Deutsch Bank Inquiry Reveals Insider Influence by Paulson


COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary CLICK HERE TO GET COMBO TITLE AND SECURITIZATION REPORT

Editor’s Comment: At the end of the day, everyone knows everything. The billions that Paulson made are directly attributable to his ability to instruct Deutsch and others as to what should be put into the Credit Default Swaps and other hedge products that comprised his portfolio. He did this because they let him — and then he traded on what he not only knew, he was trading on what he had done — all to the detriment of the investors who had purchased mortgage bonds and other exotic instruments.
The singular question that comes out of all this is what happened to the money? Judges are fond of saying that there was a loan, it wasn’t paid and the borrower is the one who didn’t pay it. Everything else is just window dressing that can be addressed through lawsuits amongst the securitization participants so why should a lowly Judge sitting in on a foreclosure case mess with any of that?
The reason is that the debt, contrary to the Judges assumption (with considerable encouragement from the banks and servicers) was never owed to the originator or the intermediaries who were conduits in the funding of the loan. The debt was owed to the investor-lender. And those who are attempting to foreclose are illegally inserting themselves into mortgage documentation in which they have no interest directly or indirectly.
If they are owed money, which many of them are not because they waived the right of recovery from the homeowner, it is through an action for restitution or unjust enrichment, not mortgage foreclosure. Banks and servicers are intentionally blurring the distinction between the actual creditor-lender and those other parties who were co-obligees on the mortgage bond in order to get the benefit of of foreclosure on a loan they did not fund or purchase.
So how does that figure in to what happened here. Paulson an outside to the transaction with investors and an outside to the investors in the bogus loan products sold to homeowners, arranges a bet that the mortgages were fail. He is essentially selling the loans short with delivery later after they fail and are worth pennies. But the Swap doesn’t require delivery, so he just gets the money. The fees he paid for the SWAP are buried into the income statement of Deutsch in this case. So it looks like a transaction like a horse-race where you place a bet — win or lose you don’t get the horse and you don’t have to feed him either.
But in order for this transaction to occur, the money received by Deutsch and the money paid to Paulson must be the subject of a detailed accounting. Without a COMBO Title and Securitization search and Loan Level Accounting, you won’t see the whole picture — you only see the picture that the servicer presents in foreclosure which is snapshot of only the borrower payments, not the payments and receipts relating to the mortgage loan, which as we all know were never owned by Deutsch or anyone else because the transfer papers were never executed, delivered or recorded without fabrication and forgery.
Paulson is an extreme case where claw-back of that money will be fought tooth and nail. But that money was ill-gotten gains arranged by Paulson based upon insider information, that directly injured the investor-lenders who were still buying this stuff and directly injured the borrowers who were never credited with the money that either was received by the investor creditors, or should have been received or credited tot hem because the money was received on their behalf.
Once you factor in the third party obligee payments as set forth in the PSA and Prospectus, you will find that we have a choice: either the banks get to keep the money they stole from investors and borrowers, or the money must be returned. If it must be returned, then a portion of that should go to reducing the debt, as per the requirements of the note, for payment received by the creditor, whether or not it was paid by the borrower.
BOTTOM LINE: Securitization never happened. And the money that was passed around like a whiskey bottle (see Mike Stuckey’s article in 2009) has never been subject to an accounting. Your job, counselor, is not to prove that all this true, but to prove that you have a reasonable belief that the debt has been paid in whole or in part to the creditor and that the default doesn’t exist. This creates the issue of fact that allows you to proceed the next stage of litigation, including discovery where most of these cases settle. They settle because the intermediaries who are bringing these actions are doing so without authority or even interest from the investor-creditors.
What is needed, is a direct path between investor creditors and homeowners debtors to settle up and compare notes. This is what the banks and servicers are terrified about. When the books are compared, everyone will know how much is missing, that the investors should be paid in full and that the therefore  the debt does not exist as set forth in the closing papers with the borrower. Watch this Blog for an announcement for a program that provides just such a path — where investors and borrowers can get together, compare notes, settle up, modify or mediate their claims, leaving the investors in MUCH better position and a content homeowner who no longer needs to fear that his world, already turned upside down, will get worse.
It may still be that the homeowner borrower has on obligation, but it isn’t to the creditor that loaned the money that funded the mortgage loan. Any such debt is with a third party obligee whose cause of action has been intentionally blurred so that the pretenders can pretend that they have rights under a mortgage or deed of trust in which they have no interest on a deal where they was no transfer or sale.

SEC looks into Deutsche Bank CDO shorted by Paulson

Tuesday, January 31, 2012
Deutsche Bank is facing an SEC investigation for its role in structuring a synthetic CDO, according to a report by Der Spiegel. The German publication states that the bank’s actions in raising a CDO under its Start programme will come under question after it allegedly allowed hedge fund Paulson to select assets to go into the fund. The bank is then said to have neglected to have told investors about Paulson’s role in the transaction as well as concealing the fact that the hedge fund had taken a short position on the assets, allowing it to profit as the deal collapsed.
According to the article, Goldman Sachs settled a similar case with the SEC for $500 million regarding Goldman’s role in arranging an Abacus CDO.


64 Responses

  1. sorry i was sloppy

    let me try again,

    Bonds are secured by the issuer’s IOU plus recourse against a hard asset. Debentures are straight IOUs. if you issue a lot of these they are defined as “securities”. The debentures’ Indenture was SUPPORTED by restrictions on other debt. debt/equity ratio caps etc

    Oil prices dropped–putting pressure on the debt ratios–oilcos could not borrow to develop fields in nort sea

    In the mid-80s oilcos created the 1st project financings that were used to develop north sea field platforms mostly. These were a new concept that we worked out whereby the debtor oilco had no personal liability–the project cash flows exclusively paid the payments.

    The reason for this was to get off balance sheet financing that would not affect the debt equity ratios in the indenture covenants. the non-recourse financing was a footnote. There were ways around that too–using partnerships to avoid consolidation of non-recourse debt even into the footnote–so one could do an off balance sheet total free-floating debt secured only by cash flows from a facility owned by a 50/50 unconsolidated partnership.

    This 1st free floating debt concept was pioneered at BY USSTEEL and syndicated by JP MORGAN in 1984. The loan was syndicated but was private–among banks.

    Then the investment bankers decided this was one great idea–and set up these trusts–inlieu of the USS partnership—-and “monetized” assets by placing them in trusts, selling debt to banks and using the $$$ to pay for the assets. The cash flows from the assets pay the debts. 1st receivables were so monetized.

    Along the way pipelines were monetized by placing them into passthru vehicles and the debt sold to public as real registered secuities. The tariff income was used to pay the public security holders.

    This was another footnote for the tariff payer who agreed to take or pay the services. .

    The two ideas merged then by 1990. The idea of a pass through vehicle that was stuffed with assets and the income of which was distributed to public registered securities holders.

    Then the banks decided to use the device to stuff trusts with homeowner promissory notes and sell the cash flow streams to public securities holders. They had optimized the process–they no longer dealt with bigco sponsors who operated the assets–be they receivables or pipelines or oilfields or power plants.

    The banks were FREE—-to do their own thing–so they invented servicers to stand in as the operators of the sham trusts. In fact the trusts were simply off balance sheet appendages of big banks with servicers doing the dirty work–collection. The reason was to reduce the bank shareholders and creditors [both publc] perceived leverage—off balance sheet concealment. The securities were issued by the banks through the sham trusts–and were non-recourse to the banks.

    Recourse back to the originator only if the loans soured under reps and warrantees errors and omissions.

    The investment banks saw the potential and got in on the act. The investment banks bear sterns–lehman etc—people bigcos rarely would touch with a ten foot pole–recruited small players to originate private label loans—-predatory—–then the investment bankers stamped out carbon copy securitizations and cash flow models.

    these small players are “socalled burn companies–usually have a life of 3-5 years–need to cut and run about when the IRS audit starts

    The investment bankers stuffed the loans into the private label trusts–then devised complex internal trust structures to shift future cash flows around in a way only they could anticipate. They could anticipate the cash flows in two iportant ways: by controlling the points where the cliffs would be hit and the loan/or siezure would be certain to occur PLUS trapping borrowers with illussory teaser rates and negative amortization 4 option ARMs–the borrowers could not prepay either–so thats always good if you have usurious interest rates built in—the investors like that feature–guaranteed ROR–

    But the investment bankers added hybridized capital structure concepts to the trusts. This deviated from older models where tranches were based soley on maturities of debt payments–short-term, medium term and long term. even more complex than the zero coupon interest rate strips of the 80s

    the new tranches gave priority to some investors over others within the securities’ tranches. The investment bankers knew how the trusts were tilted–which tranches were going to benefit from priority and which were to be losers. the lower priority tranch buyers did not think to look at the quality of the loans that initially paid the senior tranches–as the predatory loans failed in the senior parts of the pool–the waterfall effect caused the cash to flow down to the seniors and away from junoirs that initially were paid by conventional fixed loans with fixed rates–seemingly safe.

    the securities were publicly issued by phantom burn companies as non-recourse debt payable out of cash flows from the homeowner promissory notes. These MBS were not derivatives of securities–that came later as the securities themselves were repackaged and new 2nd tier securities issued.

    at any rate there are a few residual effects today–one is that the burn cos and the investment bankers did nt always file loan schedules as required to create a trust–and as represented and required by SEC and REMIC rules. Therefore the so called trusts were really pooled assets in a joint venture classified as a tax partnership. No trust–no trustee–maybe invalid PSA??? Certainly have to recharacterize the failed trusts as something–some business association of passive investors who collectively own a pool of homeowner promissory notes. By default under state law its a poolled jt venture–no other option—question is whether there is an operator? The operator is suposedly a fiduciary to the pool owners in oil law–or other JVs—-closest is the nominal trustee–the servicer cant be the operator because it has no fiduciary role –to the investors–it is actually in conflict with them.

    So there is a breakdown due to this simple aspect–it is much esier to understand where the BK court has erased all fduties of the servicer and converted him into a pure debt collector with exclusive collection rights–and no responsibility to trustee or to investors for the acctg for proceeds of default–as appears to be the case. The trustees have no review of the servicers and act as if they could forget te whole thing. This is the travesty–the private label debt collectors acctg to nobody exceot offshore hedge funds .

    And that is by design—from the beginning–and the last piece of the design after the debt collector grabs the FHA and FDIC insurance $$ is the firesale of cherry-picked housing to offshore affiliates. Then the affiliates flop it to new buyers –in Florida Canadians etc—for a huge profit–leaving a big hole for FHA and other insurances to fill–plus some opportunity to chase deficiencies

    Maybe young Mssrs Schneiderman and Biden can sort all this out in between speaches during the 2-3 years left in their offices, Im slow –it took me 3 yrs on top of 30 in finance.

    Later people of every stripe started to

  2. @dcb – I got about 1/3 down with no problem and the last para seems clear enough. I’ll try again tomorrow – it’s a whole lot to absorb, and thanks.

  3. Jeff, I hope I didn’t cause you to think I thought I might know, because I don’t. Maybe guess. The original endorsement is probably legit, because your broker probably sold the loan to U.S. BanK (and U.S. Bank likely underwrote and table-funded it). Then one of a couple things might have happened: U.S.Bank sold the note or intended to. Or the blank endorsement was added, and who can know when, to make anyone in possession be able to claim enforcement right under bearer note provisions with the blank endorsement (which is why most of them are bearer notes imo). Now why would they erase an endorsement? That’s the mystery, right? I can only guess it’s so that U.S. Bank can enforce it without explaining the blank endorsement, which is suggestive of alienation by U.S. Bank. Makes me think it was committed elsewhere but not delivered. It is possible to 86 an endorsement on a note, but erasure is not the proper manner to do it, as I recall. I believe it’s more like an X is to be drawn thru the “withdrawn” endorsement. You can look that up online, fwiw.
    The manner in which the docs got filed with the court – after a complaint was filed alleging a lost note and then the case was dismissed (i get this right?) makes me think the attorney who did it had a grudge, as if to say to Stern, “take these apples regarding your lost note bull”, but it’s pretty ballsy (I no other way I know to say) to do so. No one on the receiving end of ex parte matters likes them, but if the docs were submitted at a time when no case existed (dismissed), the court may have had no choice but to give them back.

  4. @JG
    My experience in finance was not inclusive of these syndications as was MYNPV—

    Basically as per the finance law pre-BUSH, was that a corporation issured debentures as unsecured IOUs–these were securities often enough. The general credit of the issuer was all that supported te repayment of debentures. There were various conditions in the Indenture that governed the issuer-debenture holder relationship. Eg Isuuer cant borrow more than X. Certain ratios must be maintained–no material distributions of assets–[ie no equity stripping]

    “The issuer could get a better rate by making the Indenture include recourse against certain assets of the issuer—eg a steel mill or an oil field———-or a pipeline throughput and deficiency agreement–anything of value. That morphed into bonds backed by intangibles rather than the hard assets older issues used. accounts receivable–then NOTES receivable eg homeowner promissory notes. Thus evolved mortgage backed securities.

    The recourse is typically against cash flows–ie if the issuer misses an installment the Indenture trustee grabs a percentage of the receipts of your oilfield–you still operate the field and retain opex –but the profit margin is skinned off before you can divert it to exploration–nobody ever thought about diversion to management –because that is a flat out fraudulent conveyance—but the law of fraudulent conveyances does not seem to apply to financial entities–the list of exceptions grows daily

    Then the financial guys went further–they set up off balance sheet sham operations that mimicked oilfield and utility plant “project financing” –in those instances–the bonds or private creditor was payable only out of cash flow from the named facility—this is called non-recourse debt–the old FAS allowed us to net the asset and debt as off balance sheet items–net generally to near zero—-

    there were footnotes though so you could reconstruct the true balance sheet which of course you had to do if you were evaluated a b/s for an M&A deal—-

    but the finance guys took the stuff completely off sheet–as if the trusts were floating freely out there with no parentage–then is when the fun started–nobody looking –nobody counting

    it is possible that there were securities standing as SECURITY for new securities——-before–but it was an invention of finance guys rolled out since late 1990s as far as I know–Iwantmynpv would be a better historical reference there

    this last is a true securities derivative–an MBS is a security secured by a non-security–an actual promissory note of an individual –its a short hop to a debenture issued by a corp standing as security for a new security carving up the old one in tranches of maturity which is how it started as i recall

    thus say i issued a bunch of 20 year quarterly pmt debentures or bonds secured in property——a stream of pmts made ratably over 20 yrs—so the MBA thinks Iv got buyers that want a stream for 5 yrs–another group that wants the 15 yr tail–such as insurers-so the MBA creates a derivative and sells it —-

    or i issued a debenture with interest pmts only for 20 years then a ballon pmt at the end–that started zero-coupons strips–that happened by mid 80s-had to do with appetite for matching maturities of assets and liabilities

    say an insurance company has to pay a thousand persons each $1 million in 20 yrs by looking at actuarial tables–the insurance co c does not want to get pmts along the way that it must reinvest to build the payoff–it just wants to buy that future lumpsum for a heavily discounted amount today–match funding

  5. Hi John,

    Thanks for the response. Ok here is the full story along with a description of exactly how it appears on the face of the allonge.

    1st, the note itself has all kinds of room for several endorsements, In my opinion the allonge was initially created by the Stern Law Group, (Foreclosure Mill). BUT NEVER SUBMITTED WITH THE ORIGINAL COMPLAINT.

    The original case was dismissed for lack of prosecution. 3 months after the case was dismissed, an ex attorney for the now defunct Stern Law Group, filed with the court what they purported to be Exhibits filed with the original case. How she ended up with the allonge I don’t have any idea. However, included with the so called allonge, was what appears to be the original blue ink signed Promissory Note and Mortgage.

    The new attorney taking over for Stern filed an Ex-Parte Motion for the return of the documents contained in the court file. They never had them in the first place. NOR WAS THE ALLONGE OR THE PROMISSORY NOTE FILED AS EXHIBITS IN THE ORIGINAL COMPLAINT EITHER. Only a fraudulent document that they represented to be representitive of the original promissory note were filed, which no where near resembled the original note. An obvious fraud. Plus, in the original complaint they filed an affidavit stating that the original note and mortgage were lost.

    Back to the allonge, the first time I ever saw the allonge was shortly after the ex Stern Attorney filed them with the clerk. The Judge granted their ex-parte motion and released the documents to the new attorney. My motion in Limine to block the documents return was denied.

    Before they were sent to the new attorney, I had certified copies made. On the certified copy of the allonge in particular, were two signatures,


    Date of Note: December 07, 2004. (This date was the actual origination date of our loan). It was not filed, notarized or dated showing when the allonge was actually prepared and signed.

    The first endorsement said….

    Pay to the order of

    U.S.Bank N.A.

    without recourse.

    Signed by Kevin Rudeen

    Assistant Secretary
    Westfield Home Mortgage. (Westfield was our original lender).

    The second stamp said…

    Pay to the order of

    ___________________ (Blank line.)

    without recourse. it was
    signed by Theresa Bulver (her signature).

    Vice President

    U.S. Bank.

    It is the second stamp that has been physically removed. It was removed after I received the certified copies from the court. THEY FILED THE ALTERED COPY WITH THE NEW FORECLOSURE COMPLAINT.

    Thanks for your interest, I really need some input as to why they would feel the need to erase the second endorsement. what possible benefit could it be to them? I could be wrong, but personally, I think the whole allonge is a total bogus document.

  6. @dcb – you said (and yesterday, being a bad hair day, found me after a cursory glance of your comment feeling just too dumb to deal with it, which is how I often feel trying to unravel or put reason to this mbs business:

    the promissory notes were pooled purportedly in a trust for tax and acctg purposes and people purchased proportional intersts in the pooled revenue streams

    jg: hold the presses! “people purchased …revenue streams”, read
    revenue streams generated by assets in the trust. What you did not say and what I get is that people did not purchase the asset.

    that flowed from the promissory notes—these were called “mortgage backed securities”

    jg: so I’m thinking so what if they were called mbs’s? The value of the collateral is of no real value to one who does not purchase the note it secures. It’s nice to know as an investor that the reason a person might make the payment on the note is to keep his home, so there is motivation and therefore reason I might actually get me some payment stream. But so far, I see the investors not purchasing the notes themselves. “MBS” appears to be a nice moniker or what not, but the name, “mbs”, appears to have its real value as a sales tool of fractional interests in payment streams more than in literal interpretation / application. And is that how these are differentiated from other securities? Somewhere down the line is a collateral instrument on folks’ most prized possession (generally)?
    Have there been other instances of something-specifically-backed
    securities historically? I followed the oil deal best I could and think I got it generally, but it is as you said different.

    –a type of bond which is a secured note–

    jg: you don’t mean that literally? Or do you? Doesn’t the bond (and as used here by you, isn’t this synonymous with derivitative or no? security?) merely evidence an investor’s participation in whatever prorata share(s) he has purchased of the payment stream generated by the assets in the trust?

    And as fascinating as my beliefs may be to me, so what? WHO owns the assets in the trust? No one because the depositor or whomever, got me, traded the notes for the derivatives (he would sell at a profit)?
    And Lord knows who might have stopped him from selling more shares in the income stream than the assets would support, even in those bloody tranches, which it might be more appropriate to call blooody trenches. Now there’s a swell thought. I think no one is the answer.
    Depositor puts notes in, takes out certificates. Sells certificates. ????
    (which certificate I take as either the derivatives or the thing which gives him the right to sell the thing now called derivatives, an interest in payment stream, oh, I mean mbs’s.

  7. @jeff – say it again , only this time in the order it appears the endorsements were made please. can’t tell for sure.

  8. @chris – that’s very interesting. What did you allege in your breach of contract suit?

  9. @jg,

    That’s exactly why I was so tickled pink when my state decided that “MERS not being the payee on the note, it can neither sell it nor otherwise assign or transfer it”. (Huntington National Bank v. Brown)

    That takes care of all those notes showing the payee being anyone BUT Mers, but subsequently sold/assigned/transfered to anyone else by some “Mers VP” under cover of some known foreclosure mill out of Iowa, FL or CA.

    Couple that with the lack of recordation and banks here are having it tougher and tougher. Serves them well!!!

  10. well, here’s one:
    “Nevada also recognizes the unilateral mistake found in the Restatement (second) of Contracts which allows for rescission when a mistake…at time of contract was made as to an assumption… which …has a material affect on the agreed exchange of performances that is adverse to him (who made the mistake) …and (b) the other party had reason to know of the mistake or his fault caused the mistake. Home Savers., v United Sec Co., 103 nev 357, 358-359, quoting Restatement (Second) of Contracts, Section 153 (1981)”
    Had to type that sucker because no one will tell me how the heck to
    cut and paste from a pdf doc! I tried some freebie online, not freebie and didn’t work, anyway.

    This is a quote from a case and for some dumb reason I only kept part of it, so don’t know case name or #.

    Okay, so to get any mileage out of this (which obviously in my opinion is warranted), first of all, have to identify the unilateral mistake. Then, and note its says the other party “had reason to know”, which is a distinction from actually knew, must show that party 1) “had reason to know” -OR- 2) his fault caused the mistake.
    Then, not done yet, have to show that this was adverse to us.

    The note says right there, yep, that it might be sold or transferred or whatever. Okay. However, what it doesn’t say and what we’re not told to our detriment is that it may end up somewhere where we can never find it, can never know to whom (if anyone) we actually
    owe any money. And most detrimentally, we can never know if either our payment or foreclosure actually retires the note. When the identity of a note owner is purposefully withheld (and we may need to demonstrate that it is) we can never know if other factors, such as third party payments on the note (including guarantees whether short or long term) change the amt we owe or if warranted scrutiny of something like securitization might find factually that one party owns the note with another having the right to our payments. It’s more complicated, but even if a holder (v. owner) may enforce a note, there is no guarantee the payment made or foreclosure proceeds is to the right party, that the right party will receive the benefit, leaving us in the wind to the claim of the party who actually owned the note. Our recourse (must sue) against payment to the wrong party is not something which we should be burdened with and it isn’t reasonable to believe that we would have entered into an agreement had we known of these issues. I’m just throwing out stuff, but attorneys really need to give this some thought, imo.
    Now throw in the MERS racket with no recordation of (and apparently also no execution of) assignments of the collateral instrument. One used to be able to rely on public record. Obviously, not anymore.
    Can there be any doubt this was a scheme to hide the identity of the note owner?(not good enough tho – still must demonstrate detriment) If the truth is that one party actually owns the note and another has the right to payment, is it enforceable by anyone? If not, is that what’s being hidden? We talk about the unity of the note and dot, but what about the “unity” of the note itself? There were other reasons those notes were endorsed in blank (so any yahoo could claim x,y,z and isn’t that detrimental, also?), but this one shouts for attention to me, given that NONE were actually endorsed to the trust and neither were the dots assigned. Sloppy,
    unethical, whatnot work -or- a trick because even if done, (and that would be still be blank endorsement and some even tried that baloney blank dot endorsement) because the trust was not meant
    to actually own anything. The blank endorsements provided for in the psa (did, right?) may have only been meant to dead-end those docs at the trust to supposedly preclude assignment elsewhere.
    Were those docs just evidence of the assets, which assets, producing the payment stream? Got me, but I do wonder.
    Is an (alleged transfer) to a trust a true sale of the note and its collateral instrument? Or not? In a dot, one of the two forms of title is transferred (which is why the statute of frauds is implicated, and long and short, I believe that’s why the legislation crafted the dot to effect that transfer of title – so that the statute of frauds WOULD be implicated because we were now to be dealing with NON-judicial foreclosure, and I hasten to add notes aren’t recorded and are not regulated by the statute of frauds). If a true sale, is the sec’n trust akin to the dot trust in that the ‘title’ is held in trust and the trustee is empowered to act on default? If so, where is the trustee’s authority to act to be found? Psa? It must be somewhere in the first place and of course in order for him to grant poa or agency to someone else IF that is not prohibitted for some reason I don’t know. I don’t believe it is to be found. Those trustees were insulated pretty much, which is crap. It may be that the psa authorizes servicers to do something (but here we go with almost unavoidable circular argument – is the loan in the trust or not? If not – not servicer) If so, why do they want to hide the psa? Too big an attachment to an action? What? Why? What is there they don’t want known? The cut off date? What else?

    Just some more thoughts, tho I digress. The unilateral mistake
    doctrine may hold some real relief if brainiacs will put their minds to it.

  11. @JG I would think that the presence or lack thereof on the loan schedule–if filed–would be best evidence of whether the loan was included and the trustee and servicer to have standing——it is after all thru the PSA and indenture that they obtain rights —especially if they ignore the UCC and state recordation statutes in deference to the natl filing

    and secondly–if the servicer says”you must default in order to modify” the servicer brings into question the terms of the PSA–as a matter affecting his credibility–my best shot from the hip here

  12. @jg,

    Looking into it as we speak. The thing is: so many things were completely wrong at every level and yet, there may not be any breach of actual law involved. That’s what is so frustrating.

    Same for attorneys going to work for the defense side and moving on to the offense side and vice-versa. Wrong, wrong, wrong. Actionable? Probably not. Immoral and unethical? You bet. What I believe will eventually happen is that people will refuse to do business with any corporation if they can avoid it and will, instead, return to community-based businesses where they can call them on any perceived or proven breach of ethics.

    That’s why it is so crucial that people stop paying anything to banks and close their accounts. If we want to see some order restored, we need to bring everything back to a human, controllable scale. My take on it.

  13. @enraged – it is wrong for a loan originator not to disclose that
    it is also the title insurer. I think it would be under RESPA that that disclosure had to have been made. It is wrong, as I said, but how wrong, I don’t know. Wrong enough to cause them problems? It may also impact your a.p.r. ( tila) because certain charges on your settlement statement impact that a.p.r. and title insurance isn’t generally one of them as I recall. But it might affect the a.p.r. if
    the broker is getting the money.

  14. What is it one is alleging when being then told one has no standing regarding a psa? That the loan couldn’t be in a trust because its alleged assignment missed the cut off date? Is that it? I’m asking so I can think about it, fwiw. All dots require any actors compliance with all state and federal laws and that may be an avenue. If so, then non-compliance with state or fed law might be the argument, so then you have to find the violation. Remembering I’m no sec’n authority by far, the fact that the psa says there is a cutoff date itself is not the ticket because that by itself is just a contractual breach which wouldn’t go to the borrower. I think. So I would think one would need to keep at it until you find what, if any, state or fed law is violated by what you’re trying to say has something to do with you. “Nexus” – gotta have it and it might be found in the violation of state or fed law.

  15. Here here Niel:

    I agree whole heartedly but the courts in CA are not playing. We filed BK7 thus tendering the unsecured debt but no dice says the judge.

    We have one last shot in state court after trying to stop the writ of possesion.

  16. @chris,

    Going back to the broker is the first and (maybe) most important step, imo: that’s how I found out that the broker (lender or whatever you want to call it) is also… the title insurer. The guy covered all his bases. And, even though it may not be illegal (as Obama would say), it reeks so much of lack of ethics that, somehow, it has to be actionable. The thing is: I still don’t know how and on what grounds. But… I have that nagging feeling that it has to be brought out in the open. And it will be.

    It may not change anything for my own case but, if anything, it may very well incite lawmakers to pass much more stringent regulations than ever existed…

    We’re all entitled to dreaming…

  17. ANONYMOUS- it would be good to differentiate between Hank Paulson, former Treasury chief before Geithner, and formerly of Goldman, as opposed to John Paulson, of Paulson & co., who made 5billion shorting MBS, as per Deutschebank story yesterday. We have 2 Paulsons, and can get confusing to readers who are not aware of this. Otherwise, keep posting the subprime ‘refinance’ fraud with as much info as possible. Or repost your older posts with new info. Thanks!

  18. @ All

    I have had several mortgages and they have all been suspect. I am no attorney, but I can say this: If you go back to the broker/originator you will find the dots to connect. Everything is suspect. The trustees, the assignments, the pooling and trusts, etc…nothing matches and as I said I have had loans with Countrywide, BOA, New Century, Saxon, BB&T….the list is long and every document I have checked is in question, going back to 2002.

    Like the rest of you, I am trying to unravel this maze and there are layers of covering up in the paperwork, it is intentional. From my end it appears no monies have ever been transferred. As for the homeowner having no interest in the deed and note. I, as a laymen do not see that. Everything I read and cross-reference says; “a homeowner is a party of interest”. The mortgage is a contract and is not subject to a false assignment.They are the folks who are not a party of interest, even if they have signatures from someone who says they are. This comment is from an attorney: in a court of law, they need to prove it! The courts are lying too. Many of the judges need to recuse themselves, if not, we need to get them off our case, they are NOT unbiased and not following the rule of law!

    My $.02

  19. JG

    I have wondered a similar thing. The PSA states it is governed by NY Law. NY law seems to be more “homeowner friendly” than where I’m at.
    The thing is I’ve seen judges dismiss the PSA stating you are not a party to the contract. The note however you are a party too.

    I’m trying to prove I am a party to the PSA. My exact loan #, zip code, and loan amount is in there. It has my originators loan # as well as my original servicer. I was approved for 3 loans all put in the same trust and my #’s match all 3 times so I don’t think they could say it was a coincedence.

    I’m in the process of writing the NY AG making him aware of the situation. I’m not sure if it will do anything. If anyone knows if the note is goverrned by NY UCC and what it would mean Please share.

  20. Is there a conflict here? To my knowledge, a promissory note is regulated by the UCC in the state where it’s executed and that’s why the location is always at the top of the form. It’s pretty clear I’m a dummy about sec’n, but is there a time when because of securitization, it would be necessary to follow NY’s UCC, which might in fact stand in conflict with that where it was executed thing? If so, what might this mean?

  21. BTW, DB had a horrible earning tonight. 76 percent profit failed at the fourth quarter… They blame it on European Debts but who knows.

  22. Shorting the position without holding the underlying positions… And they know what it is in that since you are the creator of the CDO…. I believe it is an insurance fraud in bad faith.

  23. @dcb – now that’s interesting as heck. I’m reading that fha case you linked. It says any servicer of an FHA loan must be an FHA approved mortgagee – hate that word – it’s from the 50’s and is used in common parlance to mean something it doesn’t anymore. I’d bet a bunch of these entities claiming to be the servicer, particularly where there is suspicion the loan has been written off and turned over for collection (which dynamic still escapes me – collecting on a written-off debt) are NOT fha approved mortgagees. So what? Well, prob not going to get them nailed for that, buuuuut this might in fact be a signal that a loan has in fact been written off (if it were an FHA loan). I would think the info – whether or not so and so is in fact an fha approved ‘mortgagee’ is online somewhere. By the way, someone said here that fnma insures mortgages, and maybe I got the intent wrong, but fnma doesn’t – it buys them. The way it used to work is that someone funds the loan at closing and then the loan is sold to fnma (after being underwritten pursuant to fnma guidelines, whatever those turned into). They may have been aggregated first. Don’t know.
    And you know, to service for fnma/fhlmc, must be fnma/fhlmc servicers, also, and this all requires certain things, including a specified net worth. So who purports to service a f or f loan may be a clue, also, as to whether or not your loan has been written off. If your loan were in f or f’s loan limits at the time it was made and was not sub-prime, it probably headed there. I don’t think they took less than
    “alt-a” loans, but not sure.

  24. Composition of Mortgage Investigation Task Force?
    Anyone with government experience should immediately wonder several things, most obviously, three things:
    1. Where are the individuals to come from with sufficient expertise to be useful in the short-term?
    2. What will the project budget be—and who will pay for it?
    3. How long will it take to negotiate the Memorandum of Understanding (MOU)?
    A failure in any of these regards will doom the performance and/ or timeliness of task force. Some suggest approaching this undertaking as if it were a “Manhattan Project.” To do so would require a military-approach—the thought is the anti-thesis to a squad of government attorneys and forensic accountants.
    In witness, today’s WSJ also announced that hundreds of attorneys and forensic accountants in the MF Global investigation had more or less reached the point of declaring that $1.2 billion from withdrawn from customers’ accounts had “vaporized” the week before the entity filed bankruptcy. That the organization operated by former Goldman-Sachs CEO—Governor and US Senator Manhattan-like if the numbers are true—just lost $1.2 billion to foreign destinations. The current assignment will be more difficult, but there is a better knowledge base.
    On January 30, 2012, it was reported that US AG Holder had assigned 10 FBI agents and 30 “other” attorneys and investigators from unnamed other “branches of the federal government”.
    Mr. Holder represents the Administrative Branch technically speaking. If the quote is accurate the investigation could include Congressional investigators.
    • Executive Office for United States Attorneys
    • Federal Bureau of Investigation
    • Financial Crimes Enforcement Network
    • Internal Revenue Service – Criminal Investigation
    • Consumer Financial Protection Bureau
    • Federal Housing Finance Agency’s Office of Inspector General
    • United States Department of Housing and Urban Development
    • United States Department of Housing and Urban Developments Office of Inspector General”]

    The foregoing “Holder Group” would thus require significant policy-making acumen and responsibility. Curiously, the Treasury Dept. funds monitoring division is not among the named players. This group has responsibility for and expertise in identification of money-laundering activities that might be less obvious to others. Possibly, the individuals are already being secunded [short-term assignment] to the legislative branch. Also conspicuously absent are the Treasury Divisions: the OCC and FDIC.
    No mailing address is announced, however, absent notice otherwise, send your comments in succinct form to the Lead:
    ALBANY, NY 12224-0341
    General Helpline: 1-800-771-7755
    TDD/TTY Toll Free Line: 1-800-788-9898

  25. Anonymous,

    Now that you mention it, my first mortgage was completely conventional (although with no money down… I used a line of credit as a down payment but the mortgage was fixed rate, no ARM, no balloon, all fair and square…). It is when I refie’d that the mess was really created. And what kills me, in retrospect, is that I ended up worse off after the refi.

    Live and learn…

  26. Paulson killed homeowners from the onset of the financial crisis. Private equity firms and banks were thrilled. According to Paulson — “you bought too much house.” YOUR FAULT YOUR FAULT — said Paulson.

    Oh yeah —most of the subprime fraud was in refinances — not new purchases. No matter to Paulson.

  27. The Paul Plan to Restore the Housing Market

    Nevada is one of the states hit hardest by the collapse of the housing bubble. Currently, 62 percent of homes in Nevada that carry a mortgage are upside down.

    The Federal Reserve’s inflationary policies, combined with the distortions in the housing market brought about by institutions like Fannie Mae and Freddie Mac, sent the wrong signal to many
    Americans regarding the wisdom of purchasing expensive homes. It is clear that four years of bailouts and continued taxpayer-funded housing programs have failed to stabilize the housing market.

    As President, Ron Paul will work to end taxpayer support for institutions like Fannie Mae and Freddie Mac and to stop all government distortion of the housing market, allowing the market to adjust and recover from the damage inflicted by the federal government.

    Congressman Paul will also work to help distressed homeowners by:

    * Extending the first-time homebuyer tax credit to help Americans use their own resources to purchase their first home.
    * Providing tax credits to those who have suffered foreclosure that would make the path to new, more affordable housing much easier.
    * Allowing individuals to make penalty-free withdrawals from their IRAs and 401(k)s to purchase a home.
    * Preserving the mortgage interest deduction for the first year of his presidency and never signing any legislation to repeal this deduction unless it is part of a broader tax reform measure of equal or greater value to America’s families.
    * Restoring the property tax deduction for those who do not itemize deductions on their tax returns.
    * Repealing capital gains on sales of private homes and commercial properties.
    * Ending all taxes on savings to allow people to save for a home and buy a new home, as well as make it easier for businesses to save to develop new commercial properties and create new jobs.
    * Allowing homeowners to take a capital loss deduction if they sell a home for less than they paid for it.

  28. RE CARRIE PROBLEM—before slander causes injury–maybe file corrective deed abandoning title –but yes its a tight spot—best to be wary –iv seen corrective deeds that undo accidental descriptions such as conveying the house next door—errors can linger for decades—-its the intentional aspect here that could get you sanctioned –pay their cleanup fees–or throw out your case if you have one–as KC said –better to pay your atty than theirs

  29. @ Carie,
    I’m not an Attorney, but it sounds to me like you have been snookered by MERS and their band of bandits INCLUDING THE NEW OWNER. Search the connection between the new owner and the other parties involved and you will be Shocked! I’m concerened about you re-titling the property back to yourselves without a court order. This could give the New Owner a cause of action against you for Slander of Title. You really need an Attorney.

  30. from a stock site–its a public spin off but somebody has a controlling interest–the CEO is a 50 yr old Indian-national it appears–off-shoring?
    supposedly an insurance-service form and multi-family tracking

    The company’s data and analytics services also include specialty finance solutions, which consist of credit solutions to mortgage and automotive lenders, as well as licensing real estate listing software systems to multiple listing services customers, and real estate brokers and agents. The company was formerly known as The First American Corporation and changed its name to CoreLogic, Inc., as a result of its financial services businesses spin-off in June 2010. CoreLogic, Inc. was incorporated in 1894 and is headquartered in Santa Ana, California.

  31. @ALL
    Depending on the loan type–it may be a fraud on FHA via excessive claim for loan insurance–or as with BankUnited an FDIC claim. Maybe not on this banker–but possibly in other instances –SEE Amercian Home Mortgage Servicing V HUD–

    This only describes the FHA mortgage insurance claim–it does NOT address resale schemes.

  32. @chris
    my email: (I’m in non-judicial CA)

    @Kathy C
    As I said before, I did pay my taxes…and I am listed as owner at the assessors… The house was sold to a third party at the Trustee’s sale. I re-recorded my Grant Deed after the new “owner” recorded their “Trustee’s Deed Upon Sale”…(which says “lawyer title” on it—what the heck is that? tnharry…?)

    They have recorded documents naming MERS as “transferrer” to Deutsche Trustee and then Aztec Foreclosure corp as Sub of Trustee, who then sold the house. NONE of the parties were lender, beneficiary, owner of the note, or real creditor…yet they sold my house to a third party anyway…because they can.

    So…I just want to know what a quiet title lawsuit could do for me at this point, if anything…

  33. @JG
    One way in which this might be inferred or described MIGHT follow.

    In oil and gas law, in1917 the Texas Railroad Commission was authorized to compel pooling and unitization agreements, these in effect are very similar to the residue left after a trust has failed.

    There was compulsory aggregation of numerous interests in mineral rights both laterally and vertically separated. Ths owner of blackacre of say 10 acres was deemed to be unitized in a single poll with the owner of whiteacre who had say 40 acres–thus in the simplest older cases –blackacre became an undivided interest of 10/50’s of the revenue stream from the unit consisting of black and white acres—so that they only needed to drill one well –and not compete at the property line to see who could extract the fastest.

    So the real estate interests were combined or pooled and people received in lieu percentage division interests in the pool.

    This was considered a joint venture–later a tax partnership.

    the securitized mortgage pools bear some similarities to this oldest divisional acctg concept.

    the promissory notes were pooled purportedly in a trust for tax and acctg purposes and people purchased proportional intersts in the polled revenue streams that flowed from the promissory notes—these were called mortgage backed securities–a type of bond which is a secured note–investors bought these slices of the pool. the pool can be sliced any way—in the older project financing context there were tranches based on maturity of the investor purchased notes–1 yr–3 yr 5 yr-10 yr 15 yr——-the MBS slicers added capital structure finance overlays with various degrees of prioritization—mezanine debt etc

    this is history–this stuff evolved out of real business purposes but was bent to burn investors


  35. @Carie,
    A Quiet Title Action is a legal action where you serve notice to all lien holders on your title to appear in court and prove they have a legal claim to your title. It is a lengthy and costly legal action, you really need an attorney. Protect yourself!! Pay your taxes and ins … remove the Servicer as mortgagee from your homeowners policy. Tell your ins agent they need to require the Servicer to Prove they are the proper mortgagee.

  36. Fraud, fraud, fraud, as far as the eyes can see… And it never stops!

    “Synovus Ousts Senior V.P. of Asset Management; Shady Foreclosure Deals to Blame?
    Posted on February 1st, 2012 by Mark Stopa

    Have you ever wondered what happens to houses when the banks foreclose? The Fort Myers News Press recently wondered just that, and its findings may have prompted the termination of a high-ranking bank officer.

    To those in the foreclosure industry in the Tampa area, Michael E. Johnson was fairly well-known. He was the Senior Vice President of Asset Management for Synovus Bank. This was no phony title, like the “Assistant Secretary” designations we see given to robo-signers; Mike Johnson was the decision-maker on foreclosure cases for Synovus in the Tampa area. To illustrate, here was the signature on his emails (copied and pasted from an email he sent me):

    Michael E. Johnson

    Senior Vice President
    Asset Management
    12450 Roosevelt Boulevard
    St. Petersburg, FL 33716
    727.568.6521 – Direct
    727.568.6532 – Fax
    I personally dealt with Mike Johnson on several occasions in recent years, and it was clear to me that if a settlement agreement was going to be reached in a case involving Synovus, he would be the one approving it. This dynamic was both good and bad. It was good because, unlike many foreclosure cases, at least there was a person at the bank with settlement authority with whom communication was possible. It was bad because, frankly, he and I butted heads frequently and, in my view, he was rather stubborn in negotiating. (Of course, I’m confident he thought the same things about me.) That was his reputation, at least as I knew it – difficult to deal with, but Synovus liked him because he got a lot of deals done for the bank.

    Anyway, with that backdrop in place, I find this article from the Fort Myers News Press particularly interesting. Essentially, this journalist studied the Public Records in Lee County to investigate what happened to properties after being foreclosed, or after they went to the bank. According to the article, there was a disturbing trend of properties being sold by Synovus to third-party investment companies, then flipped soon thereafter for a significant profit.

    In my view, the information contained in the article forces some tough questions:

    1. Why would Synovus sell a house for $53,000 to an investment company when said company was able to sell the house two months later for $78,000? Or a duplex in Lehigh Acres for $30,000 that was re-sold 15 days later for $79,000? Seriously, think about those numbers for a minute. More than doubling the sale price? Merely by doing a flip? 15 days later? For a bank that was so stubborn in negotiating with homeowners, why not insist on a higher sale price (to the investor)?

    I suppose it’s possible the investment company did significant repairs to improve the value of the property. However, as the article notes, how much work can really be done when no building permits were obtained?

    2. Doesn’t this have the feel of a shady, back-room deal? After all, why would a bank sell a house for $30,000 if it was possible to sell it 15 days later for $79,000? We may never know for sure, but it sure is interesting that Synovus had numerous deals like this with the same investor, and Mike Johnson was the one approving most of these deals.

    Think about that for a minute. One man approving multiple sales of properties to the same investor, which investor was flipping those properties for a profit.

    When you put it like that, it’s not hard to wonder whether this banker had a had a personal stake in these transactions. To be clear, I don’t know this to be the case, and I’m not saying that was the case, but when the same bank is selling multiple properties to the same investor, at prices like this, it’s not hard to wonder whether that banker was getting a kickback on the re-sale. It sure wouldn’t have been difficult – investor simply tells banker “sell this to me for $30,000, and I’ll give you $5,000 on the re-sale.”

    You may think I’m reaching or just plain wrong, and maybe so. However, it sure is interesting that Mike Johnson no longer works for Synovus, having been let go (after what had apparently been a distinguished career with the bank) shortly after this article came out. In fact, according to my sources, he now works with investment companies who buy houses from banks!

    The point here isn’t to talk about this one banker, of course. My point is that it’s terribly, indescribably sad to know that Florida homeowners are being foreclosed and this is what’s happening with their homes. Even if there was nothing shady going on with Synovus, it’s awful to know that banks are so willing to foreclose on homeowners yet so willing to sell properties for a fraction of their actual value. Anything shady, of course, only increases the level of misery.

    3. I’m also troubled at what may be attempts to increase the extent of the homeowner’s liability. Using the example from the article, should the prior homeowner be liable to Synovus for $275,000, i.e. $328,000 (the judgment amount) minus $53,000 (the alleged value of the house)? Apparently, by my read of the article, that’s what the court ruled, as that $53,000 sale price is how the fair market value was determined. The fact that the house sold for $78,000 sale price two months later (and that the deficiency amount probably should have been $23,000 lower? The court may not even have known about that re-sale. Heck, the homeowner may not even have known.

    This prompts a serious question … Are banks selling properties at reduced values to increase the amounts of their deficiency judgments against homeowners?

    You might think that makes no sense. After all, why would a bank sell a house for less than its maximum sale price? That said, do we really know what, if any, back-room deals are going on here? For instance, is this deal an arms-length transaction when Synovus is selling many such properties to the same investor? Who’s to say there weren’t other, under-the table monies changing hands?

    It’s not hard to envision ways Synovus could artificially increase the liability of homeowners … ”you give me a better deal on this one; I’ll give you a better deal on that one,” or “give me a deal for $30,000 on this one, and I’ll give you half of the profits on the resale.”

    I don’t think I’m the type of person who espouses conspiracy theories. However, I just can’t help but wonder, given what I’ve read, seen, and know, if homeowners are getting screwed on a routine and systematic basis by bankers who aren’t looking out for anyone except themselves. And when a high-ranking banker is suddenly ousted after an article like this, it really raises some difficult questions.

    Mark Stopa”

  37. @ carie

    I filed a Fraudulent Conveyance and Cloud on Title action in federal Court. The quiet title is, at least in NC a District Court remedy and hard to get, with no damages available. The Federal Court has a vast venue in that you can get RICO, TILA, RESPA, FCDPA, Fraud on the court, forgery, attorneys fees, etc..none of this is available in the Quiet Title action, so I have been told. Again, due diligence and care, no case is the same and I am not an attorney, just comparing notes here. I hope this helps.

    Email me, could you?

  38. @ javagold

    I have a mortgage with BOA, almost the same as you describe.

    Have filed a breach of contract suit and just found out they are the servicer, not the lender. My point is/was: it is important to know if, BOA has actually loaned you the money, I’ll bet not!

    And for the record; this is why I cannot get a settlement with them, they have no authority to make one. Most “banks” as we used to know them do not exists anymore. They are not funding loans. However, due diligence on your part is vital.

  39. @carie – I don’t understand quiet title actions. I just haven’t focused on them. Wrongful foreclosure, but not qt actions. You might try google scholar since you prob don’t have, say, a loislaw account or westlaw. I dont’ know what state you’re in. type in v. Wells Fargo, trype in v. Bank of America quiet title, type in v. Bank of New York quiet title, v Shearson-Lehman wrongful foreclosure. Different names and phrases til you get hits….?

  40. Fidelity National Title/Financial Company who are as complicit in this massive mortgage fraud as any of the banksters if not more so as they have been involved at every stage and level of this scheme. I would go after every part of it and make sure that everyone in any position of authority involved in this goes to prison forever.

  41. I guess one could file an answer (if one is the defendant) quickly to preclude amendment at will, but that may have unwanted consequences itself for all I know. And you’d then have to argue
    against leave to amend being granted by the court.

  42. Chris,
    are you saying even if someone went directly to BOA (albeit all over the phone which i always thought was really strange)…..and had a 20% down and fixed rate (no subprime)……. that BOA still is not considered the lender/creditor (and of course they tell me now that Freddie is the investor)……am i wrong to believe that they must have held this mortgage for atleast a few days, minutes, or seconds ????

  43. Yes do it!

  44. Amendment of a complaint is at will until an answer has been filed.
    A mtn for sj or mtn to dismiss is not an answer. These are truisms.
    Banksters have pretended this is not true when it has suited them and fought a homeowner’s right to amend. Amendment is at will as a matter of law until an answer has been filed. It is only then that amendment requires stipulation or leave.
    From Crum v Circus Circus (attorney Geraldine Kirk-Hughes),

    “Under Rule 15(a), “[a] party may amend the party’s pleading once as a matter of course at any time before a responsive pleading is served.” The defendants did not file an answer. Instead, the defendants filed a motion to dismiss. A motion to dismiss is not a “responsive pleading ” within the meaning of Rule 15. See
    Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, 216 F.3d 764, 788 (9th Cir. 2000). Accordingly, Crum did not need to obtain leave of court to file her amended complaint.”

    So in a situation where a bankster has filed a complaint with attachments which clearly don’t support the claim and then files an amended complaint or even a new one with different attachments, I guess the real argument gets down to ‘were you lying then or are you lying now?’ IMO that’s actually an appropriate question, but I suppose courts want it approached another way. Obviously, this deal with dispositively different attachments in amended complaints or new complaints needs to get shut down, but I don’t know how to do it.

  45. Okay—question for whomever:

    Do I have any hope in filing a quiet title lawsuit—because MERS is the “transferrer” in my recorded documents—which they used to foreclose—and I paid the property taxes myself recently (I am listed as owner there), in addition to the fact that I (lawfully) re-recorded my Grant Deed (with me and my husband as sole owners) AFTER the Trustee’s Deed Upon Sale was recorded…

    Will a quiet title do anything for me?

  46. @ carie

    Correct. Also, An originator is not a lender/investor…why do people keep saying that?

    Folks need to clarify what they are speaking of, or they have no legs on the case. MERS is membership only club, originators are NEVER lenders.

  47. Corlogic operates like MERS. Get it? Hide & Seek! Who is really behind the Corporate Software & Name? MERS & Corlogic? Who are they? Who are their stockholders? You already know the answer.

  48. Neil, you said:

    “Banks and servicers are intentionally blurring the distinction between the actual creditor-lender and those other parties who were co-obligees on the mortgage bond – in order to get the benefit of foreclosure on a loan they did not fund or purchase”.

    A while back, I started writing a piece which of course I can’t find now – though I just had it last night (!) – about when a third party becomes a co-obligee on notes. I was trying to get a handle on how and when, why, whatnot, that occurs. Now, you use the term “mortgage bond” and then you say “in order to get the benefit of foreclosure…”. Is this to say that if and when one becomes a co-obligee on a “note”, there is a right to the collateral, if any, for that note? I don’t see this happening automatically, so to have that benefit (to enforce), this woiuld have had to have been a negotiated benefit / right of becoming co-obligor(?) I know you don’t usually do this, but could you also clarify and expound on the first part of your sentence?

    Aha! I think if there were the dash I just put in, I would have gotten it sooner. just my pea brain. So I think what is being said here is that banksters are trying to assert that co-obligors on “mortgage bonds”
    have the right to foreclose based on their what? making themselves co-obligees? and you’re saying that right belongs to the true
    creditor-lender (and this kid still doesn’t know who that is), which in the absence of negotiation for that right, would in fact remain with the creditor-lender.

    Now who are you saying made themselves co-obligors (and why)? And do you know that there were no negotiation for the right to enforce?
    Because I can’t find the deal I was working on, I can’t remember why I thought co-obligation was relevant in this whole deal, but I must’ve
    “gotten there” for some reason.
    I would be very greatful if you wouldn’t mind clarifying this, including the relationship of the note to the “mortgage bond”.

  49. Corelogic … “Partner in Crime”

    If you are not paying your taxes & insurance and the servicer is not paying them …. The party paying them is going to get the property on a tax sale forclosure (that your servicer will not contest) … that is why they are insuring their investment in YOUR name on your ins policy. If you have a loss .. they check comes in your name and theirs. You are not going to sign it over to them, & they are not going to sign it over to you. Bingo! Property is not habital considered by the servicer as Abandoned property!

  50. @Java,

    You can find out who is paying by simply sending your tax assessor an e-mail asking for the entire accounting since you purchased the house. Di likewise with your homeoener insurer.

    I wouldn’t be surprised if, somewhere in the history, you started finding the name “CoreLogic”. I mentioned a while back that it is who’s been paying my homeowner insurance and taxes for several years. There seems to be no money going from my servicer to anyone. Then again, I expect it to be one more item in my discovery.

  51. @java
    look at your county auditors records—-most likely it is the collection agency because the sheriff etc looks at the property tax record to see who has rights and to whom should go any checks–who has the right to order you arrested for trspass etc

  52. where did my $100,000 hard cash deposit go ?????

    and who/why is paying the property taxes right now ???

  53. I think that lumping Paulson in with the the rest is wrong. He and a few other astute managers recognized the lack of validity in the process.

    He was not betting against the homeowner, but the banks. Most of his CDO positions were closed in 2007 because he knew if not, the banks would fail. He sold them back and then shorted the banks.

    If you believe Neil’s postings on BofA’s death, then Neil is not different than Paulson.

    Just because someone profited, does not make them unpatriotic or a criminal.

  54. Jeff, you asked the following questions . . .

    Jeff, on February 1, 2012 at 1:15 pm said:

    I am curious as to why the law firm representing U.S.Bank would feel the need to fraudulently remove the following described endorsement from an allonge to my promissory note.

    Why did the attach an allonge?

    There are two endorsements on the allonge, one is from the original lender who assigned it over to US bank purportedly on the ORIGINATION date of the loan, the second endorsement, (the one that has been physically erased. Say’s “pay to the order of __________ blank line then it is signed by the VP of U.S. Bank NA. Again why would they feel the need to remove this stamp then FILE IT WITH THEIR COMPLAINT. can we say fraud boys and girls?


    As happened in a case back in 2007, when law firm filed copy of the Note into USDC for ND Calif. clearly showing the moving party had no standing to sue or foreclose, and we pointed it out in our answer, Judge Alsop ripped the attorney up one side court room and down the other. He attempted to commit fraud on and the alleged defendants. Oops.
    The Note has been altered and is therefore VOID!




    IndyMac Is Set to Be Sold to Private Investors
    December 27, 2008, By DEALBOOK

    IndyMac Bancorp, one of the largest banks to fail as a result of the subprime mortgage crisis, is close to being sold to a consortium of private equity and hedge fund firms, people briefed on the matter told DealBook.

    The Federal Deposit Insurance Corporation, along with a team of former Lehman Brothers bankers who are now with Deutsche Bank and Barclays Capital, have been engaged in the sale process since federal regulators declared IndyMac insolvent in July and seized the company. The deal could be announced as soon as Monday, these people said.

    At the time, the collapse of IndyMac ranked as the second-largest failure in FDIC history and was quickly followed by near-failures and subsequent fire sales of banking giants Wachovia and Washington Mutual.

    The buyers include private equity firms J.C. Flowers & Company and Dune Capital Management and the hedge fund firm Paulson & Company, these people said.

    The proposed deal is unusual because it is one of the first transactions involving unregulated private equity firms acquiring a bank holding company. Federal regulators have been locked in a heated battle throughout the credit crisis as banks continued to fail and private equity firms initially came to the rescue, but then backed off because of regulatory concerns.

    In September,(2008) the Federal Reserve eased regulations to allow private equity firms and hedge funds to acquire portions of bank holding companies without being subject to undue regulation. Previously, a private equity firm that held more than 24.9 percent of a bank was required to register as a bank holding company and it restricts the investor’s ability to make investments outside of the banking industry.

    The consortium would buy the entire bank, including its 33 branches, reverse-mortgage unit and $176 billion loan-servicing portfolio.
    The deal is a coup for Dune Capital, founded in 2004 by the ex-Goldman Sachs partners Steven Mnuchin and Daniel Niedich, and the other partners because they are picking up a solid bank on the cheap.

    J.C. Flowers, led by the former Goldman partner, J. Christopher Flowers, focuses on financial firms, having tried to acquire student lender Sallie Mae last year. But the firm has struck few deals so far amid the banking crisis.

    Paulson & Company, led by John Paulson, has been one of the biggest winners in the subprime mortgage meltdown, having reaped billions of dollars by betting against risky home loans. Mr. Paulson recently indicated to investors in his hedge funds that he is prepared to start buying up low-priced debt like prime mortgages and investing in financial institutions.

    When Indymac failed, more than 130 F.D.I.C. employees swooped in on the bank to prepare it to reopen under government supervision. The bank was founded in 1985 by Angelo Mozilo and David Loeb, who also founded Countrywide Financial. IndyMac once specialized in “Alt-A” home loans, which often didn’t require borrowers to fully document income or assets.

    It collapsed after defaults mounted and as tight capital markets caused losses on mortgages it couldn’t sell.

    The seizure came after panicked customers withdrew more than $1.3 billion of deposits over 11 business days. The withdrawals followed comments in late June by Charles E. Schumer, the Democratic senator from New York, questioning IndyMac’s survival.
    –Zachery Kouwe

  56. It is interesting that Paulson owns OneWest Bank – a private bank.

    “In taking over IndyMac’s assets, the investor group, led by Steven Mnuchin of Dune Capital Management, put up $1.55 billion to revitalize the bank. Other investors included hedge-fund operators George Soros and John Paulson, bank buyout expert J. Christopher Flowers and computer mogul Michael S. Dell.”

  57. @ Jeff, this was posted somewhere yesterday….it has some good info which might help you:

    It’s hands down one of the most frustrating moments in court. Counsel or Pro Se has submitted a very well pled opposition or motion to dismiss attacking standing but has missed some very important facts to point out to the court in both their pleadings and oral argument. Opposing Counsel says to the Judge “we hold the note Your Honor” and the judge says to you…they have the note your motion is denied! What did you miss?

    Here are some things you need to pay attention to:

    • Is the Plaintiff different from the named lender on the note and mortgage?
    • Was there a copy of the note attached to the complaint or a lost note count pled?
    • Did the Plaintiff allege to own and hold the note or was authorized by the party entitled to enforce it?
    • Was there a Notice of Filing of the “original note and mortgage” after the Complaint was filed and did the note now contain endorsements with one now in blank?

    These are some very simple things to overlook because they are extremely common in Foreclosure Mill pleadings so you might overlook them as same old same old. But pay attention here.
    Foreclosure Mills commonly walk into court on a Motion to Dismiss or Summary Judgment hearing saying “We hold the note Your Honor…that’s all that matters!” And BLAM! Your motion is denied or final judgment is entered.

    Your motion was denied because you failed to pay attention to the details and SLOWLY point the facts out to the judge in a painted picture. Let me take you there.

    Dialog: Your Honor hold on, At the time the complaint was filed, Plaintiff Bank of New York alleged it was the owner and holder of the note and mortgage and in support of that allegation, attached to the complaint, a copy of the alleged note. The note attached was in the name of Countrywide and did not contain ANY indorsements. Two months later, Plaintiff in its notice of filing of the alleged original note and mortgage, attached a copy of the note PLaintiff is now presenting to the court. This new note contains two (2) indorsements one now in blank prompting Plaintiff to now claim they are the holder.
    The problem with this Your Honor is standing must exist at the time the complaint was filed and not after. It is the blank indorsement that allows them to claim they are the holder however, the note attached to the complaint had no indorsements and that is the note they relied upon.

    Clearly had they been in possession of this new note with two (2) new indorsements at the time the complaint was filed, they would have provided it to the court. The notice of filing of this new note with the indorsement in blank two months after the complaint was filed is in effect, an attempt to amend the complaint. The proper remedy to amend the complaint is via leave of the court which has not happened here. More importantly, a complaint cannot be amended to establish standing after the original complaint was filed thus, the proper remedy would be to dismiss the complaint and refile.

    You might even want to go so far as to suggest to the court nicely how dismissing and causing Plaintiff to refile is not only in the best interest of judicial integrity but is also in the best interest of judicial economy as the courts would receive new filing fees.

    Just recently Jacqulyn Mack of the Mack Law Firm brought her bite and this argument right to the 2nd DCA’s doorstep in Feltus v. U.S. Bank and gained a favorable detailed decision that will certainly bring this attack and GREAT rebuttal on the “we hold the note that’s all that matters” position. It’s 2012 people…momentum is in the air…let’s bring the fight to their doorstep!

  58. I am curious as to why the law firm representing U.S.Bank would feel the need to fraudulently remove the following described endoresement from an allonge to my promissory note.

    There are two endorsements on the allonge, one is from the original lender who assigned it over to US bank purportedly on the ORIGINATION date of the loan, the second endorsement, (the one that has been physically erased. Say’s “pay to the order of __________ blank line then it is signed by the VP of U.S. Bank NA. Again why would they feel the need to remove this stamp then FILE IT WITH THEIR COMPLAINT.

  59. Unfortunately, preaching to the choir doesnt do anything to rectify this scam. Take your “been saying this for 4 years” to where it might do some good…..DC and all the state capitols If you’ve been saying this for years with little effect that should tell you something: it ain’t gonna get fixed by the “little people.”




  61. State of Foreclosure as a Tool for Frauds on Investors:
    The Federal Reserve Board, and the Treasury Department’s FDIC and OCC divisions have in the aggregate made a factual and legal determination statutes and rules under those agencies’ jurisdiction have been violated by fourteen (14) regulated banks. As a result of these agencies’ investigations and findings they have collectively imposed a civil order of sanctions upon the 14 banks. Implementation of the sanctions order has been assigned in a rule-making action to a 1st tier of OCC-supervised group of independent contractors—including major accounting firms. The most basic jurisdictional reason the sanctions could be imposed was the abuse of federal judicial and administrative machinery to seize or attempt to seize borrowers’ homes. The sanction was imposed through “alternative dispute resolution” process of review of a wide-swath of borrower grievances The core conduct penalized was misuse of defective documentation to motivate court actions.
    Additionally, there are five (5) of these institutions that have implicitly made an admission of the abusive practices in state courts. The federal sanction against 14 signed servicer-collectors is now reinforced by an offer of $25 billion by 5 of the largest of these institutions to 40-50 states in exchange for releases of state civil liability for abuses of the processes of the state courts, and County Clerks of Court, and county records keepers generally. These filings constituted an industry practice that presumptively injured the home-owners, and abused state court processes generally. The remaining issues to be decided by the OCC though its contractors and the several states which agree involve the orderly distribution of proceeds to victims proportional to injury suffered. It is now a matter of legislative and judicial notice that misconduct and unethical conduct occurred as an industry practice.
    The sanctions and settlements in lieu of civil action with states’ Attorneys General of relate exclusively to federally-regulated bank-affiliated collection agencies. There will be individual borrowers who suffered equal or greater harm from the same types of misconduct for whom no relief is granted by either the federal sanction or the planned state settlements:
    1) those who were involved with the named bank-collectors but which did not elect to submit requests for review Independent collection agencies.
    2) those who were not involved with the named bank-collectors—but with independent “non-bank” or private label collection agencies—these remain subject to FTC jurisdiction which has not been exercised.
    3) Those who entered into SEALED or otherwise “Confidential” settlement agreements prior to the matters complained of becoming a matter of widespread public knowledge, susceptible of judicial notice. The publication of the front-page robo-signing expose by the New York Times in October 2010 is a rational cutoff date.
    Private label loan origination is often associated with similar private-label debt collection. These often involve initial predatory lending and predatory collection—surpassing the misconduct found for 14 and admitted widely by 5—all banks. By implication the private labels’ securitization conduct, misrepresentations and omissions resulted in substantial investor losses. The comparative lack of regulatory oversight at all levels of these private label operations was also not disclosed to homeowners who entered into agreements with these “rogue” operations. There was a substantial undisclosed risk and future cost in dealing with these entities—fundamental to the transaction—but not disclosed to the borrower. Only now does the full cost become known to hapless homeowners.
    By default, for these homeowners, David VS Goliath civil litigation is the only route allowed to preserve those citizens’ First Amendment Right to “Redress of Grievances” and Fourth Amendment Right to “Due Process of Law,” and under the Fourteenth amendment which imports those Rights into state law. The industry practice found and admitted by the regulated banks is left unbridled among the private label debt collectors. These rights have been impaired by the admitted practices and face further risk because of lack of equal application of justice among similarly situated citizens—by reason of the lack of regulation of private label enterprises.
    Under the First Amendment to the Constitution of the United States, these Citizens must have a protected Rright to apply to, and state their case to: any legislative body, any judicial body and any division of the administrative branches. They would otherwise be disenfranchised from vitally protected Rights of great importance to public policy. Today these Rights are commonly impaired by secrecy imposed by these private label collectors in civil litigation. There are: Sealed and Confidential settlement talks and drafts, Sealed and Confidential enforced settlements, Sealed and Confidential Motions, Complaints, Answers and Counter-complaints. These secrets lay the foundation for demands for emergency and closed hearings, gag orders and other restraining orders and injunctions. If connected to actions taken by the unregulated collection agency, rather than simply the amount of settlement, then this course of action is taken by the collection agency is designed to prevent identification of patterns of misconduct. This cloak of secrecy substantially impedes civil and criminal, private and public, investigations—and may rise to Obstruction of Justice, commonly characterized after Nixon’s Watergate fiasco as a “cover-up”. These facts are described by the State of Arizona:
    “BoA is Impeding Investigation Says Arizona Attorney General’s Office”…Jan. 26, 2012 (Bloomberg) — “Bank of America Corp. is impeding an investigation of its loan modification practices by negotiating settlements with borrowers who must agree to keep them secret and not criticize the bank in exchange for cash payments and loan relief, Arizona officials say… The borrower ‘will remove and delete any online statements regarding this dispute, including, without limitation, postings on Facebook, Twitter and similar websites,’ and not make any statements ‘that defame, disparage or in any way criticize’ the bank’s reputation, practices or conduct, according to documents filed in state court in Phoenix….” BUT, “…the…bank won’t enforce the non-disparagement provision if [the borrowers] talk to investigators, the bank’s lawyers have said in court filings.”

  62. hmmm…….????
    i just received a notice from NACA on their –
    “Come to NACA’s American Dream event for both homeowners with an unaffordable mortgage and homebuyers wanting to purchase with the best mortgage in America, ”

    “Everything is Free! All that is required is an investment of your time and effort. NACA has legally binding agreements with the lenders to get it done.”

    do i sense a method & necessity of creating a new “debt instrument[s]” and conferred subsequent absolution of the previous parties criminal “acts” of forgery, perjury, counterfeiting, mail fraud, wire fraud, fraud upon the court, fraudulent conveyances, ..

  63. Oh boy!

    As Robert de Niro once said: “If there really is a God, he’s gona have a lot of explaining to do.”

    Few people make me seriously hope that there is an eternal hell. Paulson is one of them. It ain’t gona end well for those guys…

  64. Excellent Article Neil! My thoughts Exactly! God Bless You! Now when are they going to deal with these titles? A homeowner should not be responsibale for fees in a Quiet Title action. The OCC settlement is inadaquate to recover these legal costs? The A.G. settlement … it’s Hogwash and I plan to do my best to make sure it does not happen til the investigations are complete.

Leave a Reply

%d bloggers like this: