BOA Preparing For Something? 150,000 second liens are released.

150,000 people are receiving letters now telling them that their second tier mortgages are “eliminated.” Whether BOA has the authority to do this depends upon whether they are the creditor in those loans. They may be the creditor in some of them but I suspect that the loans cannot be proven in any chain of title, chain of documents or chain of money transfers.

It eliminates, the possibility that the second tier mortgage holder could move into first position — if this is really effective — in the event that the first tier mortgage is shown to have been defective —- i.e., that the mortgage lien was never perfected. It also clears the way for short-sales that might leave the short-seller handing with one lender saying yes and the other saying no.

The announcement says that the entire unpaid principal balance will be eliminated from their BofA owned OR SERVICED second tier mortgage. It is a strange announcement. If they are only the servicer, and they do not reference getting authority from the creditor, there is the probability that this is an admission that at least the second tier mortgages were somehow satisfied through other means — insurance, credit default swaps or federal bailouts.

The second strange thing is the statement from BofA that if the first mortgage is in foreclosure, then the foreclosure activities MAY continue. This should put all 150,000 homeowners on notice that BofA has some doubts about whether they can prove up a foreclosure using any means or the names of any parties.

We already know that there are tens of thousands of mortgages, notes and obligations that the megabanks cannot track. They have no idea who owns the loans. This is one of the steps taken to try to clean up the mess and stay ahead of regulators who might force a write-down of all mortgage related “assets” on their balance sheet.

And the third thing about this is the argument that only “deserving” homeowners should be getting relief. The preliminary estimate is that this amounts to more than $4.5 billion in mortgages being extinguished. This attempt to potentially ward off a tidal wave of strategic defaults may work in part, but it puts the homeowners on notice that the bank doubts that they can hold into the obligation given the facts that are now in the public domain. Strategic defaulters might just turn into strategic fighters smelling blood. And maybe lawyers will finally get the notion that these cases are winnable if presented correctly and by strictly adhering to the rules of evidence.

Bank of America to Extinguish up to 150,000 Second Liens,” HousingWire (Oct. 1, 2012)

95 Responses

  1. We just had a Wells Fargo client get a notice of release of lien on second. Very interesting.

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  3. I received paperwork and it has been recorded in Harris County, TX that my 2nd lien on my home has been distinguished. I am one of the Homeowners who has been fighting for 1-1/2 years to save my home from foreclosure by Bank of America. I am now fighting off Bank of America for the 1st loan which is a Countrywide Mortgage REMIC which Bank of America claims BONY Owns and holds the note. However BONY is not putting that they own or hold the note in writing but stating they are the trustee not the investor. They have no say in loan modifications, foreclosures, or how the servicer disposes of the property. I have only one thing to say Bank of America needs to cease foreclosure action on my home. They are the servicer, the Lender was America’s Wholesale Lender, Bank of New York is not a Investor as listed on MERS but a trustee for the investors. There is a PSA, REMIC
    and there are laws to follow. The note never made it to the trust before it closed and I state this with fact because I spoke with BONY and he advised me the note was now a security. Need I say anymore.
    What I do know, is thanks to this blog I have learned so much and I will continue to fight even if it is Quiet Title, I will fight. Thanks Neil and all of his followers.

  4. @Jan

    Your scenario is worse in CA than anywhere else—just look at everything Brian Davies has gone through.

  5. Reader “Steve” posited the question of the case where the homeowner files a bankruptcy petition, has an unperfected lien by a supposed creditor against his house, and then the BK Trustee and the creditor go off together, negotiate a deal, and the unperfected lien is treated as a perfected lien and the homeowner is screwed over, as the BK Trustee then proceeds to sell the house.

    Yes, this can happen, if the debtor files a typical Chapter 7 BK, where the assets are “liquidated”. In a “7”, you lose control over your assets and the Trustee takes over, your voice is muffled, and the Trustee can and will sell of the home to distribute the proceeds to creditors. One reason for doing this is that the trustee gets to keep a percentage of the value of the assets so sold. It is also a reason why homes are “abandoned” by trustees to claimed creditors, by stay-relief, and as abandoned assets end up being taken by creditors in the state court system – or by non-judicial foreclosure in certain trust-deed States. It is also why you need very skilled counsel in the court, and why so many of these Petitions end up in such dismal results.

    It is also why I do not favor the Ch. 7 approach; the Ch. 11 personal petition is more logical, but a lot more difficult and also full of traps. In a Ch. 11, the debtor becomes “debtor in possession,” and retains control of the assets – and can go litigate, by filing lawsuits known as ‘adversary proceedings,” against the pretender creditors. Again, you have to know exactly what you are doing – another reason they are not popular.

    People misunderstand the purpose of the BK Courts. It is not to dispose of assets or deal with claims. It is a mechanism for forcing the creditors and the Debtor to come to agreement – or face a scorched-earth, General Sherman result. Banks won’t deal at least at first, as they think (correctly) that they can bulldoze the debtor (or, equally, the lawyers are controlling the flow of decisions, and the bankers are not paying attention; the lawyers then proceed to milk the file). It is only when the debtor hammers on the banker and defeats stay-relief and gets traction with discovery in Objections to Proofs of Claim, that the groundwork is set for the debtor to make a good deal – or to completely prevail. Trust this explains a bit.

  6. You have Good Questions DCB, I have faith you will find the answers.

  7. @ALL

    Whether or not your neighbor or the outfit that is violating your human rights persistently is evading state and local net income[cal, az], franchise [ohio], gross receipts [texas], sales taxes on delivered srvices [Illinois, fla—-think those guys nosing around your house] business and occupation [Washington state and west va]–well although they are not paying the same taxes they would if they were locally based—because of non-reporting–not out of state exempt

    Under the right circumstances its simply tax evasion. But the question is —often non-payment of taxes constitutes a bar to use of the courts–ie lack of capacity—-the question is whether this tax evasion issue can be used to deny the party the right to bring suit.

    possibly non-payment of taxes constitutes unclean hands–it should color the credibility of the claimant—it should raise questions as to whose income it is if it is unreported—-should you be able to raise it as a simple yes/no—does trust xyz pay income taxes in this city–in this twshp–school district

    The amount of any interest income received by the trust back to day 1 of the loan??

    i think we are talking serious money here for each trust—payable by the rogue general partner–trustee and/or servicer collection agency–a really big servicer could get taken under by this contingent liability

    this is a real issue folks—-the unfiled loan schedules–the failed trusts — accounts for a significant portion of loans out there including ones that have not defaulted—

    Im curious SC —-do you think that failed trusts with assets in your state and city should continue to get a free ride on your govt—–the basic notion of why one pays income tax is that the payer is receiving valuable benefits from the local jurisdiction

    Does a debt collector and trustee generate income in your jurisdiction from servicing–from looking in the windows—carrying off peoples goods–changig locks and selling the house?

    Does the servicer and debt collector benefit from the use of govt services: street lights, police, sewers and roads—from bridges and courthouses? does the sheriff dept do their bidding? does the court hear their pleadings?

    These are te tests of due process in applying tax—-certainly local financing entities have to pay tax —why should these people be allowed to swoop in and out—hold property—use force and the legal system —all for the cost of filing a complaint? whats wrong with this picture?

    The question of whether a trust is in fact a jt venture DBA a “trust” permeates the case from day 1. Can a nonexistent entity maintain a suit in a ficticious name ? A challege to Capacity comes mind???

    Then in association with that comes deference—how much deference should a tax evader receive?

  8. @jan van
    STANDING is denied to homeowners before they walk into the Gates of the Courthouse

  9. @DCB,,, wanna take a guess what comes in the last round of letters?

  10. Yes DCB, you left out the part where the lender keeps all the swaps … makes the litigation fees and the 50,000 look like a drop in the bucket. They never planned to ever let you out of defualt. If they did … they would crumble.

  11. @ALL
    from DOCX—-lets say the debt collector that claims to hold the note associated with your house used an assignment of mortgage created/obtained by DOCX—and you had proof it was not properly notarized, and was as well refiled a year later–by diferent MERS officers resident in the servicer’s offices. –instead of centrally

    now when the debt collector/servicer comes up with a purported original note to meet UCC 301–to avoid putting up bond–it just appears on opposing counsel’s desk one day a year after the case was filed as a foreclosure—there is a rebuttable presumption that the document is not a fake–nor the signatures unauthorized

    and in the meantime fed reserve etc made a finding of fact that there wasa systemic negligent practices industry wide

    toss in noncompliance with UCC Art 9 filing of schedlued assets–notes—provable by certified copy of filed

    On these facts–or just the industry negligent practices–would not the presumption be rebutted—evidentiary hearing not required if based on govt filings —order to shift burden to claimant.

    “plaintiff trustee–provide a chain of custody of that document—-and ownership of that document,; and represent as a bank–not an immune trustee –that servicer and bank represents the pool and that this note is from that pool and that one only”–all signed by the authorized employee [not robosigner janitors]

    Oh and that the trust is a trust—hmmmm
    What else do i need to prove the next claimant does not have the original note or that if it turns out a copy upon exacting criminal type analysis, –then the new guy makes you pay him the full amount of the note —so you need full indemnification —

    indemnities are not the best thing—and must address who pays cost of defense—should the homeowner—if another claimant pops up–even if hes driven away–still you homeowner will be distraught—foreclosed–then just when you thought you were out of it –they drag you back in

    so its their industry’s fault—and any loss should be theirs just as any gain was theirs

    so there must be a simple “liquidated damages” provision needed as part of that “prove the note and protect the maker”—where the homeowner wants to leave the house and debt collector behind—50k?–is that enough

    does that get the gist of it?

  12. Received the B of A letter.

  13. @ALL
    Summary of article –rest not online but something strange is happening –concentration in servicing industry. This on top of announcement yesterday that AHMSI [NKA Homeward… ]—-very interesting. I suppose it seems like the name gets cleaner if they can change it frequently.

    Be wary when they change names that its not dropping your note and note service into some remote entity that is essentially sold off to a local predator–for better or worse. Or into a bankrupt LLC–how wonderful it would be to get dragged into bankruptcy court as a claimant against some estate that consists soley of a rundown house by the railroad tracks.

    Is bigger better? But also the new AHMSI entity is a loan originator. So now it would seem AHMSI can refi a loan at a lower face amount——make fees as if it were a sale with no realtor. Then sell them to FANNIE??? Or is it still presumed that it is better to vacate a house than refi for someone to reflect the combined value of a house and employment condition that is diminished by deteriorating job markets and aging–physical deterioration of people after or apprioaching retirement age. The Mitt Romney view that people are responsible for their successes or failures is not compatible with reality. As the global depression expands and deepens the US seems to float on an increasingly thick $$ floater. In economic terms -it remains more efficient to have home ownership vs rentals. Rentals require administration—unwanted interactions between landlords and tenants, and that leads to property deterioration. A realtor charges 8% or more per month to perform the marketing and contracting of routine repairs. There is no real opportunity and little incentive for a tenant to use self-help to maintain. these features plus many others suggest at least a 20% NPV of possession of a rental. Overall the administrative burden of overseeing rental properties versus refied discounted always suggests the resident homeowner should have a higher economic value to society. Further a change in possession of a house results in substantial economic loss to those forced to leave—appliances often discarded, furnishings that do not fit–or are too expensive to move–requiring lower value replacement—a houseful of carpet. If this is supposed to occur to foster jobs–certainly—but when people are driven from their homes in short order after exhausting struggles with creditors—or through a miserly state bankrupt estate reduction—anything replaced is made in china–or vietnam.

    In short lets hope the concentration and origination process can be used to refi people that can afford where they live if the property is priced at FMV. What is the justification for not reflecting this in mods? Phantom income for one. the partners in the JV must recognize the gain on the sale by the JV –without receiving a distribution

    They need to trigger a refi–they could if they wished obtain supplemental insurance—but the heavy reliance on credit scores is distorting economic recovery of individuals and the nation.

    Today if you lose your job and are paid less in a new one, face illnesses—cant work as many hours–ie lose revenue, you get a credit knock fior having defaulted upon a reason outside your control in the majority of cases.

    Or take the case of a 60 year old couple whose family has grown and moved away? A large home filed with little more than memories. But you may be trapped 50% underwater.You cant swap for a smaller house—dragging an oversized debt.. You are stuck

    Default–in the latter case you are a strategic defaulter—one who could affrd to live in an oversized home with a yard to big to mow–a garden to big to weed–etc

    There should be an effort to allow people to pay in line with pre-buble prices and loan sizes–that bubble was pumped—we know it–why do we insist on pretending somehow we citizens fixed the prices so high? similarly in commercial transactions there are three-way swaps all the time—-what justification is there for saying a person can only afford the oversized house hes trappen in—if he clses out that transacton by short sale or whatever—hes credit dinged so he cant get a mortgage for half what he was paying??

    People should not get dinged for walking away from a house once—–impose that credit record and many more people will be able to meet current ratios —there is no justification for being punitive. Few of us intentionally lose their jobs or health—and these will increasingly over the next 5 years become the high growth area for defaults.

    “From the Editors of American Banker
    Nationstar’s Creative Financing Maintains Growth Tear
    After government-subsidized servicing transfers to Fortress’s Nationstar stopped, the company kept expanding through private market deals with innovative financing structures. But as it bids for the massive ResCap portfolio, the GSEs’ good will remains a valuable asset.

  14. @johngault (You had asked me about this false-default info before)

    “Subprime refinances were created by reporting default to the GSEs, prior to refinance, to make sure the GSE could not “invest” in the refinance.”

    “…Think of this way —- even though many people showed to have qualified for Freddie/Fannie refinances, because they were already a F/F loan and were well withing the loan limits, these loans were not refinanced (or repurchased) by F/F. And, the question is WHY?

    Because the banks were earning higher interest rates by reporting the loans as in default to F/F prior to refinance, and purchasing collection rights with insurance proceeds from F/F.

    Then the banks securitized the cash flows to these fraudulent loans — and sold the upper tranches to these trusts F/F. Thus, F/F could share in the higher interest rates with the banks by purchasing the fraudulent securities derived from the fraudulent loans derived from inflated appraisals to the houses. There is a a lawsuit by the Federal Housing Finance Agency (FHFA), now conservator to Freddie/Fannie, for these fraudulent securities.

    Was F/F aware that servicers were falsely placing loans in default prior to refinance, in order to remove them from F/F refinance and/or repurchase? I do not know. But, F/F DID purchase the securities derived from the false refinances — so they had to have read prospectus on these loans (and properties) — they had to have known that the securities were derived from prior F/F loans.”

  15. @ALL —remember what happened to Al Capone–this time let the banks be nibbled to death by a thousand state and local income tax adminstrators.

    Mr Whalen states, accurately;

    “What is really interesting is that the legal complaint filed by Schneiderman talks about sloppy procedures for loan selection, but still does not get to the real fun, namely multiple pledges of loans for different RMBS. And you can be sure that Schneiderman does not really want to go that far because it might force him to ask the same question about the other, far larger issuers of RMBS.

    Remember, the whole point of the Robo-signing settlement is not consumer protection, but rather fraud. The key question: Who’s got the note? If you don’t have to deliver the note into an RMBS trust, then the door is wide open for securities fraud.”

    As a foundational matter, I was Tax Counsel –including stints as senior tax litigation counsel state and local and trasactional taxes, legislative tax counsel, and general tax counsel for variously the affiliated group United States Steel Coroporation, Marathon Oil Company, Marathon Petroleum Company etc. for 26 years. Following that I was asked to join IRS to establish an interagency state of art fraud analyitcal center in washington Dc ancillary to IRS national office operations. That assignment lasted 3 years until April 2011.

    I was intimately involved with a variety of financial transactions over years; domestic and international loans, leases, off balance sheet financing. REITs, MLPs etc

    I have had occasion to investigate the operation of certain of the more notorious operators in non-Bank circles involving questionable mortgage practices: American Home Servicing Inc and DOCX LPS. I initiated the investigation of DOCX in October 2009, filed complaints re the failed notarizations that month, and followed with a SARBOX notice to LPS Board of directors Audit committee. In recent months, I have cooperated with Nevada , Missouri and Federal investigations of alleged criminal conduct by DOCX senior officer L. Brown also an LPS VP. Bank of New York Mellon Global Corporate Trust division.

    Based upon my investigation, interviews with DOCX employees etc, I have concluded that at least the DOCX document creation operation enabled the special clients AHMSI and allegedly Countrywide-BAC-BoA to pursue foreclosure without offering up proof of assignment of the notes under UCC Art 9, or “possession” and “presentment” for “payment” of the original note in compliance with UCC 3-301, 309. 502, 602.

    I have also obtained some evidence of apprarent duplicated holding of the same note in two different trusts–as asserted by Mr. Whalen with attendant risk of doubled payment by the maer of the note.

    In fact I have ddetermined that some 60% of the trusts sponsored by old AHM group 2004-2007 and Option One—-failed to make the filings of schedules of intangible assets–homeowner promissory notes–with SEC and Secretary of State [NY or Delaware] UCC financing divisions. Thus the purported REMICs suffered defects in respect of the alleged transfers of notes–as Mr Whalen states.

    To wit: although the securitization filings with SEC represent in multiple places that mortgage loan schedules were in fact filed–they were not 60% of the time. I inspected the SEC Edgar site in 2009 before the site removed the manually filed loan schedules from online viewing to arrive at the 60% statistic.

    Black-letter law demands that intangible assets be scheduled in order for a trust to take constructive ownership thereof–adequate to give the trust a corpus and reason for being. A trust without a assets fails ab intio. Ucc art 9 permits assignment of notes by reference to the requisite schedule of intangibles. The PSAs refer to this requirement. The failure to file loan schedules vitiates the existence of the trust as a specialized and protected entity. The IRC implicitly relies on the “trust” to meet state law requirements –ie filing the appropriate schedule of assets.

    The IRC adds further conditions–requiring passive treatment and by a 90 day closing period requirement assures that notes are not subject to continuous “active” business conduct.

    As Mr Whalen has stated–the failure to file schedules of the loans-notes allowed the sponsors to entrust the same notes to multiple non-filing “trusts”. There is no other good reason for the pattern of conduct–employing different bank trustees sequentially for sequentially unfiled schedules of assets-notes. I have actually encountered both AHMSI and BAC being described as servicers of the same note for example.

    The failure to file the schedules destroys the REMIC exemption for “trusts”. The problem goes deeper–these associations not only fail REMIC status but they also fail as state-law trusts–all from lack of observance of the formalities–which go to prevention of fraud as is noted by Mr Whalen.

    One implication is that the note maker homeowner is at risk of double collection on unpresented notes–in violation of the premises of CRP 17 “standing” requirements to bring suit. This amounts to deprivation of Due Process—the loss of by way of dual payment being a property right loss—the loss of peace of mind, being more basic.

    A looming economic issue never mentioned goes to a basic reason for the federal treatment of REMICs. The federal exemption from entity taxation provided to a REMIC shield the entity from very burdensome state and local taxation. A failed trust defaults under IRC 7701 to a joint Venture. IRC 7701 and the regs thereunder also provide that the default joint venture itself is treated as a tax partnership. This entails complex accounting which is particularly problematic for vulture investors who bought MBS at steep discounts in 2008. Wilbur Ross & Co among them. WL Ross & co also controlled AHMSI [new] until very recent days. With the loss of REMIC status, the joint ventures become subject to state and local taxation.

    For example, Texas has extensive history taxing oil/gas joint ventures-partnerships. Because individuals are not subject to Texas Income/franchise tax, the partnership or JV itself is subject to Texas income tax as a business entity. In Ohio the individual investors are subjecto their undivided share of partnership income–but out of state investors’ share of income is taxed to the entity–the failed trust.

    Every alabama police jurisdiction is entitled to levy tax on the entity and/or the investors individually. This is an extreme situation–but less so is NYC, Chicago, etc—as well as the states. The only fact that the local tax administrator must establish is that thre failed trust have an interest in real property in the local jurisdiction. Typically trusts have many thousands of mortgages spread geographically. The failed trusts should be reporting the apportined share of net income or gross receipts to each jurisdiction. The failure to file tax returns by the general partner bank-trustee and the servicer allows the statute of limitations to remain open —and the unpaid taxes to be levied on those deep pocket general partners–along with stiff penalties and statutory interest.

    There are consequences for failing to meet the REMIC requireents -even if there was no fraudulent intent. Today many budget-impaired state and local govts can if they become aware plug their budgets and indirectly punish the parties responsible for the failed trusts and fraudulent duplication of loans within multiple trusts. Mr Shneiderman may have difficulty proving intentional fraud–but he can easily impose income taxes upon few facts in evidence. al capone faced a similar set of circumstances.

  16. I agree carie. In reality they were all just broker/dealer scammers. They never lent anyone any money from day one. It was all a work of fiction designed to deceive all of us into believing they lent us money or anything of value. They did not. They misrepresented every aspect of this scam in order to hide the true purpose of these fictional transactions. They were out to destroy us financially so they could steal everything from us. This was never really about the money for the real players behind the scenes of this. These people are control freaks. This has all been the work of imposters who want all of us to believe their biggest lies that they own everything and therefore, they own all of us. If people buy that, they are being mind controlled and turned into slaves of these psychopaths.

  17. @Ivent

    This comment from my friend explains the TRUE “origination fraud”.:

    “…Agree with Neil, as to the subprime, that the origination is false.

    But, it is false for different reasons than Neil asserts. Neil has to separate his markets. My focus has always been — subprime refinance.

    Subprime refinance was GSEs rejects. And, subprime was in great demand because of the higher interest rate it paid to security investors. Security investors, however, are not the creditor — they are not the creditor for prime debt, not the creditor for subprime, not the creditor for GSE loans.
    They are, in fact, NEVER the creditor. And, they do not fund any loans. They fund the BANKs — who are the “investors” in the debt. If you were ever to name security investors for TILA violations, or request rescission, you would be immediately tossed out of court.

    This is NOT the way the market works — no matter how Neil tries to slice and dice it to “make-it” work. It does not work, will not work in court, and counterproductive to foreclosure defense.
    Neil has never quite understood the distinction between security investors and investors. Ask him to define this in terms of Freddie/Fannie. Freddie/Fannie is the INVESTOR, security investors invest in Freddie/Fannie pass-throughs. They are NOT the same. And, niether Freddie/Fannie, as investor, or security investors in Fannie/Freddie pass-throughs — are the lender/creditor under federal law.

    I also agree with Neil that the financial transaction occurred with a different party than stated at origination.
    But, Neil has the “trail of money” wrong.
    Subprime refinances were created by reporting default to the GSEs, prior to refinance, to make sure the GSE could not “invest” in the refinance.
    Banks wanted themselves to be the “investor.” . GSEs charge off the falsely reported debt, servicer or mortgagee collects insurance and pays GSE –and, simultaneously, purchases rights to the (false) default debt. And, the mortgagee “modifies” the default debt by calling it a refinance. Borrower remains in default with GSE.

    NO funding is necessary, unless borrower requests “cash-out.” These (false) default debts were, perhaps, modified several times. No problem for debt buyer “investor” — because, if borrowers did not pay the high rates — foreclosure was the option.
    Default is default to courts, they just do not know that the loan was a (false) default before actual default.

    Now, ask Neil, whether or not he knows if prior loan was paid off — to a specified trust — at the time of the last so-called refinance. Does Neil think that the loan was not securitized prior to last refinance?? They were. What about the security investors to the prior trust — before refinance? Nothing prior is VALIDLY paid off. And, THAT is the money trail that Neil is missing. Why was prior loan not paid off??
    It did not have to be — refinance was only modification of the false default debt.

    The wire transfer are meaningless, except that we can sometimes use them to help show that loans were table funded. Was money actually transferred by the stated wire transfer?? Maybe, but that money was paid right back to the party who is “modifying” the loan by the claimed refinance. In other words, payoff of prior loan is directed right back to the party that owns the collection rights. There is never a payoff of anything.

    There is no “trading” of ownership of the “loan” (although some debt buyers may “swap” collection rights). There is a “trading”/transfer of servicing rights.

    Also, do not dispute that banks were beneficiaries of payouts…. First, the banks were the investors to default debt/collection rights, they were the ones that purchased the collection rights from the GSEs. Prospectus may not outline that the “loans” were first sold to an affiliate of the security underwriter (some do), but is clear by the conversion of the so-called loans to certificates in a trust, that they are sold to the security underwriters. These security underwriters, actually their parent corp., were the “investors.” The subprime lending corporations (now all gone) worked for these “investment/commercial” banks. Banks could operate as both investor and lender by repeal of Glass Steagall (which, by the way, many are calling for return to). Second, once the certificates were allocated to tranches, and sold to the the “investment/commercial” banks, the banks kept the upper tranches for themselves, and pawned off subordinate tranches to other “investors” — most often, another bank. Lower tranches may have been sold to other entities. But, the bigger effect upon the public, was the Collateralized Debt Obligations (CDOs) that were derived from organizing multiple trusts, multiple certificates, and multiple tranches — into a CDO. A SYNTHETIC derivatives that leveraged the fake loans — over and over.

    Credit default swaps are often executed with cash and without transfer of collection rights. The banks do this privately, to parties not divulged publicly or to the borrower. That is, if they can dispose of collection rights. For a long time, market was shut down. But, thanks to government assistance (ha-ha), it has been greatly been revived…”

  18. @DCB… Yep!~Yep!. Its alway a good thing to have friends that are tax attorneys familiar with state laws. Yep! Yep!

  19. They really just want to steal whatever they can, even though they never owned any of it. They are getting away with this mostly because they are masters at the art of deception…. They are very adept at making masses of people believe lies that they have some inalienable right to steal from all of us and control all of us… In reality there are a few thousand control freaks who have managed to brainwash alot of people..including the best and the brightest into believeing their lies. Well, they can count me out.

  20. DC….I think what you described just sounds like more stuff that never really happened. IMHO…it all goes back to the Origination Fraud. They all invested in nothing and there is no legal fix for that. They can try and make us believe alot of things but if you go back to the Origination Fraud then you realize, none of these so called transactions ever occurred. REMIC or not, there is a lot more to creating a legal lien than filing a UCC statement with the SOS..that is only part of the chain and I have yet to see anyone produce one of those in court and try and claim that is a legally enforceable lien. There is alot of dizzying deception so when I feel confused, I remember the Origination Fraud and realize, they are all just trying to pull rabbits out of their hats, grasping at straws, whatever you want to call this charade but in reality, and I mean reality here, not some work of fiction they want all of us to believe… they are all just really full of it.

  21. @CARIE
    you said some very interesting things that may be generally accurate but as in many things suffer exceptions:
    “those “off-balance sheet” REMICs were PUT BACK on the corporation’s balance sheet by FASB 166 and 167. Also, remember that security investors in REMIC trusts only invested in a fractional interest in a pool of loans. No one can hold title by a fractional interest in a pool of loans. Thus, title is absolutely NOT acquired by security investors.”

    Let me posit a fact pattern–all too common:

    American Home Mortgage and Option 1 originated loans and sponsored purported REMIC trusts. The PSAs required the filing of “mortgage loan schedules” ie lists of the intangible A/R that you refere to. The filings were represented as part of the SEC filings as well as the pertinant Secretary of State UCC financing statement recordation division. Thus the PSA flatly stated that the UCC Art 9 financing statement was to be filed in order to transfer by assignment en masse tens of thousands of the A/R. Such a UCC 9 filing must include a schedule of intangible assets to put the world on notice and define the assets subject to the sale/hypothecation.

    Similarly, basic black letter trust law states that a transfer of intangibles to a trust ralso requires a schedule—although the recordation requirement is a bit more ambiguous. The two rules dovetail and overlap. 60% of the AHM and Option 1 sponsored “trusts” lacked the SEC-filed schedules—misrepresenting that “fact” to investors. Blank pages where the lists were to be. Same in state UCC repositories.

    Consequently, the “trusts” were not vested with assets. A trust cannot exist without a defined set of assets–thus even if the trust expects to receive assets upon a condition subsequent–still the assets must be listed–“scheduled”.

    the IRC looks to state law as the 1st step in meeting REMIC status—a general rule applicable to all business associations. So as a precondition to meeting REMIC status there must 1st be a statelaw recognized “trust”. The state law requires that the assets be scheduled or there is no trust corpus–and the trust fails. Then the IRC REMIC rules nail down the rules more tightly yet and specify the type of trust—passive—and by implication deriving from that rule—a limited period of time [90 days max in general] for the assets to be scheduled and assigned. Ie the IRC does not give the special tax exemption status to this trust-entity unless it settles its assets up front–and does not engage in an ongoing active trading of those A/R.

    so the schedule of A/R serves two purposes: to meet the minimum conditions necessary to create a state-law trust. and the list is frozen in time to meet the IRC passive test.

    If there was no schedule–there is no trust–and if no trust no exemption—the association reverts to default status which is an unincorporated joint venture under state law and under IRC an unincorporated JV is a tax partnership with special complex pass through characteristics.

    The JV passive investors are real parties in interest–they own an undivided interest in the JV assets—through the partnership. Their status as limited partners is not assured. If they wanted to be passive limited liability partners–then they needed to file an LLP or LLC—or actually comply with REMIC conditions.

    Thus the implications of failed trust hit at many points:
    the investors do not have limited liability as a certainty
    the investors do not have a simple passive income stream based on distributions—instead they have a much more complex income calculation that may result in phantom income–income w/o distributions–this will worsen towards the end of the life of the JV pool.

    And although the active partners the bank-trustee and servicer may represent the JV it is not as specially protected immunized liability as trustee and agent [servicer] but as fully liable GPs.

    Lastly–and I must hammer on this–because it is a local issue that people can actually affect —-the JV and its partners of all stripes are absolutely liable for state and local gross receipts and income taxes. For example in Texas there is no personal income tax but there is very definitely a gross receipts tax on JVs–same as corporations. Gross receipts!!!!

    In Ohio the JV is taxable itself unless the partners individuall accept the tax liability—-by election–if the out of state limited partners refuse to waive out of state jurisdiction by Ohio–then the partnership itself must pay on their behalf.

    I spent decades as a senior tax atty for an oilco—–with many many JVs in the upstream [production] and downstream marketing sectors——–the JV issue was always looming—-these people when they did this did not think through the consequences of state and local taxation—it is intricate, convoluted and nasty to administer. Bottom line is that businesses are not supposed to be exempt from s/l income and gross receipts taxes —only in special cases—which was the driver for REMIC

    Every jurisdiction–from Alabama police districts to NYC city income taxes–from Ohio franchise/income taxes to Washington State business and Occupation gross receipts taxes have clear authority to levy these taxes on the partners or partnership–or both. All that is needed is that the JV own an interest in realty in the taxing jurisdiction–servicer income is similarly taxable by many jurisdictions.

    These govt entities need to goose their tax administrators and plug their fisacl holes—when the crooks short cut the schedles to facilitate multiple sales of the same note–they exposed the jvs to multi-jurisdiction taxation.

    Now I mention AHM and Option 1 because both filed bankruptcy therefore FAS 166-167 etc did not operate to put the assets [homeowner notes] and debts [MBS] back on their balance sheets—for acctg purposes these JVs DBA trusts—-are orphans with nowhere to go—but the acctg treatment does not alter the tax situation to which i refer.

    Go talk to your local tax administrators and explain that the entities are not legal trusts much less REMICs —but large private partnerships–they will then know what to do.

  22. if you watched the debates last , you will notice, that both Romney and Obama provided cover for Wall Street crimes. The real deal, Honest banks do not inflate appraisals, honest banks to not give out loans to those who do not qualify. Wall Street gave instructions to design the system to fail. Obama continues the cover up . Romney made a fortune off the housing market. Neither of these S.O.Bs will get my vote, not my neighbors vote and their neighbors vote. These SOOBs destroyed my property and someone needs to go to jail and someone needs to clean up my neighborhood.

  23. Allow me to clarify what I mean by non existant risks..Wall Street created the risks by committing massive frauds..It was in reality, all fictitious buying and selling and risk created off of thin air….They never held the collateral to back up any such sales.

  24. RE: the comment below about some fictitious trust coming along and grabbing property under false pretenses by, I am assuming, uttering some counterfeit documents…that is criminal fraud by deception. There is no legal fix for the ORIGINATION FRAUD. If there was we would all be in the street by now. The only way they can win is by slight of hand such as you are mentioning below. You cannot own, sell or buy what you never held legal title in the first place. WE THE PEOPLE are the only title holders of record because they never perfected the collateral lien because they never paid the Treasury back for the money THEY BORROWED…Because if they did, they could have never oversold investors investments in nothing to the tune of $700 trillion in mortgage fraud…and insured themselves on non existant risks with CDS insurance…which was the real reason why they oversold the mortgages…that was the set up to fail so that the broker-dealers and the investors could collect at least 10x the value of the property in CDS insurance money… It was insurance fraud on steroids but the real reason this ocurred was to steal everything from the people…TBTF and all of that b.s. was just a name given to the massive robbery of our wealth and property try and make it all sound legitamite when it is just criminal…There is no monetary fix for $700 trillion in mortgage fraud…thats why we are all slowly going bankrupt from bailling out these so called TBTF crooks who in reality have quintillions in ill gotten gains hidded overseas…The total amount of this credit fraud committed by Wall Street is estimated to be…a quadrillion dollars..

  25. @ Jan van Eck,

    You state… “as a practical matter, if there is a 1st in there, and you are upside-down, then there is nothing to hustle (unless the 1st is an unperfected lien, which happens).”
    Understood….but….What if….the first is UNPERFECTED, ….you are not upside down in house, bk. trustee, gets together with “purported” holder of unperfected first…those two parties reach a settlement agreement which states the unperfected lien at that time becomes perfected, bk. trustee and “purported” holder of first, sell the property and split the money?

  26. I am going to post a link to the latest Keiser Report. I think everyone will enjoy this one. During the second half of the show in particular there is a great interview where Max and his guest talk about this coup de tat of the wealth of the American people by these sheisters and Citi bank fraud, Geithner and helicopter Bernanke and what Sheila Bair really thinks about all of this.
    http://rt.com/programs/keiser-report/episode-349-keiser-max/

  27. @Patrick—or whomever cares
    I am re-posting your comment re. securitization and a “response” below:

    Patrick, on October 4, 2012 at 5:42 am said:
    From the (Neil’s) article: “That failure appears to cause the trusts to fail both the definitional requirement and the timing requirement that are necessary to elect REMIC status. They fail the definition requirement because they do not own obligations, and what they do own does not appear to be secured by interests in real property.”

    Well, duh.

    UCC Classification: No Receivable is secured by “real property” or “fixtures” or evidenced by an “instrument” under and as defined in the UCC. The Aggregate Receivables constitute “general intangibles” within the meaning of the applicable UCC.
    Read more: http://www.faqs.org/sec-filings/120210/HOME-LOAN-SERVICING-SOLUTIONS-LTD_S-1.A/d151656dex107.htm#ixzz28FH2FP6S

    Securitization is nothing more than an elaborate scheme to finance anticipated loan receivables.

    The lender has already realized the value of the commercial paper when it financed (i.e. sold) the aggregate loan receivables

    They’ve made you an account debtor without your knowledge or consent.

    UCC 9-105(1)(a) “Account debtor” means the person who is obligated on an account, chattel paper or general intangible.

    An account debtor pays on unsecured debt, no different than credit card debt. Difference is, the mortgage borrower only agreed to pay an obligation evidenced by an instrument. If the value of the instrument has already been realized through financing….. POOF

    RESPONSE:

    “…Correct as to receivable securitization. Receivable securitization does NOT transfer title.
    Although it appears that REMIC trusts were assigned the loans, this was NOT actually ever done, and furthermore, those “off-balance sheet” REMICs were PUT BACK on the corporation’s balance sheet by FASB 166 and 167.

    Also, remember that security investors in REMIC trusts only invested in a fractional interest in a pool of loans.
    No one can hold title by a fractional interest in a pool of loans.

    Thus, title is absolutely NOT acquired by security investors.”

  28. Right DC..that is what they did. It was actually equity stripping in many inconpicuous ways. I am not a realtor either, but I knew my house was not worth $550,000.00. My gut instinct told me things were not adding up. Now here I am. @shadowcat…I did see a glimmer of hope last time in was in court. A gentleman who appeared to be a pro se defendant had his foreclosure dismissed by the bank. I thought my ears were deceiving me at first when I heard the Judge ask the bank attorney, you are dismissing this case? And the bank attorney said yes and handed the gentleman a piece of paper. I know that is the goal, to get out of there. And now I know it can be done.

  29. @hman

    I have a response to your comment the other day:

    hman, on October 2, 2012 at 10:43 am said:
    Carie,

    It’s not what you say isn’t without merit. I think there is some truth in it. However, without proof it’s a loosing battle. My title records shows a lien release from the former bank and that is easy for the judge to understand…(etc.)

    Response:

    “…Be very careful —- “payoff” of loan DOES NOT necessarily mean pay off by the borrower. It means SOMEONE paid off, but not you. Means paid off by insurance and borrower is reported in default.

    Records must be examined for flaws in the lien release. It is not easy to prove, but the consequence for anyone who can prove — is huge.

    Funding instructions is also important. But, many courts just disregard. Even if you can show someone else other than the lender funded, this would be a violation of the law but would not necessarily negate borrower obligation.

    On the other hand, prior loan not being paid off WOULD negate the “refinance” in question.”

  30. YES IVENT

    They intentionally created the false illusion that the homes were worth much more than they were. They did this with supposed in house appraisals–albeit telling the homeowners something else. So if for example –you were a boomer with kids about to fly off –leaving you an empty nest—and you decided in two years im gonna sell that house–but i need the money now to pay tuition etc—-it was not such an obvious miscalculation by homeowner as people would have us believe—-the effects of misrepresentation can be far-reaching–reliance on the false appraisals caused all sorts of problems

    Maybe a simple analogy: If i dive into my coin collection–if i had one—and pull out a coin–take it to an appraiser —he tells me its worth $1 million—and backs it up by offering a loan for 950k——personal loan secured by the coin—-am i an idiot overspender because i take the money and invest it in other things—maybe take a trip around the world to use my unexpected wealth before i die? am i the miscreant here???

    pretty much same pattern with houses—-i know myself—i was suprised by the appraisal—-but what do i know–im not a real estate expert–thats what the appraisal was for–so a couple years after the refi and fake appraisal–i listed my house as long planned—at 10 % more than the appraisal–and was shocked even at the price peak at the time –not a single offer in more than a year…..by the time i realized it was a fake appraisal—searching throught the documents—and finding they substituted an in house appraisal for the local appraiser they told me was doing the work—-the market was collapsing—

    I was deceived both by the amount of the appraisal and as to who was doing it—am i guilty of anything but gullibility to a frauder? I dont think so—–even big actg firms reserve out that they cant find fraud on their audits–the presumption is that people engage in legal activities–and if you get screwed its your fault–but when they use deception…..its their fault –not yours—–thae govt is supposed to earn its keep by maintaing this fairness–as it is today–no such presumption of good faith far dealing exists—caveat emptor all the way—well if that is the way it is to be –one needs advance notice so they dont foolishly walk in and do a 30 minute closing with a bunch of unregulated crooks–but i did—-just as i had for 30 years numerous times–nobody told me the rules of the game had changed

    so yes —these two clowns dont know what they ae taliking about–not real people–and no real people within miles of those clowns –they do not know what it is like in the real world

  31. Stopa has a good piece–the insolvency piece is good if there was a refi for a mark-up in supposed value of the house–if i recall correctly the forgiveness statute does not extend to refis in excess of the cost of the house

    also if the bank-trust does not in fact own the note –such that there is no collectible deficiency–there are other ramifications. What is the legal basis for taking the house itself?

  32. LOL..DC..! Did you ever hear the freudian slip by Erin Burnett who used to work for Citi? I think it is still on you tube..she called them Shitty Bank…oops..! Anyway..they are all one giant TBTF bunch of crooks. I don’t differentiate between any of them. They are a network of scammers who all interconnect in very deceptive ways. Did you see the debates..? Romney and Obama both agreed to the same old b.s. that too many people bought homes they could not afford. Didn’t Sheila Bair just say ALL OF THE MORTGAGES WERE SET UP TO FAIL…? They don’t pay attention to what’s going on and they both look like stone cold liars for saying that… I did appreciate Romney coming out with the truth about the section of Dodd-Frank that TBTF, the 5 largest banks can never be allowed to fail. That is b.s. is the reason why we are all nearly bankrupt. Anyway, I hope Obama loses because he is a sneak.

  33. That hands the bank a tax loss benefit, both for the current year against current income, possibly a loss carry-back (if they had net income the previous year), and a loss carry-forward against future income.

    this is a very good point—–as i think about it–if fed reserve is buying MBS on 1st mortgages–probably denying 2nds——and is paying face to folks that paid say 15 cents on the dollar—-then the fed action of $40 billion/mo—is pouring taxable income into the vulture roosts–and absolutely its a good thing to take write offs on the 2nds to offset that income on the 1sts

    but if they do not send out those notes marked “paid in full”—-then it may not be a closed transaction—–im not sure the letter meets ucc payment/satisfaction terms–ie they could just as easily send another letter in a month saying–oh sorry about that –we changed our minds

    sad but true –i think–i hope im wrong

  34. @shadowcat..I did not allow that. That is how they filed their complaint. I have objected to everything they have done so far because it has been improper and insufficient in law. MERS released the mortgage remember? How can they sue MERS anyway? MERS is not a bank. PHH is the servicer for CITI? The mortgage refi was with Amcore bank and PHH became the servicer for Amcore 2 months after the closing. So what you are hinting at is the payoff to CITI never occurred and in fact their servicer just picked up the ongoing fraud in Amcores court. Anyway, it is all in the closing docs. Thank you for that info on PHH…! As I said, CITI claims to be the previous lender but we never had a mortgage with CITI. CITI must have did a swap sometime when my mortgage was in MERS…As far as the discrepancies on the HUD 1 are concerned, as I said before, I knew things were not making sense. However, it was a confusing piece of work and generally you do not hire an attorney for a mortgage refi. They prey on that fact. The escrowee from Chicago Title signed and attested to all of this as his her signature appears on the HUD 1. As far as hiring an attorney goes, I have been throught the rounds with that to. I have been to several and have not found one to date that will do what I want done. It is the standard response and that is unacceptable. So far the judge has not bought any of their crap. I have had some advice from an attorney, however, he will not rep me in court. He said he can’t. .Thankfully, I have had help along the way when I have needed it from many like Neil and others. I am fighting 2 foreclosures pro se. My commercial property as well. Oh yeah, it has been a thrill a minute. However, I have learned alot. I am not backing down. I am determined to see justice served because all evidence proves we were set up to fail and that is unacceptable. We have worked to damned hard to allow them to get away with this. Thanks again for your concern and your help. I really appreciate all of the help I can get…!

  35. @IVENT

    I am pleased that you are now dealing with the nuts and bolts –and in such a way that you can benefit by advice from SC etc [hopefully anyway] and also relate yor facts so others can see —CITI ugh—they are the worst large bank in the world–now shifting their foocus to 3rd world—where their CEO came from and now hopefully will return to—its easier for him to do business in the 3rd world—they literally uses street thugs to go beat the crap out of you if they think you owe

    they were hoping they could do it here—but its a little more restrained–they have the thugs –but mostly just to steal personalty in homes

    oh and set em up for casualty insurance claims

    they dont appraise and inspect: they “case the joint”

    CITI—-I hate city

    I had a credit card through them for 25 years–made all my purchases through that card–always paid it off monthly—until pandit took over —-then they added a couple hundred fake international source porno charges——and worked nite and day hammering me to pay them

    i tried to shut the account down—no couldnt shut it down while fake porno charges pending—-i contested them —-they added more–even after i had cancelled card and attemted to cancel card–tey called them recurring charges—they mademe call and beg some nasty in INDIA–to take charges off my account added months after i canceled card and tried to close acct——but they doggedly pursued harrassed –phone calls 10 times a day—call say “is this Mr Breidenbach?” “Yes it is” ——-then they hang up–over and over for months

    over a lousey $200 in obviously fake foreign porn chgs—I cant imagine owing them for a house……They should not be allowed to do business in this country–using 3rd world practices–and 3rd world debt collectors–no wonder the indians riot every other week and kill people routinely—if that Geithner had had a CITI card —he would understand why they were in such bad shape and would not have moved heaven and earth to make sure they stayed in business—of course –another 3rd world practice is rampant bribery…..no offense intended tim—-i hope he gets to be pandits successor after election and gets to preside over this 3rd world userious collection agency–it does not deserve to be called a bank–it demeans even the worst
    banks

    ok so im venting–did i say –i hate citi–after 25 years as a customer

    PS i had to pay the porno chgs in the end just because i couldnt use my phone anymore from their continuous calls –and sure its illegal—they dont care–its a criminal organization–using outsourced foreingn call centers to harass us citizens

  36. BoA…. did you say BoA….. Lorayne Souders v. BoA is headed for a meltdown one way or another… as noted in today’s video:
    Obama Romney Debate ignores RESPA QWR and IRS 211 REMIC fraud by banksters in fraudclosure cases. http://www.youtube.com/watch?v=BEwXuwX6g_4

  37. BoA…. did you say BoA….. Lorayne Souders v. BoA is headed for a meltdown one way or another… as noted in today’s video:

    Obama Romney Debate ignores RESPA QWR and IRS 211 REMIC fraud by banksters in fraudclosure cases. http://www.youtube.com/watch?v=BEwXuwX6g_4

  38. @shadowcat Hopefully we will all find our way out of this with the help of many here who collectively offer info for the love of our fellow man but YOU are climbing the wrong tree trunk if you are ASSuming this is what I did, no……. it was job loss, sister with stage 3 cancer …company would not give the lawful FMLA , personal surgery from an idiot that cant drive and t boned me all within 6 months creating possible foreclosure to loom and yet another hit/lawyer fees. I was forced there at retirement age! the love of money disgust me and always has, if you did not mean this to be directed at me then pls forgive me sir/madam for my outburst but it def appears you want to attack,….WE know where and how this started, don’t you? And YOU sir/madam …. are just 1ofthemany. Rage on

  39. I am reposting something really important about the tax liability after the bank writes off some or all of the mortgage amount (makes little difference whether after bankruptcy, deficiency judgment or anything else) and how to approach the IRS.

    Expiration of the Mortgage Debt Relief Act … Is it a Problem?

    Posted on August 14th, 2012 by Mark Stopa

    In recent weeks, many clients have asked that I share my views about the impending expiration of the Mortgage Debt Relief Act of 2007. It’s probably past time that I do so.

    To understand how this works, one has to first understand what a deficiency is. The best way to explain that is to give an example. Suppose the total amount you owe your bank is $300,000, but the house is worth only $125,000 when the bank forecloses. (Unfortunately, that type of ratio is common nowadays.) Many homeowners are willing to “walk away” from that house, and understandably so. Unfortunately, however, the law, at least in Florida, generally entitles the bank to pursue collection of the entire $300,000 that is owed to it, even though the house is worth just $125,000. The extra $175,000 – the difference between what is owed ($300,000) and what the house is worth ($125,000) – is called a deficiency.

    Many homeowners can accept that a foreclosure may happen at some point, but they don’t want to get foreclosed and still owe the bank money. They want the deficiency to be waived. Sometimes, banks are willing to do so, particularly if the homeowner consents to a foreclosure. That sounds great – the $175,000 owed is no longer owed! But here’s the problem. Even if the bank agrees that the homeowner doesn’t owe that $175,000, the Internal Revenue Service may treat that $175,000 as income. In the IRS’s eyes, forgiving $175,000 of debt is the same as that homeowner earning $175,000 in income, so that homeowner has to pay taxes on the $175,000. Depending on your tax bracket, that could necessitate a payment of $45,000 or more – a prohibitive amount for anyone, especially homeowners in foreclosure.

    To help the economy, our government passed a law (one of the few that has actually helped middle class America during foreclosure-gate) called the Mortgage Debt Relief Act of 2007. Basically, it says that when a bank forgives a deficiency on a homeowner’s primary residence, the debt forgiveness is not taxable. Hence, in my example above, if the bank is willing to waive the $175,000 deficiency, the homeowner doesn’t have to pay the $45,000 in taxes to the IRS.

    Sounds good, right? Well, here’s the problem there. The Act is set to expire at the end of 2012, and it’s unclear whether it will be extended. This has caused many homeowners to openly wonder:

    Should I try to get a deficiency waiver now, while the Mortgage Debt Relief Act is still in effect?

    I certainly see the logic in this. However, I generally think that concerns of these types are overplayed – not the sort of thing that should be driving a homeowner’s decision-making process with respect to his/her residence (generally speaking). Here’s why.

    First, the Act has been extended before, and I’d be surprised if it’s not extended again. Remember, this is an election year.

    Second, the Act only applies if we’re talking about a homeowner’s primary residence. So if we’re not talking about debt on your primary residence, the expiration of the Act does not affect you.

    Third, even if we’re talking about your primary residence and even if the Act is not extended, there’s another significant exception to a homeowner’s obligation to pay taxes upon a deficiency waiver – insolvency. If you’re insolvent, as defined by IRS Code, then you have no tax liability on any deficiency waiver. What does it mean to be “insolvent”? I’m no tax expert (and anyone in this situation should seek advice from an accountant). However, it’s simpler than it sounds – you’re insolvent when your total debts exceed the total fair market value of all of your assets. Yes, “assets” includes everything you own, but if we’re talking about someone facing foreclosure on their primary residence (which, by definition, we are) then many homeowners don’t have many assets, so they’ll fit the bill. Just think about it. Using my example, above, if your house is worth $125,000 and you owe $300,000 and you’re getting foreclosed on that house, you’d have to have at least $175,000 in other assets – without any other debts – not to be insolvent.

    For example, suppose you have no other debts and have $25,000 in the bank, $100,000 in IRAs and 401(k)s, two vehicles worth $20,000, and your furniture and all other personal property is worth $25,000. That would be far better than most homeowners I’ve encountered in this type of situation – most have many other debts (e.g. credit card debts) and not nearly that much in the way of assets. (Bear in mind, your personal property may be worth a lot to you, but the fair market value of the used possessions in your house is probably much less than you think.) Anyway, using those numbers, that’s $170,000 in assets, plus the $125,000 house, for a total of $295,000 – still less than the $300,000 in debts, so you’d still be insolvent, so you’d have no tax liability. Think about that – someone with no debt except the house and $170,000 in other assets is still deemed insolvent for purposes of owing taxes on the deficiency waiver.

    If you’re trying to figure out if you are insolvent, but aren’t sure because you don’t know how much you owe or what your house is worth, bear this in mind … the amount you owe is almost always greater than what you think. By the time the bank includes the bogus charges, costs, and fees they always include, plus 18% default interest, the amount owed is invariably higher than most homeowners realize. (Fortunately, this is one time where it pays to owe more, and the banks’ crooked inclusion of bogus charges actually helps.) As for what the house is worth, just go to zillow.com – it typically provides a decent estimate.

    So if you’re insolvent, whether the Act is extended is irrelevant – you won’t owe taxes.

    Fourth, I’m going to share the way I’ve handled this situation on many occasions.

    Under the IRS Code, tax liability flows from a deficiency waiver because of debt forgiveness. The term “waiver” says it all – the bank is “waiving” its right to collect the deficiency, and by waiving the homeowner’s obligation to pay, the bank is forgiving the debt. That debt forgiveness is what creates tax liability under IRS Code. Deficiency waiver = debt forgiveness = tax liability.

    But what if there was no obligation to pay the deficiency in the first place? What if there was no entitlement to a deficiency at all? As I see it, if there’s no entitlement to a deficiency, then there’s no “waiver,” no debt forgiveness, and, hence, no tax liability. No deficiency waiver = no debt forgiveness = no tax liability.

    How is that possible? How could that be? It’s actually quite simple. Mortgage foreclosure cases – at least the ones in my office – are contested. We contest the amount of the debt and we challenge the bank’s entitlement to anything at all, much less the full amount sought. When we’re making these challenges, this can easily create a situation where the parties are willing to compromise – by entering a Final Judgment of Foreclosure, one which waives the deficiency. We consent to a foreclosure, and the bank agrees to waive the deficiency … everyone wins. Except I don’t call it a ”waiver,” as it’s not a “waiver.” Instead, I want that Final Judgment to say “Plaintiff is not entitled to a deficiency against any defendants.”

    The distinction may appear subtle, but I think it makes all the difference in the world. Think about it. If a Final Judgment says Plaintiff is “not entitled to a deficiency against any defendants,” then how could there be any tax liability? No entitlement to a deficiency = no debt forgiveness = no tax liability.

    How can this argument possibly fly? For me, it’s a compilation of factors. First, we are challenging the debt – both the amount owed and that creditor’s right to collect. The Final Judgment represents a compromise of that settlement. We don’t think we owed that bank anything, but to resolve the dispute, we’ll agree we owe the bank the house – but nothing else. When both sides agree that is all that was owed, and there was no deficiency, how can the IRS possibly disagree? In that same vein, if the court which presided over the dispute rules that the bank is not owed a deficiency, and the parties so agreed, how can the IRS possibly disagree?

    I suppose the IRS might disagree, and might try to pursue a claim for taxes. But guess what that means? In my view, that means they’d have to prove that XYZ Bank, as Trustee for the ABC Trust (or whatever alphabet soup trust was suing for foreclosure) was actually entitled to more money than the house was worth. After all, for the IRS to be owed anything, they’d have to prove debt forgiveness, which would require proof that the homeowner owed more to that plaintiff than the house was actually worth. Now, think about that for a minute … the banks themselves are having a miserable enough time as it is proving what they are owed. Do we really think the IRS is going to try to start proving what these banks were/are owed? I don’t. I’m certainly skeptical, anyway.

    If this sounds like a cheap lawyer trick, think about it like this … there are many, many instances (not just in foreclosure cases) where parties disagree about the amount owed. Reaching a compromise of that dispute is routinely encouraged … in many walks of life. I suppose it’s possible, but it’s hard for me to imagine that the IRS will start going behind an agreement of the parties, and a Final Judgment of a court, and take the position “even though the parties agreed and even though the court ruled there was no debt forgiveness, there actually was debt forgiveness, so you owe taxes.”

    Is this foolproof? Probably not. But do I like it? Absolutely.

    Fifth … if somehow all of that doesn’t work, there’s always bankruptcy.

    So there you have it, folks. Do I hope the Mortgage Debt Relief Act is extended another year (or more)? Yes. But even if it’s not extended, should everyone be petrified that they’ll owe a bunch of money to the IRS? I’d say no. Chances are, you’re either insolvent, can file bankruptcy, or can settle the dispute in a way that won’t create any tax consequences.

    Might I be wrong? Sure, maybe. Can this work out for 100% of the people reading this? Probably not. But what’s the alternative? In case you didn’t realize, it’s not exactly easy to get a bank on the phone to try to agree to a short sale (with a deficiency waiver), especially quickly. So don’t fret. There are ways around a deficiency short of owing the IRS a bunch of money.

    Mark Stopa

  40. In a typical bankruptcy, where the creditor proof of claim are not contested, then the discharge Order serves as an absolute bar (in theory) to a money claim against the discharged person. What remains is the “in rem” claim against the property, and typically that carries through the BK process. So the creditor can go try to hustle the property, but cannot touch your wallet any more. However, as a practical matter, if there is a 1st in there, and you are upside-down, then there is nothing to hustle (unless the 1st is an unperfected lien, which happens).

    When these banks send you a “forgiveness” letter, it is a write-down of an uncollectable asset on their books. That hands the bank a tax loss benefit, both for the current year against current income, possibly a loss carry-back (if they had net income the previous year), and a loss carry-forward against future income. Assume a tax exposure of 38%. That worthless 2nd mortgage lien on your foreclosed property now gets converted into a valuable tax offset, at 38% – which sure beats 0%. Do you have to pay tax on it, as deemed income? Sometimes.

    The bank has to file the Release of Lien on the County Land Records within 30 days; if they don’t, then you can go sue them for damages.

    If the Note was paid by insurance, without subrogation, then there is no basis for the forgiveness: you should receive a Note back, stamped “Paid.” You don’t, because these bankers are bums. Although bankers hold themselves forth as persons of great moral rectitude, in actuality they are without a moral compass in dealing with “Christian” customers in the heartland, who are viewed as mere goyem, to be exploited. In a nutshell, that is why there are so many problems on Wall Street.

  41. PHH refinances and services loans for Citi. I’m not sure if you did the right thing letting them join you against MERS. They are sueing themself for their own error . I’ve been seeing that alot here locally where the NAs are sueing MERS.

  42. If Citi owned my mortgage like Amcore claimed, wouldn’t Citi have released my mortgage and not MERS? I can only imagine the debt they created off of my mortgage since 1992 would be mind boggling. MERS no doubt is covering up alot. I asked the recorder of deeds clerk when Chicago Title released my mortgage to public..who is public? The clerk said it could be anybody..! Nice huh..? I do have a release from Citi they recorded but it does not say what they released and there is scratch outs on the original doc. The clerk at the recorders office told me that its a fraud..

  43. Amcore Bank..Mers released the mortgage to us…Chicago Title and Trust then released the mortgage to public…no assignment ever recorded….There is an allonge to PHH mortgage..who is the servicer and was the servicer begining 2 mos after the closing…no legal assignment ever recorded by Amcore..who is now a failed bank and calls itself Amcore N.A. MERS…The plaintiff, PHH has joined us the defendants to sue MERS…..MERS as nominee for Amcore Bank recorded an assignment/deed of trust to PHH……
    9 mos. after
    the foreclosure lis pends was recorded….

  44. Bottom line..I was off on the initial numbers but, the house did appraise at $550,000.00…My mortgage ended up being $500,000.00 with the side note and we only took $89,710.18 in equity our of our home..that’s criminal..

  45. Who was your origionater of the new loan? Did Mers transfer the title and note together? Do you have any Allonges or Assignments? Who was the title Company?

  46. You didnt catch such a large discrepancy in the amount of the payoff at closing? When did you first notice it? I really wish you would get an attorney to guide you thru the process. I’m sure they could relieve some of your frustrations, and you dont have to fear losing on a technicality… lets admit it …. you could use some R&R?

  47. I should add MERS had the mortgage. That is, I am assuming how Citi and some so called Verdugo Trustee Service Corporation claims to have had my mortgage. The release of mortgage came from MERS…Marilyn Brown..VP of MERS……Shawn “Lyerly”..notary public for MERS….there are actually stamps on the release of womens dresses on hangers…I am not kidding..

  48. @shadowcat…We took a home equity line of $89,710.18 to buy inventory for our business. Line 303..cash to borrower…$89.710.18…..Line 220 says Total paid by/for Borrower…$406,826.36….Line 301 says Gross amt due from borrower 317,116.18…Line 302 says Less amts paid by/for borrower…406,825.34….They state they paid off a mortgage to Citi for $209,471.28…we never had a mortgage with Citi..never got a cancelled note or mortgage back from Citi…they said they paid off a line of credit to In bank..for $20,000.00 got the cancelled notes and mortgages on that one.

  49. Anyone watch the debates tonight and hear Romney tell Obama that in Dodd-Frank there is a TBTF provision for the 5 largest banks….? What a bunch of sneaky lying bastards…! That is why we are all nearly bankrupt and the FED keeps bailing out these crooks. Obama said the banks paid back all of the bailout money with interest??? Well where is it? It certainly hasn’t made its way back to the U.S. TAXPAYERS anywhere that I can see. I would like to see proof they made out those checks to the U.S. TAXPAYERS…and that money is in the U.S. Treasury because it is about time every American received monetary restitution for the usury fraud they committed and the other massive frauds they committed with our electronic signatures. They destroyed the economy, our businesses, our livelihoods, our property titles, our home values, our wealth, they have outright stolen millions of homes and rendered our mortgages insolvent. Screw this welfare nation crap because of what these Wall Street crooks did…The American people are struggling to make ends meet with these shitty jobs that don’t pay the bills to replace our “failed businesses” and good paying jobs, no borrowing of our own goddamned wealth for small business for the private sector, food stamps and the whole unemployment charade….its pay back time….!

  50. @Ivent… on your HUD of the New Mortgage of $550,000, How much cash back to the borrower? Did you pay off other debt with proceeds? I’m a little confused… give me names.

  51. Much as I would appreciate a Dimon indictment on general priciples, it was posted many hours ago with no verification from an official source
    and there is a law about urging people to make a run on the bank—and as you may guess its not a good thing—the stock would drop like a rock —and the article says itll be several days till mainstream catches up—it soulds pretyy thin–also the interpol thing—?????

  52. BSE..I have been warning my son to get his money out of there for over a year and my dad too..I sure wish they would. People believe their money is insured..not so sure I trust that notion anymore. I think the banks have pretty well cleaned us out.

  53. Is that for real BSE..? The FBI is going after that jerk weasel? If so, I feel all of my complaining about these crooks was not a waste of time after all. Thank You…!

  54. If that is not enough, folks, the brazen little piece of manure, Dimon, is now conspiring with Nazi lesbian Janet Napolitano and her corrupt Department of Homeland Security (DHS) to freeze FDIC federally insured customer and corporate accounts under the accusation that the accounts had too much activity involving investors from our great American ally, the nation of Canada.

    It is clear punk Dimon and his crooked JPMorgan Chase Bank need money to make a forthcoming margin call reference their undermargined risk asset bubble position.

    Clearly, Janet Napolitano is trying to help sociopath punk Jamie Dimon meet his margin call.

    In closing, I, once again, urge all American citizens that have federal insured deposits (FDIC) at JPMorgan Chase Bank to get their money out of there NOW before the sociopath punk Dimon loots it!

    http://beforeitsnews.com/banksters/2012/10/has-jpmorgan-chases-ceo-jamie-dimon-been-indicted-and-had-an-arrest-warrant-issued-two-insiders-say-yes-2431994.html

  55. under controlled circumstances

  56. dc..whatever people chose to do with that second lien money, which was their own equity, was their choice, and they paid dearly for it. In my case, our home equity was used for business purposes. In 2007, the bank told us we could have 20% of the current market value of our home. They never told us what we owed. I estimated it was less than $100,000.00. Our mortgage was initially for $192,000 and we put $100,000 down in 1992. We ended up with an appraisal of $550,000, the current market value of our home at that time… and wa-la.. a new mortgage for $550,000 and a side note for the equity of $82,000. Yet, we only took out $82,000…I knew this was all wrong but my husband needed the money at the time to keep the business afloat. It was a scam and that bank was a predator. That bank is now a failed bank. It was the biggest bank failure in Illinois history and they are under investigation for alot of fraud. These loans should have never been given because the liens were never perfected. It was a suicide squeeze. The problem was, the American people never thought they would stop making money. They always thought they could always make more money..Boy, were we wrong.

    @shadowcat…RE: the second lien being extinguisable in a bk. My sister just filed bk and was told she could not extinguish the second lien in the bk.

  57. It can now be reported that an FBI arrest warrant has been issued against JPMorgan Chase CEO Jamie Dimon.

    The charge: massive mortgage-backed security fraud involving JPMorgan Chase’s and Bank of America’s purchase of Bear Stearns during the period of 2007 – 2008.

    JPMorgan Chase used worthless Bank of America mortgage-backed securities that were fraudulently marked up by noted derivative clearing house Maiden Lane LLC, who is linked directly to the Federal Reserve Bank of New York.

    P.S. The indictment against punk Dimon also charges the little, out-of-control sociopath with over a ten (10) year period blatantly co-mingling customer insured (FDIC) segregated accounts to write bogus cross-collateralized derivatives on the corrupt London LIFFE Exchange so as to give JPMorgan Chase an advantage when it comes to leverage.

    source

    We can also divulge that punk Dimon, along with the Federal Reserve Bank of New York, has been involved in the illegal co-mingling of U.S. Taxpayers’ money reference the Wanta-Reagan-Mitterrand Protocols.

    P.P.S. At this hour, sociopath punk Dimon is still illegally using STOLEN MFGlobal and PFG FDIC insured customer segregated account funds in an asset bubble ponzi scheme.

    Message to CFTC Chairman Gary Gensler: IF YOU DO NOT TAKE ACTION NOW, THE NEW YORK ATTORNEY GENERAL MAY INDICT YOU, PUNK GENSLER, FOR CRIMINAL CONSPIRACY INVOLVING THE CROOKED JPMORGAN CHASE BANK AND YOUR CORRUPT CFTC!

  58. @DCB….. have you ever given Mr Bankster access thru your land yet?

  59. well if you owned kraft this morning they almost let you make 10/share

    they cancel the mistakes that let other people make money—but they never reverse and cancel a downward hit

  60. hahaha on those family vacations .. Thank God for Etch a Scetch and 8 track players. I was talking about the romantic..your kids are raised and not going this time, job well done kinda vacations. And Yes, I totally understand the unemployment situation, the medical bills and such. I know many in this situation … most have moved in with other family members to share expenses and such. Our homeless shelters are turning families away … there are two many to serve. I have always been a consumer advocate… I dispise the Buttwipes that created this. But you understand where I am coming from as a person whos pension & 401k will be all but gone soon. Right?

  61. SC

    Im sitting here sort of laughing to myself re the no vacations or restaurants with 2-3 kids

    I have 3 sons. We gave up going out to eat anywhere but a drivethrough McDs of course [yuk] as soon as #2 could walk—w/ #3 they wouldnt even seat us at a restaurant—wisely

    And vacations??? It required sedation just to drive across town [for me]–and barriers between seats—-it was a good day if there was no blood spilled

    now all grown up mostly educated and only thing in common amoung 3 besides the last name is unemployment—

    and that is my gripe—-one son two degrees in bio-chem-3.8 GPA–no jobs available –no research in his field–cancer cure/ prevention —–at least not for US citizens——those mostly go in that field to Indians and Chinese to the extent there is such reasearch—which we cant detect

    why indians and chinese —immigrant job preferences set asides—globalism good for the soul? but bad for the pocketbook–unless you like to buy cheap junk with a warrantee good for the life of the importer

  62. We went to collage and worked to pay for it at the same time. We have two children ages 28 & 30. They also worked while going to collage. They both graduated the same year.. both got married the next year. Both bought homes the following year and both got pregnant at the same time. Law & Medicine ….. Two Good Fields to be in right now.

  63. Don’t get me wrong DCB, but in 1forthemoney … everyone knows you can wipe out a 2nd lien in BK. without going insolvent.

  64. we didnt go on vacations, we didnt eat out, we clipped coupons,

    that just comes natural when you have 3 —or only 2 ? —its that last 6 that gets you—then the phd cause they cant get jobs–yours are older–you were on the right side of the timeline——ill bet you had 2 or 3 kids before i even got done paying MY student loans—-

  65. @dcb, you know dang well that is a totally seperate issue. But if you want to go there … Yes,…I’ve done everything you described. When the girls went to collage, they went to one we could afford. And while they went, we didnt go on vacations, we didnt eat out, we clipped coupons,we bought resale and we worked two jobs 12hr days.. We adjusted our life style .. A total of 12yrs of collage between the two girls. Only $26,000 of it was financed thru student loans.

  66. @dcb

    “sc –dont climb too high on that horse”

    Got that right.

  67. People went out and hocked themselves up to the wazzu, cars, vacations, boats all paid for on a credit card or a HELOC and/or 2nd. They bought jewlery and clothes

    and dont forget a generation of baby boomers paying tuition room and board—the family suv—-the kids cars and insurance—-

    the jewelry boomlet? chump change next to 4-6 years college for a couple kids—and if they are normal people they spent on the kids 1st—-

    and the kids many are still in debt–but not as much as they would–i understand the average student loan debt is about 25K—–well i dont know where you get 4 years for 25k–and i dont think the balance was raised by the kids on part-time and summer jobs at min wage–although they may remember it like that–and forget those 10k and 20k checks along th
    e way

    poor boomers—-after doing what you describe –sending kids to college—-then to be told you are high cost employes–often legacy employees post a bain-rape—–out at 55 greeting at wallmart–thats where it fell apart

    sc –dont climb too hogh on that horse–have you ever put money into a kids future–its rhetorical

  68. SC,

    Oh, I forget! And I shop at Volunteers of America (hate shopping. Always. Shopping for me is a punishment!) But you’re right: I do look good. I guess that makes me a deadbeat…

  69. SC,

    “They bought jewlery and clothes they couldnt afford, but hey they looked good for a while right?”

    No Heloc, no car (I drive a 1999), no credit card, vacation, boat or what not. Where the hell did I go wrong?

    Oh! I remember now: my income got slashed by half even though i work twice as hard! That must be it…

    With that kind of an attitude, you’re not flying on my broom!

  70. YEP —-now its 180,000 letters —and 2nds not eligible for relief if over the cost of the house unless a person is essentially bankrupt–but for ira sources–pensions—–so banks gonna turn people over to irs for punishment—-i hope irs does not waste resources chasing busted people—but they are easy cases to bring asssessments then the debtor bears burden of proof re being busted

  71. We have already reviewed dozens of these letters and our clients have started to receive the recorded Deed of Release and Reconveyance here in Arizona. If you had old me this year ago, I would have called you a liar. Amazing.

  72. We have reviewed about a dozen of these now and already our clients have started to received Deeds of Release and Reconveyance. If someone had told me this one year ago, I would have called them a liar. We are in Arizona.

  73. @1ofthemany, or should I say . 1forthemoney? Either way my response to your concerns is this …. There have always been deadbeats and always will be. People went out and hocked themselves up to the wazzu, cars, vacations, boats all paid for on a credit card or a HELOC and/or 2nd. They bought jewlery and clothes they couldnt afford, but hey they looked good for a while right? Then they found themselves insolvent (as in CH7). All their creditors and the taxpayers and the retirees screwed. But Hey… they had a Good Time Right? Now they set on their carcus and wait for the next free ride. I only help those who are responsible and help themself first. Dont care much for FreeLoaders or Deadbeats. If your gonna get on my nerves … I’m going to give you a reality check.

  74. @dcbreidenbach
    The article I posted answers your question. It says for every debt forgiven the amount is credited toward the settlement they had to pay out.

    So what better way to pay less than to remove from your books the phantom debts that should have been written off when the bankruptcy discharged them.

    I guess no real money will ever change hands since banks are the ponzi masters

    Trespass Unwanted, corporeal, life, a free and independent state, free, a freeman

  75. New York Times article says these debts were already discharged but the banks claim they were still holding the lien even after bankruptcy discharged the debt.

    http://www.nytimes.com/2012/09/30/business/when-banks-erase-a-debt-that-isnt-there.html?partner=rss&emc=rss&_r=0

    Trespass Unwanted, corporeal, life, a free and independent state, free, a freeman

  76. Does the writeoff of uncollectible 2nd liens count toward the $25 billion—probably want to announce that BoA has handed out “relief” totalling its proportionate share of $25 billion

  77. Part 2 – Oh and you are always gonna have the good politician and the bad politician, kinda like the good cop bad cop play, they all live under the same dumpster with the same agenda and will throw the pigeons a little morsel here and there just for grins and giggles I guess or for entertainment …will not try to figure that one out as it is far below the normal red blooded American thought process.

  78. Another thought, are we going through the “look over here” while we are getting a good screwing over there due to no news until after the fact if any news is given at all after the dust settles, this has happened many time, these people are so diabolical it is hard to SMELL, still looking for DJD to go down, kinda thinks BO will not let his biggest presidential cuff link wearing buddy go down, just saying think about this rhetoric. Time will tell as always, it is hitting the internet big time since this morning when I saw it here. Look around every where while this is blasting out to the every so hungry public. Agree that the second is looking (BOA) to reap here, mine was charged off in BK7 so yes I will reply to boa with you got nothing you have been dealt with, also did not reaffirm the first as they are all unsecured debt due to the fraud and they only have first and last page of original papers (copies) and I have an unlawful mod, just paying rent now and watching and waiting and paying attention. Our time will come. Our time will come!

  79. Chris Whalen on Sellout Schneiderman’s latest charade: What is really interesting is that the legal complaint filed by Schneiderman talks about sloppy procedures for loan selection, but still does not get to the real fun, namely multiple pledges of loans for different RMBS. And you can be sure that Schneiderman does not really want to go that far because it might force him to ask the same question about the other, far larger issuers of RMBS. Remember, the whole point of the Robo-signing settlement is not consumer protection, but rather fraud. The key question: Who’s got the note? If you don’t have to deliver the note into an RMBS trust, then the door is wide open for securities fraud. What is really troubling is that while Schneiderman is making a big fuss about suing JPM over the Bear Stearns RMBS, he refuses to go after Bank of America, Wells Fargo, Citi, Ally and other large banks for precisely the same type of fraud and deliberate criminal acts as were committed by Bear Stearns. The degree of negligence and stupidity displayed at Bear Stearns may have been more egregious than that at say Countrywide, but only in degree. http://dailybail.com/home/chris-whalen-jamie-dimon-not-so-brilliant-after-all.html

    He needs to add the next step: multiple claims on a single note –using reproductions. The collection agencies will not hesitate to collect a deficiency through the backdoor by using two plaintiffs in two suits on the same note. Each may also make an insurance claim—either govt or casualty. There is nothing to stop a servicer from satisfying–paying off two trusts [or jvs] using two casualty insurance policies–then creating an insurable event. the debt collector gets the broken shell–and salvage

  80. Those of you who are still hoping that sanity will return and that judges across the nation will awaken from their collective amnesia due to their mass embolisms, returning to that quaint construct we used to call due process and the rule of law, get over it. Everyone who is anyone in elite power circles understands the fraud inherent in the financial system.

    We are the weakest link in their chain. The Unwashed – Expendable Ones. If it takes every last one of us losing our homes, they believe, so be it, if it saves the financial system that they’ve come to love and adore. How else will they get multimillion dollar compensation packages for running firms into the ground? Work for a living? Are you daft?

    Here’s bank analyst Chris Whalen on Sellout Schneiderman’s latest charade:

    What is really interesting is that the legal complaint filed by Schneiderman talks about sloppy procedures for loan selection, but still does not get to the real fun, namely multiple pledges of loans for different RMBS. And you can be sure that Schneiderman does not really want to go that far because it might force him to ask the same question about the other, far larger issuers of RMBS.

    Remember, the whole point of the Robo-signing settlement is not consumer protection, but rather fraud. The key question: Who’s got the note? If you don’t have to deliver the note into an RMBS trust, then the door is wide open for securities fraud.

    What is really troubling is that while Schneiderman is making a big fuss about suing JPM over the Bear Stearns RMBS, he refuses to go after Bank of America, Wells Fargo, Citi, Ally and other large banks for precisely the same type of fraud and deliberate criminal acts as were committed by Bear Stearns. The degree of negligence and stupidity displayed at Bear Stearns may have been more egregious than that at say Countrywide, but only in degree.

    http://dailybail.com/home/chris-whalen-jamie-dimon-not-so-brilliant-after-all.html

    We are expendable due to their fears. What they fear more than anything is that their RMBS scheme will be exposed, collapsing the entire globe’s financial infrastructure, and more importantly to them, destroying their free pilfer and gang rape. Whalen gets to the heart of the issue that DCB is always hammering home here on LL…..even if one of us successfully holds these rat bastards at bay, or even, God forbid, is successful at slamming a bank to the turf, it will just start up all over again given the criminality rampant in the system due to multi-pledging of notes. Don’t forget, multi-pledging is a friendly way of saying major felonious securities fraud.

    The bottom line is….1) we will never recover from this hangover until we face the facts….and….2) they should never have bailed out the banks, 3) they should have immediately bailed out Main Street. What we need to demand is simple…. 4) arrest all of the criminals in the entire C wing of every major financial institution. Every CEO of every major bank MUST be prosecuted and made to serve lengthy prison sentences for the crimes committed under their watch, acts that they signed off on. It’s the law. Judge that, your honors.

  81. I think the fur will fly after the election, probably in Jan/Feb. I saw something on the Internet about Geitner getting fired after election if Obama wins. Either way, the 99% are going to have to fight for what they need and deserve.

  82. All nicey nice before election—-the collection agencies have been actively pushing back actions until late november –for months

  83. hmmmm

  84. I agree. We were all betrayed by Obama and I, too, question the timing of Schneiderman’s action… Which tend to lend credibility to that Jamie boy story: people want some blood and Obama knows it.

    That may very well make or break his re-election.

    “Jeff Connaughton: Why Romney Should Attack One of Obama’s Greatest Political Vulnerabilities
    Listen to this article. Powered by Odiogo.com

    By Jeff Connaughton. Connaughton was the chief of staff to Senator Ted Kaufman during the financial reform fight in 2009-2010. He is the author of the new book The Payoff: Why Wall Street Always Wins. Connaughton was a special assistant to Senator Joe Biden, a lawyer in the Clinton White House, and a co-founder of Quinn Gillespie & Associates, one of DC’s premier lobbying firms. He’s now retired from politics and lives in Savannah, Georgia. Cross-posted from JeffConnaughton.com.

    Why has President Obama so far avoided responsibility for one of the most notorious failures of his administration, deciding not to pursue potential Wall Street crimes? Because Obama’s negative ads – and Mitt Romney’s own foibles — have successfully defined Romney as the candidate for the 1 percent. A recent Esquire/Yahoo! News poll shows that 58 percent think Romney would pursue policies that favor the wealthy, while just 23 percent say the same about Obama.

    In reality, the willful failure of the Obama administration to investigate Wall Street executives is the political issue that should most frighten the Obama campaign – and I have little doubt it was the prime motivation for the unusual timing of the filing yesterday of a case against JPMorgan/Bear Stearns by New York State Attorney General Eric Schneiderman. Ignoring potential criminal wrongdoing by his largest 2008 campaign donors discredits the Obama message across the board: He hasn’t always fought the 1% on behalf of the 99%, and he’s the main reason Wall Street plays by different rules than Main Street. If an already dispirited Obama base – those who by the millions originally sympathized with the anger that drove the Occupy Wall Street movement – were constantly reminded by the Romney campaign of this odious Obama failure, some of them might stay home in November. And it might be a tipping point for independents. A recent Labaton Sucharow survey found that 61% of Americans will significantly factor a candidate’s commitment to rooting out corporate wrongdoing in their voting decision in November.”

    Read more at http://www.nakedcapitalism.com/#st25kBVeIj22ezhP.99

  85. I just posted this but moderator blocked it. I really, really want to believe it!

    UPDATE 10/3/2012 11:00 am EST

    We’ve just been informed from one of our sources that the Arrest Warrant for JPMorgan Chase Jamie Dimon has been confirmed from another source independent of Tom Heneghan. Our source reports that Jamie Dimon will most likely turn himself in and post bail and await the trial. It will be interesting to see which mainstream news source is the first to post about this ongoing situation with JPMorgan Chase and Jamie Dimon today!

  86. I was a recipient. However, the obligation was already discharged in Bankruptcy along with the first lien. FMFCwas the alleged originator. Looking to see if and when they will record a satisfaction of the second lien. I do not believe they had the authority to forgive the 2nd lien.

  87. SC,

    Don’t know yet. Last year, there was a big to do about Geithner being arrested. in the end, he only had been taken for questioning.

    Still, seeing it in writing gives me a good feeling.

  88. http://www.msfraud.org/

    Poll uncovers perceptions of flaws in U.S. civil justice system

    DRI-The Voice of the Defense Bar recently issued a report titled “The DRI National Poll on the Civil Justice System,” in which it found, on the basis of a random sample of 1,020 U.S. adults, that a significant percentage (41) of respondents indicated that they were not confident that the civil law system produces just and fair results. A vast majority of respondents (83 percent) indicated that “the side with the most money for lawyers usually wins.” About two-thirds said that they preferred juries over judges to decide disputes.

    Duh!

  89. They are going down down down in a ring of fire …. they’ll burn burn burn as the flames go higher. Oh Jamie Boy… leader of the Rat Pack, I think your Master is calling you home.

  90. 1ofthemany

    Yup, I agree, something is up and I suspect the frenzy is on. Trying to foreclose on the first lien, by removing the second.

    Thanks, Shadowcat…I’m on for the ride, no matter what. I have a couple of cards up my sleeve yet!

  91. Right out of “fringe”… So i don’t know how true it is but, just for the pleasure of reading it, I’ll post it.

    HOT EXPLOSIVE BREAKING NEWS: JPMorgan Chase Jamie Dimon Indicted

    OK, we give in, some of this stuff, even though it is what it is (and no doubt some drones out there will think less of us for publishing something so ‘unsourced)’, but the bottom line right now is, with the USA Patriot community seemingly giving much weight to Tom Hennigan’s briefings, we simply MUST PUBLISH THIS ONE (because we guess it just has to be true otherwise Tom Hennigan just destroyed his credibility worldwide knowingly, which seems something he’d highly unlikely do). U ready for this?? I think NOT!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

    [My comment]: i don’t know who Tom Hennegan is and right now, i don’t care. Just savoring that headline. To get the feel for what it’s going to be like when they all get indicted, one by one.]

  92. Hang in ther Poppy, those who fought will be rewarded. Dont follow the negitivity from those who didnt. I assure you their outrage is not something your gonna want to hang around here for. Prepare to part ways soon ……

  93. If you had a HELOC you are good and they still can not verify ownership and they have dif dates/yrs on mine because of their shoddy paperwork handling and you may, But more likely… probable… pay income tax ..yep one gov entity ripping the other and you are in the middle as always, tired of your or what is left of your carcass begin ripped apart one shred of meat at a time. Insanity at it’s finest, looks like the feeding frenzies are on the rise again. uh uh uh jeezie some people’s banks/servicers/thieves. I trust they will ALL go down and soon…very soon. Wonder how much of the people’s money they get off this one???

  94. @Poppy

    Yup—there is something more:

    “…Banks are ahead of the game. They lose the “home equity” loan collection when foreclosure occurs. So — no harm to forgive these “debts.’ Problem is they are using this under the AG settlement. The settlement did not address home equity loans — it addressed FORECLOSURES. Thus, first lien mortgages (which of course are not really mortgages). Just another way to falsely apply settlement money.”

  95. There has to something more…Hmm…..

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