Whitewashing at the Fed and the SEC: Pennies on the Dollar

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EDITOR’S COMMENT: Money makes its own morality. Here again the FED and the SEC are planning to slap the wrist of criminals with fines amounting to rounding errors on the scope of theft these people committed. Martha Stewart went to jail and paid a $30,000 fine for an alleged infraction worth $46,000. Nobody has gone to jail yet for what is clearly criminal fraud. At this point in the savings and loan scandal in the 1980’s more than 800 people from high up to down low, were spending their time counting the days in prison. The system has been hijacked by the rule of men instead of the rule of law. And the men who rule answer to only one higher power: MONEY.

Fed to Announce Monetary Penalties for Robo-Signing and Unsafe Practices ; Another Whitewashing Move by the SEC

SEE FED TO ANNOUNCE PENALTIES FOR ROBOSIGNING

Courtesy of Mish

The always behind-the-curve Fed seeks to fine mortgage servicers for unsafe practices and robo-signing with an amount dependent on allegedly independent review by consultants.

Federal Reserve Governor Sarah Bloom Raskin on Saturday said the Fed must impose monetary penalties on banks who entered into an April agreement with regulators over how to fix problems in their mortgage servicing businesses.
“The Federal Reserve and other federal regulators must impose penalties for deficiencies that resulted in unsafe and unsound practices or violations of federal law,” Raskin said in remarks prepared for delivery to the Association of American Law Schools. “The Federal Reserve believes monetary sanctions in these cases are appropriate and plans to announce monetary penalties.”
In April, 14 mortgage servicers, including Bank of America and JPMorgan Chase entered into a settlement with the Fed, the Office of the Comptroller of the Currency and the now defunct Office of Thrift Supervision on steps that have to be taken to correct and improve their servicing practices, such as providing borrowers with a single point of contact for questions.
As part of the agreement, these mortgage servicers have hired consultants to review foreclosures that took place in 2009 and 2010 to see if any were improper.
Regulators have said these reviews will help determine the size of any penalties the servicers will have to pay.

Expect Trivial Penalties, Spread a Mile Wide

Don’t expect this announcement to amount to much of anything. Penalties, if any will be trivial and the fines are nearly guaranteed to not benefit those harmed in any substantial way. Instead, expect fines to be spread out to include those not harmed at all.

 

21 Responses

  1. Aw, this was a really nice post. Taking a few minutes and actual effort to generate a top notch article… but what can I say… I procrastinate a lot and don’t seem to get anything done.

  2. chas404

    The reason never properly conveyed to trusts is because they were never valid loans to begin with. Securitization is the removal of receivables. It is not clear from the securitizations — from WHOSE balance sheet the receivables were removed. Why??? There were no balance sheet receivables, it was simply securitization of cash flows to collection rights — that are reported by the income statement and not by balance sheet current asset accounting.

  3. To Ian,

    I agree….

    1. If the loans were never placed into the trust propertly…

    or

    2. The ABCD assignment trail is broken, missing or messed up via MERS

    then not only are we arguing that the foreclosing entity not have standing or have rights to the note BUT as Ian suggests the servicer which is guided by the PSA has no right to collect the payments or forceplace insurance, etc.

    This is the next step. I sent a QWR to Wells Fargo essentially asking that, in light of the assignments not recorded and other issues, I am demanding that WF assert that it is indeed collecting my 6 years of payments (over $150K) with authorization or atleast as agent to true beneficiary. WF and Fannie Mae both refuse to disclose the trust where my loan is or the true credit and WF asserts that it has a valid lien and that title insurance is in place.

    My only recourse was to stop paying and essentially have them prove that.

    I understand that defending a foreclosure may be easier than attacking but it seems to me that a legal complaint could be made in my case to file a lawsuit essentially saying…. “Given the lack of recordations of assignments, the bankruptcies of several entities in the title chain, the lack of lender placed title insurance and the unwillingness of either servicer or FNMA to disclose the creditor, I demand that all payments $150K be returned unless it can be proven that payments are being applied properly AND BY THE PROPER AUTHORIZED PARTY”.

    Essentially this is a non-TILA rescission. Or running a foreclosure in reverse.

    I really believe this is the next stage.

    I understand that WF will show up with a printout of applied payments but the question is 1. prove that you are authorized servicer for creditor and 2. that payments are being properly applied (and not to some dissolved Fannie Mae trust of which there are hundreds).

  4. johngault,

    But, I have remained civil. Right now, no choice.

  5. johngault,

    I do not make any comments regarding Illinois and “bench law by some judges.” Know nothing about Illinois. You reference comes from elsewhere.

    Ian,

    OK. But, the trust does NOT allow the servicer to do whatever they WANT to do. The servicers’ role is very limited, with very limited POA.

    One major thing I have learned is that the PSA must be followed to every dotted i and crossed t. What we get in courts is far from compliance with the PSA. This is regardless of whether or not the Trust, and “notes” (and I question this) and “loans”, were valid from the onset, and as to Trust conveyances, and PSA governance. If the adversaries want to claim the PSA and Trust are valid, they have to go by the PSA. And, they do not. We have massive violations of the PSA, by foreclosure fraud. Again, if they want to claim the PSA and Trust are valid, they have to abide by it — and they do not.

    As to “making into the Trust” — or not, or subsequently making into and removed, we have no access to this information. Why? These trusts filed 15-D SEC documents, which allowed them to cease reporting to the SEC (all by deregulation). We do not what is in these trusts, what was removed, and whether or not the trusts are “dismantled” or dissolved. We can speculate on dissolution since “remnants” of the trusts were purchased by the US Government — forming a new “Trust.” But, no one will clarify this to a court of law. No one will publicly clarify this. And, no one, except security investors, are even challenging the validity of the Trusts to begin with. We do not even know if a “true sale” ever existed. We do know, that loans were NOT validly conveyed in accordance with the PSA.

    Agree with you, need attorneys to weigh in on this. And, to ask them, why are you not challenging the structure of the PSA, and non-compliance, on behalf of the homeowners?? Are some attorneys keeping this a secret to induce their own settlement for individual homeowners, thus, profiting on the fraud individually. Or, are attorneys simply not cognizant of the law? We need case law. And, to any astute attorney, the flaws in the Trusts and PSA — are HUGE.

    So far, very few legal cases address the real meat of the fraud. And, AG “investigation” is limited and far from inclusive. Foreclosure challenges are dismissed on legal technicalities. This is just not acceptable as a whole. Servicers and trustees/security investors — are not the creditor. Will not repeat this argument here, have stated this over and over. Until Neil gets a grip on this, we will not see it validly addressed here.

    Which — begs me to ask — do some want to continue the fraud to benefit by its falsities?

    Never see my questions addressed here (except from you — Ian — and a few others).

  6. @anonymous – the substance of your comments regarding Illinois and bench law by some judges cuts deep. Hate to read that stuff, to get an affirmation of such rampant oppression, but have to. It must have taken some effort to keep your tongue civil. It would me.

  7. ANONYMOUS- I believe I was the first person on this site to ask the question, “if a note never made it into the trust, would this not void all the provisions under which the servicer/debt collector is acting? It is the Trust which permits the note to be born, and NY Trust law is unflexing in its’ requirements and conditions. And, it is the Trust structure, which permits REIT or REMIC status under the IRC. The PSA enables the servicer to do what they do. And it is my educated opinion that non-inclusion of the note into the trust would void all provisions of that trust, including the PSA. No right to put force-placed insurance on a property, no foreclosure rights (as the ABCDE assignments would be void), no right of the servicer to pay(or require) property tax, no rights, in fact to anything recited in the note.
    Say, you attys out there- Gregory Bryl, Jan van Eck, DCB,et al, can you weigh in on this? This could be very important.

  8. BSE

    Love when songs relate. Everyone ignored when I posted “The Bridge” way back.

    Simon l,

    FIA is only a servicer — we know about those servicers. The credit card debt receivables, just like mortgage loan receivables, are sold to the parent of the security underwriter (to which the (converted into) securities are sold). Check out the security underwriter.

    Banks knew everything about you — everything. Solicit for credit cards, then they purchased the mortgage loan. Racketeering. Of course, today, no one wants your credit.

    And, AG will settle for chunk change penalties, without investigation, and without resolution of the fraud???

  9. What they should do is see behind the smokescreen – BOA will be taken over, along with all of BlackRock, Merrill Lynch, and FIA (yes they securitized credit card accounts!), by Wells Fargo (how convenient!)

    The Bailey family (Forrest, etal) has big business in Florida (Palm Springs, to be exact), Texas, Illinois, and a few others….Delaware-governed Draper and Kramer, Inc – who is tied to the hip with Wells Fargo Bank, NA. D&K is a real estate behemoth in Chicago, developing properties and renting them out.

    ForrestBailey is President of DK, Vice President of Merrill Lynch, and a Vice President of Bank Of America. D&K is one of the founders of MERS (along with Wells Fargo). If you look very closely, one can see tha many, many Wells Fargo Advisors are or were previously employed by Merrill Lynch.

    Also, it looks very suspicious that Wells Fargo was the Trustee for most of Wachovia’s failed loans – for FOUR YEARS before Wachovia went down. If you can get the trust lists which were gotten from Wachovia by Wells Fargo, you’ll notice that almost NONE of those trusts were issued by Wachovia – but instead by every other Big Bank. Wachovia was just a patsy?

    This was all planned out very carefully – underwrite loans that will fail, and when enough of them fail, buy out the company, get all its assets but none of the liability, turn it into an LLC and when the coast is clear, give it a new dba and start all over again, using the foreclosed properties. They never intended anyone to OWN a home – the loans were designed to be refinanced over and over and over, a perpetual rental.

    Plus, Wells Fargo “owns” Chicago. Back in 2006, Chicago borrowed almost 2 billion dollars, and Wells Fargo is Trustee. Needless to say, last year Chicago could not pay the money back, and had to borrow more and extend the term.

    Wanna bet that Draper&Kramer and Merrill are behind all this? Lets just sit back and watch – When Wells Fargo and FIA finish merging their database, the announcement might be made that “innocent” Wells Fargo will take over BOA.

    Did anyone notice, on July 21-31, 2011, many predatory mortgage lenders turned from FSB’s to LLC’s, with the OCC having regulatory power over them (ie ETRADE BANK is one).

    And did you know that PNC Bank is actually a subsidiary of FIA (BOA)? and that even after it closed its doors in 1996.

    Wells Fargo holds out to be the innocent one – but it is the mastermind.

    Research the BaileyFamily,KramerFamily,andLynchFamily.

    And check out Perce & Associates’ lawyers – some of them just “happen” to be MERS Officers for Wells Fargo, as well as chairpeople of the Illinois Mortgage Banker’s Association.

    And, MERS is publishing, on its website, opinions of Judges as case law – even before the case is decided. In Illinois, that might prejudice future similar cases, right?

    Sheshunoff AMPratt published an opinion of Judge Norgle in a case that is not over – it seems Illinois had never deccided whether or not tender was required before a borrower may rescind under TILA’s 3-year provision – the Judge opined that tender was first required. I read part of the case, and it seems that these borrowers exercised the right to rescind BEFORE default, and the servicer and lender refused to rescind, refused to credit over $70,000 of payments, refused to release lien so the borrowers could sell the lender-overappraised home; refused to take the home in lieu – and instead filed foreclosure 8 months later – causing severe financial damages which was why the borrower could not make tender 3 years after sending notice to cancel.

    Plus, these pro se Plaintiffs motioned a challenge to that opinion, which remains outstanding. In that challenge, the Plaintiffs reveal that the Judge was twisting their words (and even saying in the opinion that the Plaintiffs alleged that the Servicer was the assignee of the lender – even though the Plaintiffs had been disputing it, not alleging it). The Judge also opines that MERS is not a fraud (very convenient, no wonder MERS posted it at their website!!). And, Sheshunoff listed the opinion as a “regulatory development”, Illinois being one of the States that requires tender before someone can have a right to rescind. But, now what happens when others in IL try to rescind a predatory, damaging loan like the Plaintiffs’ in this case? Attorneys can open up the Truth in Lending Manual by Sheshunoff, and see the opinion (of a case that is not even decided yet).

    Draper&Kramer(and WELLSFARGO) had to know that any such loans could never be rescinded the day they were made. It really gets me that TILA is no remedy – its a sham – because if you rescind within 3 days, what punishment is there to the lender??? He didn’t give you a loan yet (he probably got paid for it already, though) – and if its after 3 days, and you are given a loan based on an overappraisal (say, the loan was for 300K, they appraised your house for $400K, but you try to sell a month later and find out its only worth$200K), now what? Where’s the damn remedy if the lender can damage your finances and delay for 3 years before finally stating, in YOUR lawsuit for failure to rescind, that “too bad” now you can’t make tender, so we get the house and all themoney you already paid?? TILA was written a certain way to protect the consumer, right? So, what gives this Judge (or any other Judge) the right to CHANGE the law to protect and reward the violating lender?
    These Plaintiffs raised a time-bar issue because the lender did not take action within 20 days. The Judge has not even considered the TILA claim of failure to rescind – instead says that the TILA claims are dismissed as time-barred, and that he has equitable discretion to condition release of lien to take place after tender is made, and since the Plaintiffs have no CURRENT ability to tender, the issue of whether or not the lender acted in time 3YEARS AGO is not relevent.. “EQUITABLE”. WTF???

  10. Here is another article that I have found that is interesting to be mentioned here. DOJ is pushing their jobs to Federal Reserve. This is incredible that DOJ has been ignoring the criminal investigations and passing the responsibilities to FED which is a bankers’ self-regulated gentlemen’s club like the state bar associations for lawyers.

    http://www.housingwire.com/2012/01/10/doj-feds-must-take-active-role-in-foreclosure-mediation

  11. From Bloomberg: “.JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said he would be willing to attempt a takeover of another U.S. lender even if regulators weren’t likely to approve.”

  12. Correction to my previous post: “lender owned trustees” Make that “servicer owned trustees” (debt collector free house companies).

  13. Not much being said about the “abrupt” resignation of Chief of Staff William Daley. Just thinking he was probably too close to Chase. I wonder if they are about to make Jamie Dimon (who can do no wrong) King of the “clean up” and needed someone else to hold up the banner. “From 2006 to 2009, Lew worked at banking giant Citigroup, where he headed its Alternative Investments Unit and made more than $1 million per year, plus a bonus of nearly another $1 million in 2009. In 2008 and 2009, Lew’s subdivisions made tens of millions of dollars in profits by investing in a fund that correctly bet real-estate prices would collapse” Maybe there is a way to re-securitize everything and someone has to do it – why not Chase? JD is the darling of Wallstreet. Did you know BofA makes money on the unemployment insurance program for CA and Chase makes money on food stamps in CA?

    I voted for Obama. Now I think he should be impeached. Now that a few AG’s are suing MERS, LPS and Fannie-Freddie – when are they going to sue lender owned trustees like Chase/California Reconveyance Company and other relationships like that? They carry on business as usual in non- judicial states. I wish there was an American Home party that puts the interest of homeowners and renters (which the 99% is destined to be) front and center. Easy victory for someone. Count how many own and rent.

  14. without a home – After they took everything they could steal
    , Just like a Rolling Stone – without a home. and now like a complete unknown.

  15. Criminals run amuck. With the aid of the regulators.

    And their enablers’ candidates are winning primaries!

    Yay! USA USA USA!!!!

  16. Robo-signing is a symptom of the fraud — not the fraud itself.

    Problem here is that DOJs are immune from action for liability, and failure to investigate.

    But, as long the DOJs limit to Robo-signing., they limit the settlement. First, how will the robo-signing be corrected — beyond penalties? Second, how will mortgage fraud and foreclosure fraud be corrected beyond robo-signing?

    What kind of incompetent people do we, as taxpayers, pay to stand up for our rights?

    Robo-signing a symptom — not the fraud itself. No way to fix the fraud — not even by penalties.

    Servicing and foreclosure fraud way beyond robo-signing. Consultants not qualified to determine that fraud. Settlement will have to be extremely narrow as to liability. No other way.

    Political in nature. – a front. We have no viable candidates for Office. DOJs — bought. SEC needs to come to task. SEC is not immune. Neither is the OCC, the FDIC, the FTC, Consumer Protection Agency, Federal Reserve, Treasury Department, Freddie and Fannie, FHA, FHFA, HUD, and state Banking Commissions. And, not the consultants the servicers hired.

    Hmmm — the consultants the servicers hired. Sounds to me outside the authority of the DOJ.

  17. BOMBSHELL- Your Honor, We Don’t Represent The Plaintiff….EXACTLY!
    January 10th, 2012 | Author: Matthew D. Weidner, Esq.

    http://mattweidnerlaw.com/blog/2012/01/bombshell-your-honor-we-dont-represent-the-plaintiff-exactly/

    The following is a transcript from a hearing when I was sitting in a courtroom where a most extraordinary exchange occurred.

    The Plaintiff in the case is, “US Bank”. “US Bank” is suing a homeowner, trying to throw them into the street. There is an attorney standing in the courtroom arguing on behalf of “US BANK”….the judge is upset because she’s been trying to figure out who to hold responsible when the Plaintiffs who are foreclosing are ignoring rules of the Florida Supreme Court, abusing homeowners and just generally making a real mess of things and the responses out of the Plaintiff sound like an Abbott and Costello Routine called, “Who’s On First”….

    Who owns the note? We don’t own the note, “they” own the note. Who’s “they”? “They” who? The who that owns the note.

    And then that’s when this exchange occurs:

    “U.S. Bank is not our client. We have no communication with them on this loan.”

    Whoa, say what?

    “U.S. Bank is not our client. We have no communication with them on this loan.”

    WHICH IS PRECISELY WHAT IS WRONG WITH THIS ENTIRE STINKING SYSTEM CALLED THE AMERICAN LEGAL, FINANCIAL AND FORECLOSURE MESS.

    A bank, US BANK, is foreclosing, but they are not represented by an attorney. US Bank is the Wizard Behind The Curtain, somewhere there’s someone else calling the shots. Someone else deciding not to accept a modification. Someone else not accepting a short sale. Someone else pulling the strings. To which my friend Rand, quite correctly responds:

    MR. PEACOCK: Your Honor, I’m a little bit
    troubled because plaintiff’s counsel just said
    that the plaintiff — she is not their client or
    vice versa. That makes a real representation
    issue. If they are not represented by her firm,
    she cannot advocate on their behalf, and they
    can’t continue this lawsuit.

    This is precisely what is wrong with this country. Exactly what what is wrong with what is choking our court system. Exactly why our court system has such problems with what is happening.

    Full transcript below:

    March 11 CL
    http://mattweidnerlaw.com/blog/wp-content/uploads/2012/01/March-11-CL.pdf

  18. Yup, they will. I am questioning daily why we have any of these agencies. They do nothing. Having been through SEC filings, Bk paperwork and deed assignments, which in my case is a maze of assignment after assignment, where people in the attorneys office have assigned themselves as trustees and all the players work for the attorney and the servicer with 2 hats, is mind boggling.

    It’s frightening what the banking system, if that’s what you want to call it has become. One thing, I have noticed none of what is on this blog is in the mainstream media!

  19. LOL after the penalties they will give them another Trillion bucks LOL

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