Another Pennies on the Dollar Settlement

Editor’s Note: like the post before this one, it is astonishing how these settlements fall so far short of the actual damage that was created by the banks by their intentional illicit and criminal behavior.

This one “relates to conduct at Greenwich Capital, the R.B.S. unit that bundled mortgages into securities and sold them to investors. Nevada found that R.B.S. worked closely with Countrywide Financial and Option One, two of the most aggressive lenders during the boom.” They were categorized as sub-prime even if the borrower was not sub-prime. That way they loaned less of the investor money at a higher nominal rate, charged the borrower for additional underwriting risk when there was no underwriting at all, and kept the excess interest, the excess funding that should  have gone into standard loans properly underwritten according to industry standards.

The trap was teaser rates that borrowers could never decipher: “From 2004 through 2006, R.B.S. packaged $90 billion of these loans, many originated by Countrywide. The mortgages typically began with an artificially low interest rate that rose significantly after a year or two. Under the terms of these loans, borrowers could choose to pay only a fraction of what they owed monthly, resulting in a rising principle balance.”

And the media is all about how the housing problem is ending. That is nonsense. It is coming to a head, but the peak won’t be until perhaps 2014.

Bank Settles Over Loans in Nevada

By

The Royal Bank of Scotland agreed to pay $42.5 million late Tuesday in a settlement with the Nevada attorney general that ends an 18-month investigation into the deep ties between the bank and two mortgage lenders during the housing boom.

Most of the money paid by R.B.S. — $36 million — will be used to help distressed borrowers throughout Nevada. In addition, R.B.S. agreed to finance or purchase subprime loans in the future only if they comply with state laws and are not deceptive.

The settlement between the bank and Catherine Cortez Masto, Nevada’s attorney general, relates to conduct at Greenwich Capital, the R.B.S. unit that bundled mortgages into securities and sold them to investors. Nevada found that R.B.S. worked closely with Countrywide Financial and Option One, two of the most aggressive lenders during the boom.

Officials working with Ms. Masto say that they examined R.B.S.’s activities from 2004 to 2007. During those years, the bank provided funding for more than $100 billion of risky loans, many made by Countrywide and Option One. In 2005 and 2006, R.B.S. was the third-largest securitizer of subprime mortgages and adjustable-rate loans.

“I remain committed to enforcing Nevada’s laws against the players — including those on Wall Street — that contributed to and profited from reckless and deceptive mortgage lending in Nevada,” Ms. Masto said in a statement. “The payment from R.B.S. will alleviate some of the injury to the Silver State and its residents. The changes to its securitization process should help make sure that we do not go down this road again.”

In agreeing to the settlement, R.B.S. neither admitted nor denied the acusations.

During the investigation, Nevada officials examined more than one million pages of documents and interviewed former R.B.S. employees and borrowers. Ms. Masto’s office concluded that the bank had essentially created joint ventures with Countrywide and Option One and that its financing enabled those lenders to make reckless loans that were unlikely to be repaid.

The attorney general also examined whether R.B.S. reviewed the mortgages bought from Countrywide and concluded that the bank bundled and sold loans even after identifying them as problematic. Moreover, at Countrywide’s request, the bank limited the number of loans it reviewed, the attorney general’s office said.

Nevada has been hit hard by the foreclosure crisis. Some 60 percent of borrowers in the state have mortgages of greater value than the properties underlying them, according to Core Logic, a real estate data company.

Ms. Masto’s case comes after several others brought recently by state regulators against firms involved in mortgage securities. Earlier this month, the New York attorney general sued Bear Stearns over its conduct during the boom, and last week, the Massachusetts securities regulator sued Putnam Advisory, a unit of Putnam Investments, for misleading investors who bought a collateralized debt obligation it was managing. Officials at both firms rejected the allegations and said they would vigorously defend themselves in court.

Some securities lawyers say that it is easier for state officials to bring successful actions against banks for questionable activities than it is for federal investigators. That is mostly because of stringent requirements under federal securities laws.

“This strategy sidesteps the need to prove intent to defraud and to detail fraud allegations as is required for similar actions under the federal securities laws,” said Lewis D. Lowenfels, an authority in securities law in New York. According to the Nevada attorney general’s office, R.B.S. was among the larger bundlers of a risky type of loan known as a pay-option adjustable-rate mortgage. From 2004 through 2006, R.B.S. packaged $90 billion of these loans, many originated by Countrywide. The mortgages typically began with an artificially low interest rate that rose significantly after a year or two. Under the terms of these loans, borrowers could choose to pay only a fraction of what they owed monthly, resulting in a rising principle balance.

R.B.S. also worked hard to keep Countrywide generating loans for the bank’s securities, investigators said.

Ms. Masto’s office said that R.B.S.’s mortgage funding operation was widespread across Nevada, which is why most of the settlement will go to borrowers who have suffered harm.

62 Responses

  1. It’s the biggest Rabbit hole ever.

    By the way, Has anyone ever gotten absolute proof, that Steve Nagy or Stephen L. Nagy even worked and/or appointed authority to indorse notes for them. Just because their lawyers says so doesn’t mean its true. Be careful there. Force their hands.

  2. That’s right, Poppy—because of DEREGULATION—we are being mowed over…with Congress’ blessing.

  3. @ carie

    What are Enraged credentials, is the question? This stuff is petty, even who is cited, who isn’t. Who cares? Are you people winning? If not, then you have it wrong.

    All this posturing. Do you have your house? PSA ‘s mean nothing if they are followed by the people who made them and the game of semantics are being played out every day by these cats. The fact is: they all have “immunity” from prosecution…or am I blind here?

  4. Indemnification-immunity semantics…all the game they play. Petty correction Abby.

  5. “She ain’t got no use for a former first grade teacher with no qualifications whatsoever!”

    More proof that @enraged is full of it.

    I NEVER SAID I WAS A FIRST GRADE TEACHER. EVER. SHE’S LYING. AGAIN.

    Qualifications for what? The truth is the truth. The truth is ONE.

    THE TRUTH OF FALSE DEFAULT JUNK DEBT BEING WHAT WAS FED TO US AS “MORTGAGES”—THE PAPERWORK WE SIGNED—ALL WAS A LIE. MILLIONS OF PEOPLE KICKED OUT OF THEIR HOMES BASED ON “COLLECTION RIGHTS” LIES.

    BRAVE SOULS WITH SOME POWER LIKE REGISTRAR JOHN O’BRIEN ARE FEW AND FAR BETWEEN.

  6. Wouldn’t you think that would be a conflict. Acting as custodian and then appointed as substituted trustee ??

  7. I’ve seen us bank listed as custodian in PSA and they then get appointed substituted trustee of securitized trust . That at one time or other was listed with sec but then files 15d within 2 years of closing date .

  8. @Poppy
    re: US Bank
    if you read the PSA you may see that US Bank, should they be named as securities trustee, is indemnified. The proper term is indemnified.

    I don’t know about your terminology of ‘anointing’.

    and if you don’t know who I am, I, like ANONYMOUS, am one of Neil’s original posters on this blog. He does cite me.

    Be aware that other entities may be named as securities trustee in the PSA (stands for Pooling and Servicing Agreement), which if you have a securitized loan, you may find the PSA on the SEC website.

    Note that there are some private securitizations, thus there would not be filings on the SEC website for those.

  9. @ Anonymous /Carrie:
    No statute of limitations on fraud on court?? who says??? especially when courts are part of the frauds??
    also, such conclusory statements are useless unless you included cations to every issue you present. That is what memorandum of points & authorities are utilized for. This sounds like it comes from that bogus MasterServicer whose link is a spam.

  10. Mass Resident,

    “Why doesn’t ANON make the info public? Or let you or someone else do it.” Anon is currently working on it while fighting her own case and as anyone deeply involved in litigation, she won’t do anything to jeopardize it.

    As far as letting Carie make it public… pleeeeeeease! It takes an expert and Anon, as an expert herself, has a roster of people she is working on it with. She ain’t got no use for a former first grade teacher with no qualifications whatsoever!

  11. I would like to have some input on the case that the Spire Law Firm LLC filed Oct. 26, in New York to bring the banks to accountability. My question, as I read the suit is, will this really stop the banks with the scheduled foreclosures? Also am interested in receiving proffessional opinion if I were to take this case and record it on my property as a Lis Penden to stop a foreclosere, it seems to me this suit filed in behalf of all of America that has a house in jeopardy of foreclosure to a bank. A lis pendens suit, whether it is from a law firm in New York or here in California, is a suit that would freeze the forclosure process until outcome of case is settled. Are there any Attorneys that would like to comment of possible results or defenses of this actions? Robert I. Wade. Pro Se Litigant.

  12. @mass resident

    ANON has legal reasons why she can’t say more here…but she has been doing what she can behind the scenes.
    If Neil would follow the guidance he has been given, this whole thing would be farther along…but, Neil appears to only want to help investors—not the homeowner victims.

  13. Careful with US Bank…they say the have “immunity” from anything…I have been told by a credible source they anoint themselves as trustees? Have a friend dealing with them, I will check and get an answer for you…

  14. Here’s is an example:

    Fictitious Name Detail
    Fictitious Name
    U.S. BANK NATIONAL ASSOCIATION
    Filing Information
    Registration Number G10000003642
    Status ACTIVE
    Filed Date 01/11/2010
    Expiration Date 12/31/2015
    Current Owners 2
    County MULTIPLE
    Total Pages 1
    Events Filed NONE
    FEI/EIN Number 27-6402380
    Mailing Address
    15476 NW 77 CT
    SUITE 257
    MIAMI LAKES, FL 33016
    Owner Information
    TORRENTE, GEORGE LUIS
    15476 NW 77 CT SUITE 257
    MIAMI LAKES, FL 33016
    FEI/EIN Number: NONE
    Document Number: NONE
    ANDREWS, EDDIE LEON
    15476 NW 77 CT SUITE 257
    MIAMI LAKES, FL 33016
    FEI/EIN Number: NONE
    Document Number: NONE
    Document Images
    01/11/2010 — Fictitious Name Filing
    Note: This is not official record. See documents if question or conflict.

  15. @Poppy:

    “One other point: The NA’s are listed at the SEC, not the Secretary of State. They are trust entities, not corporations. It does matter in the pleadings and for relief. Seriously….they are misrepresenting who they are what their function is!”

    How do you serve them? Who is agent for service of process? US Bank NA for instance…..(and not listed or searchable on Secretary of State website anyway)

  16. Actually, these comments aren’t related to the personality issues here directly, but I am beginning to wonder if it not be mandatory for kids to learn conflict management and listening to understand, rather than to respond. This is a really large problem.

    It occurs to me, far too many people cannot handle a differing opinion, nor do they check things to make sure…ego really gets in the way of getting things done. And that does apply in this situation.

  17. @ Mass resident

    The information has been put out here and guess what? There are lawyers out there that read the blogs…all of a sudden they have information about your case, that has not been provided in discovery…Hmm… and then there are a few on this site that are dishonest and put you in the wrong direction… imagine that? People think many of the bank lawyers are smarter than us, not so…they have a lot of money to throw at the case and we don’t. I, personally have been dressed down and have thus far moved through the courts. Many here do not listen…the beginning is where it all began and it takes thousands of hours of research, due to each case, as similar as they are, are in fact different. The great fighters here, have all but disappeared. Footnote: they are having success and will not share here for a variety of reasons, one being the attacks.

    Then the are people who are losing, there is a lot of information there, as they are not always losing because they do not have a case, it is the pleadings. Fine tuning will solve that. People are looking for a fast answer and do not look “outside” the box. Just my say so! And I do know…the losing cases have helped me more than the winning ones, believe it or not. And for all who care; the lawyers give a lot of information, even with some of the stupid things they say in their complaints and pleadings.

  18. @Carie… before this stupid storm hits…. ( think of the damage to all those empty fraudently foreclosed properties that could happen all along the east coast….can you just imagine the conversations between false deed holder and the insurance companies?? oh boy…..) NOT funny….. Question:

    Why doesn’t ANON make the info public? Or let you or someone else do it. There are people who would take it… give it to people who could do something about it. The time of fear should be over. They created this mess, and in most cases, they cannot fix it. That is the truth.

    Just curious. It would be helpful to many, I am sure. And once it’s out there, the player’s can’t do anything about it. Admit to the fraud?? Yea right.

    I say put it out there. And let the chips fall where they may. It would help many, and shove a boot up their fraudulent asses, please excuse my ‘French” as Dad used to say.

    “It’s Mother Nature’s way of telling you…. something’s wrong….”

    Stay safe everyone!!

  19. @Poppy…. Both You and Neil are Correct. There are the Loans done the Old Way of Banking (funding Invester money cash). Then there was the MERS way of funding…. Credit. Anyways …. When the MERS way of Funding was done with the Refinances/Purchases both the Origional Old Loan funded by those Investers were Never Paid Off. Get How they are Connected?

  20. I got the “shovel”….got the paper trail lies too…and not one of these people are “investor” “Lenders”…no such thing! Paperwork proves it. Neil is incorrect.

  21. N.A.s only represent unsecured debts on loans that were Registered with the SEC and Securitized. If they are not registered with the SEC …. ummmm ….. N.A.s have NO What? Funny Thing thou…. 1st Advantage Mortgage no longer has their Records, they claim they sold the loan but dont remember to who. Public Records show they still own it. I have to wonder why they dont file fc ….. oh yeah …. they didnt fund the loan. Anyhows … 1st Advantage didnt sell MERS Squat! And if MERS didnt own Squat .. then CW, BAC, BofA N.A……. have no Squat!

  22. @Poppy…. when I nailed them on the Title, they didnt play by the rules. So I nailed them on the Note to! Yep! I nailed all their lil peckers down! I wish you the Best of Luck! Show them the Back-Side of your Shovel….. They can not rake their way out of that! NOPE!

  23. @ Shadowcat

    Kuddos to you…if they get mine, ….Hmm, good luck to them!

  24. One other point: The NA’s are listed at the SEC, not the Secretary of State. They are trust entities, not corporations. It does matter in the pleadings and for relief. Seriously….they are misrepresenting who they are what their function is!

  25. Once a Loan was defaulted, they Raked in the Dough. But if that loan was re-enstated, they had to hide it (loan swaping on books at bonus time). They didnt want to pay back the Dough on Swaps. That is Why They Played Down Right Hard and Dirty……. To Get That Foreclosure Deeds! They Need the Deed to make a claim on the Taxpayers to payoff the Investers what was Left AFTER their Fees. Well ….. I know of at least one Deed they will NEVER get! Buttwipes are Disposable! Yep! Yep!

  26. What I see: these entities made more money selling CDS, MBS, defaulting loans, etc…now they need to hide who they are to collect the house. Legally, if they financed the homes properly, they could only get paid once and a proper lien would have been effectuated on ONE property.

  27. I have found the substitute trustee is suspect too. Forgeries all over and mine has a Steve Nagy page, no allonge or assignment on the note and there is room, with no date, where Steve Nagy quit working for New Century in 2007. Just my idea, but the courts should not ever entertain a suit with all of the inconsistencies in this paperwork.

    I have not found any credible paperwork Proving any ownership or rights of anything.

  28. If your Loan is still with N.A. and not transferred to sub-trustee……and not Modified. There is a Reason! Perhaps the Reason is if you can not mod it…. you cant transfer or sell it either. Probably because you cant prove succesion on the Note. Sure It Is!

  29. @Poppy….. I’d say this to buying the Origional Note .. Allonges/Assignments Please. Yep! Yep! Oh… Yes I did! And it was filed like this …. Mers transfers the Note and Mortgage Together… yacky yack yack …… Dont come Back!

  30. @ Mass Resident

    I too, found thousands of satisfactions of mortgages, filed one minute after the other around the U.S. Does anyone really think people are paying off their mortgages around the country like that? NO! And further, many of the substitute trustees are getting their names on a note for “debt collection” , buying the ORIGINAL note, sold to them….from places like US Bank, NA, Bank of America, NA, etc…using the special proceedings in non-judicial states.

    Bank of America, NA claims to be a corporation doing business in NC…Hmmm, well I can find no corporation in either NC, TX, CA, DE or NY as a BOA, NA corporation, per these states Secretary of State, doing business in that name. Under the law, you must be a corporation, if you name yourself as such, to do business in any State, or to defend or initiate any legal action.

    Comments anyone?

  31. It;s all crap. Citizens Bank is owned by RBS, and both were in deep with Option One. It’a amazing what you will find when you look. Subprine, interest only…. LIBOR…… a virtual stew of crap!!

    Did my homework ( Thank you Carie and Anon), and found a big piece of the puzzle.

    Would someone please tell Wells Fargo to please stop making assignments from Sand Canyon??

    I was looking for something yesterday and fell upon page after page of mortgage discharges signed by Linda Green. Oh my. One right after the other. 2008. The sigs were not the same. One was thrown in there from Crystal Moore. All Option One loans.

    Yeehaw!!!!!!

  32. from ANONYMOUS:

    ” First, servicer only acquires collection rights on behalf of the investor/current creditor – servicer is not the creditor. A servicer cannot acquire any interest when they are acting as a servicer for another. Second, any refinance that was conducted under the guise of a mortgage refinance when, in fact, in was just a modification of a (false) prior default, with the prior mortgage never validly discharged, is not a mortgage refinance at all. And, therefore, the note fails to fall under the UCC as no negotiable note actually exists.

    This was the root cause that exploded the financial crisis. Notes were not notes at all — and foreign investors knew it — but, US has refused to investigate. It is why investor lawsuits are settling, but homeowners got nothing more than a bogus 49 state Attorney General settlement — all without investigation. (Settlements do not divulge the fraud).

    Yes, correct, the role that servicers actually occupy is — concealed. Servicers will not disclose WHO they are actually servicing for and this is from the onset of the fictitious refinance to the fraudulent foreclosure in question. Deregulation has allowed servicers to publicly withhold any information that discloses the actual creditor. In fact, disclosure would disclose that the note in question is not a valid UCC instrument but, actually, a modification of the PRIOR mortgage/note.

    Courts run scared. All they need to hear is the name of bank and they accept this falsity. It does not matter what false capacity that bank is appearing in — including as trustee to a fraudulent trust that holds false and invalid mortgage loans, notes (and UCC instruments). .

    The Court hears “bank” in name, especially with “NA” attached, and they believe it is valid. This is simply not so. Court does not given the opportunity to hear the evidence that the subprime refinance was orchestrated under fraud, and that no valid UCC instrument exists, and that the “Bank”, “NA”, and/or servicer, is NOT the creditor.

    Further, under federal law, which preempts state law when there is conflict, the CURRENT creditor must be identified. Servicers are not the creditor if assignment is executed for the ministerial purpose of administering a foreclosure action. No legal rights transferred under this scenario.

    Time for attorneys to wake up. Start digging at records, and pursue records disclosure under the Freedom of Information Act as to the GSEs. This may take a federal action to enforce. But, would clearly win on this as it involves the borrowers’ right to the those records.

    When Neil finally understands that this is about homeowner victims, and not “investors”, we may finally get somewhere. Until Neil realizes this, we will remain without media help. Neil’s allegiance is not on the same page. And, any help to homeowners is bogus — unless the truth is told. Help without the truth is simply a continuation of the fraud. Modify??? Not without disclosure of ALL records. To do so without disclosure – is to continue the fraud.

    Fraud upon the court. No Statute of Limitations.”

  33. Interesting…I guess that’s why Neil loves the (fake) term “investor-lenders”…his loyalties are to the securities investors—so he never really reveals the whole truth—and he tries to “spin” it.

  34. Neil has a real estate investment firm…check it out. He does some good things, but he too is buying from the bleeding bodies. He can at anytime put us all together and coach us, where he charges for all his services. I have been fortunate enough to acquire some rock solid relationships outside this blog and they have a lot of information, that never gets on here.

    A couple of these people are making great headway and do not trust some on this blog…so they stay away! So, it does matter what you say and do to people.

  35. Deb—cute—I think you mean off the “soap box”—anyway, I appreciate it…ANON’s info is not a “theory”—she has absolute proof, and actually went to Fannie/Freddie and they did not tell her it wasn’t true—they just told her to “let it go”—in other words “let us cover it up, don’t make waves”…I don’t like cover-ups…especially when it means millions of people suffer because of it.

  36. @carie your posts are helpful don’t get me wrong just stay focused on what is useful and not what is unprovable unqualifiable and a case of trying to fly before some know how to walk if you know what I mean. I’m off the shoe box now. Onward and upward.

  37. Sorry Deb—nothing personal—but ANON left because Neil refused to state the difference between investors and security investors. He also refuses to investigate what happened BEFORE the subprime refinances and purchases, and continues to say things like “investor/lenders” (he is talking about the securities investors)—which does a disservice to those who seek the truth.
    I don’t give legal advice, but I do post information that needs to be known—and I will keep posting it unless and until Neil starts writing about the WHOLE truth.
    ANONYMOUS has discovered the truth, and I’m not going to let it get buried.

  38. If I were a newcomer to this site what would the first impression be. I ask you , whilst freedom of expression is a given right ( still) what serves ? If we are to gain any ground in this monumental battle the more people that understand the better, know its complex but to make statements like ” too many thick heads” is well.., off putting and to argue constantly points over n over anyone who wanted to hear what was said just moves past it. It’s getting bloody ridiculous, let’s get procedure down, ESP the tricks the bad guys play and case law, this is what wins cases. I am not an attorney bla bla but if you mean it when you want to really help stop the banging heads . Onward. I will be posting good stuff when I know it holds water.

  39. Sorry, won anything, one…DAH

  40. @ carie

    Yes, you are correct. I have dealt with Enraged several times and have changed my sign in name, due to the confrontations. Many very savvy people have left this site due to Enrages attacks on them. We are not cowering from her, it is just not worth the defense of our actions to her. Who is she, to insult and berate anyone?

    Neil, needs to put her in check. As she said: copy and pasting articles, from jaded sources are not helpful and to my knowledge, she has not one anything either.

    All this information is helpful if properly used and pleaded. She needs to get over herself!

  41. On the other hand, ANON’s motives are completely pure—she is a victim advocate and she has been digging at the truth of all this for years—I post her info because it is the truth. We need the truth.

  42. “Having been on this blog for years, I have witnessed enraged attacks on people and she has not won anything either, so who is she? She spends all day here, analyzing newspaper articles, which are not honest…”

    RIGHT ON POPPY.

    @enraged has her own ‘agenda”—and her motives are not pure…beware.

  43. Anonymous has lent some very credible information here…As far as I know, no one here has won. Few people do in these courts. And there are very few attorneys that are winning, even giving them thousands of dollars.

    The art of procedure is where it all comes together. The research is where your case is derived from and if used correctly you can gain traction. Having been on this blog for years, I have witnessed enraged attacks on people and she has not won anything either, so who is she? She spends all day here, analyzing newspaper articles, which are not honest…if they were the entire free world would know the truth, the whole truth.

    Max Gardner, NC has gained the most momentum/traction in most of these cases.

    Believe it or not, I and some cohorts in CA have in part, made progress in the courts staving these parasites off, for now, using his approach. The RESEARCH is key, not newspaper articles. Most of us have been across the table as Pro Se’s with seasoned, Pedigreed attorneys and some of their pleadings and complaints are laughable. They refer to things like the Pioneer factor and Owen Corning for claims, when in fact if they read the entire case, it was ruled in the Plaintiffs (say homeowners’) favor, by the SUPREME COURT. And the judges are ignoring this.

    Don’t kid yourself folks, many of the attorneys are not that good either, they are just bringing to the table lots of money to dump into the cases. My suspicion is: the judges are getting paid!

    Trust no one and verify and validate everything. Keep fighting…we are on the front lines here and sooner or later this thing HAS to go bust, just hang in there!

    And one more thought; Neil is right, once you admit a default you are DOA…has anyone here borrowed from an originator? Of course not, so you are not lying to the court. The originator had a contract for lines of credit on your behalf, done incorrectly means they owe that money, not you!

  44. So far, no one has won using Anonymous theories. Not even herself and she’s been fighting for 10 years.

    I don’t qualify them as false or wrong but I really would guard anyone seriously trying to save his house against listening to them from a third-party who has nothing to show for, other than:

    1) A monkey’s uncanny ability to cut-and-paste over and over the same thing without any personal thought, knowledge or understanding;
    2) A mean streak a mile long
    3) Such insecurities that everything is a “personal attack”
    4) Such cowardice as to walk away from the fight without any attempt whatsoever at fighting (other than pestering many people on the site to fix her doings… after the fact!)

    People, you get what you pay for. Go to the source if you’re serious. Otherwise, you’ll lose.

  45. “…That way they loaned less of the investor money at a higher nominal rate…”

    NO, NEIL—INVESTOR MONEY WAS NOT “LOANED”—PLEASE WAKE UP, NEIL:

    (from anon):

    “…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 GSE charge-offs FROM THE ONSET.

    And, therefore, never valid NOTES, never valid Mortgages, and never valid refinances…”

  46. I especially love the part about the “cheap suit”—-stunning verbiage, to be sure! Breathtakingly brilliant verbosity—and so original, too!

  47. What—you’re not going to post your own words again? Please? One more time? They’re so brilliant! I wish you would post them just one more time! I’ll wait with baited breath…

  48. Beware people—you have to have “credentials” to post the truth…oooh, I’m so scared.
    I will continue to post ANON’s answers. Period.
    Too bad if you don’t like it—last I checked, you STILL don’t own the comment section.

  49. Like I said—too many thick heads.

  50. And, again, stay away from “…short read from unqualified individuals posting about subjects they have no credentials to post about and who simply folded like cheap suits in the face of adversity.”

    Unless, of course, your big ambition is to duplicate their results and lose your house as they did so brilliantly for want of elementary courage.

    Anon has that courage. I’d address my questions to her if I had any…

  51. She doesn’t answer here anymore. Too many thick heads.

  52. As I was saying and to make sure no one gets sidetracked,

    “…if I were so inclined as to really dig into MBS and GSE loans, I’d leave a post for the original author with my questions.”

    For all those having questions, Anonymous monitors the posts. If you have any questions, it is safer to address them directly to her.

  53. You are simply attacking your beloved ANONYMOUS—not me…idiot.

  54. Word of advice…

    Read and understand that Mark Stopa post before you jump on any 10-liner, short read from unqualified individuals posting about subjects they have no credentials to post about and who simply folded like cheap suits in the face of adversity.

    Or suffer the same fate…

    I’d go the Mark Stopa route long before I give any credence to MBS, GSE mumbo-jumbo from second-hand bloggers, who can’t testify to the validity of their allegations. And if I were so inclined as to really dig into MBS and GSE loans, I’d leave a post for the original author with my questions. Common sense and self-preservation.

  55. We are not dealing with “real” notes.

    “…Simply put, just because someone produces a note, does not mean it is valid.

    The subprime fiasco was about fraud.

    This is not about predatory loans, although many of the modifications (falsely called notes) were predatory.

    This is about LOAN fraud itself.

    This is about converting a valid GSE loan into a fraudulent “default” loan.

    This is about fraudulent subprime refinances—falsely presented as mortgage refinances.

    A note is not a note if is was procured by fraud, and if the prior mortgage is not discharged.

    And, THIS is what occurred.”

  56. What is a “Negotiable Instrument”? And Why Does it Matter?

    Posted on October 24th, 2012 by Mark Stopa

    If I’ve heard it once from a plaintiff’s lawyer, I’ve heard it 1,000 times. “We have the original note, and it’s endorsed in blank.” Plaintiffs’ attorneys love to argue this to support foreclosure. Sometimes, it’s ALL they argue. Contrary to what the typical homeowner might think, there are typically no lengthy arguments with case law, no public policy arguments, no attempts to show documents aren’t forged or robo-signed … just “we have the original note, and it’s endorsed in blank.”

    Why does this matter? Why is the argument so simple? More importantly, should it be so simple?

    Many Florida cases have clarified that the “holder” of a promissory note is the person/entity that gets to foreclose. See Fla. Stat. 673.3011(1). “Holder,” of course, is defined by Fla. Stat. 671.201(21) as the person/entity in possession of the original Note, with an endorsement. Hence, that’s why I so often hear “we have the original note, and it’s endorsed in blank,” as that’s the Plaintiff’s way of saying it is the holder of the Note and is entitled to foreclose.

    There are a few ways this argument can completely fall apart. The most fundamental problem, though, is to attack the very premise upon which it is based. You see, the entire concept of being a “holder” or of having possession of an original Note, with an endorsement, is predicated on the Note being a “negotiable instrument.” If it’s not a “negotiable instrument,” then the entire concept of being the “holder” is irrelevant.

    So what is a “negotiable instrument”?

    Florida Statute 673.1041 defines a “negotiable instrument” as an “unconditional promise” to pay a “fixed amount of money” if it: (a) Is payable to bearer or to order at the time it is issued or first comes into possession of a holder; (b) Is payable on demand or at a definite time; and (c) Does not state any other undertaking or instruction by the person promising or ordering payment to do any act in addition to the payment of money, but the promise or order may contain: 1. An undertaking or power to give, maintain, or protect collateral to secure payment; 2. An authorization or power to the holder to confess judgment or realize on or dispose of collateral; or 3. A waiver of the benefit of any law intended for the advantage or protection of an obligor.

    If that sounds confusing then, well, it is. That’s why I like to think of a negotiable instrument as a check. Imagine you have a check, and it’s payable to you. If you wanted to give that check to John Smith to cash, you’d have to endorse that check on the back, i.e. sign it and write “pay to the order of John Smith.” Also, you’d have to hand John Smith the check. If John Smith had the check in his possession, with an endorsement on the back to him, then he could take it to the bank and cash it.

    Suppose John Smith had the check, but you hadn’t endorsed it. Could John Smith cash the check? Of course not – the bank would tell him it wasn’t endorsed. Likewise, if you endorsed the check, but didn’t give it to John Smith, the bank wouldn’t cash the check. John needs two things to cash that check – an endorsement and possession of the original check.

    But what if what you gave John Smith wasn’t a check at all. What if it was an IOU. Or a bag of rocks. Obviously, John Smith couldn’t take those things to a bank and get cash – they aren’t negotiable instruments. Silly examples, perhaps, but they illustrate the point. A negotiable instrument has to be an unconditional promise to pay a fixed amount of money, payable to bearer, payable on demand, without any other undertakings.

    Sounds confusing, and it is. In fact, there are very few cases that talk about this. Hence, let’s use a simple example from foreclosure-world. Suppose a bank is suing to collect on a home equity line of credit agreement. The agreement provides the homeowner can borrow up to $25,000, and the agreement is recorded, just as a mortgage is recorded. As is typical, the bank that is suing isn’t the same as the bank that loaned the money.

    When that bank comes into court and tries the same, old party line – “we have the original note, and it’s endorsed in blank” – make sure you stop them, dead in their tracks. You see, that entire argument is irrelevant. It doesn’t matter that the plaintiff has the original note, or even that it has an endorsement. Those buzzwords are only relevant if the agreement is a negotiable instrument. In the case of a home equity line of credit, that plainly isn’t the case. After all, looking at the home equity line of credit agreement, nobody can tell whether the homeowner borrowed $25,000, zero dollars, or some amount in between. In other words, the agreement is not an “unconditional promise” to pay a “fixed amount of money,” it’s a conditional promise to pay an unspecified amount of money – predicated on how much the homeowner decides to borrow, if anything, in the future.

    To understand this distinction, check out this hearing transcript as well as this Order, entered by St. Petersburg judge David Demers. Clearly, Judge Demers understands and agrees with this distinction, ruling the Plaintiff’s complaint (and amended complaint) had to be dismissed because the Plaintiff was incorrectly arguing that a home equity line of credit agreement was a negotiable instrument.

    Why does this matter, you ask? Simple. If the Note (or HELOC, or whatever you want to call it), is not a negotiable instrument, then all of the statutes I’ve cited above don’t apply. The entire argument Plaintiffs like to make – ”we have the original Note, and it’s endorsed in blank” doesn’t apply. That, in and of itself, doesn’t mean the bank can’t foreclose. However, to prove its standing to foreclose, the bank has to prove the Note/HELOC was transferred to it in some way other than the standard endorsement. As I see it, this likely means the bank has to provide proof of an assignment. What’s the difference between an assignment and an endorsement? It’s a big difference, actually. The way banks have operated in recent years, they’ve used endorsements to prove standing – that’s what the machine in their huge factory kicks out, over and over again – endorsements. If you make them spit out an assignment, you may well see that the machine that is the banking industry is ill-equipped to do so, particularly one that predates the filing of the complaint, as requierd. Hence, if you successfully argue the Note is not a negotiable instrument, and force the bank to prove standing with something besides an assignment, you may render them unable to prove standing at all.

    There are almost no Florida cases that make this distinction. Many cases make the conclusory statement that the Note is a negotiable instrument, without explaining how/why. It’s imperative that everyone realize that not all notes are negotiable instruments. Judge Demers realized it, and if/when more judges follow suit, I’m convinced many banks will be unable to establish the requisite standing to foreclose.

    Mark Stopa

  57. More SHAME: Why FREDDIE MAC Resisted Refis

    Freddie Mac, the “TAXPAYER”-owned mortgage giant, made it harder for millions of American “TAXPAYERS” to refinance their high-interest-rate mortgages for fear it would cut into company profits, present and former Freddie Mac officials disclosed in recent interviews.

    “Almost immediately after taxpayers bailed them out, Fannie and Freddie imposed unprecedented restrictions on refinancing, preventing millions of people from saving money on their mortgages and leaving hundreds of thousands of people to lose their homes unnecessarily,” says Mayer.

    http://www.msfraud.org/

  58. FIRST FORECLOSURE TOWN HALL KICKS OFF IN NORTHERN CALIFORNIA

    To address the crisis, C.J. Holmes, the founder of Home Owners for Justice, has come up with a novel plan to help bring the community together so they can take matters into their own hands – through foreclosure town halls. “I’m angry and disgusted at the ruthlessness of the banks, mortgage companies and gangs of complicit politicians and bureaucrats,” says Holmes, an independent real estate broker based in Santa Rosa. “At the same time, I’m shaken to the core by the predicaments of people caught in this giant swindle. I deal with them daily, and they’re in shock!”

    Let’s get every county in the nation to implement a de-facto county-level foreclosure moratorium. It can be done overnight. That’s job #1.

    http://www.msfraud.org/

  59. Sure they give that to homeowners’. Unless the state decides to use it for budget shortfalls.

  60. My fearless forecast is that many more bad apples are going to fall out of the barrel in 2013 until there is a tsunami-like wave of banks gone bad with the appropriate lawsuits that will virtually begin bankrupting the banks. Then, finally, the actual crimes of the banks will be in the open for all to see. I have to agree–it probably will be 2014 before the final explosion. The American people should follow the example of Iceland and tell the banks, hell, no we are not paying your phoney debt, jail a bunch of banksters, break up the monstrous TFTF banks and bring our economy back full swing. We will have no debt if we are back on economic track. How housing goes, so goes the economy.

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