Whistleblower Bangs BofA for $14.5 million in Mortgage Case

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Editor’s Comment:

Countrywide Financial Inflated Appraisals 

For people in law enforcement this is a time when it gets to be fun going after the big guys.  Being arrogant to the highest degree going into this mortgage mess you can only imagine the ego of the Titans of Wall Street after making trillions of dollars in turning the entire mortgage process on its head and reversing all common sense criteria in underwriting loans.

The rats are leaving the ship by the thousands, whether they want to or not.  There is hardly a day that goes by that some former employee of Countrywide, Bank of America, Chase, Citi or Wells Fargo does not reveal that they were under instructions to violate regulations and law.

The inflation of appraisals of the securities and the inflation of the homes themselves was the key to the success of the Wall Street plan.  This plan was devoted to sucking out as much o the liquidity in the marketplace as they could possibly achieve.  This in itself is a reversal of even the purpose of allowing Wall Street to exist.  Wall Street’s mandate is to provide liquidity in the marketplace and not taking it away.  Instead they took the equivalent of the gross domestic product of several countries combined (including the United States) and converted the proceeds to “trading profits”.

It is good that these whistleblowers are appearing and it’s even good they are making so much money.  This will encourage other whistleblowers and will encourage those attorneys who thought mortgage litigation was beneath them.  As these cases proceed we will see more and more understandable facts emerge that explain the tragic reversal of our financial model and the historic consequences to most of the major countries of the world.

Bank of America Whistleblower Receives $14.5 million in Mortgage Case

By Rick Rothacker

(Reuters) – A former home appraiser will receive $14.5 million as part of a whistleblower lawsuit that accused subprime lender Countrywide Financial of inflating appraisals on government-insured loans, his attorneys said Tuesday.

Kyle Lagow’s lawsuit sparked an investigation that culminated in a $1 billion settlement announced in February between Bank of America Corp (BAC.N) and the U.S. Justice Department over allegations of mortgage fraud at Countrywide, his attorneys said in a news release. Bank of America bought Countrywide in 2008.

Lagow’s suit was one of five whistleblower complaints that were folded into the $25 billion national mortgage settlement that state and federal officials reached with Bank of America and four other lenders this year. His suit was unsealed in February, but the amount of his settlement had not been disclosed.

Gregory Mackler, a whistleblower who challenged Bank of America’s handling of the government’s HAMP mortgage modification program, has also finalized a settlement, said Shayne Stevenson, an attorney with the Hagens Berman law firm, which represented both whistleblowers. Stevenson declined to comment on Mackler’s settlement amount.

The complaints were brought under a whistleblower provision in the U.S. False Claims Act, which allows private individuals with knowledge of wrongdoing to bring suits on behalf of the government and share in the proceeds of any settlement.

Both Lagow and Mackler lost their jobs after raising concerns about practices at their companies and faced difficult times awaiting settlements, Stevenson said. Lagow, who worked in a Countrywide appraisal unit, filed his suit in 2009; Mackler, who worked at a firm called Urban Lending Solutions, brought his case in 2011.

“These guys are inspirational,” Stevenson said. “They both did the right thing. They should inspire other people to come forward.”

Bank of America declined to comment. A spokesman for the U.S. Attorney’s Office in the Eastern District of New York, which handled the Bank of America settlement, also declined to comment.

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25 Responses

  1. […] Whistleblower Bangs BofA for $14.5 million in Mortgage Case (livinglies.wordpress.com) […]

  2. […] Read more… Posted in Banks, MERS, News Around The Country, States « Table of Contents of 2nd Edition of Attorney Workbook Attention Hawaii Homeowners with Bank of America and Ocwen Loans… Let Me Help » You can leave a response, or trackback from your own site. […]

  3. I KNOW FROM THE INSIDE TO THE OUTSIDE. THAT IN NEW YORK LONG ISLAND SUFFOLK COUNTY. NOT ONE MORTGAGE DOCUMENT FILED IN THE COUNTY CENTER IN RIVERHEAD IS ACTUALLY NOTARIZED BY A TRUE NOTARY. N0 BANK VPS EVER SIGNED THOSE DOCUMENTS…I MEAN NONE. ALL ARE PHONIES. COUNTY IS GOING BROKE BUT EMPLOYEES PADDING THEIR POCKETS WITH THE FEDERAL GOVERNMENTS MONEY.

  4. @SS

    How ’bout this:

    — DERIVATIVES —- It goes through an automated clearing house — no actual cash exchanged.

    Derivative clearing house — just “cancels” “ownership” by the exchange— all in the name of the trustee — who refuses to disclose the “derivative” holder. “Funding” –is not funding at all. It is a “SWAP” — “swap out” of collection rights. There is no CASH exchange in the “funding.” It is simply a “Swap-out” of collection rights. And, all in the name of a false “creditor” — a trustee —for undisclosed, deregulated, creditor entity.

    SWAP OUT DERIVATIVE. NO cash funding.

  5. carrie 22 wins to date sweet heart – ask NG about his ATM track record and experience in securities …. Null like you Null

  6. http://www.courts.ca.gov/opinions/nonpub/B233529.PDF

    “As in Fontenot, we conclude
    that Deutsche Bank is presumed to be a proper party to foreclose on Bushkin’s
    loan absent substantial evidence to the contrary.”

    “John Gallagher, a Deutsche Bank spokesman, said the bank would not comment on details of the U.S. Trustees’ motion.

    But in an e-mailed statement he said that any steps taken in the case had been the responsibility of the loan servicer, not Deutsche Bank.

    Servicers handle routine tasks, such as collecting mortgage payments, tracking defaults, and initiating foreclosure actions. But the court documents show that the foreclosure action, technically known as a “proof of claim,” was filed by Deutsche Bank itself.

    Lawyers expert on loan securitizations said that the servicers work for the trustees, which directly represent the interests of the mortgage trust investors. Gallagher did not say whether Deutsche Bank would contest the U.S. Trustee’s motion.”

  7. @SS

    Bottom line: NON “LOAN OWNERS” ARE SELLING/STEALING HOMES…hello?

  8. http://survivingglobalrecession.wordpress.com/2012/05/07/landmark-lawsuit-filed-n-y-supreme-court-by-us-home-owners-implicates-obama-and-big-banks-in-massive-global-laundering-scheme/

    “The laundering of trillions of dollars of U.S. taxpayer money — and the wrongful taking of the homes of those taxpayers — was known by the Administration and expressly supported by it. Evidence uncovered by the plaintiffs revealed that the Administration ignored its own agencies’ reports — and reports from the Department of Homeland Security — about this situation, dating as far back as 2010,” Wittenberg said.

  9. uh oh…he’s baaaaaaaaack…

  10. Carie – No Pass Go!

    “…since the “loan” refinances (subprime/alt-a), and jumbo new purchases were [non-compliant]
    SS – Ahhh what?

    And non-performing manufactured defaults,
    SS [What – even 26% default is upwards of near 75% responsible homeowners…What?

    No funding at all was necessary (except for the cash-out for the loans).

    SS Oh oh – is this another appeal towards the creation of money gibberish?

    The warehouse lines of credit never actually transferred any actual
    Cash for funding.

    SS -Do you know what the differences are for tier 1 and tier II capital?

    These lines of credit were simply “credit lines” that the “Depositor” would provide to their correspondent lenders.

    SS The depositor is the common stock offering held by the tax payer by a Taxable REIT subsidiary / see TRS.

    SS – The funding was from an FDIC or FSB member bank request for wire under the ABA scheme holding to the Fed and US Treasury. That wire could have come from AIG, Travlers, Black Rock Shell Co , Co-America, Downey Savings , Crispy Chicken , Sybianese Limbercheese As you please – I mean What ?

    SS The depositors were offered the commercial lines as debt – a commerical receivable and washed them into paid in capital into the corpus.

    SS – Oh my lord – What ? Your winging it darling – stop! Please, in the name of lust – you’re winging it. Have you been on Wall Street or conducted a private placement or structured finance offering?

    Read Wiley’s GAAP for insight – Your talking economic Zulu

    SS

    Now a lookie here –

    as for shorting Goldman – look at the price of its current “Call value” trading somewhat deep in the money – going out 9 months to 12 months – You keep your eye on the premium over the next 30 days. ….watch the premuim champo ….

    S Shafer

  11. . . . .days since the Arizona Attorney General Tom Horne told Neil that he would get back to Neil on why the AZ AG is not prosecuting the banks and servicers for corruption and racketeering by submitting false credit bids from non-creditors at foreclosure auctions.

    Corruption – saving the US housing market from liquidating its homes to German and Asian Banks?

    Servicers – Give Soliman credit here – NO SERVICING ALLOWED UNDER ASC 320 AND OLDER FAS 140 ..get it – No ?

    Read the Deed & plant the Seed before you Plead – if you agreed to a public or private sale , look Holmes ….look at your deed Private sales are allowed. What is happening here is a failure to communicate >>>

    False Credit Bids,- IRS rules for washing assets – Uhhhhh …Hey Gilligan lil buddy …pay attention .

    Non Creditors at foreclosure auctions? (Hmmm Lost …what , I mean , Look , hey … ahhhh …Okay

    Sail

    Analyst

  12. Did you catch the Obama speech in Las Vegas a while back? Talking about HOPE or SCOPE or DOPE for homeowners. LOL, But, where is this fraud in the appraisal you referred too. ?

    In Obama’s own words…”No appraisal is necessary!”

    Your site is up and running – going on four years and still your behind the eight ball by months. Wake up Cue Ball X$#?

    analyst

  13. appraisals were over stated – is that what yur suggesting here?

  14. I rest my case: no matter how egregious your behavior, if you are part of the who’s who of banking, you are literally indestructible. Even if you were once “ousted in a big shake up”. Isn’t that as great country?

    http://www.nytimes.com/pages/business/global/index.html

    Fannie Mae Names Its Top Lawyer as Chief
    By NELSON D. SCHWARTZ 8:28 PM ET
    The government-backed mortgage finance giant appointed Timothy Mayopoulos, who was ousted in a shake-up at Bank of America at the height of the financial crisis.

    .

  15. iwantmynpv- nice commentary on what we already know will come to pass. You should post more often, I appreciate the posts from a seasoned insider. JPMorganChase can only be described as a criminal organization, nothing more, nothing less. I wish I had the time and the wherewithal to bring suit on behalf on the homeowners of the USA to drive home the illegalities which are being perpetrated against them. Keep up the good work.

  16. Pie,

    Jamie boy is a Harvard guy. He’ll find a handy job at the Feds. And I bet Covington and Burling can use him too.

    The sad thing is that if Chase goes down (and I want that very, very much), 28,000 poor saps will find themselves out of a job. That is dreadful!!!

    Now, about the Euro: Germany is willing to safeguard Europe… if countries abdicate all sovereignty in its favor. Can’t France doing that…

  17. For anyone who took my advice and shorted Morgan Stanley at 22 last month – do not cover your short. Morgan Stanley will ahve to be absorbed by Goldman or UBS by year end, or they will be required to raise 15 billion in new capital. Nobody is giving Morgan 15 Billion, except maybe Bernanke. They have greater exposure to the imminent euro collapse than even Citi.

    Goodbye Morgan, and with any luck some of the officers will be jailed and stripped of their ill gotten gains. I would love to see some of their wives applying for a loan modification. It would be a great movie..

    “Mam, what exactly is your hardship” “Well sir, my husband fleeced the taxpayers of the US, and we are going to lose our house while he plays hide the salami in prison”

    “Miss i am sorry, but you do not qualify” “Get your ugly kids, pack up your toy poodle and get out”

    The camera pans to an ugly cell scene with loud screaming…

  18. Got a question and it may be a stupid one but here goes. Do the Whistleblowers actually get the money or do they have to fight to get the payoff?

    Whatever has a spitting or unzipping event for Stumpf let me know, I’m in.

  19. @Carie,

    They’re all paid a very helfty compensation but the bulk of it is in stocks. So, all we need to do is pray, pray, pray that the whole shabbang crumbles once and for all and the stock ends up being worthless, Not only that but, in some cases, investors may go (and are more and more inclined to do so) after the CEOs personally. So, once they’ve paid their attorneys and settled out of court, the plain field should be pretty leveled…That would already take care of lowering the inequity quite a bit. Then, we need to go after their taxes. You know, the damn taxes they don’t pay because of the Swiss/Bahamas/Bermuda accounts?

    It’s coming though. It’s coming.

  20. Who says crime doesn’t pay:

    In 2010, Stumpf’s total compensation was $17,568,387, with a base salary of $3,239,847, $3,300,000 in cash bonuses, $11,000,009 in stock granted, and $28,531 in other compensation.

  21. Waiting are the whistleblowers for this…:

    “…since the “loan” refinances (subprime/alt-a), and jumbo new purchases were non-compliant and non-performing manufactured defaults, no funding at all was necessary (except for the cash-out for the loans). The warehouse lines of credit never actually transferred any actual cash for funding. These lines of credit were simply “credit lines” that the “Depositor” would provide to their correspondent lenders. Once the “loan” refinance origination was completed the Depositor would then reverse the “credit” owed by the correspondent (originator). This never involved any actual deposit of cash proceeds —- the “funding” payoff check is never “deposited” into any bank account. The check is routed to a security derivative clearing house — who then simply cancels the credit-line transaction.”
    “DERIVATIVES —- It goes through an automated clearing house — no actual cash exchanged.
    Derivative clearing house — just “cancels” “ownership” by the exchange— all in the name of the trustee — who refuses to disclose the “derivative” holder. “Funding” –is not funding at all. It is a “SWAP” — “swap out” of collection rights. The SEC explained this…quite some time ago. Knew about derivatives — but the SEC confirmed. There is no CASH exchange in the “funding.” It is simply a “Swap-out” of collection rights. And, all in the name of a false “creditor” — a trustee —for undisclosed, deregulated, creditor entity.
    SWAP OUT DERIVATIVE. NO cash funding.”

  22. @Jordana….… I will be the first to spit on John Stumpf’s shoes

    I wouldn’t waste the spit. I would, however, unzip my…..

  23. I agree with you Jordana!!!!

  24. I love this stuff. It is the nectar of gods! The insider signatories to the false and fraudulent affidavits, assignments and allonges (the 3A’s) will come soon. Hopefully, it will be from Wells and I will be the first to spit on John Stumpf’s shoes.

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