“A day of reckoning may soon be coming.” Yves Smith

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Editor’s Comment:  

Yes it is a mouthful. But it boils down to this — Barclay’s Bank in cooperation with others manipulated the actual LIBOR rates which in turn effects other rates around the world. If you take this information and apply it to any loan that supposedly was reset on the basis of interest rates, you come up with the inevitable conclusion that the resets during the period of the manipulation were probably wrong.

So if a mortgage rate went from 3% to 4% on the basis of a change in interest rates tied to the note, then the proper rate charged to the homeowner was either higher or lower than what was actually charged. If the rate changed was directly  tied to LIBOR that is the end of the argument. If the reset was based upon some other index you will find that those rates were influenced by LIBOR rates. 

In a nutshell what this means is that most notices of default and foreclosures were based upon the wrong figures. In many cases the borrower was being charged too much and the loan balance was being overstated. This effects not only the notice of default but the amount required from the borrower for redemption and the amount of the credit bid allowed (presuming that the bidder was indeed the creditor which it seems is never the case in this country). 

The bottom line is that even if all the other defects in the origination of the loan, the foreclosure of the loan, and the auction of the loan are accepted as true, the remaining defect deals with the real thing — money. Procedurally I have an issue with those who file these defensive positions in a motion to dismiss. I think a simple denial of the foreclosers allegations or implied allegations coupled with affirmative defenses is the proper thing to do, even though it puts the burden of proof as to LIBOR and other rates on the borrower. But the truth be told, the Judges are putting the burden of persuasion on the borrowers anyway. 

Yves Smith has hit on something of huge importance. 

Yes, Virginia, the Real Action in the Libor Scandal Was in the Derivatives

As the Libor scandal has given an outlet for long-simmering anger against wanker bankers in the UK, there have been some efforts in the media to puzzle out who might have won or lost from the manipulations, as well as arguments that they were as “victimless” or helped people (as in reporting an artificially low Libor during the crisis led to lower interest rate resets on adjustable rate loans pegged to Libor; what’s not to like about that?)

What we have so far is a lot of drunk under the streetlight behavior: people trying to relate the scandal to the part that is most visible and easy to understand, meaning the loan market that keys off Libor. As much as that’s a really big number ($10 trillion), it is trivial compared to the relevant derivatives. From the FSA letter to Barclays:

The Eurodollar futures contract traded on the CME in Chicago (which is the largest interest rate futures contract by volume in the world) has US dollar LIBOR as its reference rate. The value of volume of that contract traded in 2011 was over 564 trillion US dollars.

This is only one blooming exchange contract, albeit a monster of a contract. There are loads of OTC contracts in addition to that:

Interest rate derivative contracts typically contain payment terms that refer to benchmark rates. LIBOR and EURIBOR are by far the most prevalent benchmark rates used in euro, US dollar and sterling OTC interest rate derivatives contracts and exchange traded interest rate contracts.

Devil’s advocates have also argued that while Barclays submitted improper Libor rates, there’s no evidence they influenced the rates. I read the FSA document quite differently.

Recall that (so far) we have two phases of activity: one from 2005 to 2007, in which derivatives traders at Barclays would lean on the Submitters on a regular basis to place bids that would help improve the profits of positions they had on, and a later phase, during the crisis, where Barclays felt its peers were submitting lowball figures to the daily fixings and it was getting bad press for being an outlier, and it went to posting what it though were competitive, as in artificially low, data.

The earlier period looks to be far more damaging, and the regulators may have gotten only the tip of the iceberg. Readers have told me this sort of manipulation dates from at least 2001; the Economist quotes an insider saying it goes back 15 years. And with so few banks in the end influencing the rate, it isn’t hard to imagine the gaming worked. If you have 16 banks on the panel, as you did in late 2008, the top and bottom 25% of the bids are eliminated and the ones left are averaged. So it’s the average of 8 that remained that would determine the rate.

First, the FSA document suggests that it has only partial information, and it quotes e-mails and some isolated instant messages. A lot, presumably most, of the communication was verbal. But even with what the FSA presented, the traders were often and aggressively working with the submitters to influence their bids, and the FSA found in the overwhelming majority of the time the submitters cooperated. The directions were often quite specific, to hit a certain number, even to submit a figure that would be so high or so low as to get Barclays’ data point excluded from the daily calculation. The enthusiasm and frequency with which the traders were pushing the submitters, as well as the reaction in the market, suggests these efforts were having an impact:

Other individuals with no apparent vested interest in the strategy commented on the EURIBOR rates on 19 March 2007. Trader D stated in an instant message to an external trader “look at the games in EURIBOR today […] I am sure a few names made a killing”. A trader at a hedge fund communicated with Trader E, also on 19 March 2007, stating “it’s becoming dangerous to trade in 3m imms […], especially when Barclays sets the 3m very low […] it does draw attention to you guys. It doesn’t look very professional”

But how could this be? Barclays was only one of a number of banks putting in daily Libor prices.

First, the FSA account notes that Barclays was sometimes working with other banks. It would seem likely that this was more frequent than the paper trail thus far would suggest. Someone working with other banks to rig rates would probably be a bit more circumspect than in internal communications. The fact that the traders would sometimes try to have a rate put in that was intended to be knocked out of the final calculation suggests a collusive strategy.

Second, the derivative traders weren’t working just with the submitters. The report indicates that on at least on occasion, they got the cash desk to cooperate with the manipulation. And again, if the derivative traders sometimes worked with traders in other banks, they might have gotten those cash desks to play along with their scheme.

Third, their objectives for rate moving were to achieve single or a few basis points. Some examples:

Trader B explained “I really need a very very low 3m fixing on Monday – preferably we get kicked out. We have about 80 yards [billion] fixing for the desk and each 0.1 [one basis point] lower in the fix is a huge help for us.

..the Submitter responded positively on 10 November 2006, “of course we will put in a low fixing” and on 13 November indicated they would make a submission lower than the Brokers thought EURIBOR would set that day, “no problem. I had not forgotten. The brokers are going for 3.372, we will put in 36 for our contribution”

As the Economist points out:

The sums involved might have been huge. Barclays was a leading trader of these sorts of derivatives, and even relatively small moves in the final value of LIBOR could have resulted in daily profits or losses worth millions of dollars. In 2007, for instance, the loss (or gain) that Barclays stood to make from normal moves in interest rates over any given day was £20m ($40m at the time). In settlements with the Financial Services Authority (FSA) in Britain and America’s Department of Justice, Barclays accepted that its traders had manipulated rates on hundreds of occasions.

And the idea that one party’s loss from the manipulation was another’s gain is irrelevant to those on the losing side:

….banks will be sued only by those who have lost, and will be unable to claim back the unjust gains made by some of their other customers. Lawyers acting for corporations or other banks say their clients are also considering whether they can walk away from contracts with banks such as long-term derivatives priced off LIBOR.

I expect the firms involved to face a locust swarm of litigation. Lawyers may accomplish what regulators and politicians refused to do: strip the banks of ill gotten gains and bring their preening CEOs and “producers” down a few notches. A day of reckoning may finally be coming.


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30 Responses

  1. First of all I want to say awesome blog! I had a quick question which I’d like to ask if you do not mind. I was curious to find out how you center yourself and clear your thoughts before writing. I’ve had a tough time clearing my thoughts in getting my thoughts
    out there. I do take pleasure in writing however it just seems like
    the first 10 to 15 minutes are lost just trying to figure out how to begin.

    Any ideas or tips? Many thanks!

  2. […] Read more… Posted in Banks, MERS, News Around The Country, States « Registers of Deeds in Five NC Counties Take Issue with Fannie and Freddie’s Tax Exempt Status You can leave a response, or trackback from your own site. […]

  3. @dcb

    I like it!

  4. @ dc: “a typical US attorney” is a coward ignorant bum, nothing more…

  5. @ CARIE

    I disagree about retro impact–if the owner was not established–then the party with power to release the mortgage or DOT–whatever they have is also unknown. If you as the prior owner show up on the front lawn of some new party who has nothing more than a limited warrantee deed—i cannot see how the prosecutor could prove beyond a reasonable doubt that you are a trespasser. I think that the georgia rule should be tested in this way—–the new owner should be forced to quiet title against you——and the true mortgage holder—there is no other way to clear the title—and if you beat em to the front yard —they must buy your quit claim from you

  6. @GUEST

    The surplus of young attys simply is not trained in what to ook for –it seems that what would be the way to go would be to trigger an arrest for tresspass and then defend with your quit claim deed—-and point to the limited warrantee deed as evidence that the current owner is not certain beyond a reasonable doubt that the property truly belongs to him—pose the defects in the trust–prior litigation on title and obtain an acquital from judge or jury—the current owner would then be on notice that people can camp in his front yard at will —–and the entire ruse would be up—this seemns to be the best way to attack the weak titles–to bring this to a head–my thought would be if i were a judge that id be hard pressed to find as a matter of law that the indiviual camper with a quit claim was guilty of trespass beyonf reasonable doubt—judgment not withstanding the verdict–this would be an earthshaking case on appeal

  7. @GUEST
    The typical US attorney that is neither a tax atty nor an estate atty —will understand a clean “title” to be akin to having an automobile title—–a “general warrantee deed” –being a warranteed fee simple absolute without contingencies or restrictions–without liens—no litigation [lis pendens] touching the property—no property taxes pending unpaid

    The banks since 2005 have virtually rewritten the books on real property law by having the MERS /securitization systems —today anytime a foreclosure or DIL is involved—certainly—or even a property where there was a mortgage that the owner believes is satisfied —the deed more than likely will be a “limited warranty deed” —which is barely one step better than a flat out Quit Claim deed

    the limited warranty deed basically is a statement by the owner that there is no title issue that came into being after he got the last deed—previously there was a chain of general warrantee deeds that stretched back to the grant from the King of England or the United states govt for a territory—-but the banks have trashed 200 years of title certainty ——by playing securitization games—so the titles will no longer be unlimited for at least 21 years under the prescription statutes—the title insurance companies will insure the title that you the buyer acquire–no more unless somehow you take out a rider policy—

    thus the tiles have become nearly unmarketable—the new buyer who doesnt really know what hes doing—-accepts a limited warranty deed from somebody —which in itself should be a huge red or at least yellow flag—-to indicate that the mortgage that was upon the property and supposedly held by some ephemeral trust —-that probably did not actually meet the trust requirements to be treated as a legal trust–that the trust agreed to file a release of mortgage which mortgage was grated to another party entirely—

    the mortgage under the MERS system incorporates the promissory note——so the release of the note is dragged into the slate of old fashioned mortgage release issues—can a holder of a mortgage truly release the mortgage if the underlying promissory note that is restated in the body of the mortgage —is not released? Or does the incorporation of the note force the bona fide purchaser to inquire as to whether the note was satisfied?

    If there was litigation about standing with an MTD or simply a settlement leaving the standing issue unresolved—-does that put the BFP on notice that the satisfaction of the note is also a condition to satisfaction of mortgage–since it was incorporporated in the body of the mortgage?

    The actions by the originators and securitizers have put all titles in question as to which mortgages and notes were made under those conditions—one might speculate that this uncertainty contributes to the reluctance of lenders to put up loans today—if the limited warrantee deed is attacked, the new securitzer is on notice that something was wrong when he added that home into the pool of the new offereing—–and the new investors if they are on their toes should have provisions in the new securitization doics that allow them to put the note/mortgage back to the new bank originator ASAP———-

    these investment bankers–hotshot MBAs that did this have done immense damage to the entire property structure of the US—-you have absolutely no certainty that your home is yours for at least 21 years—and probably need to put up a sign out front to invoke the prescription statutes—–trypically the rule requires that you hold the property in open and notorious fashion –barring all others except by permission—so when you buy one of these squishy tile proprties you should post no tresspass signs up —-and wait for 21 years so that the former owner doesnt show up and pitch a tent in your front yard

    and that former owner can execute a quit claim deed to an OWE type and that person can do the sit in and then you must file a trspass action to which OWE will file a quiet title and away we go

    If I were a young atty starving for work–as most are–id be carefully reviewing the contested actions settled and the limited warrantee deeds and putting people in your front yard—triggering the litigation–a

    id cite the limited warrntee deed itself as an admission the seller was not certain about the title–and drag em in to say what was bothering them—there is work out there for these young people–a lot of it

  8. @ukg

    from your post:

    “The Georgia Court of Appeals held Thursday that the name of the actual owner of a mortgage must be present in foreclosure filings and notices sent to delinquent borrowers.
    The 4-3 ruling probably won’t undo the result of past foreclosures, lawyers say, but could open another avenue for borrowers to sue mortgage firms.”

    I’m suing the servicer/debt collector. They said: “your loan was securitized”—every time I asked them “who is the owner”? Telling me there is/was no owner.
    The payoff check was supposed to be written out to them for full amount—a debt collector…how much more proof do we need?

  9. “Bankers say Georgia’s foreclosure system is efficient, that the vast majority of borrowers are in default and that a judicial system would be costly by clogging up the repossession process.”

    I wish the Congressional investigations would just point up that the servicer/collection agencies simply get to assess a lot more fees and costs on a foreclosure—–then obtain govt insurance via HUD/FHA, VA and FDIC —so they profit from foreclosures at govt subsidy. When even a deep discount modification would cost taxpayers a fraction and without wiping out the little reamaing assets and dignity of the homeowner turned tenant in overcrowded and overpriced rental tenements. But of course we must rememeber if we go back to the late 1990s EPA long term “sustainable development” plans, the ultimate goal of govt was to cause a repatriation of suburban dwellers to city-center highrises/tenements to alleviate traffic congestionand rduce fuel consumption–thereby stopping emissions of greenhouse CO2 gas by the poor and middle class workers. And rooftop gardens–shared city gradens–resurgence of farmers markets—–would be another plus in reaching this utopia. Everone can walk to work—and live in happy inner city communities. Nearly self-sufficient–and if you need to go to the burbs for some extraordinary reason–use a miniature plug in car rented on the street as they are in washington DC. reminds me of the utopia of 1900—-with the rockefellers and Vanderbilts and the masses of happy ignorant workers supporting those great forunes by frugal lifestyles. A utopia indeed–Al Gore co-authored a lot of this.

  10. Didn’t really know where to post this. Today’s news…..

    Atlanta Business News 7:04 a.m. Saturday, July 14, 2012
    Ruling could have impact on foreclosure suits

    By J. Scott Trubey

    The Atlanta Journal-Constitution

    An appeals court ruling this week in favor of a Cobb County couple could leave mortgage companies liable for damages for not following state law in an unknown number of Georgia foreclosures.
    The Georgia Court of Appeals held Thursday that the name of the actual owner of a mortgage must be present in foreclosure filings and notices sent to delinquent borrowers.
    Don Ryan, AP The Georgia Court of Appeals held Thursday that the name of the actual owner of a mortgage must be present in foreclosure filings and notices sent to delinquent borrowers.

    The 4-3 ruling probably won’t undo the result of past foreclosures, lawyers say, but could open another avenue for borrowers to sue mortgage firms.

    “This could breathe new life into the challenges of foreclosures that took place in late 2008 and throughout 2009,” said Frank Alexander, a real estate law professor at Emory University.

    The number of cases where the ruling might be applicable was not immediately clear, but could be in the tens of thousands.

    The issue involves the many lenders who sell their loans to other parties such as investment trusts, but serve as stand-ins handling the paperwork in the foreclosure process and act as if they still own the loans.

    The Georgia Court of Appeals held Thursday that the name of the actual owner of a mortgage must be present in foreclosure filings and notices sent to delinquent borrowers.

    State law was modified in 2008 to require that foreclosure notices and legal advertisements include the name and contact information of the mortgage owner and of organizations that could negotiate a modification, short sale or other relief on lender’s behalf.

    “A debtor has a right to know which entity has the authority to foreclose, and there should be no confusion about the identity of that entity. The practical ramifications are troubling if it were otherwise,” the court majority agreed in its opinion.

    The court said that if a debtor knows a mortgage servicer no longer holds the loan, for instance, he could be “misled or confused, or simply disregard, a notice of foreclosure” that doesn’t correctly identify the loan’s proper owner.

    David Ates, an attorney for plaintiffs Izell and Raven Reese, said mortgage servicers, stand-ins for investors who buy mortgages the original lenders have sold, often have an incentive to foreclose because of potential fee revenue.

    Though banks have improved some of their practices since 2011, Ates estimated that “90 to 95 percent” of residential foreclosures in Georgia from mid-2008 to 2011 could be susceptible to a challenge based on lack of disclosure.

    “We’ve been arguing for quite a while these notices are bad,” Ates said.

    Georgia’s amended foreclosure law went into effect July 1, 2008, and other real estate observers said that mortgage servicers and law firms conducting foreclosures have done a better job complying with the law since early 2010. But for about 18 months that was not the case.

    Alexander said the ruling is significant as an affirmation of the 2008 amendment to Georgia’s foreclosure statutes.

    In addition to helping borrowers under threat of foreclosure know where to turn for help, the principle of the 2008 amendment was to help ensure that the true holder of the mortgage was foreclosing.

    “Even a dog in Georgia has a right to know who’s kicking them,” Alexander said. “Before you lose your home you have a right to know who’s taking it from you.”

    A lawyer for Provident Funding Associates LLP, the defendant in the Reese case, did not immediately return a call seeking comment.

    The Reeses were in default on their mortgage and sued in 2009 after foreclosure, claiming it was invalid because of improper notice. The couple were evicted after their legal challenges were initially dismissed, and they later appealed.

    Hugh Wood, an attorney who handles foreclosure cases for lenders and defense cases for borrowers, said pending borrower cases could be amended and new ones could crop up if the Reese case survives a likely appeal to the Georgia Supreme Court.

    Georgia ranked fourth in the nation in foreclosure filings in June, after topping the nation in that category in May, according to RealtyTrac.

    The ruling does not address other allegedly faulty or fraudulent foreclosure documentation at the center of controversy over robo-signing, mortgage company agents approving foreclosure documents with no or little review, that roiled the nation in 2010 and led to a nationwide settlement this year with the major banks.

    Georgia law in foreclosure cases affords few protections to borrowers, but the 2008 amendment was one nod to borrower’s rights.

    Borrower advocates have been critical of Georgia’s so-called “non-judicial” foreclosure system, where lenders must only assert they have a right to foreclose, not prove to a judge basic facts such as ownership of a loan or that it is indeed in default.

    Bankers say Georgia’s foreclosure system is efficient, that the vast majority of borrowers are in default and that a judicial system would be costly by clogging up the repossession process.

    Alexander Brown, a borrower’s attorney in Atlanta, said the lender-identification issue is just another example of shoddy paperwork that overwhelmed mortgage companies and law firms used in flushing foreclosures through the system.

    But he said the potential effect of the Court of Appeals ruling is covered in some ways by the $25 billion foreclosure settlement reached with the major banks earlier this year. Applying for a review of a foreclosure under the settlement might be an easier way to claim damages than suing in court, he said.

  11. @ dc: for instance: if you Google: “taking title to real property” one of the lawyer crap-talks comes up: http://www.youtube.com/watch?v=FK61Ot5U_sU without knowing what “TITLE” itself means!!!

  12. @GUEST

    I feel compelled to add vis the context of negotiable “notes”—and let me say im not conversant on the points about non-negotiable notes –which seemingly would simply devolve to assignable contracts–so im not sure where this new line is headed frankly.

    However vis notes, my overall sense is that there were at least some of the fly by nite burn company originators that simply originated mortgages ASAP——and created large inventories of same—-they sold X thousand notes with face of 10 billion etc—–every few months–and often used the same notes as collateral simultaneously with the purported sales to purported trusts which the originators used to take the notes and the MBS they sold off balance sheet

    the whole off balance sheet thing was a tax and financial acctg charade–a legalized sham—-the sort where if you dot the is and cross the ts and follow the rules–the sham will be accepted as reality—although the sham seemingly would still be subject to attack as a fraud upon creditors under state law—such that the MBS investors were not really limited to recourse against the listed notes

    but in full recognotion of the sham character of the trusts–the fly by nites never bothered to follow the rules–the did not list the loans on mortgage loan schedules filed with SEC and Delaware Sec State UCC etc

    they basically remained general assets of the fly by nites and the MBS were general unsecured obligations of the originators—but they also had the added flexibility by all this churning to sell the notes to other originators and use them as collateral–hold them as investment or as inventory—–it affords a lot of flexibility if one never follows the rules about identifying intangibles to particular transactions

    they did this because they fully expected to file bankruptcy at end of 3-5 years before the auditors could come in and get a handle on things–this is typical criminal syndicate style financial planning–take the money, destroy the records and run with the loot—guys like madoff and this midwesterner that hang in for years are the exception–most real carrer criminals follow the MF Global Corzine strategy–hit and run—-so corzine did—set up losing contracts with offshore buddies —declared amts due and shipped out customer money ASAP in last days thatthe recipients could not be found in collusion—but surely they were and were probably kicking back

    so old AHm Group–Option One and others were criminal syndicate types engaging in typical syndicate behavior—-

    so after they ran the bankruptcy guys and the named trustees end up with lists of mortgages–perhaps sold multiple times and simply had to sit down and allocate particular notes to particular purported trusts—-and then carry out foreclosures on this basis

    now a really good criminal plan would be to purport that the the original notes were not around—collect on them using copies and actually retain the originals in a warehouse somewhere—then they convey the documents which are best evidence of the homeowner debt to a bona fide purchaser–and that party shows up a few years afer the property is gone and attempts to collect on the noriginal note–to which the homeowner has no defense

    at this point we have all seen that these crooks leave no stone unturned and recognize no boundaroes of legality, ethics or propriety—-so it would be the height of ignorance and naivety to think that if they can do this –they will miss the opportunity

    most auditors–eveinvestigators do not properly arm themselves against the full range of devices to which a determined frauder will go to accomplish his purposes——that is why the regulators keep looking so clumsy–as even this most recent scandal re the smalltown hero stealing 215 million using forged bank statements shows–the regulators asked the frauder how to reach the bank??????/? —come on –this is extreme even for the typical regulator who is looking to find undotted Ts rather than wholsale fraud—but goodness id like to loo at the audit manual there–i cannot imagine it allows one to ask the party under review to tell me as auditor how i can do my crosscheck–my verification–it is per se negligence–i managed audits for a corp 100 corp for 30 years more or less—its hard to fathom this

    BTW for any readers–is the rate at which material typed really slowed down on being added to the post–or is it justme—it takes several minutes for the leeters that i type to actually print on the post–so i type–then wait for the letters to show up—-its dragging me to a halt on adding to posts?? is this typical–i dont have this problem on any other site or email—fishy–

  13. @GUEST
    “RANT”? Not sure what you mean by that term but the title concept is generally derived from old english law. the “title” can be slivers of ownership interest in a property “blackacre” —-under english law —-the King held title [fee simple absolute] –and gave out leases to run to his supporters and their male blood heirs—good normans who were loyal. Then over generations it devolved into cutting off the teil–meaning the leases could pass to non blood heirs—then could be sold

    one can have a present possessory interest by way of a lease lasting anywhere from an hour to 99 years—–to a right to a future interest that springs into being upon some set of future events occurring—-your cousin dies without heir and etc–“springing executory interest”

    I could set up a deal whereby i convey to you a fee simple absolute “title” subject to a present possessory lease and a reserved option to purchase the “title” for the original selling price plus 10%/yr–lots like a mortgage right?

    then there is tax law which abandons simplistic “title”—because of the shading—for example in the previous case i described “who is entitled to depreciation” —the tax law has embraced a more objective standard referring to “ownership” –the owner of a property is the party that possesses the majority of the burdens and benefits of ownership——most often alligned with risk of loss——–he who bears risk of loss is most often deemed owner–no matter who is nominal title holder——-any number of facts and circumstances play into the conclusion as to who is “owner” entitled to depreciation etc

    the word “title” is not so much subjective as it is a descriptor of one condition of ownership—nominal ownership vs beneficial ownership—i add all this to very clearly point out that the context determines the question—and reasonable persons might argue about the use of the word or the meaning –and all be correct—as long as the word is not tied down to a particular set of facts and legal issues

  14. @dcb: I can’t blame you for the rant, because if you ask 10 lawyers who advertise themselves as specialized in real-estate law most probably none of them can give you a legal definition of the word “TITLE” because they don’t have the faintest idea what it means, yet this word is thrown around like tennis-balls.

  15. @GUEST
    In context of notes Im using term title in most generic sense—-to be purist we must look to the UCC transfers by assignment upon execution of authorized signers IF WE HAVE THE HONEST TO GOD ORIGINAL—-so really its a 2 part question–when i see these discussions they are preoccupied with the indorsements —timing and who is doing it–and so that must be appropriately established

    but really the threshhold question is whether you have the ORIGINAL–because all of the UCC rules about indorsement are associated with original–if not then there must be indemity agreements–sureties and god knows what to show the collection agency has some real right as a holder rep

    but the harsh reality is that it is really hard to prove that you are looking at your own original–people jump to conclusions—-it looks like the original but when the fly by nite originators set up closinfgs they knew exactly what ink was being used because they made you sign with their black ink pens with their name on it—–they knew the copy paper used at the time so they can do autopens which only the most discerning QDE can tell—-it was set up from the beginning that copies would be forged—few people walk out of closing with a countercopy

    so you should be looking not just at the indorsements as a trail but at the chain of custody of the document itself as an authenticity issue—who had possession all these years?

    how did it get in the hands of that attorney?

    this thing is indorsed in blank laying around somehere for years they would have you believe–as bearer papoer its good as cash–a stack of $100 bills about a foot high—would you leave em laying around a warehouse ?

    the whole thing is incredible if you think about it that way

    so thats what i mean by title—re note–holder in due course [bona fide purchaser] with indorsements—-of the original

    if the manage to induce you to tranfer a deed or obtain a deed through use of deceit –ie not as above–then its a void transaction and the title to the realty itself is in hands of a thief or somebody claiming title from a thief—-they can get away with it on realty via bona fide purchaser rule—not on a motorcscooter–but on a house its ok to buy from a thief–just better not do it at a discount

    so i mean title to both to the note–or to the fruits of the crime of the theft by deception using a forged note or a note without a valid trail of indorsements

  16. @dcb: re: “…real law where title is destroyed” Q1: What is your legal definition of TITLE? Q2: and how does it get destroyed?

  17. @guess
    Iv seen posts where people claim to have acquired the original and are still defending—the question is then argued to be whether the note was lost or stolen –was the homeowner a bona fide purchaser —holder in due course—did he collect on behalf of the tue owner

    in my humble opinion the ownership gets spo tangled in such circumstances that everybody should throw up their habds and say–no known owner for certain—the state escheat laws or common laws re abandoned assets apply–the king gets the property back and resells it—-this is what should be happening wherever the loan schedule was not filed–but nobody ever takes this approach because everybody is so damn greedy that they all want to ignore the real law where title is destroyed

  18. Thank you, sir.

  19. @Carrie
    The financial industry is testing the capaciies of governments globally to function in their traditional role as nationalistic institutions. There is one financial industry with a couple dozen or so private players a handful of national govt agencies—middle east, china, other asian, south american, and growing group or groups of loosely knit hedge fund players in control of large pools of cash.

    In European matters the media speaks of “the markets” driving rates and risk taking. The term “investors” is also used to refer to this group with an evolving constituency. In years past–prior to 2000, large “investors” typically referred to pension trust/mgrs and insurance companies who gathered piles of cash from private citizens.More exotic investments appealed to Middle Eastern potentates–more interested in fashion than farmground.

    Today the potentates remain—but offshore hedge funds have replaced workers’ pension funds and insurance pools. One might infer that the losses suffered by insurers and pension trusts became the gains enjoyed by hedge funds that allowed them to replace the workers’ representaives at the financial tables. Early in the game the hedgefund operators wined and dined and otherwise pesuaded the workers financial reps–particularly state/local trust funds–to place money in progressively more risky and less substantive “investments”.

    Among the most egregious examples occurred in that bastion of conservatism –Ohio. In the early 2000’s Republican campaign contributors routinely obtained management control over slices of the Ohio Workers Comp trust fund. Bad enough, but the creme of thr fundraisers convinced the state to buy non-existent rare coins to park tax collections. That 30 million received a lot of attention. Another 100 million scheme did not. Under similar circumstances as the Tom Noe coin fraud was the state’s “investment” in bets [derivative contracts] that interst rates would rise. The bad timing resulted in bad bets that lost the state over $100 million. The Caymani hedge fund counterty “winner” of this bet won the money fair and square and no good politician in the State of Ohio would question that deal—-as they did the non-existent coins. No hedge fund better went to jail–or was scrutinized.

    Today those hedge funds control the fiscal and political activities of one half of Europe. Foreign “Investors” today are hedge funds. They somehow dictate the daily pricing of Spanish, Italian and French bonds. How competitive are those pricing strategies? the LIBOR scandal suggests –maybe not so competitive….

    This past 10 days these “investors” in effect forced the european union to sieze Euro 37BILLION of retail depositors’ life-savings in order to repay older maturing bonds–that these gamblers can now use to buy distressed assets. It is simple logic—dependent only upon a very mutually cooperative group of hedge funds. They collectively call the shots. They are unregulated. They lie outside the reach of national govts. The hedge funds are the pirates of old—but have accumulated so much loot that they outgun the national govts of the world–through corruption and even clandestine operations worthy of CIA–if the supporters of the past IMF director are to be believed.

    The primary focus of national governments should be upn these modern day financial pirates who pay no tax–represent no citizens and corrupt ebven smoothly operating and efficient national govts.

    Today it more often refers to the offshore hedge funds

  20. @guest

    Interesting…

  21. if originals of such “distressed notes” truly exist, ask the crooks to find you any of them in your own name and offer a fraction of its face value. It they are the real notes you had given to your lenders and could buy them back for fraction then you can record a “notice of full re-conveyance” with note-copy attached, then you could quiet title to your home, or lost home (whichever).

  22. @dcb

    So true. I keep getting things in the mail (with a photo of a really dishonest looking guy) urging me to buy “distressed notes”…

  23. @ Yves Smith- what you call “LIBOR-SCANDAL” has really been part of a routine massive counterfeiting operation for decades as I documented in this 2011 [modified] exhibit to my U.S. Supreme Court case #11-1013 Petition: http://kareemsalessi.files.wordpress.com/2010/06/the-american-meltdown.pdf denied on 6/25/12: http://www.supremecourt.gov/Search.aspx?FileName=/docketfiles/11-1013.htm

  24. I received a bokerage account solicititation today–at the bottom was the following:
    “Brokerage Products: Not FDIC Insured • No Bank Guarantee • May Lose Value”

    I think they should enhance their disclaimers –listen up CFBP—add “transparency”

    MAY FORGE ACCOUNT STATEMENTS—-MAY STEAL CUSTOMERS MONEY TO PAY GAMBLING DEBTS—MAY FALSIFY RATES OF RETURN—-MAY LIE CHEAT AND STEAL AT THE SOLE DISCRETION OF MANAGEMENT–NO OVERSIGHT BY REGULTORS GUARANTEED–NO DUE DILIGENCE GUARANTEED–OUR MOTTO IS: CAVEAT EMPTOR IN SPADES

  25. http://www.huffingtonpost.com/2012/07/12/warren-buffett-libor-scandal_n_1668649.html?utm_hp_ref=business&utm_hp_ref=business

    “Everything is tied in [to Libor],” Buffett said. “The idea that a bunch of traders can start e-mailing each other or phoning each other and play around with that rate is an important thing, and it is not good for the system.”

    Buffett said that unwinding the collateral damage from the alleged Libor rate-rigging will not be easy because millions of contracts are based on Libor.

    “It is a can of worms,” he said.

  26. Tis TIme for Tar n Feathers!

  27. Let me get this straight, the central bank of the United States of America has directly influenced currency, equity and debt markets since Bretton Woods, and now we want to get pissed at others.

    We have been sucking the Queens …… since July 07,1776,and now we are going to get mad.

    Cmon, MS has been most corrupt bid on or all over the globe. Go lock some of these guys up already.

    Here’show it works guys… We will let you fleece the masses, through any number of fraudulent schemes, and we take 20% fo the entire take in fines. For example, you steal 10 trillion as an industry, we take 2 trillion in fines. Oh yeah, every so often we have to lock up a mortgage broker or a realtor so they can see we are tough on white collar crime.

  28. dc yeah its called spread and nominal rate

  29. Any lawyer who is not denying the default amount in every case,reagrdless of the LIBOR,should head over to matrimonial court whith the other two bits.

  30. “I think a simple denial of the foreclosers allegations or implied allegations coupled with affirmative defenses is the proper thing to do, even though it puts the burden of proof as to LIBOR and other rates on the borrower.”

    if it is not certain as a matter of general knowledge upon reports filed with govt agencies—-verifiable and reliable comments as govt records—subject to judicial notice—-ie MTD stuff–what then mition for summaey judgement–otherwise i need a report by an examner familiar with rates at any particular time?

    what if the rate rigger is trustee or originator—is there a spread between the originator-lender and the rate quoted the homeowner set close in time but showing different libor off rates—eg bigco has a cost of libor plus xxx—and his libor rate that day is 3.3, while your homeowners is 3.5—–then you quantified the theft–debt forgiveness altered—-claims for intentional theft

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