Pension and Union Funds Were Upside Down the Moment They Bought MBS

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Editor’s comment: Smith’s statement about the passivity of investors is well taken. Up until recently, they were content to let the Banks and servicers fight it out and they assumed they would get their fair share of the money that was due to them. Remember that these are NOT just “institutional investors” like banks — they are pension funds, unions, cities, counties and states that invested in what was thought to be investment grade securities Triple A rated and insured.

So it isn’t surprising that the investors are now going on the attack. It is obvious that the banks and servicers are having a field day feeding off the carcass of what was purported to be good collateral — the homes of the borrowers. The starting insult though was the money the banks took out of the funds advanced by investors before they started funding mortgages. In some cases the percentage is a staggering 40%. So for each million dollars that your pension fund put in, the banks immediately removed $400,000 and booked it as trading profits. Now with only $600,000 left, the pool was supposed to make enough money to pay the interest expected by investors plus the principal.

Those figures don’t work and Wall Street knew it. So all they needed was to place bets that the pool would fail and that is what they did under the guise of merely covering the “minor” risk of loss with yet another hedge. But the proceeds of insurance and credit default swaps were received by the banks who did not report those proceeds to investors, much less pay them. The whole thing was carried in a classic PONZI scheme where the money from the investor was paid to the investor without investing or funding any other income-producing asset.

So now Goldman Sachs has a genuine class action (approved by Federal Judge) on its hands, the major banks and MERS have a major lawsuit (Schneiderman) that will completely upend the mortgage transactions and foreclosures that have taken place, as well as eliminating the secured portion of the loans. The Banks are right where I predicted they would be when I projected the path of this long road. The banks and servicers are intermediaries and conduits with no interest in the loans other than some vague contractual rights that were long ago breached by the banks.

The interests of the investors and the interests of the homeowners have thus become strangely but inevitably aligned. Neither one would have entered into the deals if they knew the truth and both were defrauded by inflated appraisals, inflated securities ratings, misrepresentations about the loans, misrepresentations about the loan underwriting process, and neither want to be part of any large-scale foreclosure process. The investors want as much of their money back as possible and then the right to get the rest from the banks, who stole their money. The borrowers want to stay in their homes so much so that they are willing to accept mortgage balances in excess of the fair market value of the home.

Both the investors and the homeowners are underwater — some for the same reasons and some for different reasons. But the full accounting of all money in and all money out will restore far more of the original capital that was siphoned out of the nation’s economy than the current foreclosure process — even if the foreclosures were valid and enforceable which they clearly are not because they are based upon documentation that was intentionally fabricated, forged, misrepresented and a direct breach of the duties of the originators to perform due diligence.

The choice is the same one I stated 5 years ago — which will be more important — the power and wealth of these overs-zed banks or the rights guaranteed by the U.S. Constitution. We can’t have both. In order to give the banks what they want, with amnesty, further bailouts etc., we must surrender our sovereignty and consent to being subject to the rule of Banks without any governing charter. In order to ratify the millions of foreclosures that have already taken place and allow the millions more to proceed, we must abandon all notions of due process, equity and fairness.

by Yves Smith

Investors (and Others) Realizing Their Ox is About to be Gored in Mortgage Settlement

Investors have been remarkably passive as banks and servicers have taken advantage of them. We’ve heard numerous reports of servicer fee abuses that amount to stealing from investors (remember, if you overcharge a stressed borrower and that borrower loses his home, the money in the end comes out of pension funds and 401 (k)s when the excessive fees are deducted from the proceeds of the sale of the home). Investors can even see suspicious patterns in investor reports. We’ve also pointed out that they are guaranteed even more pain, since $175 billion of losses that have already recorded on loans in MBS pools have not yet been allocated to the related bonds.

But the fees to manage bond funds are pretty thin, and fixed income investors are generally a risk averse lot, and are not well set up to litigate. But the biggest obstacle to them Doing Something is that they don’t want to rile the banks. They think they need them for information and transaction execution.

So it shouldn’t be surprising that investors have sat on the sidelines during the mortgage settlement and “fix the housing market” debates, even as becomes clearer and clearer that the solution envisaged is to take from investors to make the banks whole. Remember, the major banks have very large second lien portfolios that should be written down. The banks claim the second loans, almost entirely home equity lines of credit, are current, but that is often an accounting fiction. The banks are often engaging in negative amortization (as in taking any trivial amount and deeming it to be acceptable and adding any shortfall to what should be a proper minimum payment to principal) and allowing customers to borrow in order to make their payments. MBS investors have told me that realistic marks on Bank of America’s second lien portfolio would exceed the market value of its equity, and would also take a big cut out of the equity bases of Citi, JP Morgan, and Wells.

So the plan, which was messaged in an interview with William Dudley in the Financial Times in early January and is embodied in the mortgage settlement plan, is to write down first liens and leave seconds largely intact (there have been some indications that seconds might get a modest ding in the case of a principal mod on the first, but that is backwards. The second should be WIPED OUT before anything modification is made to the first mortgage). Any principal mods on the first lien that leaves the second in place amounts to a transfer from retirement plans to banks. Pensions are being raided to avoid exposing the insolvency of the big banks.

We are, rather late in the game, getting some plaintive bleats from investors as they are being led to slaughter. Reader Deontos sent us a statement from the Association of Mortgage Investors:

The state Attorneys General, federal agencies, and certain mortgage servicers have worked for approximately one year on developing a solution to address our national foreclosure crisis. The time now may be nearing for a settlement of claims of alleged wrongdoing by servicers. AMI and mortgage investors have neither been involved in the negotiations nor are aware of the ultimate settlement terms. In anticipation of a possible settlement, however, AMI cautions these negotiators not to rush into a settlement, but rather work to get a properly constructed settlement that helps distressed homeowners with the right solutions. “Investors in mortgage trusts, such as unions and pensions, do not service these loans and certainly did not create these woes for borrowers. The use of mortgage trust money (from pensions funds, unions and charities) to settle the investigation is tantamount to a bank bail-out. We expect that principal modifications of private mortgages made to satisfy any kind of settlement will involve only mortgages held by the settling parties and that the criteria for all additional principal modifications be firmly established,” explained Chris Katopis, AMI’s Executive Director.

AMI would only support such a resulting settlement, if any, if appropriately designed to address such alleged wrongdoing while not implicating innocent parties. AMI is on-record as supporting long-term, effective, sustainable solutions to the housing foreclosure crisis. It is generally supportive of a settlement if it ensures that responsible borrowers are treated fairly throughout the foreclosure process; while at the same time providing clarity as to investor rights and servicer responsibilities. The settlement should be designed in a way that ensures that investors, who were not involved in the alleged activities and, who likewise were not a participant in any negotiations, do not bear the cost of the settlement. Specifically, mortgage servicers should not receive credit for modifying mortgages held by third parties, which are often pension plans, 401K plans, endowments and “Main Street” mutual funds. To do otherwise, will damage the RMBS markets further and limit the ability of average Americans to obtain credit for homes for generations to come.

Erm, the fact that you weren’t given a seat at the table means the power that be thought you were dispensable.

More amusingly, a Bloomberg report reveals what most insiders know full well, that industry associations that supposedly represent the buy side and the sell side, like the American Securitization Forum and the Securities Industry and Financial Markets Association, really take care only of the sell side, meaning Wall Street. SIFMA’s Asset Management Group, which represents investors, wanted to issue a statement objecting to the use of investor funds to settle bank misdeeds, but it was squelched by management:

Wall Street’s biggest lobbying group is split over a proposed settlement of state and federal foreclosure probes, after a committee of money managers signaled it opposes terms letting banks push some costs onto bondholders.

The Securities Industry and Financial Markets Association’s Asset Management Group planned to release a statement last week urging government negotiators to protect innocent investors, amid reports that banks will get credit for lowering the balances of mortgages packaged into bonds, three people familiar with the matter said. Sifma’s leadership said no. The panel’s members oversee $20 trillion and include BlackRock (BLK) Inc. and Pacific Investment Management Co.

Sifma elected not to issue the statement “because the settlement surrounds potential legal issues involving the commercial interests of many of our members,” said Cheryl Crispen, a spokeswoman for the group in New York. “Sifma generally does not intervene in such matters and remains focused on matters of policy and advocacy.”

What bullshit. This is a “all animals are equal, but some are more equal than others” statement.

Needless to say, as the propagandizing gets louder, a few lonely voices are decrying the settlement. For instance, Daily Kos had a refreshing piece, “Stop the Delusional Celebration: Victims of Foreclosure Fraud Have Little to Celebrate.” Dave Dayen gets to an aspect of the settlement that I have not had time to cover, namely, that the enforcement is a joke. A story by Loren Berlin and D.M. Levine at Huffington Post remind us “Robo-Signing Settlement Might Not Provide Homeowners With Needed Help.” The short form of their story: the deal looks to be targeting mods to not that deeply underwater borrowers. Addressing a related Administration PR effort, Alan White at Credit Slips, in The Permanent Foreclosure Crisis and Obama’s Refinancing Obsession says, in no uncertain terms, that refis won’t solve the mortgage mess.

There is a possible saving grace here. I am told by a principal that if this settlement goes through, the odds are 100% that it will be challenged on Constitutional grounds, as a violation. Taking from the first lienholders to save the second lienholders to keep otherwise insolvent banks from going under amounts to a transfer from private parties to the government, as in it saves the FDIC from needing an emergency injection from Congress, as it did in the savings and loan crisis. So as much as I’d rather see this deal scuttled, it would terribly amusing to see Obama tidy’s efforts to generate pretend to help homeowners while really helping the banks sidetracked by litigation. The courts have stymied bank efforts to get away with their heist, and they may prove to be their bane yet again.

Topics: Banana republic, Banking industry, Credit markets, Investment management, Legal, Politics, Real estate, Regulations and regulators, The destruction of the middle class

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26 Responses

  1. CALL CALIFORNIA AG KAMALA HARRIS RIGHT NOW. YOU CAN LEAVE HER AN URGENT MESSAGE TO NOT SETTLE WITH BANKS.

    CALL 916-322-3360
    PRESS 1 FOR english
    PRESS 7 FOR where you can record your message–it will ring a couple times then voice prompt to leave message.
    when done PRESS 2 to mark the message URGENT

    FAX her at 916-323-5341

  2. Think like a machine yes, and also pre-visualize what you are looking for.

  3. multi-character recognition —-strings with high correlation—–like a combination lock thatll work if the tumblers are really loose–i played that game for three years –try to think like a machine

  4. Meant to write, left hand margin for additional time and date search tools, yeesh. The longer phrase one puts in quotes, the more accurate the result, until of course, no results come back.

  5. Because they did not buy valid MBS.

  6. Thankyou—and hope all get it too—iv posted all i could find re WSJ doing as you suggest–now its “New york times foreclosure business practices” that will help you if you are in ne for sure—what are acceptable natl newspapers that meet E.R. 21????

  7. To optimize your search skills when using google, us quotes. If you are searching wall street journal articles, search this way on google,

    “Wall Street Journal” foreclosure. You can also refine your search to within a certain time frame on the right hand margin.

    If you want to further your search, throw in one more word such as
    “Wall Street Journal” foreclosure, illegal, or

    “Wall Street Journal” foreclosure, HAMP, or

    “Wall Street Journal” foreclosure, verdict,

    and so on, If you have specific words add them, but I think you will want to start with “Wall Street Journal” and then add whatever words you want.

  8. Ironically, pension funds have also helped cripple local economies. Promises were made 30 and 40 years ago to city and state unions to pay into their pensions and to honor a pension load that has turned out to be unrealistic.

    But where was the pension fund money invested? At some point in time, be it the 80’s, 90’s, or this century, Pension fund money was given to wall street to reinvest for the highest possible return.

    Wall Street obliged, but before they invested in home mortgages, they invested offshore. The result?

    City Pension fund returns did super well for many many years, MASKING the fact that eventually the ever escalating amounts of pension fund money could not forever achieve double digit returns.

    The city and state pension fund investments helped accelerate overseas business competition against the very local businesses that funded those pension funds via local and state taxation in the first place!

    There’s a reason why social security pays out very modest sums, it’s the very reason why social security is still solvent almost 75 years after it was started.

    All pension money funds needed to STAY LOCAL. Instead, cities and states are now so desperate to try and honor their pension fund promises they RAISE TAXES and EMBRACE more and more imports because the profit margins are greater and they can get their cut.

    As Pogo once said, “We have met the enemy and he is us”.

  9. This is not intended to be nor is it competent legal advice in any way; YOU MUST Run this by your attorneys whether you are thinking of settling or struggling on to get an offset against the debt;
    THIS IS SOMETHING LIKE WHAT PEOPLE MIGHT WANT TO TRY TO REACH AT THE END OF DAY—AT A MINIMUM:HOPEFULLY A COURT ORDER MUCH LIKE THE OCC AND FEDERAL RESERVE FINDINGS [REFERENCED IN THE WSJ] THAT THE DEBT COLLECTORS ARE/WERE AT LEAST NEGLIGENT PER SE IN THE FILING OF DOCUMENTS SUPPORTING CASES—MORE THERE AT DIFFERENT LEVELS; MAYBE ITS STYLED AS A MOTION FOR SUMMARY JUDGEMENT ON THIS ISSUE NEGLIGENCE—IT EXISTS, AND ONLY ISSUE IS AMOUNT OF DAMAGES

    GREATER QUESTION IS WHETHER IT WAS WITH ULTERIOR MOTIVES RISING TO ABUSE OF PROCESS TORT—AS IF THE DEBT COLLECTOR HAD NO RIGHT TO COLLECT AND WAS USING THE DEFECTIVE DOCUMENTS TO ACHIEVE NOT ONLY SIEZURE FROM HOMEOWNER BUT ALSO DIVERSION OF TRUE OWNER MONIES. This is like jumping the civil violation from mere negligence to intentional misconduct at a couple levels—–this should be reported to agencies if it is clear—not in any way certain from the WSJ articles. The review of their loan account data may prove these facts if they exist. This would be more likely where there was no “LOAN SCHEDULE” filed with SEC at the time of securitization. That requires a review of the securitization documents at SEC online and the Sec State office UCC filings of intangibles as security. This issue is touched upon in some press accounts but is not industry practice.
    Request to Take Judicial Notice of Adjudicative Fact : Request for Judicial Notice under E.R. 21(C): WSJ
    Plaintiff herein respectfully requests the court take, APPROVE AND ORDER, via signature on the attached “Approval and Order of Judicial Notice”: of the Wall Street Journal articles listed below which relate to governmental agency findings of fact in respect servicer-debt collector defective and faulty “industry practices.”
    Memorandum of Facts and Authorities
    Whereas, there have been well-respected articles published that are well-known to the national and local public and not subject to reasonable dispute, specifically; articles widely published to the general public by the Wall Street Journal (WSJ). These articles meet the standards set out in the state or federal Evidence Rule 21 in respect of legally demanded rights to assemble evidence by “Request to Take Judicial Notice of Adjudicative Fact”, for purposes of pleadings, motions, and as admissible evidence at trials: 1) WSJ widely-read national Press, also thereby presumptively well-known locally, and from a 2) reliable, credible Wall Street Journal publisher has reported and published several articles, that via verified interviews, excerpts from official statements an industry admissions detailing the general failure of the home-loan servicing and debt collectors to use defective filing documents to effect seizure of homes, and
    Whereas, the Wall street Journal and other news-sources have characterized those defective filing activities as “industry practice” and
    Whereas published speeches of senior Federal Reserve officials also characterize such defective filings and other related debt collector actions as “industry practice”
    Further Statement of Authorities
    Under Rule of Evidence 201(C) , the Court “shall take judicial notice if requested by a party [plaintiff herein], and supplied with the necessary information….” “…of adjudicative facts…” which are “…capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned…” In anticipation of objection to admission of excerpts by defendants under Evid. R.106, the entirety of the Articles is offered, along with links to internet sources to ease access for defendants’ and courts’ verification .
    Now Then:
    Defendant [plaintiff] herein respectfully requests this court take Judicial Notice of the WSJ articles listed below, and the excerpts therefrom as evidence of the matters stated therein for all purposes in pleading and establishing proof of the facts in this case—that the filings herein are also similarly defective, pursuant to [FRCP Rule 21 or corollary state rule of civil procedure]
    Defendant offers the copies of the full text of those articles, with the excerpts offered as descriptive of the evidence stated therein.

    List of Documents for JUDICIAL NOTICE

  10. List of Documents for JUDICIAL NOTICE
    1. New York Sues Banks Over Mortgage Registry System, WSJ, MARKETS FEBRUARY 3, 2012, BY CHAD BRAY NEW YORK—New York Attorney General Eric T. Schneiderman sued three of the nation’s largest banks over a private national mortgage registry system, contending it has resulted in a wide range of deceptive and fraudulent foreclosure filings. The lawsuit, filed in New York State Supreme Court in Brooklyn, names units of Bank of America Corp., J.P. Morgan Chase & Co. and Wells Fargo & Co. as defendants, as well as MERSCorp., which owns and operates the Mortgage Electronic Registration Systems, known as MERS. In his complaint, Mr. Schneiderman alleges that MERS has effectively eliminated the public’s ability to track property transfers http://online.wsj.com/article/SB10001424052970203889904577201060859616158.html

    2. “Fed’s Raskin: Mortgage Servicers Must Fix ‘Deceptive’ Practices,” WSJ, JANUARY 8, 2012, By ERIC MORATH; “ WASHINGTON—Federal Reserve Gov. Sarah Bloom Raskin called upon mortgage servicers to fix their “sloppy and deceptive practices” and said the Fed must impose fines on servicers as part of a push for more forceful government action to fix the broken housing market… It is important “that the severe misconduct that has been uncovered in the mortgage servicing sector be addressed through intensified public enforcement of the law… “The Federal Reserve and other federal regulators must impose penalties for deficiencies that resulted in unsafe and unsound practices,” Ms. Raskin said…. Regulators, including the Fed, must take action against mortgage servicers to correct bad practices, Ms. Raskin said. For example, the Fed and other federal regulators investigated 14 of the largest mortgage servicers and last April found each had “significant problems. The review process is one of several efforts to address revelations that surfaced a year ago over banks’ use of so-called robo-signers, bank employees who signed off on huge numbers of legal foreclosure filings daily and falsely claimed to have personally reviewed each case. Ms. Raskin and fellow Fed Governor Elizabeth Duke have led the central bank’s study of housing policy, an area normally outside the central bank’s purview ” [Emphasis Added.]
    http://online.wsj.com/article/SB10001424052970203513604577146801346334564.html

    3. “NEVADA ATTORNEY GENERAL SUES LENDER PROCESSING SERVICES; ALLEGES WIDESPREAD ABUSES.”
    DECEMBER 16, 2011. “Nevada’s attorney general filed a lawsuit against Lender Processing Services Inc. (LPS) alleging widespread fraud and misleading of consumers, adding to legal woes at the mortgage-services company and sending its shares lower.

    The company’s shares were down 8.7% at $15.83 in
    http://online.wsj.com/article/BT-CO-20111216-710615.html
    4. “BANKS IN PUSH FOR PACT,” WSJ, BUSINESS DECEMBER 13, 2011. BY RUTH SIMON, NICK TIMIRAOS AND DAN FITZPATRICK “Five large lenders could be forced to make concessions worth roughly $19 billion as bank representatives and government officials push to put the finishing touches on a settlement of most state and federal investigations of alleged foreclosure improprieties…” http://online.wsj.com/article/SB10001424052970204336104577094772749499652.html

    5. “MASSACHUSETTS SUES BANKS OVER FORECLOSURES,” DECEMBER 1, 2011, Associated Press, NEW YORK — “Massachusetts sued five major banks Thursday over deceptive foreclosure practices such as the “robo-signing” of documents, potentially undermining negotiations between lenders and state prosecutors across the nation over the same issue…” http://online.wsj.com/article/AP42fa25a884654772aaf9a9ec07459844.html

    6. “NEVADA GRAND JURY INDICTS TWO IN ALLEGED ROBO-SIGNING SCHEME,” WSJ, U.S. NEWS, NOVEMBER 16, 2011. BY RUTH SIMON, “A Nevada grand jury has handed up criminal indictments against two title officers employed by Lender Processing Services Inc. for allegedly directing and supervising a robo-signing scheme, in which documents filed in foreclosure cases were signed without proper legal review…”

    7. “PRICE OF FORECLOSURE SETTLEMENT CLIMBS HIGHER”,. WSJ BUSINESS NOVEMBER 1, 2011 BY RUTH SIMON, NICK TIMIRAOS AND DAN FITZPATRICK “The price tag to settle the state and federal investigation of bank foreclosure practices has increased by at least $5 billion in recent weeks, people familiar with the negotiations say. The proposal on the table now puts a $25 billion value on a settlement by the nation’s five largest mortgage servicing companies—Ally Financial Inc., Bank of America Corp., Citigroup Inc., J.P. Morgan Chase & Co. and Wells Fargo & Co. In exchange for picking up a bigger tab, banks would be released from certain legal claims tied to mortgage originations. Representatives of the five banks declined to comment…” http://online.wsj.com/article/SB10001424052970203707504577010421094503502.html

    8. “BANKS, STATE REACH A DEAL” WSJ MARKETS SEPTEMBER 1, 2011. BY LIZ RAPPAPORT “The mortgage industry will take a step toward cleaning up some of its most controversial practices under a deal between a New York regulator and three financial firms, including Goldman Sachs Group Inc. Under the agreement with the state’s financial-services superintendent, Benjamin M. Lawsky, the three firms—Goldman, its Litton Loan Servicing business and Ocwen Financial Corp.—promised to end so-called robo-signing, in which bank employees signed foreclosure documents without reviewing case files as required by law. They also agreed to comb through loan files for evidence they mishandled borrowers’ paperwork and to cut mortgage payments for some New York homeowners….” http://online.wsj.com/article/SB10001424053111904716604576543021468088268.html

    9. “JUDGES SEE LITTLE IMPROVEMENT IN FORECLOSURE PROCEDURES,” WSJ, HOMES APRIL 29, 2011. By RUTH SIMON, “Some judges are skeptical of claims by lenders that they have substantially improved their foreclosure procedures since controversy over the practices exploded last fall F. Dana Winslow, a N.Y. State Supreme Court Justice in Long Island’s Nassau County, said there has been only “a marginal improvement in what is being submitted to the court.…For example, financial institutions are ‘showing a better chain of title’ about who owns the debt, he said. “But I’m not seeing any additional clarity on who has control over the actual mortgage note signed by the borrower and lender and where the note is….’ In New York, foreclosure filings have declined sharply since New York State Chief Judge Jonathan Lippman issued an order in October requiring lawyers to sign an affidavit affirming that foreclosure paperwork was properly reviewed and to their knowledge is accurate. ‘There’s almost a presumption that there may be something wrong with the documentation,’ said O. Max Gardner III, a lawyer in Shelby, N.C., who represents borrowers in bankruptcy cases. U.S. regulators have ordered banks to take steps to “ensure the accuracy of all documents” used in the foreclosure process….” [Emphasis added.] Write to Ruth Simon at ruth.simon@wsj.com http://online.wsj.com/article/SB10001424052748703367004576289241312106726.html

    10. “FANNIE REPORT WARNED OF FORECLOSURE PROBLEMS IN 2006,” WSJ MARKETS MARCH 25, 2011, By CARRICK MOLLENKAMP And NICK TIMIRAOS, “Fannie Mae was warned in a 2006 internal report of abuses in the way lenders and their law firms handled foreclosures, long before regulators launched investigations into the mortgage industry’s practices. The report said foreclosure attorneys in Florida had “routinely made” false statements in court in an effort to more quickly process foreclosures and raised questions about whether some mortgage servicers or another entity had the legal standing to foreclose… In recent months, federal and state officials have initiated probes into whether banks and foreclosure law firms improperly seized homes by using fraudulent or incomplete paperwork. Some U.S. banks temporarily froze foreclosures to review their processes and now face the prospect of a multibillion-dollar settlement with federal and state officials. Elizabeth Warren, the White House adviser in charge of establishing the new Bureau of Consumer Financial Protection, said in congressional testimony last week that with proper oversight, “the problems in mortgage servicing would have been exposed early and fixed while they were still small.” Ms. Warren didn’t name Fannie Mae and referred to the industry in general….” http://online.wsj.com/article/SB10001424052748703784004576220582457540372.html
    11. “FORECLOSURE TALKS SNAG ON BANK LIABILITY”, WSJ, LAW AUGUST 22, 2011. BY RUTH SIMON, VANESSA O’CONNELL AND NICK TIMIRAOS: “Efforts to reach a settlement that would end the long-running probe of foreclosure practices are snagged over whether banks will get broad legal immunity from state officials for mortgage-related claims. Federal and state officials are seeking penalties of $20 billion to $25 billion from Bank of America Corp., J.P. Morgan Chase & Co. and other financial firms under investigation since last fall. The banks are pushing hard for a deal, but they have insisted on a wide-ranging legal release from state attorneys general. ‘They wanted to be released from everything, including original sin,” said a U.S. official involved in the …’” http://online.wsj.com/article/SB10001424053111904070604576521282894534152.html

    12. “BANKS IN PUSH FOR PACT” WSJ: BUSINESS, DECEMBER 13, 2011.. BY RUTH SIMON, NICK TIMIRAOS AND DAN FITZPATRICK, ”Five large lenders could be forced to make concessions worth roughly $19 billion as bank representatives and government officials push to put the finishing touches on a settlement of most state and federal investigations of alleged foreclosure improprieties…” http://online.wsj.com/article/SB10001424052970204336104577094772749499652.html

    13. “U.S. PROBES FORECLOSURE-DATA PROVIDER-LENDER PROCESSING SERVICES UNIT DRAWS INQUIRY OVER THE STEPS THAT LED TO FAULTY BANK PAPERWORK.” WSJ LAW APRIL 3, By AMIR EFRATI and CARRICK MOLLENKAMP “A subsidiary of a company that is a top provider of the documentation used by banks in the foreclosure process is under investigation by federal prosecutors. The prosecutors are “reviewing the business processes” of the subsidiary of Lender Processing Services Inc., based in Jacksonville, Fla., according to the company’s annual securities filing released in February. People familiar with the matter say the probe is criminal in nature. Michelle Kersch, an LPS spokeswoman, said the subsidiary being investigated is Docx LLC. Docx processes and sometimes produces documents needed by banks to prove they own the mortgages. LPS’s annual report said that the processes under review have been “terminated,” and that the company has expressed its willingness to cooperate. Ms. Kersch declined to comment further on the probe. A spokesman for the U.S. attorney’s office for the middle district of Florida, which the annual report says is handling the matter, declined to comment. The case follows on the dismissal of numerous foreclosure cases in which judges across the U.S. have found that the materials banks had submitted to support their claims were wrong. Faulty bank paperwork has been an issue in foreclosure proceedings since the housing crisis took hold a few years ago. It is often difficult to pin down who the real owner of a mortgage is, thanks to the complexity of the mortgage market.” http://online.wsj.com/article/SB10001424052702303450704575160242758576742.html

  11. @Faith,

    Karma: what goes around comes around… The American people created the biggest financial scandal ever visited upon it, either by concocting it, actively participating or by sitting on the sideline, stuffing up with oreo cookies and watching it unfold.

    Homeowers lost their houses. Rich investors did nothing. Homeowners lost pension plans. Rich investors did nothing. Rich investors started losing, en mass, their money as well. They still did nothing. Rich investors start fearing that they will be next to lose their house. They are starting to wake up.

    What they never realized was that investors and homeowners were the same people from the very beginning… The only difference was the amount they had to lose. Leveling of the plainfield.

  12. Now we all know how the Native Americans felt as they watched their lands being taken and they could do nothing about it even though they signed papers with the white mans government.

  13. Tid bit I did not know until recently… Guess who insured congress pension funds… AIG

  14. @javagold ,

    “Banks” pay the property taxes because if the taxes are delinquent somebody will buy the “tax certificate” which in Florida accrues 18% interest (1.5% a month or part of a month) ,, Florida law allows the buyer of the certificate to foreclose after a minimum of 2 years and a max of 5 years… What’s so sweet is that if you get a foreclosure through a tax deed sale all liens are wiped out…

    http://www.professorprofits.com/states/state.php?name=Florida

  15. It’s terrible to have an epiphany that reveals my ignorance of a subject.

    The only way this could work would be from a standpoint that is prior to entry into the banking profession or the Wall Street profession, or even the government and congressional professions.

    Prior to these people obtaining their positions of authority, they are young and impressionable. They have class mates and friends, and cohorts, and clubs and organizations they join.

    Schools start off with these clubs with the PTA (Parent Teacher Association), kids join the Band, or Choir, or some sort of group for the science kids, or the math kids or debate clubs. There’s the Girl scouts and Boy scouts, and it’s from an early age they are taught to join groups that have a common goal or a common theme or a common perspective of how they want the world to be. There’s the Peace Corps, and of course military organizations, religious organizations, secret organizations, etc.

    It’s that beginning that leads to this end.

    How can I judge someone who has joined some organization, even if it’s no more than all of them being an alumni of a certain college or university, and in their association with whatever, they had decided what future they wanted to make for themselves, at the expense of the rest of us who were ‘not’ part of the group.

    It’s there from the beginning, and I didn’t judge it at the beginning, so for me, and this is my soul development, how can I point a finger at their association at the end. I won’t even get into groups that have common themes that are sexual, racist, nationality, or even ethnic.

    They are all different versions of the same separationist ideas.

    It’s that separationist way of belonging that has led to this situation we find our self in.

    I wish I’d had full disclosure of their intentions so I would not be an unwilling participant in the game of ‘steal your home, steal your wealth, and make the world unlivable for you, not me’.

    I don’t want to play that game. I came here just like they did with the same rights to the same life. I have a right to be here, to live, to move freely, to seek shelter, and seek protection from the elements and from trespassers who don’t know the boundaries of this existence, to find my way but not at the forced direction someone else made me go by what they did to block me or to prevent me from gaining access to something I should have by birth right had access to.

    I wanted to walk this experience and let them all play their game with each other, and let me live without playing unwillingly.

    That’s the distortion. If all of us were in same societies, secret or otherwise, or graduated from the same schools, or were part of the same clubs and organizations, we’d know the hierarchy of entity and know the rules and how to play and what to do to rise in the ranks, but it is an abomination of the original truth that ‘all must play’ and all won’t know they are forced to play because we won’t tell you, but we’ll oppress you and your families such that the only choice you have it to play.

    Listen. I don’t want to play anymore. I don’t want to comply to your will. I don’t want to fight you, and I want to exercise my right to go my way according to my will without trespassing on you and without the rules of your game trespassing on me.

    I have backed out of many things I unwillingly joined not knowing they were part of the game. I thought they were part of me ‘determining my way’, but once I go a way, someone decides that by my selection I want to play. That’s not true. I just want that right I have from the creator. All paths are infinite, and no path is marked as a ‘do not pass Go unless you are playing’ path. So when I see the signs and check out that road, I don’t want someone to assumed I have given away my ‘Free Will’.

    A Free Will contract cannot exist unless it’s expressed and even then One has to be in their right mind to decide to give that up, and how can one be in their right mind to give up their Free Will. It would have to be under Duress or Coercion that one would give up their Free Will.

    How can this game continue and the players continue to call this a fair game, when the rules we do know about are violated, and no one told us there was one more rule, that some players can ignore the rules of the game.

    There is no game where all the rules cannot be known, because that would mean all the consequences of a violation of any rule would not be known.

    If one violates a rule, the know the consequences of the violation, that’s a rule that is also written, but if one has joined a group or society where the rules do not apply, well the consequences of being a member of that group or society is also an unknown consequence.

    Don’t you see? That’s why the Universal Law of Free Will was created. We know not to violate that law and not to trespass, and to have a group that says it’s okay means the ultimate trespass has the ultimate penalty and with an unknown rule of ‘right to trespass’, there is an unknown judgment waiting on those who have played that game.

    Karma is a consequence of any violation of any rule. The Free Will rule is an Earth Rule, but on a Cosmic and Universal level, to violate the Will of the Creator who is in every aspect of the game brings down the judgment of the Creator.

    This is beyond man and the karma we create among ourselves for what we do to each other. This Earth experience was supposed to be different, without the interference of each of us against each other.

    I see this as the end game for many. The bankers have already played their role. They have set their fate, not for us but for their selves. Hey bankers. I hope you get to spend it, because you sure can’t take it with you. The Attorney Generals are in the game now, this is the judgment we’ve been waiting for. We are in revelations. The judges who have dispossessed us have signed their warrants…yes that’s what it is…while they were signing them thinking themselves higher or better or godlier, they signed their own fate in the path they took under the oath they swore to protect and serve. The lawyers who were hired by the bankers and their law firm employees and the document servers who created fraud documents and the county clerks who filed these documents without pushing back saying, “I can’t file this…it violates our state laws for having standing to sue and showing a right to own or convey an property…there is no assignment so you can’t file this.’ And the county attorney who serves as trustee (I think, not sure, but what else is he there for..a county is not a republic form of government like a state or federal), he has a fudiciary duty to the property and ownership and wealth of the county he’s managing under trust.

    This is their judgment, we just happen to be the witnesses of the Creator into their deeds.

    The epiphany is that from the moment someone changed the rules of the planet such that we have Free Will but they had a rule that they could violate the rule, the end was already in play. The end of the game had been set as soon as the beginning of the game was created!

    Magnificent! Totally magnificent! That’s what I call divine plan.

    Now full judgment of the entire planet is occurring and this is a once in a infinity (thus far) event. Never has the planet itself on how she handles the inhabitants and what they do to her, and the people who handle what is being done to them, and those who are doing these things, and those we are manipulating these things from behind the scenes, all been judged by their deeds and a separation of the masses will occur.

    The negatives in their secret societies and their ‘our Free Will is no one has Free Will’ people will be separated from those who enjoy Free Will and recognize the importance of no trespass on another’s Free Will.

    Now that I know…keep the home you stole. That is the shirt taken off my back when I needed it, but if you must have it and take it, I will not fight you for it back. My Creator promised me that all will be taken care of, but that will come when you are removed.

    Settle for your measly billions, AG. We need you to sign on the dotted line so we know which way you tend to go. You have dragged out your allegiance. Only a few have stepped back and shown us their true selves and their belief in the oath they took over any organization they may have joined.

    Please, I’m like O now…hurry up and make a decision. The rest of the Universe is ready to move forward. You can’t straddle the fence for long, there is a statue of limitations for when Fraud is discovered until you have to do something about it or the statute runs out. Allowing it to run out shows us your decision too.

    You can’t hide…I’m loving this vantage point.

    Revelation is the revealing of all things hidden. The truth will be known to all of us and the planet and the universe and the cosmos. Everyone in the galaxy can see your individual spark of the Creator, and everyone will know what you have done.

    This is greater than this planet and these people who have been killed, maimed, starved, and made homeless. It’s greater.

    No matter where I am, I am always home. My body is home to my spirit. Just put a bubble on the surface of the earth and point to where I sit right now and say ‘You are Here’, When I go to the grocery store, just move it over there and say ‘You are Here’.

    I am always home. So no one stole my home, they took some property I had a right to by their own constitutional documents.

    Your game really is over. The game of rules that say you can violate the rules is over. The masses have spoken and we don’t want to play anymore.

    I hope you enjoy your eternity where you are headed. Now I know why they call it ‘hell’. Here you could force your rules of violating the rules on people whether we liked it or not. There; all of you will be violating each other and trespassing on each other, and none of you will have a right to property without it being seized or a right to have food because someone can destroy what you create, or a right to work, because someone can decide to close shop and not pay you for the work you’ve done, and everything you set up, because the rules are that ‘there are no rules’, you will not have what you had here, and the ultimate hell will be you remember what you had here and you live out your eternity remembering when you were in heaven and you created rules to turn it inot a hell.

    You will be the ones kicked out of heaven. As above so below.

    To have seen the darkest side of creation and not turn dark ourselves in response to the darkness thrust upon us; is truly a cosmic lesson for all Conscience.

    The story of the match hold true. You can take a dark room and strike a match as the only light source and make darkness go way and become mere shadows of what is used to be in that room. But you cannot take a lit room and do anything similar where you bring that same amount of dark in that size of a match and activate the dark that is the size of the match and make that room dark at all; at most you only create a shadow.

    The time is nigh people.
    Enjoy the dog and pony shows. If the show is negative based, they are trying to pull you into their space (maybe even their space ships if you are part of that crowd) to take you with them to the unhappy place they created for their selves.

    One should never create a game with rules that the rules don’t apply, there are unintended consequences of playing such a game and that is, consequences of playing such a game where the end is not written but will be experience anyway by the players who played.

    Sorry for being winded, This will make sense to some and seem like rambling to others. Congratulations and apologies to both.
    Trespass Unwanted, corporeal, life, free. enjoying this experience but ready to exercise my right of Self Determination, and not a life by someone else’s Will.

    Game Over!

  16. perhaps this why the banks are still paying the property taxes ????

  17. Right of due process forces judge to admit notary declaration

  18. my brain was mush after another 20 hour day of reading, thinking, guessing, and all. Last night I dreamed my wagon train of settlers was surrounded by wild banksters and their attorney. The wagons were on fire and people we screaming. Heard someone say walk into Recon office with a Notary, ask for original deed and note before writing my check to tender, Notary completes declaration that Recon does not hold the note. Walk across the street to BOA saying Recon said you hold the docs, Notary complete another declaration saying BOA does not have docs either. Paralegal draws up proper notice to defendents of breach of contract siting consquences of failure of fuduciary duty and damages for fraudclosue. Paralegal says robo and note arguements make money for attorneys who know courts don’t listen to homeowners. Says dismiss attorney and his complain, dismiss bk filing, and for $50 per page just a few hundred dollars will buy more time–instead of hearing attorneys just say “Sorry, too bad for you”

    I guess this strategy is “go to the office and get a notarized declaration that says no one has the note” then bring that to the judge.

    What say ye about that? Am I dreaming? Please reply now

  19. A must listen especially for the California Victims of Fraud

    http://mandelman.ml-implode.com/2012/02/attorney-wins-free-house-in-case-before-9th-circuit-court-of-appeals-a-mandelman-matters-podcast/

    The banks want us to pay for their mistakes unbelievable.

    NEVER AGAIN
    BE STRONG AND COURAGEOUS

  20. locate local news articles that state”its industry practice to file defective foreclosures” and yo have the golden keys to the bank

  21. we all need help at this point

  22. hi all good morning so in a ut shell we and the investors have been lied to and our president doesnt know this?? come on i am a very educated person , why i found these websites to begin with) i am an RN that has to critically think to save lives for 25 years and we are having our homes (and investors their invested pensions) stolen from us how does the president of the united states not knowthis i am sorry seems not right to me. What i know about realestate when you apply for a mortgage and an appraisal is done. the info goes to underwriting. if underwriting was not doing their due dilegence these mortgages are all null and void. we were approved for a mortgage on falsified information. that is breech of contract. although we signed the promissory note not using adequate underwriting standards to approve people for homes we can not afford is breech of contract. so from closing the loans were fake. which brings us to what is happening now with robosigning the documents are fake. what i am seeing is our due process failed by a society that looks up to banks as being god almighty. Please you all have to know people still beleive that and are leaving their homes.

  23. SAD–this is everybody’s answer–this is what happens when Murdoch gets control–this newspaper can sweep away the evidentiary burdens of proof on homeowners to establish faulty foreclosures –certainly as to the 14-22 servicers that signed onto the consents–this is huge–must be something out there in WSJ–if you live in NY–use NYT—if LA use LA times etc–but for flyover states we need WSJ—-why is WSJ failing to nbe a newspaper

  24. THIS MAY BE AN ANSWER FOR MANY OF YOU__IT SHOULD BE A KEY PIECE OF YOUR CASE__EVIDENCE FROM NEWSPAPERS__JUDGES MUST ACCEPT SOME STATEMENTS OF INDUSTRY PRACTICE BEING DEFECTIVE__THEREFORE YOURS AUTOMATICALLY__RATHER THAN YOU PROVING YOURS IS BY ITSELF{DONT IGNORE YOURS BUT REINFORCE

    ALL STATES HAVE ESSENTIALLY SAME RULE AS THE FEDERAL RULE–but check casesw–you must request court take judicial notice caption is “Request Court take judicial notice” list articles and excerpts that you want to use as evidence–but must introduce full articles too —check out with your lawyers–the recent stuff re settlements and consents changes the evidentiary lanscape re pleading defective foreclosures—look at abuse of process now too

    Rule 201. Judicial Notice of Adjudicative Facts
    (a) Scope. This rule governs judicial notice of an adjudicative fact only, not a legislative fact.

    (b) Kinds of Facts That May Be Judicially Noticed. The court may judicially notice a fact that is not subject to reasonable dispute because it:

    (1) is generally known within the trial court’s territorial jurisdiction; or

    (2) can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.

    (c) Taking Notice. The court:

    (1) may take judicial notice on its own; or

    (2) must take judicial notice if a party requests it and the court is supplied with the necessary information.

    (d) Timing. The court may take judicial notice at any stage of the proceeding.

    (e) Opportunity to Be Heard. On timely request, a party is entitled to be heard on the propriety of taking judicial notice and the nature of the fact to be noticed. If the court takes judicial notice before notifying a party, the party, on request, is still entitled to be heard.

  25. DCB,
    i think i read (just this morning) that the WSJ had articles ready to go on this subject but sat on them and never published/printed them !!!!

  26. PLEASE HELP ANYBODY–I need Wall Street Journal article that states something about crappy foreclosure practices being an “industry prsctice” ——iv seen it everywhere else—–but my court does not take judicial notice of any press but WSJ ? help

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