gender, religion, nationality or any other divisive factor that the common enemy may use to its advantage.

  33. It is not only the ones who in foreclosure that are suffering. It is also those who make the payments.,0,6176564.story

  34. I am sure this is true, however I know it was not just the black community, it was all American’s, white, black, brown or red. The banks took every step at every lever missing no stone unturned to screw us all for all the same reasons in all the same ways. I hope everyone screwed gets these banksters leaving no stone unturned. I hope this black community’s church officials help their congregation go after these crooks. Good luck and God Bless!

  35. Wells Fargo gave Getto Loans to Mud People…

    Talk about institutional Racism

    Google it, the new York Times did a story on this…

    Anyone who thinks this was just people biting off more than they could chew? Read this!

    As she describes it, Beth Jacobson and her fellow loan officers at Wells Fargo Bank “rode the stagecoach from hell” for a decade, systematically singling out blacks in Baltimore and suburban Maryland for high-interest subprime mortgages.

    These loans, Baltimore officials have claimed in a federal lawsuit against Wells Fargo, tipped hundreds of homeowners into foreclosure and cost the city tens of millions of dollars in taxes and city services.

    Wells Fargo, Ms. Jacobson said in an interview, saw the black community as fertile ground for subprime mortgages, as working-class blacks were hungry to be a part of the nation’s home-owning mania. Loan officers, she said, pushed customers who could have qualified for prime loans into subprime mortgages. Another loan officer stated in an affidavit filed last week that employees had referred to blacks as “mud people” and to subprime lending as “ghetto loans.”

    “We just went right after them,” said Ms. Jacobson, who is white and said she was once the bank’s top-producing subprime loan officer nationally. “Wells Fargo mortgage had an emerging-markets unit that specifically targeted black churches, because it figured church leaders had a lot of influence and could convince congregants to take out subprime loans.”

    Ms. Jacobson’s account and that of the other loan officer who gave an affidavit, Tony Paschal, both of whom have left Wells Fargo, provide the first detailed accusations of deliberate racial steering into subprimes by one of the nation’s top banks.

    The toll taken by such policies, Baltimore officials argue, is terrible. Data released by the city as part of the suit last week show that more than half the properties subject to foreclosure on a Wells Fargo loan from 2005 to 2008 now stand vacant. And 71 percent of those are in predominantly black neighborhoods.

    Judge Benson E. Legg of Federal District Court had asked the city to file the additional paperwork and has not decided whether the lawsuit can go forward.

    Wells Fargo officials have declined detailed interviews since Baltimore filed suit in January 2008. In an e-mail statement on Friday, a spokesman said that only 1 percent of the city’s 33,000 foreclosures have come on Wells Fargo mortgages.

    “We have worked extremely hard to make homeownership possible for more African-American borrowers,” wrote Kevin Waetke, a spokesman for Wells Fargo Home Mortgage. “We absolutely do not tolerate team members treating our customers or others disrespectfully or unfairly, or who violate our ethics and lending practices.”

    City and state officials across the nation have investigated and sometimes sued Wells Fargo over its practices. The Illinois attorney general has investigated whether Wells Fargo Financial violated fair lending and civil rights laws by steering black and Latino homeowners into high-interest loans. New York’s attorney general, Andrew M. Cuomo, raised similar questions about the lending practices of Wells Fargo, JPMorgan Chase and Citigroup, among other banks.

    The N.A.A.C.P. has filed a class-action lawsuit charging systematic racial discrimination by more than a dozen banks, including Wells Fargo.

    At the heart of such charges is reverse redlining, specifically marketing the most expensive and onerous loan products to black customers.

    The New York Times, in a recent analysis of mortgage lending in New York City, found that black households making more than $68,000 a year were nearly five times as likely to hold high-interest subprime mortgages as whites of similar or even lower incomes. (The disparity was greater for Wells Fargo borrowers, as 2 percent of whites in that income group hold subprime loans and 16.1 percent of blacks.)

    “We’ve known that African-Americans and Latinos are getting subprime loans while whites of the same credit profile are getting the lower-cost loans,” said Eric Halperin, director of the Washington office of the Center for Responsible Lending. “The question has been why, and the gory details of this complaint may provide an answer.”

    The affidavits of the two loan officers seem to bolster Baltimore’s lawsuit. Mr. Paschal, who is black and worked as a loan officer in Wells Fargo’s office in Annandale, Va., from 1997 to 2007, offers a sort of primer on Wells Fargo’s subprime marketing strategy by race.

    In 2001, he states in his affidavit, Wells Fargo created a unit in the mid-Atlantic region to push expensive refinancing loans on black customers, particularly those living in Baltimore, southeast Washington and Prince George’s County, Md.

    “They referred to subprime loans made in minority communities as ghetto loans and minority customers as ‘those people have bad credit’, ‘those people don’t pay their bills’ and ‘mud people,’ ” Mr. Paschal said in his affidavit.

    He said a bank office in Silver Spring, Md., had an “affinity group marketing” section, which hired blacks to call on African-American churches.

    “The company put ‘bounties’ on minority borrowers,” Mr. Paschal said. “By this I mean that loan officers received cash incentives to aggressively market subprime loans in minority communities.”

    Both loan officers said the bank had given bonuses to loan officers who referred borrowers who should have qualified for a prime loan to the subprime division. Ms. Jacobson said that she made $700,000 one year and that the company flew her and other subprime officers to resorts across the country.

    “I used to joke that ‘I’ll pay for your kids to go to private school if you give me clients,’ ” Ms. Jacobson said in the interview.

    Loan officers employed other methods to steer clients into subprime loans, according to the affidavits. Some officers told the underwriting department that their clients, even those with good credit scores, had not wanted to provide income documentation.

    “By doing this, the loan flipped from prime to subprime,” Ms. Jacobson said. “But there was no need for that; many of these clients had W2 forms.”

    Other times, she said, loan officers cut and pasted credit reports from one applicant onto the application of another customer.

    These practices took a great toll on customers. For a homeowner taking out a $165,000 mortgage, a difference of three percentage points in the loan rate — a typical spread between conventional and subprime loans — adds more than $100,000 in interest payments.

    The accusations contained in the affidavits, which were given to Relman & Dane, a civil rights law firm working with the City of Baltimore, have not drawn a specific response from Wells Fargo. But city officials say the conclusion is clear.

    “They confirm our worst fears: that this is not just a case based on a review of numbers and a statistical analysis,” said the city solicitor, George Nilson. “You don’t have to scratch your head and wonder if maybe this was just an accident. The behavior is pretty explicit.”

    Both sides expect to appear in court at a hearing in the case in late June.

    Tags: Mudd People, WELLS FARGO

  36. Quote from above Neil article:

    “a vast number of of mortgage loans were made to borrowers who could not reasonably be expected to be able to repay their mortgage debt.”


    “If “irresponsible sub-prime borrowers,” caused the meltdown, then $1.4 trillion would have solved the problem in its entirety, right? Because that’s all the sub-prime loans there were.”

  37. Finally the Banks are getting squeezed on all sides…

    I am working with a producer in Hollywood on a under ground documentary called

    “Smoke and MERS”

    its about foreclosure Fraud, robo, BS, etc?

    The Producers are looking for homeowners who want to tell their story … Here’s your chance to be heard!

    If interested email me

  38. When I speak about investors I’m referring to their agents, and/or the decision makers, Directors of Finance, Governors, CEOs, etc. – not the members of the unions, 401k contributors (et. al.) whose money was raided.

    Going back to my layman analogy, I don’t think this could even be simultaneous there was too much work to be done prior to selling, yet alone closing the Trust.

    And there is this little legal analogy of whether you “knew or should have known” that keeps nagging at me… how could the investors not know they were being sold something Wall Street did not yet own? The investors were not buying the mortgage – they were buying pieces of the revenue stream. Actually they were buying a fictitious revenue stream of a non-existent debt, apparently with insurance.

    I don’t see any “future” tense in the Indenture, Prospectus or PSA concerning “we don’t own these” – just that it is guaranteed that the Seller will transfer to the Depositor and the Depositor to the Trust by closing – the mortgage loan documents pursuant to the schedule that make up the guaranteed revenue stream.

    So, the investor is insured – he doesn’t care. But just how did he get insurance? Right, there was a mortgage loan schedule… no loan documents – just a schedule. They all knew or should have known the position of the borrower (not signed) at some point and that the borrower was the integral part of the securitization equation… only the borrower had no disclosure and warning of risks associated with his loan.

  39. Morgan-Stanley is part of Bend-Over, also known as Shank America, right? Saxon and La Salle are also Bend-Over, right?

    These same actors have now settled with the DoJ for foreclosing on military families.

    I’m hoping that MBIA wises up and amends the suit regarding the pools.

    I’m also hoping this gets full disclosure of everything MBIA asks for during discovery.

    The more we get forced out into the open, the better we ALL are.

    Go MBIA, but do not settle!

    Just leave a piece of the Shank for me to collect on too.

  40. We are seeing that judges are ruling more is favor of the lender even though evidence had suggested a wrongful foreclosure.

    People really need to educate themselves on improper securitization so that they don’t get taking advantage of in court.

  41. Yes — Virginia — there is a Santa Claus. And, Santa Claus came in the name of insurance — MBIA finally catching. on.

    Simultaneously, while homeowner is doing a subprime refinance — the insurance is kicking in. Happens at the same same — insurance gets in on GSE loan by false manufactured default — and — VOILA — you have a subprime “loan” — out of the hand of GSE — and into a false default — for which insurance pays.

    Subprime refinance appeared to be a valid refinance — BUT — NOT. And those old records??? Gone. How else do you think banks/debt buyers gained market share ground on the GSEs???

    Yes — there WAS a Santa Claus — and about time insurance companies woke up. Oh, but then again, did insurance companies also invest in the fraudulent MBS??? Along with the GSEs themselves???

  42. Virginia:

    “the banks were gambling with the borrowers’ collateral without permission or disclosure of risks and warnings – and the investors knew it.”

    Half true. The investors were deceived as well (but not by the borrowers).

  43. Apparently and logically these mortgage loans, specifically their revenue streams were sold to investors BEFORE the borrower signed the documents.

    Ponder this – how could the borrower sign the document on the 21st of the month (plus 3 days right of rescission) and its Trust closed on the 28th of the same month; yet, the loan was calculated, printed in the Prospectus and Mortgage Schedules AND sold to investors in less than a week? Nahhh, we’ve been had pardoners – this is why they kept the borrower in limbo for 90 days to 6 months+… they were selling what they didn’t yet own… that is Nemo dat… and this should be the keys to allowing the borrowers to sue under SEC 10(b), Antitrust and RICO at the very least.

    Check out BLUE SHIELD OF VIRGINIA ET AL. v. McCREADY, 15 U. S. C. § 15 sec. 4. ” As we have recognized, “[the] statute does not confine its protection to consumers, or to purchasers, or to competitors, or to sellers. . . . The Act is comprehensive in its terms and coverage, protecting all who are made victims of the forbidden practices by whomever they may be perpetrated.” Mandeville Island Farms, Inc. v. American Crystal Sugar Co., 334 U.S. 219, 236 (1948).

    There are a number of cases that have held that under RICO you need not be a seller of purchaser of securities; you need be an injured party as the result of the transaction.

    And while I am just a paralegal, my logic kicks in as I read and research – the banks were gambling with the borrowers’ collateral without permission or disclosure of risks and warnings – and the investors knew it. That’s why the investors don’t participate with the borrowers’ plight.

    If I buy something I know fell off the truck; or I pick fruit without the farmer’s permission – its the same as stealing. It will come out, when the borrowers start suing the investors – that the investors knowingly participated in the fraud… at least their agents did – and probably the finance directors’ bosses. Kinda reminds me of a ring of car thieves that steal cars “made to order” – happens all the time in NY… maybe that’s where Wall Street got the idea.

  44. “A fraudulent inducement claim may be sustained when it is alleged that misrepresentations contained in documents collateral to the contract were made to induce the Plaintiff to enter into the contract in the first place…”


    A guy walks into a casino and with $100 in counterfeit chips, parlays it into $500 at a blackjack table, cashes in and heads for the door. But he is stopped by security because the counterfeit chips were discovered by security before he gets out . So the guy tells security that he is willing to surrender $100 of his winnings but only if he gets to keep his $400 profit because, after all, he did beat the dealer. Security guy sez: “I don’t think so”.

  45. Well put and spot on Mr. Garfield.There never was anything to insure as nothing made it into the pools.It was fraud at the inception of all these loans and financial products.Had any of us known what the truth to the matter is we would have run not walked from the closing table.We were never given the chance to even be able to make an informed decision.Who would have wanted to be involved in something you don’t understand.Never again.

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