With All the Settlements, What is Owed on Principal?


The complexity and shroud of mystery surrounding claims of securitizations, assignments etc can be simplified if you just look at the money. This is why I have forensic auditors who chase this information down. Call living lies customer service 520-405-1688 if you can’t find an adequate analyst of your own who REALLY dig in.

  1. What money was paid to whom? When? How? Who is a witness that can authenticate and verify the documents used (ACH, Wire transfer, check) the documents used for money transfer?
  2. If the creditor already settled with the investment bank, then is the claim for collection or foreclosure on the mortgage still viable?
  3. How was the settlement allocated as to the investor-lenders?
  4. If the investor-lenders received all or part of the money from the investment bank, how much is owed by the homeowner and to whom?
  5. To whom was money paid? Who received the actual payments from borrowers, co-obligors, insurance, credit default swaps, federal bailouts and civil settlements? How much of this money was received as agent for the investor-lenders (creditors)?

There are lots of questions but they can all be answered with arithmetic. If investor bought a bogus mortgage bond for $100 million and received $50 million in settlement, then they are either owed still $50 million or they settled the claim and if you contact them, they will say they have no interest in pursuing the matter any further. So why the foreclosure? And if there is a foreclosure, who gets the money? Who is the “creditor that submits a “credit bid.?”

People don’t like talking about the free house syndrome, but SOMEONE IS GETTING A FREE HOUSE one way or the other — either the banks or the homeowner.

One thing I am sure about is that there is a claim that can be firmly supported by the presence of a settlement or proceeds from co-obligors (insurers, CDS counterparties etc.). Either the amount due is wrong, eliminated or at least subject to a proper accounting. This would negate the issues of foreclosure, at least for a while, in the notice of default and initiation of foreclosure based upon the assertion that the creditor has been identified as beneficiary or mortgagee and the amount due is as stated. The amount due is probably NOT as stated and the creditor identified might not even have a dog in the race anymore.

Judges get angry at borrowers for bringing this up. I think lawyers should have the guts to stand up to such judges and say your anger is misplaced. Don’t shoot the messenger! The borrower didn’t create this mess, it was the financial industry and this loan was not even originated using standard rules of underwriting and document preparation.

111 Responses

  1. Great article more people should read it

  2. Very nice post, thanks for sharing it

  3. I would comment on the letter to Neil from ENRAGED, on the abuse of this site by individuals undertaking a personal “war.” directing myself to the remark that “If these are the clients, I’m [attorney] dead in the water! [before the Court]” followed by a bad impression is impossible to turn around. Actually, that is not so.

    When approaching a completely botched, screwed up, hopeless case, in which the defendant(s) have been hammered, even sanctioned, by the Courts, remember the old lawyer’s adage: “No case is perfect.” Remember also that your man is and can be postured as (previously) not having a clear idea what he was doing. In contrast, remember (and set forth) that the bank or Servicer (usually also a Bank) did not exactly hang out a big banner over the entrance to that bank branch, saying: “Come on in! We are thieves and pirates and scoundrels and scalawags, and if you are dumb enough to entrust us with anything, we as Pirates will go steal it!”

    Instead, the “Bank”/Servicer can be Pled: “Plaintiff postured and postures itself as an institution of great moral probity and prudence, held and continues to hold itself forth to the defendant and his family and to the public at large as an institution of great moral rectitude, and invited the defendant and the public at large to repose its faith, trust and confidence in Plaintiff Bank.” [And when you are suing them, then they invited the public to repose their faith, trust and confidence in Defendant Bank!].

    Now, what is that Bank going to do: deny that they invited you to repose your faith, trust and confidence? Nope, tough to do that, and admit that they are scoundrels and scalawags. So, responsively, that part of the Pleading has to be Admitted.

    Now you are getting some traction. Once that happens, then it is a short leap to allege that, “by the receipt and exchange of confidential information, coupled with the invitation of defendant Bank to Plaintiff homeowner to repose its faith, trust and confidence in said defendant Bank, the defendant Bank assumed to role of fiduciary to Plaintiff as respects the transactions in controversy.”

    See what happens? Now you have converted the bums into “fiduciaries,” and once you do that, then the roof drops in on them; because, in law, a Fiduciary has a duty of “utmost care,” not “ordinary care.” You get to this point, and they are torpedoed. As the submarine captain, you still have a few tricks – and torpedos – left to go fire. No case is hopeless. One case I handled had the homeowner facing a five-year bar from the BK Court, and sued post-BK in State Court. By building up a solid wall, the bank Withdrew the Complaint two days before trial. Can be done.

    Final note to Inquirer as to how to raise “failure of presentment” of the Note: You can do that by Pleading as a “special defense,” also known as an “affirmative defense” in some jurisdictions, which is the section so captioned after you recite the Answer to the Complaint. Remember: the burden is on you to prove your affirmative defense, and it cannot be mere bald allegations, it has to have something substantive in it, but while affirmative defenses remain “standing,” no summary judgment can flow.

  4. Bloomberg news headlines…..U.S. FORECLOSURES DROP TO 5 YEAR LOW IN SEPTEMBER….

  5. Straight out of the mouth of the guy who knows:

    The banks are TOO BIG TO JAIL…

    Must watch—Barofsky admits Wells Fargo cannot go down because of what it would mean to the economy…(which is another way of saying—the BULLSHIT MORTGAGES AND FORECLOSURES MUST GO THROUGH!!!!)


  6. Pay….or give me back your property is extortion….and its criminal when this was not our fault…we had no knowledge of this set up to fail by these crooks…!

  7. Forcing property owners to renew insolvent debt created by Wall Street is fascism and it’s criminal….!

  8. Right on carie…! This scam could not continue without the investors in the FED’s junk……Bloomberg said today…the investment banks are loaded & need things to invest in…..! Good Lord…what will they do next…? It’s scary to even think about it….

  9. Down graded investments that have been turned into junk by corporations are called fallen angels. They are no longer investment grade quality….they are defaults…their status can be raised by re-purchases & selling investments in that junk ….that is why they want to force everyone to pay again. That keeps the ponzi scheme going for a while but, cannot be sustained. The FED repurchases of junk is an intent to deceive…..fraud & deceptive practices…it is criminal because it is a set up for a bigger failure down the road…they destroyed their own credit system…..end of story….There is no legal or monetary fix for the destruction of the FEDS own credit system…by the FED…

  10. What would happen if we woke up tomorrow and there was complete honesty and truthfullness with regards to all of this?

  11. …and the “refi frenzy” involved Fannie/Freddie already falsely defaulted “loans”…actually just collection rights to unsecured debt…why do the people have to continue be a party to fraud?
    The people signed documents that were a lie from beginning to end…yet—the people are STILL being blamed and kicked out…the AG’s are only helping the investors—why don’t they want to help the homeowners? The exact same scam is affecting both of them…the EXACT SAME SCAM.
    What is the difference between a homeowner being defrauded and an investor being defrauded—when it’s the same scam that defrauded BOTH of them? Why is one more special than the other?
    Oh, I know—because one has money and resources and the other one doesn’t.
    Controlled oppression.

  12. These mortgages were 10 year bonds….that is what the refi frenzy was all about. That kept the ponzi scheme going and allowed them to create more crap investments to sell. However, by 2008, the bonds peaked in interest rate maturity. They had to dump them….the yields were to high…that was devaluing the value & yield on U.S. Treasuries.

  13. Lets take a look at the risk & term structure of interest rates to find out how they set the Baa rated loans up to fail…..it is all in the structure of the mortgages…we could have never known this..

  14. I would stop paying the mortgage & sue these crooks before their next scam implodes………THE REPURCHASE OF THE INSOLVENT DEBT FRAUD THEY ALREADY CREATED….! MWAHAHA…!


  16. What do you know….? Hank & John Paulson too….ALL THE TRAITORS ARE HERE….INCLUDING TREASURY SECRETARY TIMOTHY GEITHNER…..Lloyd Blankfein, & no doubt the entire boardroom of GOLDMAN SACHS & AIG……!

  17. Enraged, you have an attorney, What would you Need to know? Why would you be here feeding these people iradic ideas they can somehow defend themself if you keep feeding them information that is totaly irrelavant to their cases. KindaTwo Faced … Being represented by a fc and bk attorney and all. Tell them to Get an Attorney!

  18. @enraged…..This is no social issue….this is an issue of a crime of the highest order committed against the American people….the crime of TREASON….!

  19. Look at the list of all the traitors at the link below…..Ron Paul….Dick Cheney…..the list goes on & on…..

  20. Always the same …. Complain and Whine, when they keep dodgeing the “Act” of Personaly Responsibility. The Truth Shall Set You Free! This site is for Investers, Homeowners,Pensioners, and Taxpayers! Quit trying to beg Neil to make it one sided for those who wont or cant face their own Responsibilites!

  21. Why enraged….? Is the truth too much for you or, are you a member of THE COUNCIL ON FOREIGN RELATIONS….? CNBC ANCHOR MARIA BARTIROMO IS……SO IS CNN’ s ERIN BURNETT….

  22. Here is a membership list of COUNCIL ON FOREIGN RELATIONS MEMBERS…

  23. Out of 86, 64 posts are from the two imbeciles who use Livinglies as a social forum.

    Hopefully, since I contacted Neil to ask him to intervene below), something will be done. Otherwise, I’m done like many others who had very good information to share.

    “Hi Neil,

    I come to this site to find information and share whatever I find in relation with foreclosure defense or to ask questions. However, the site has been literally highjacked by two individuals who use it as an instant messenger to text each utter nonsense no one is interested in, completely unrelated to the subject matter. A number of your readers have nicely asked them to cut it out and have been thoroughly insulted. I, for one, have resorted to call it like it is: two poorly-functioning imbeciles who mistakenly believe that this is the new social site in town.

    You may wish to start policing the site somewhat better. Many who have a lot to offer other than insane, narcissistic rants have simply quit visiting this site. Anonymous (who has great information to share), E.Tolle, Johngault, Tnharry, and many others whose names I can’t even recall since they no longer visit.

    This blog, as it now, has become is a disgrace. It only serves to confirm what main stream media have said all along: homeowners in foreclosure or trying to avoid it are unintelligent individuals who deserve everything that happened to them.

    I would also like you to know that a seasoned attorney friend of mine won’t even consider handling foreclosure defense or attending your seminars on the basis of the crowd you attract. In his own words: “If this is the kind of clients I am supposed to represent, I’m dead in water!”

    Bad reputations can be made very quickly by a very few number of individuals. Once the damage is done, it is nearly impossible to correct the impression you make.

    Thank you for looking into it.”

  24. William black says it best ” the best way to rob a bank is to own one”. The environment for the biggest fiancial fraud in the history of this world was deliberate and the stage was set . Somehow we must rewrite the next act I hope with the correct application of the rule of law .




  28. O’O’…. Looky There Mommy —–> Its a Felon, Its a Criminal… Its a Theif. I want him in Jail so I can have the bag of loot he stole. Why should they give it back to the people he stole it from? … and the Book drops!



  31. So.. we Agree, Mr. Bankster took advantage of the investers and the homeowners. I still dont see your reasoning in why The Taxpayers should pick up either the banksters bills or yours? Again….. Their Insolvency and Your Insolvency should NOT be dumped on the Taxpayers! Get over your intitlement bullshit already and take some personnal responsibility! I’m tired of paying for it!


  33. per In sol Vent……”INSOLVENCY DOES MATTER……IF WE CAN’T PAY OUR BILLS…..EVERYONE SUFFERS…..EVERYONE PAYS FOR THIS FRAUD….INCLUDING YOU…” …… In case you havent heard I sol Vent, I am already paying… for the bankster fraud, and for your InsolVENT Ass, Yea ..Kudlow do Right!

  34. This is also how they “wiped out” their shareholders…However…they were all insured on their “risk”, they got the bailout money & they are re- investing in the next phase of their scam…buying investments in re-purchases of the failed mortgages…they caused to fail…and buying fraudclosures …..all courtesy of the U.S. TAXPAYERS…..I want to see the SEC RULE THAT ALLOWS THE FED TO BUY BACK MORTGAGES THEY CAUSED TO FAIL……THAT IS CRIMINAL….THAT WILL WIPE OUT EVERYONE…..THE RECYCLING OF INSOLVENT DEBT THE FED CREATED IS CRIMINAL …..THAT WILL BANKRUPT US…WHERES THE CUFFS….?

  35. Clear evidence points to SEC RULE 10-b-18 as the culprit of the 2008 financial crisis……stock repurchases….or share buybacks allow companies to buy back their own stocks….& insider trade their stock into freefall…

    During the 2008 financial crisis, the relationship between capital structure & substituting stocks broke down….The Baa rated corporate bond interest rate peaked at over 9% and 10 year treasuries bottomed under 2.5%….SEC RULE 10-b-18 (explicitly allowing share repurchases) enabling the “fine adjustment” (stock market crash) toward equilibrium. Appparently, the FED miss-specified 30 years of investor money. By overvaluing their stock, they had to Insider trade…..(per SEC RULE 10-b-18); their overvalued bonds by buying back shares of their own worthless junk via their investors……Corporations can repurchase their own stock ( junk) by distributing cash to their existing shareholders in exchange for a fraction of the company’s outstanding equity ; that cash is exchanged for the reduction in the number of shares outstanding. The company either retires the repurchased shares, or keeps them as Treasury stock, available for re-issuance. That action by the banks, massacred the Baa rated bonds and had a domino effect on the over selling of investments in credit …..(our mortgages) and destroyed the value of the currency….and the credit markets. BTW SHADOWCAT….INSOLVENCY DOES MATTER……IF WE CAN’T PAY OUR BILLS…..EVERYONE SUFFERS…..EVERYONE PAYS FOR THIS FRAUD….INCLUDING YOU…

  36. @Carie….. you refuse to acknowledge that the proper party(invester/lender or creditor) exists. The Proof is in the Pudding!

  37. Neil said:

    “…Judges get angry at borrowers for bringing this up. I think lawyers should have the guts to stand up to such judges and say your anger is misplaced. Don’t shoot the messenger! The borrower didn’t create this mess, it was the financial industry and this loan was not even originated using standard rules of underwriting and document preparation.”

    A lawyer told me: “The most important thing is—DID YOU PAY THE WRONG PARTY?”

    But—since there is no RIGHT PARTY in all this—what constitutes the WRONG PARTY?

    And how to prove you paid the “wrong” party…

  38. Beware … we are in a deficiency state. we are in a state where secured or unsecured creditors/debt collectors …. can take a bite out of your assets. It really does not matter ….. If your insolvent.. your insolvent…. i.e. Ivent.

  39. from investopedia……for investors…..how one of the most powerful “organizations” in the world works……(with our wealth of course)…

  40. The crooks are blocking that link…..Please, write that link down & google that link….!

  41. Here’s a link to OWNERSHIP OF THE FEDERAL RESERVE BANK…These are the crooks who are robbing us ……

  42. Shadowcat says…funny coming from someone pumping free money from the system….. Who is pumping free money from the system..? The investors & shareholders in the Federal Reserve Bank are . Therefore, YOU are no better than a Jamie Dimon…..you are aiding and abetting those crooks as well…chew on that for a while..

  43. The docs were altered & forged after the closing….by the bank or the title company….an attorney told me the title company wouldn’t have forged or altered the docs…Hmmmmm…..???? The fact is..it doesn’t matter who did the dirty deeds…..the title company is responsible for all transactions pertaining to the title…..

  44. Here’s a tip sc……I know what the banks did was criminal……could be time to subpoena the escrowee from the title company who is the trustee for the “loan” & find out exactly what that person did … I have evidence that person did absolutely nothing…..because the banks & Wall Street were having a sick orgy with our signatures….

  45. Carie….they never sold the “loans” they swapped them…or passed them around. They could not sell what they never owned because of the Origination Fraud. That is why they created CREDIT DEFAULT SWAP INSURANCE……they knew they were selling investments in nothing……so did their investors…that’s why they were all insured on their risk..and we weren’t …. That’s why the remics failed….there were no trusts…and no trustees. They never had to pay tax on their malfeasance because without the trusts….the “loans” never existed. The REMICS were another scam to make us believe they were conducting legitimate business…they weren’t. Like with MERS…they were hiding all of their malfeasance behind fake entities….The only business practice they were engaging in was massive fraud & deceptive practices.

  46. BTW shadowcat…..I can hear your cackle ….and it’s not even Halloween.. I have the complete title history & I know exactly what they did…they created debt from thin air & a lot of it with our signatures & without our knowledge…You are just a Govt. troll who is fishing and trying to make me believe you have some knowledge of my business….you just proved that you don’t know squat and you are an imposter. I know all of this fraud varied slightly but basically, they did the same scam to everyone. You lose….

  47. Shadowcat..you are talking about 1 refi & what $$$…? We got lousy credit…I was at both closings & he nor I ever signed or attested to any of the fraud they committed….Must have been the bankster who pocketed any $$$ & his girlfriend …..the notary who forged all the docs…..you need to go back to to your cauldron…

  48. (for anyone who missed it)

    Neil said:
    “…They took money, they used it not the way the lender or investor intended…” Add to that they took the money from the homeowner and used it not the way it was intended…the homeowners are/were investors in their home…

    Here is how the process went (thank you ANON):

    1) the subprime loans were sold to one of the major banks (this is NOT reflected in any assignments, and only some REMICs disclose this). (will explain why not reflected in assignments in a later here).

    2) the bank’s subsidiary Depositor deposits the loans in an off-balance sheet trust (some Depositors were not subsidiaries of big banks — but they had corridor agreements to sell to the banks — which we also do not see by REMIC disclosoure — (Corridor agreements to sell to the banks, but the Depositor name would remain on the trust )

    3) the REMICs are structured into certificates, which are all sold to the security underwriter (except the bottom tranche which the servicer would usually own).

    4) the security underwriters were subsidiaries of the big banks.

    5) the top tranches of the REMICs were rated the highest because the lower tranches provided support to the upper tranches — that is, given a default, losses would accrue to the lower tranches first.

    6) the big banks sold the top tranches to Fannie/Freddie and kept them for themselves (Louis Ranieri — grandfather of the subprime trust has explained this).

    7) Ranieri has stated that the lower tranches (credit enhancement) were sold first — to hedge funds, and other distressed debt investors, while the banks retained the upper tranches

    8) some of the tranches were sold to other big banks.

    9) Then the banks would take different tranches from different REMICs trusts, and package them into CDOs — to be sold to security investors. And, yes, the guy who sold the software for these CDOS is right — one had to be an idiot to invest in these CDOs, because the ratings on the REMIC trusts from which the CDOs were derived, were manipulated. Anyone who read the prospectus for the REMICs would know that the CDOs were derived from risky “loans”, and that they were not legitimate. From CDOs, CDS (credit default swaps) were derived — which are contracts not even “synthetic securities.” Sometime CDOs were repackaged into Structured Investment Vehicles (SIVs).

    10) The CDO “security” investors are, the pension funds, insurance co., etc, that Neil refers to when he talks about “those who put up the money.” These security investors, however, did not put up one dime to the borrowers, they were just the “synthetic” SECURITY INVESTORS that bought the idea that the derived CDOs, derived from the REMIC certificates, derived from the bogus loans, were actually triple A rated (this deriving is what is called “leverage”). These security investors do NOT fund mortgages, they do NOT give borrowers money, and they are NEVER the creditor. The creditor “investor” is the bank that originally purchased the subprime mortgage — that was never a “mortgage” to begin with.

    11) the CDS (default swaps) remove collection rights from the cash pass-through structure. Once removed from the above — who knows what the original bank does with your loan. Very often, collection rights are sold to the hedge funds who provided credit enhancement by purchasing the lower tranches of the REMIC trust. The “servicer” who owed the bottom tranche, continue to “service” for unidentified CDS holders — who have nothing to do with the REMIC trustee (as CDS are contracts not securities). So creditor is never identified.

    12) Back to #1 — why the assignment to the purchasing bank is never apparent — because in real securitization, the asset/liability balance sheet receivables are removed from the balance sheet to an off-balance sheet conduit (such as a REMIC). BUT, THE SUBPRIME WAS NOT REAL MORTGAGES, THEY WERE GSE CHARGE OFFS, WITH ONLY COLLECTION RIGHTS SURVIVING. Collection rights are not reported as “receivables” on an asset balance sheet. Any pass-through of cash is considered income, not collection of receivables (you can not have receivables when the loan was previously charged-off). Thus, the subprime REMICs were never “true sales” of anything. They were not legitimate balance sheet transfers.

    13) Many of the original tranches to the bogus REMICs have been paid off. At the very least, by the TILA amendment, the remaining certificate holders to the REMICs could be considered your creditor (remember there are only about 15 tranches to begin with). Creditor is NOT the derivative security investors. According to the Fed Res Opinion to the TILA Amendment, when there are multiple creditors, the creditor who holds the largest percentage interest in the loan, must identify itself to the borrower. Thus, the tranche holder with the largest position in your loan — should be identified. This is not happening — foreclosures continue under the bogus name of the trustee to the trust. Again, and again, security investors, trusts, trustees, and servicers are not the creditor.

    And, Neil is on bad track when he starts saying that “security investors” funded the loan. This is in gross error, and has caused more harm than good.

    Security investors were chasing high yields — they expected the subprime borrowers to fund their pensions. I find outrage in this. Interest rates on these loans could go as high as what one might consider “usury.” And, the further outrage is that the properties that funded the bogus subprime were inflated to make these bogus loans higher and higher — which would generate more and higher cash flows. The fact the government still has done nothing to help these victims is the final OUTRAGE…”

  49. You should talk to your hubby about those mortgages/loans/cc he took out without your permission. Thats alot of money, what do you suppose he did with it? ….you poor thing,… your hubby really took advantage of you by not telling you. I’m sure that must be his girlfriends signature on the spousal docs. WOW .. She forged your name. Its Voided for certain! You Just hit the Jackpot!

  50. SFO Bay and Orlando FL are being purchased by Russians. Chinese and Indian investors scoop up thousands of properties nationwide previously owned by Fannie Mae. Canadians buy the land on which sat houses foreclosed upon and empty. Even the Mexicans are buying, as evidenced by the following. The writings have been on the wall for two years and those dumbed down Americans allow it while posting insane conspiracy theories all over the internet. The world is having a real big laugh! Patriots my foot!

    October 10, 2012

    Real Estate Seemed Like A Smart Choice

    “A Canadian investment and development company, Toronto-based Bayshore Capital Inc., plans to build a 1.3 million-square-foot condominium hotel on a 10-acre lot just south of Sun Splash Park that could have 900 units.”

    “The Sun Sentinel. “A group of foreign businessmen is spending upward of $150 million to scoop up hundreds of foreclosed homes across South Florida at bargain prices. Vulcan Investment Partners, led by a group of Mexican businessmen, says it plans to buy 1,200 foreclosed homes. Almost half will be split between Broward and Palm Beach counties, with the remainder in Miami-Dade County, said Iñaki Negrete, chief executive of Vulcan.”

    “The News Journal reports from Florida. “A few years ago, the oceanfront land that straddled the eastern tip of Oakridge Boulevard was the home of some time-worn motels that didn’t have the big city feel or luster of the new hotels that local leaders felt the primo beachside land deserved, and Daytona Beach needed. Then along came a group of Russian hotel developers, eager to create a 21st century-style dream high on the wow factor. Now those Russian businessmen say they’re ready to start building two massive condo hotel towers, one 29 stories tall and the other 26 stories, if they get the necessary OKs from city, county and state officials in coming months.”

  51. No way would I hire one of those whatchamacallit attorneys ….they are crooks….

  52. There is No Reason for Anyone to be losing their Homes. (unless they are insolvent of course… then drinking is all they do) Get yourself an Attorney, You can not do this alone! Get an Attorney! Over the years I’ve seen to many deserving fail. These are folks who wanted to pay … work it out and lost. (not freeloaders or deadbeats) 10yrs ago if you walked into an Attorneys office and wanted them to represent you in fc… you got laughed out of the office. If it werent for those who fought then and continue to fight for prosecutions now … your bacon would be fried. GET AN ATTORNEY!

  53. LOL….enraged….the sharks have been feeding on the U.S. TAXPAYERS for decades…did you just wake up and realize they have been devouring US for the past four years…..? Did you just find a taxpayer carcass left on your doorstep or something…?

  54. Hey….smells like las vegas….just pfft….phew….

  55. Las Vegas,

    My pleasure.

  56. Thank you Neil for writing this column.

    @enraged, jan van eck, carie.

    thank you for your posts so far.

  57. Fear…fear….fear….imbeciles..who spread fear….

  58. This country is going to pots because too many imbeciles would rather sit in front of a computer all day long typing stupid, self-serving and narcissistic comments nobody cares about than go out and take action. We’ll see how that end for them…

    In the meantime, the sharks are eating each others. Compliments of the tax payers.


    Wells Fargo Lawsuit: U.S. Sues Bank Alleging Civil Mortgage Fraud
    Posted: 10/09/2012 3:24 pm EDT Updated: 10/09/2012 5:01 pm EDT

    Wells Fargo lied about the quality of thousands of loans it certified for a federal insurance program, a decision that ultimately cost the government $190 million in claims when those loans failed, according to a civil lawsuit filed by federal prosecutors on Tuesday.

    From Jan. 1, 2002 through Dec. 31, 2010, Wells Fargo intentionally concealed the problems with 6,320 loans it had determined were “seriously deficient” from the Federal Housing Administration, which insured the loans, according to the complaint filed in Manhattan federal district court. The bank didn’t report the problems with the loans even after its own risk department conducted reviews that according to one bank employee, unearthed “a dirty underbelly of bad loan officers,” the lawsuit claims.

    “As the complaint alleges, yet another major bank has engaged in a long standing and reckless trifecta of deficient training, deficient underwriting and deficient disclosure, all while relying on the convenient backstop of government insurance,” said Manhattan U.S. Attorney Preet Bharara, who brought the case, in a statement.

    Wells Fargo is one of hundreds of banks permitted to certify mortgages for government backing by the FHA. Should these loans fail, the FHA, a division of the U.S. Department of Housing and Urban Development, will reimburse whoever holds the loans for the charges they incurred.

    Because of this guarantee, millions of moderate and low-income borrowers who wouldn’t otherwise qualify for a mortgage have been able to take out a home loan. But an investigation by federal authorities has found that many of these loans were improperly certified by bank mortgage officers that ignored lending standards in an effort to pad their bonus checks.

    Citigroup, Flagstar Bank, Bank of America, Deutsche Bank and FBC collectively have repaid the FHA $1 billion following legal settlements in cases similar to the one brought against Wells Fargo.

    In this case, federal prosecutors allege that Wells Fargo’s brokers issued loans that shouldn’t have qualified, and then the bank lied about it to the government. The lawsuit also alleges that Wells Fargo’s bonus incentive plan, which rewarded employees based on the sheer number of loans approved, “was an accelerant to a fire already burning, as quality repeatedly took a backseat to quantity.”

    “Many of the issues in the lawsuit had been previously addressed with HUD,” the bank said in a statement. “Wells Fargo is the leading FHA lender and has acted as a prudent and responsible lender with FHA delinquency rates that have been as low as half the industry average. The bank will present facts to vigorously defend itself against this action. Wells Fargo is proud of its long involvement in the FHA program, which has helped so many people obtain affordable mortgages and become homeowners.”

  59. I don’t remember who said that, with the elections coming fast and Obama not doing too well, the administration would scramble to give the appearance that it is, after all, interested in criminal pursuit. I don’t care what their motives are so long as they jail someone(s)!


    October 10, 2012

    With Tapes, Authorities Build Criminal Cases Over JPMorgan Loss


    Federal authorities are using taped phone conversations to build criminal cases related to the multibillion-dollar trading loss at JPMorgan Chase, focusing on calls in which employees openly discussed how to value the troubled bets in a favorable way.

    Investigators are looking into the actions of four people who previously worked for the team based in London responsible for the $6 billion loss, according to officials briefed on the case. The Federal Bureau of Investigation could make some arrests in the next several months, said one person who spoke on the condition of anonymity because the inquiry was ongoing.

    The phone recordings, which were turned over to authorities by JPMorgan, have helped focus the investigation, the officials said. Authorities are poring over thousands of conversations, in English and French. They are also relying on notes that employees took during staff meetings, instant messages circulated among traders and e-mails sent within the group.
    Article Tools

    Authorities are examining how some traders in the chief investment office influenced market prices as their bets began to sour. Investigators are also looking into whether records were falsified to hide the problems from executives in New York. Based on those records, JPMorgan submitted inaccurate financial statements to regulators, another area of focus for investigators.

  60. Funny coming people pumping the system of free money…

  61. I knew you were a Trader! Pfffft!!!

  62. I saw the entire Jamie show….my takeaway…he feels a loyalty to the Vatican…he doesn’t particularly like being told what to do by the Government. He doesn’t trust these politicians much…. Simpson Balls…..LOL…!

  63. An entire country of imbeciles. You two are in good company. No wonder the rest of the world is laughing at Americans!

    Guest Post: The Many Guises Of Financial Repression
    Submitted by Tyler Durden on 10/10/2012 – 20:31

    Economists, market analysts, journalists and investors alike are all talking about it quite openly, generally in a calm and reserved tone that suggests that – to borrow a phrase from Bill Gross – it represents the ‘new normal’. Something that simply needs to be acknowledged and analyzed in the same way we e.g. analyze the supply/demand balance of the copper market. It is the new buzzword du jour: ‘Financial Repression’.

    The term certainly sounds ominous, but it is always mentioned in an off-hand manner that seems to say: ‘yes, it is bad, but what can you do? We’ve got to live with it.’ But what does it actually mean? The simplest, most encompassing explanation is this: it describes various insidious and underhanded methods by which the State intends to rob its citizens of their wealth and income over the coming years (and perhaps even decades) above and beyond the already onerous burden of taxation and regulatory costs that is crushing them at present.

    One cannot possibly “print one’s way to prosperity”. The exact opposite is in fact true: the policy diminishes the economy’s ability to generate true wealth. If anything, “we” are printing ourselves into the poorhouse.

  64. Your the freeloader shadowcat…you are getting paid hard earned taxpayer money by deceiving people & committing fraud and using others lack of knowledge, misery & robbery is gaming the system….BTW…I wouldn’t spend my hard earned money to hire one of THOSE WHATCHAMACALLIT CROOKED attorneys ..in fact, I wouldn’t take one of THOSE WHATCHAMACALLIT CROOKS for free..! They are damned traitors & IMPOSTERS too..

  65. You deserve a Good Chuckle poking at Jamie Boy! Keep it up! LOL!

  66. Another made-in-America imbecile… This is country is going to pots and no one should wonder why: it manufactures imbeciles faster than anything else.

    JPM’s Dimon Builds Fiscal Cliff Bunker As CFO Exits “Balance Sheet Fortress”
    Submitted by Tyler Durden on 10/10/2012 – 21:16 Bear Stearns Bond default Eurozone Greece Italy Vigilantes Washington Mutual


    Jamie “The Europeans have the will, but no way; The US has the way, but no will.” Dimon had a very open and wide-ranging discussion with the Council on Foreign Relations today. The conversation ranged from the unfairness of the Bear Stearns’ deal (poor chap – all that very limited downside from $2/BSC share, at least initially) to the immediate threat of the pending Fiscal Cliff – and his $100mm-debt-ceiling-preparedness war-room bunker, and America’s longer-term fiscal profligacy (vigilantes moving against the US bond market is virtually assured – question is when and how). He also discussed the London Whale ‘error’ and went on to discuss the Greeks and the Eurozone’s political and economic debacle in general. Some significant anti-administration rhetoric (ironic really), summed up with the veiled threat “Hey folks, if you think Washington and American Business can go to war with each other and it ends good – terrible error!”

  67. What in the hell are you talking about…? I don’t drink or do drugs..I despise porn…& I don’t participate in Satan’s evil….and I never refinanced anything…my husband did…he was trying to build a business..little did he know the foundation the bank put us on was quicksand….

  68. Ivent… is it possible your couldnt pay your business expenses because you were drinking and snorting them all up while watching porn? Or did you have to solicit? So you took out a what? a 4th loan? Gimme… Gimme… Gimme More More More. Sure you know where the money went … Your brain is Fried. That is why a lawyer wont talk to you and why you dont know what AA is. You are in Denial and you want to Blame it on someone else! Freeloader!

  69. 43 bottles of rum missing from the wall….

  70. Carie they never securitized their lien ……AKA THE ORIGINATION FRAUD…OOMPA….so pass the lamb…& the oozo..

  71. Shadowcat….sprinkle away..! @Enraged..hey, hey my my….there’s more to the picture than meets the eye….hey, hey my my…

  72. “…it appears Neil is tapping into what I have been saying — MAYBE.

    IF and only if, he is providing services to trace what happened to the money at the borrowers last refinance (and/or subprime purchase).

    Is that what he is suggesting???

    Neil has a big problem if he is only looking at the securitization of the last refinance.

    Neil must look to the securitization related to the property PRIOR to the last refinance.

    Is Neil going to check that securitization??

    Is Neil going to corroborate with the SEC to insure that the last refinance paid off the trust that the supposed PRIOR loan was securitized into — PRIOR to the last refinance, PRIOR to the foreclosure in question??

    If not, his services are severely flawed…”

  73. Imbecile. No one is interested in what you think. You don’t even think. Imbecile.

  74. Well … then let me just pull out my Majic Fairy Dust and whip it right up for ya …

  75. Shadowcat..sorry..I don’t have a magic decoder ring …all I want is my Satisfaction.

  76. Mandleman mattered until I caught him lying….quite deceptively in fact……I think hes an investor…..

  77. ANONYMOUS, on September 18, 2011 at 5:46 pm said:

    Well Neil — hats off to you — you are getting closer and closer. And, you now understand that “security investors” are not the creditor — and that is despite whether or not servicer advanced payments to securities trustee.

    But, your “Catch 22″ scenario — is right on point — did servicer advance payments or not? Only ledgers will tell — and both servicers and securities trustees MUST have those ledgers. Because if they did not advance as required by PSA — then the “security investor” argument as creditor is immediately quashed — even without application of TILA Amendment as to defined Creditor. If they did advance — then loan not in default — but then have to apply — security investors are not the creditor. When anyone advances payments on another party’s behalf — this does NOT mean the borrower is not in default –they are in default to the party that advanced the payments. Of course, servicers rarely act on their own behalf — they act on behalf of someone else — the current “investor/creditor.” — And, that is why the creditor definition must be introduced.

    Courts that continue to apply antiquated law to subprime securitization — otherwise called — the advent of fraud — are simply not “educated.” They need to educated. And, if not plead properly — court will “simplify” for its own convenience. .

    Now — why the need for such secrecy at closings and by MERS as “nominee.” A reason for this — and that is why you have to have all “loan” accounting prior to the “refinance” in question. Due to passage of time and discovery difficulties —this can be a problem ascertaining — but, not impossible — and is definitely — available. .
    Once you get this Neil — you will have nailed it.

    FRAUD — BEGETS Fraud .

    …At no time, does the REMIC itself (who cannot own assets), or the trustee (who can only hold assets), or the security investors (who only purchase a fractional interest in a pool of loans cash pass through), ever ACQUIRE legal title.
    The question is — on WHOSE balance sheet do the collection rights lie??? As to subprime — most likely on a distressed debt buyers financial statements — but, they will report as income — not balance sheet receivables (as the debt has been charged-off).

    None of this is disclosed in courts.

    And, of course, how much did the distressed debt buyer pay for the collection rights??? Who really denied a modification???

    And, of course, this whole process does not inform that the subprime “loans” were Government Sponsored Enterprise’s (Fannie/Freddie) charge-offs from the onset.

    And, therefore, NEVER valid NOTES, NEVER valid Mortgages, and NEVER valid refinances.


    First, “certificate purchasers” are the banks themselves (security underwriters), and they only purchase a “pro-rata” share to a “pool” of cash flows —- that is all — they are NOT the mortgagee/creditor—the trust is assigned the loans from which the pass-through cash flows are derived—it is the DEPOSITOR (subsidiary), that owns the collections rights (they are not mortgage loans), and the Trust itself. The “certificate purchasers” (the bank security underwriters (another subsidiary) themselves) then repackage the certificates to “pro-rata” cash flows into CDOs that are marketed to security investors — who are also never the mortgagee/creditor. According to all PSAs — there must be a documented valid sale of the “loans”, with supporting Mortgage Schedule to the Depositor in order for any Trust to be valid. There was never any valid sale of loans — and the loans were never actually loans — they were collection rights.

    Second, since the “loan” refinances (subprime/alt-a), and jumbo new purchases were non-compliant and non-performing manufactured defaults, no funding at all was necessary (except for the cash-out for the loans). The warehouse lines of credit never actually transferred any actual cash for funding. These lines of credit were simply “credit lines” that the “Depositor” would provide to their correspondent lenders. Once the “loan” refinance origination was completed the Depositor would then reverse the “credit” owed by the correspondent (originator). This never involved any actual deposit of cash proceeds —- the “funding” payoff check is never “deposited” into any bank account. The check is routed to a security derivative clearing house — who then simply cancels the credit-line transaction.

    Third, it is not productive to state that since someone else was actually making payments on the “loan”, “albeit” not the borrower, that the loan is not in default. Courts do not care about this — they only care if the borrower is in default. However, if the actual party does not come forward claiming that the debt is owed to them, and the actual party cannot prove how they came to own the collection rights — borrower does not owe the debt to anyone. That party is never going to able to demonstrate that collection rights belong to them because they would have to divulge the above fraudulent process and that the “mortgage loan” from onset was not a mortgage but, instead, collection rights. This admission would also mean that the “debt” is unsecured and can be discharged in BK.”

  78. A few weeks ago my brother came in to visit and brought the 8mo old puppy they had adopted. My brother .. not being an Obama fan, didnt care much for my husbands comment …………………………………………””” “”Your Dog Has Obama Ears””.”” Now everyone calls the puppy Obama Ears …… hehehehe

  79. It opened the second time w/o issues.

  80. Same problem here ….

  81. Is anyone unable to access Mandelman Matters? Either it stops me by saying that access is forbidden or it stops me from opening the articles and switches to an old 2009 page showing Obama’s face. And i have all kinds of antivirus. So, i know it’s not me.

  82. That is the real evil here….what the people don’t know….the deception….most people believe they did something wrong….they did not…..they are being villified as if they are criminals….that is why this is so evil…Myself & a few others are their nemesis…

  83. In most cases shadowcat.. the defendants don’t have a clue … that I the real evil here.

  84. Just because I’m not as Heartless as you think … Here is Two More Lifelines for you. AA and AA

  85. The way I see it……you trolls are trying to convince yourselves you have a conscience but you don’t. If you bank attorneys had any integrity…you would send all of us our Satisfactions….withdraw your cases……and tell these IMPOSTERS you quit….and start working for your countrymen…not these IMPOSTERS.

  86. Nahh… Imbeciles usually do that to themselves. My Job is fairly clean …. I just wait for them to dig their own hole and fall in it. I have my bobcat license now … filling in the holes is the easy part.

  87. Shadowcat said….”I threw you a couple of lifelines”….and you call yourself moral..?

  88. Shadowcat…..are you bleeding yet…? You better get the tourniquet …

  89. The game is rigged shadowcat……therefore, remaining optimistic is a cop out. Leaving it to the victims to climb there way out of the 6 foot hole they threw us in is sadistic to say the least.

  90. Imbecile…….

  91. shadowcat & enraged like self inflicted pain. If that makes you feel less guilty…who am I to stop you….?

  92. Imbecile …

  93. When you throw out the IMPOSTERS …..you throw out the crooks..

  94. Imbecile.

  95. Enraged…..speak for yourself…

  96. I’m a Realist and an Optimist. I realize the Intents and I remain optimistic of the outcome. Its never been about opinions … Its never been about winning….. Its always been how you play the game.

  97. Imbecile.

  98. Enraged…….Sorry to tell you …..war is not fair….and this is war….

  99. I only see the judges get angry when they are made to look bad. Little do they know those who know the truth are there…..we are observing this & they all look like big fat traitors…..!

  100. Nothing happens in a vaccum. Unfortunately, looking at the two imbeciles who have been posting for 2 weeks to the tune of 45 or 50 unrecyclable pieces of trash on every page, no one should be surprised at things such as this one below. This country is done and over with, regardless who wins the elections.

    GMAC Bankruptcy Amicus Brief on Appointment of A Borrower’s Committee–MUST READ
    October 10th, 2012 | Author: Matthew D. Weidner, Esq.

    (Read here for an article on GMAC in the boom times)

    For those that do not understand all of the complex issues surrounding the GMAC bankruptcy, I urge you to read carefully the brief that was submitted by Paula Rush to the federal bankruptcy court.

    When I traveled to New York City last month for the GMAC Bankruptcy hearings, I was struck by the madness and the magnitude of it all. Corporate titans and out of control enterprises burning up billions of American dollars like it is Monopoly money. Most of them obscenely and arrogantly out of touch with the fact that this money they’re talking about is my money. Your money. Our money. These are taxpayer dollars they’re playing with…a fact they all seem too willing to ignore…as they burn away spending attorney’s fees at hundreds of dollars per hour. I will say, that it’s clear the most important person in the room clearly got it….that person was the judge that sat there managing this room full of hundreds of lawyers….all pushing hard….but this judge clearly was in control of these proceedings…and this multi billion dollar bankruptcy.

    Immediately after the hearing, I left the courtroom and went to the location where George Washington bade farewell to his soldiers and cabinet members as this nation was first born. To the extent that any of those stories about the higher purposes and calling of this nation still have any application or reality in the disgusting descent that this nation has taken, I sat in that room and could only think to my self that these founding fathers would undoubtedly be disgusted by what this nation they fought and died for to create has become….


  101. Carie…..the TILA only puts you back at the closing table. It gives them another chance to negotiate, when their massive fraud rendered these mortgages insolvent. We don’t need to go back to the scene of their crime & give them another chance to screw us.

  102. Their massive fraud nullifies them.

  103. @neidermeyer, National City Bank is dba PNC Bank (never went bankrupt and never funded their own mortgages). If you do not have an attorney … Get One Now!

  104. Yes Neil .. Judges do get angry, tis is always better to go in with all your ducks in a row and nailed down. Floating ducks dont hold water.

  105. @carie ,

    Mine’s a mess … prior loan was with National City (bankrupt) , loan never marked paid , current loan (whole REMIC) blew up in 2007/8 and was paid by AIG in the first wave. Nobody that I can trace that actually advanced money is anywhere on any paperwork… The only solution I see is ENFORCE THE LAW and show us the real transactions , if you cheated and get hurt TOO F***ING BAD.

  106. They must comply with the TILA Amendment and Federal Reserve Opinion —- cite — Federal Reserve Rule, 74 Fed. Reg. 60143 (November 20, 2009) – Final Rule at 75 Fed Reg. 58489 (September 24, 2010), definition as to creditor under the TILA, 15 U.S.C. sec. 1641, et seq.,

    REMICs are not the creditor, and neither is the trustee or security investors.

    …Contact your servicer for your loan prior to your last refinance. Tell them that you want cancelled check, Note marked paid in full (although this will be bogus), and the name of the trust that the prior loan was securitized into. Others are doing this — and getting no response. If you get no response, write a letter to the SEC. And, forward it to the OCC and the CFPB, and Attorney General.

    You need to get info on the PRIOR loan. Issues are not just for current trust. And, you need to cc every government agency that you can. The SEC should be able to tell you as to whether or not the PRIOR loan (as to that TRUST), was — or was not – paid off. Check your credit reports. See if any prior reported loan as any reference to Freddie or Fannie. You must look at the credit reports in detail. Get each one — and click on “hidden” “details.” Go back as far as you can when you are looking.

    …look for part (re. TILA & Fed Res Final Rule) as to “balance sheet.” This is not about “holding” title — (which many foreclosure attorneys try to claim in court). It is about acquiring title. REMICs are about a transfer of a “pool” of loans. Security investors only have a fractional interest in a pool of loans. No one in the securitization process acquires full and legal title to the WHOLE loan. Trustees only “hold” — but do not acquire title. However, if you want to state that anyone in the securitization process must identify itself to borrowers under the law (and I have discussed this with the Federal Reserve – they agree), it is the tranche owners with the largest proportional interest in your loan.

    Look for the part that also states that if there are multiple owners, then the entity that holds the largest proportional interest in your loan, must identify itself to the borrower. At most, a REMIC consists of about 15 to 20 tranches. The security underwriters purchase the tranches from the Depositor. The security underwriters are stated on the Prospectus. While they may sell some tranches to other banks (for CDOs etc), the security underwriters will always hold the largest proportional interest in any individual loan. Thus, the security underwriters will, at most, under securization, be the creditor responsible under the TILA amendment. Two problems with this — 1) security underwriters do not have their own balance sheet (as the Fed Res Opinion also refers to), Therefore, it is the security underwriter’s parent corporation that actually owns the loans/certificates. 2) the parent corporation has likely long disposed of any tranches certificates to the subprime REMICs, and the loans themselves, that were once underwritten by their subsidiary security underwriter — and removed from the parent corporation’s balance sheet to off-balance sheet (which, by FASB rules must have been placed BACK on the parent balance sheet).

    At no time, does the REMIC itself (who cannot own assets), or the trustee (who can only hold assets), or the security investors (who only purchase a fractional interest in a pool of loans cash pass through), ever ACQUIRE legal title. The question is — on WHOSE balance sheet do the collection rights lie??? As to subprime — most likely on a distressed debt buyers financial statements — but, they will report as income — not balance sheet receivables (as the debt has been charged-off).

    None of this is disclosed in courts.

    And, of course, how much did the distressed debt buyer pay for the collection rights??? Who really denied a modification???

    And, of course, this whole process does not inform that the “loans” were Government Sponsored Enterprise’s (Fannie/Freddie) charge-offs from the onset. And, therefore, never valid NOTES, never valid Mortgages, and never valid refinances.

  107. The accurate commentary in this article is: “Judges get angry at borrowers for bringing this up.” Think about this for a moment: why on earth would you want to get the Judge mad – at you?

    The better course is to go at this piece-meal. First, as an affirmative defense, plead “tender, accord and satisfaction.” Note that you have not (not yet) pled “payment.” That keeps the door open. then, you can go after them in Discovery asking for the bills of sale and checks/wires for the various claimed transfers of the Note. Once you pry open what really happened, and that the investors as settled with, you can go back in and with an Amended Special defense, plead Payment. Remember that with Affirmative defenses (“Special Defenses”), the burden of proof is on you, so be sparing with what you plead – the other side will immediately try to take your deposition and demand you demonstrate the special defenses with hard evidence.

    As thee stonewalling against your discovery mounts, the judge will start to get irritated with the foreclosure-mill attorneys. That gets interesting.

  108. Credit bid by debt collector or title company…(there is no real creditor)and your $100,000 was stolen…along with your house.

  109. credit bid….credit bid,,,,credit bid !!!!……..by who ??????????

    and where is my 100K hard cash deposit !!!!!!!!!!!

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