Criminal and Civil Actions Against Chase and BofA Creep Forward

The Department of Justice and the Securities and Exchange Commission are proceeding from the wrong presumption. They are starting with public policy and politics instead of enforcement of the law to maintain the fabric of our society. It results in the rule of man rather than the rule of law. And it is tearing us apart even if government refuses to talk about and mainstream medium refuses to report on it despite the constant drum beat of new lawsuits and new settlements of bank wrongdoing.

Hardly a day goes by without some settlement being announced with respect to the sale of fraudulent securities to investors. Now we have announcements that Bank of America and Chase are being investigated and sued for civil and criminal behavior with respect to the sale of mortgage bonds to investors.

They have framed their complaints in such a way that it is presumed that proper procedure was followed in the origination and assignment of loans while at the same time they are alleging that proper procedure was not followed in the origination and assignment of loans. The difference is only whether they are saying the victims are the investors or they are ignoring the fact that the victims include the homeowners. It is like a scene from Gulliver’s Travels where the incredibly ridiculous is taken as true. Investors should be restored but homeowners may be cheated and bear most of the burden of the bank’s misbehavior because it is convenient to do so.

Once again we have agency determination of wrongdoing and still we have a judicial system that is more concerned with validating the illegal mortgages and validating illegal foreclosure judgments and validating illegal foreclosure auctions and validating deeds issued from illegal foreclosure auctions and validating evictions of homeowners who legally should be declared the owner of the home free and clear of any encumbrance and frankly free and clear of any debt which by now has been paid multiple times by third parties who have no interest in pursuing the homeowners for payment.

This is going to be decided on a case-by-case basis in the judicial system and only successful where the attorney for the homeowner is extremely aggressive on discovery. Otherwise, the public policy and mainstream media will control the narrative on each case such that despite fatally defective fabricated documents with false signatures were used in the origination and assignment of the mortgage loan.

Attorneys have to be creative in explaining how the fraudulent sale of securities to investors is tied to the fraudulent sale of a loan product to homeowners. But you can start with the single transaction doctrine in which it can be stated with considerable certainty that had the investors known what was going on in the origination and transfer of loans they never would have advanced a penny. And the borrowers would never have signed the documents if they knew that an inflated appraisal was used in making the loan unreasonable and very expensive once the true value of the property was reflected in the marketplace. Borrowers would also have never signed documents if they knew that the  undisclosed intermediaries were making a mystery profit that amounted to far more than the amount of the alleged principal due on the mortgage. They would not have signed the documents if they knew that their identities were being stolen and traded.

In other words, if federal law had been followed requiring the disclosure of all compensation and all parties to the loan transaction, none of the transactions would have occurred. The federal law is the federal truth in lending act and the federal real estate settlement and procedures act. Qualified written requests and debt validation letters are treated as jokes in the industry and irrelevant in court.

The banks are rolling in money while the rest of the economy struggles. How is that possible? Answer: they are taking the money owed to investors and which would erase the debt and they are keeping it thus maintaining the illusion that the loan to the homeowner has not been paid.

The banks have succeeded in driving home a false assertion, to wit: that the homeowners are seeking a windfall profit by receiving the house free and clear of any encumbrance and being released from any debt. What they are really doing is covering up their own windfall caused by stiffing investors, insurers, credit default swap counterparties, homeowners, taxpayers and the Federal Reserve. It might SEEM wrong to let the homeowners off the hook but only if their debt remains unpaid. But under the rule of law that is exactly what happens when the debt has been paid. Homeowner did not create this. Wall Street created this complex series of transactions that were conjured up to cover up a Ponzi scheme in which depository institutions created the illusion of ownership of the securities and cash deposited with them in good faith by investors.

At some point the prosecution in the cases that are now pending and that will be pending in the near future will come face-to-face with the conflict of the rule of law versus the rule of man. The conventional wisdom is that public policy should prevail even if it means taking someone’s home illegally. The logic is that if the mortgages were declared invalid and the debts have been paid, a large shift in wealth would occur from the banking sector to the middle class and even parts of the poverty sector.  We already have enough information in the public domain to know that most of the foreclosures are illegal and the parties that have been thrown out of their homes have a cause of action in damages or to recover the home —  a fact well known to agencies and their investigators but not known to the families because the agency has stepped in to protect the bank and refused to notify the families that were affected by the illegal behavior.

It may be true that the mortgages and the alleged transfers of the mortgages were all an illusion that there is no value to most of the mortgage bonds and therefore there are no assets that have been purchased by the Federal Reserve in those bond purchases because there was noting to put in the asset pool (trust) and they never bothered to event try to put it in the pool until challenged in litigation.  This has created the ridiculous situation where an illegal transaction of no value and no valid documentation supports it is nonetheless treated as valid simply because nobody has challenged it. And when they reach the line in the sand where it means declaring the mortgages and foreclosures to be fraudulent and invalid, void and unenforceable, past, present and future, then they will settle for pennies on the dollar —- again.

The Obama administration is simply running on the wrong track. Restoring the rule of law will restore the ability of the middle class to fuel a dynamic economy. Any negative impact on a mega-bank that is broken up into pieces is not a price to pay —  it is an additional perk to bring the banking industry down to size where it can be regulated and where they can be stopped from using the money of depositors and investors as though it was their own.

32 Responses

  1. @ ukg,

    craig & mlk isn’t very far from me. there was a ton of building over there. north las vegas is talking about eminent domain. sorry about your mom. i m just happy that it was a recontrust lawyer who wrote that, don’t know what effect it will have. i think the decisions for mers have gone both ways. hang in there

  2. vegas, I thought ReConDistrust had a few cases already decided against it. That may have been NOD stuff. Anyway, also cases wherein MERS states it lends NO money as nominee. I’ll admit to knowing little on MERS case law. and my pops used to have a home up by Craig Road west of MLK before mom passed.

  3. hey ukg- hows this one- i have a letter from lawyer for recontrust stating my original creditor was Mers!

    Three banks sued Richmond, Calif., challenging a city plan to use eminent domain to seize houses with underwater mortgages and refinance them at deep discounts for the owners, who would keep them rather than lose them to foreclosure.

  5. HERE HERE Bob G.! But I’m going for Door #1 AND Door #2. Not only do the banks have deep pockets, so do the LAW FIRMS who violate these laws. The fraud is indeed extrinsic when the lawyers are drafting the forged assignments off of summations made by looking at an imaged file.

  6. carie – because the bankster still owns the loan (if anyone) and they only use the trusts for the handy credit bid which also conveniently precludes exposing the ruse that the investors have at best security interests. The banksters can’t have it both ways, but they are. And what is the hapless homeowner going to do about it when she gets a 1099 from someone other than the alleged owner, a trust? Who is one going to sqwauk to? The IRS? Yeah, they’re all over it as I’d guess you know.

  7. Hmmm…what if you ask the servicer: “who owns the loan?” and they say: “The MBS.”
    Then they give you a 1099a that states that the servicer is the “lender”…

  8. Bear in mind that Glaski is subject to review by the Cal Supreme Court, so there’s a 30-day SOL to sweat out there. And just as the public interest requested publication, requests to de-publicize it can be admitted until the 20th.

    And you can bet there will be a TON of money (just not in gold) spent to quash the opinion. For all we know the state BAR is low on funds and sees this as an impromptu fund-raiser. There are 7 justices on the Supreme Court, 105 justices in the Courts of Appeal, and approximately 2,175 judges, commissioners, referees, assigned judges, and temporary judges in the trial courts. If you gave all of them a $10k ‘gift’, it’s only $22M. That’s about one morning of one day of net income to Chase.

  9. elex….good stuff. where can one get a copy of the Nardi deposition?

  10. @carie I haven’t been there (yet) but my understanding in CA is you can file an affirmative defense in an unlawful detainer action to subsequent purchaser attacking the standing of the party who sold the property if an early assignment can’t be corrected by a mere re-signing of the transfer papers, e.g., conflict with PSA closing date. Then you might request rescission of the trustee sale. Mere robo-signing won’t cut it. If WAMU loan and you introduce Nardi deposition showing loans weren’t transferred thru FDIC, only servicing rights were, that would likely be a legitimate cause of action (IANAL). If you miss the 20 day window to respond to UD, then you have to get creative from the curb. If you’re over 65 or a disabled adult, you might approach it from elder abuse (triple damages!). Case law works against you at that point as a n-j foreclosure and trustee sale is presumed to be regular if you don’t respond to it and you waive rights and objections. Just don’t try the alien abduction excuse for not responding – there’s so many illegal aliens in CA the courts are numb to the idea.

    In CA you need to get into discovery promptly. If you question the note holder identity, they’ll ague “well, you can’t tell us who is”, which isn’t the point – the point is THEY are not the note holder, and they know it, and are attempting to exert criminal activities toward your property. But you should have a good guess of which way the beneficiary interest went – perhaps into a discharged BK entity, if you’re lucky. If it went into the WAMU family of companies, then you have Nardi and the WAMU / FDIC cesspool to deal with.

    That’s when following the money pays off. The lender has to show a trail of purchases and sales of your loan from original lender to them in order to claim a ‘lost note or destroyed note’ (only the possessor of the note can make that claim), in which case they can post a bond and take your house.

    I don’t know what happens if lender can’t produce business records – that’s when I think the courts are giving ‘without prejudice’ rulings. You may be able to nip that in the bud by filing a quiet title cause of action, which may keep them from ‘finding’ the missing documents many months later.

  11. carie…ya gotta do what glaski did…you have to file a complaint as plaintiff against the bank as soon as you get a NOD. nonjudicial states are tough. but you can see from glaski that if you do it right, you can beat them.

    the glaski appellate court with the published decision has now provided lots of cover for the CA trial courts. remember, the trial court judge doesn’t want to get reversed, especially if he sided with a pro se litigant. that’s when he’s most likely to get reversed, so heretofore the judges have leaned heavily in favor of the banks with their prominent law firms.

    but with glaski, things are different. i would now expect to see a lot of homeowners in CA taking the offensive when served with a NOD. In effect, they would be turning the state into a judicial/nonjudicial state.

    but as i’ve said before, in most jurisdictions fraud upon the court or otherwise has to be raised while the litigation is pending, not afterwards. google “extrinsic fraud vs. intrinsic fraud.”

  12. That’s not what I meant…and I wasn’t addressing you. Rudeness personified.

  13. “How would that “fraud on the court’ work if it’s non-judicial CA, and you were never actually in court?” In order to be “in court”, one has to file something… Moot question.

  14. Bob G. (Please don’t berate me because of my layperson question):

    How would that “fraud on the court’ work if it’s non-judicial CA, and you were never actually in court? They just had a foreclosure sale based on the fabricated recorded docs…

  15. “prime directive in all this litigation stuff is:

    * don’t confuse the judge,
    * don’t complicate his life, and
    * don’t piss him off.”

    Bingo! I’ve seen pro se foreclosure defense motions include civil right violations, violations of Sherman anti-trust act and all sorts of nonsense that really have nothing to do in that kind of litigation. And when you tell people to stay away from that, they snarl and bite.

  16. elex & carie

    i’m kinda old school about these things…short, sweet knockout punch. I don’t want to start throwing things in that a major law firm would not throw in against the bank.

    prime directive in all this litigation stuff is:

    * don’t confuse the judge,
    * don’t complicate his life, and
    * don’t piss him off.

    now you could show forgery or the filing of false docs, but i would do that only to influence the judge about what bad hombres he’s dealing with. leave step two to the prosecutors if the judge wants to refer it over to them. and know this, in this neck of the woods, even if a BK judge or BK trustee refers a matter over to the U.S. Attorney’s office, the fed prosecutors will ignore it if it’s less than a $20K incident.

    carie, file a counterclaim for wrongful foreclosure and fraud upon the court. but don’t you try and file a claim for fraud, because it’s too difficult to make it stick. let the judge decide if the bank has tried to defraud the court. that’s his job.

  17. What about using Glaski as fraud on the court (because they have the same issue in their docs) for people who have already been foreclosed on? To litigate for damages? *ducks*

  18. @Bob G – Why deny the leverage of criminal charges thrown into your pleadings as an indication of unclean hands? Forgery, perjury, grand theft, false filing, and now, elder abuse … these are a few of my favorite things.

    You don’t have to press the charges, just mention them now and again in your pleadings to save them for appeal. For example, if the publication of Glaski in CA passes the muster of the CA Supremes, it gives a lot of homeowners an issue of ‘false filing’ of the assignment by the (alleged) trust holder (Freddie Mac, Fannie Mae), and if they lied once, they can never have their word taken at face value in court. That is a tremendous tool for leveling the playing field for homeowners.

  19. Goal Clarification…This is important.

    Homeowner/Mortgagors (“HM”) have to figure out what their ultimate goal is and stick to it.

    1. Do you want to keep your home, and keep it free of bankster liens?

    2. Do you want to get large amounts of settlement cash from the banksters?

    3. Do you want to fight with every ounce of your spirit and being to put the banksters in jail?

    Knowing what we know, and knowing the tools at our disposal, which of the above three goals is LEAST likely to be achieved by individual litigants, pro se or otherwise?

    I would submit that #3 is least likely. The only thing that is going to accomplish #3 is a large, institutional force with police powers, i.e., govt. But that’s not going to happen anytime soon, especially with the present govt crowd in Washington and state capitals.

    So if you can’t change something, don’t worry about it or expend precious time, emotional or physical resources on it. The odds are more in your favor setting #1 and #2 as your goals and winning on those counts.

    The best way to piss off rich people is to take large amounts of money away from them (well, ok, that’s the second best way…imprisoning them is probably the best way, but that’s unlikely to happen soon). So you play the game where the odds are in your favor, and you take whatever steps are necessary to make the odds in your favor….otherwise you don’t play the game.

    You don’t go to Las Vegas to win money. You go there for the entertainment value. I’ve heard lots of people say they always win when the go to Vegas. Then I hear Steve Wynn say “no they don’t.” So think about it…if the average guy could consistently win, Las Vegas would still be a desert, wouldn’t it? But it’s not.

    Likewise with this litigation game. Trying to nail the banksters on criminal charges is a “fool’s errand.” Trying to extract money from them is not.

    I believe that the banksters are evil sociopaths. But I also look at them as very large piggy banks that have lots of cash available to pay off smart folks who know how to litigate against them. And I know people who are getting their fair share of the cash held in those piggy banks. And my primary goal is to take the banksters’ money…nothing more, nothing less. I’ll leave criminal prosecutions to someone else.

    So just focus on keeping your house and getting nice cash settlements. At this point, everything else is a useless time-wasting distraction.

  20. I found this interesting post on the internet and perhaps this is why the judges are ruling against us.
    “.Lots of fraud folks. Many of the crooked attorneys who foreclose very homes are financed by the mortgage companies they foreclose for. Many of the judges are taking bribes thru their homes also being financed multiple times and then paid off by robo signers. Basically check the records they’ll get loans totaling $200,000 up to millions on the same home some show 2-3 loans a year. The loan is quickly paid off, a few months later they’re given another loan. No one can do this, but they can. The government doesn’t inquire about a fat check like this. They walk away with big bribes to go against borrowers no matter even though they know it’s a fraudulent loan. Many of these attorneys and judges allegedly make no house payments.

    Their income would not sustain this but they have been also trustees for predatory lenders also and trustees for home improvement companies that defrauded borrowers which turned into predatory loans. This is how they proved themselves worthy to be judges and hold a license to defraud the borrowers. This has been going on for years. They are being paid by the title companies and banks to do this folks. This is a big network all the attorney bar associations want to keep the crooks on the bench. This the very reason when folks have been defrauded by mortgage and title companies most attorneys refuse to take the case or if they do take the case won’t fight and just take clients money. They know what will happen if they challenge the crooks, they won’t ever win another case in court. This thing is sinister folks, but true “



  23. O-M-G IT’S DONE!!!!!!!!!!!!!!!!
    This is a WATERSHED moment for California


    08/08/2013 Order granting publication filed. As the nonpublished opinion filed on July 31, 2013, in the above entitled matter hereby meets the standards for publication specified in the California Rules of Court, rule 8.1105(c), it is ordered that the opinion be certified for publication in the Official Reports. (JAA)
    08/08/2013 Received: request for publication submitted by atty Freshman, however pos does not include all parties ; moot since publication granted

  24. keepon your right as Obama playing this Robin Hood act only to misled the masses as he is really throwing out BS to an ignorant homeowner and a public that bought into Obama’s lies because its convenient and they ready to move on.

    However with as many as 10 million foreclosures since 2007 and properties in the shadow and more properties in some stage of the foreclosure system, the housing market cannot recover. How long can the Fed keep up this charade where its buys $85 billion of these BS securities just to keep the stock market flying high?

    Obama allowed Ginnie Mae to steal these loan , and that must be address!

  25. good luck legally fighting people who do every illegal thing they possibly can .. ***BURY THEIR HOUSES IN LIENS ***BURY THEIR HOUSES IN LIENS *** BURY THEIR HOUSES IN LIENS***

  26. “Mr. Obama said in Arizona a few weeks after taking office that the government would help “as many as three to four million homeowners to modify the terms of their mortgages to avoid foreclosure.”

    What did my president know? When did he know it? Listen to the fine detail with which he KNEW it back in 2009! WHERE DID THESE plans ALL GO?

    This president is INTENTIONALLY running on the “wrong track.” His INTENT is to take a path that he’s certain will fail, so it looks, once again, like he’s taken the ‘best shot’ for the people, but oops, it failed (again.) If this president commits such Treasonous deceit in the foreclosure space, you KNOW he’s doing the same with jobs, healthcare, social security, medicare, immigration, energy….

    He is here to TAKE this Nation DOWN, as ‘they’ were on 911.

    Congress shares the mission, or, they would, by now, have stopped him.


    …to take a family’s home when they know it’s all criminal fraud?

    Now, NSA that!!

  27. Bear Stearns mortgage executives have plum jobs on Wall Street

    The executives in charge of mortgage securities at the failed investment house are now at JPMorgan, Goldman and Bank of America
    By Lauren KygeremailAlison Fitzgeraldemail
    6:00 am, July 31, 2013 Updated: 3:17 pm, August 5, 2013

    Before Lehman crashed, there was “The Bear.”

    Bear Stearns, once the nation’s fifth-largest investment bank, had been a fixture on Wall Street since 1923 and had survived the crash of 1929 without laying off any employees.

    But in 2008, its customers and creditors didn’t much care about its storied history. They were worried that the billions of dollars of mortgage-backed securities on its books weren’t worth what the company claimed. En masse, they stopped doing business with Bear.

    Within a few days, on Monday, March 17, Bear was gone — subsumed into JPMorgan Chase & Co. with the help of the Federal Reserve for a price that was approximately the value of its shiny new Madison Avenue office tower alone.

    Bear Stearns failed largely because it had spent the previous five years gorging on subprime mortgages in what appeared to be an ever-rising housing market. When home prices started falling and those loans started to go bad, Bear’s creditors got scared and pulled their money out of the investment bank.

    The demise of the 85-year-old firm was just a harbinger of what was to come. Six months later, Lehman Brothers collapsed under the weight of its own mortgage securities, sending first the financial system, and then the entire global economy, into a tailspin from which it hasn’t yet fully recovered.

    Five years later, the executives that were in charge of Bear’s headlong dive into the cesspool of subprime mortgage lending hold similar jobs at the most powerful banks on Wall Street: JPMorgan, Goldman Sachs, Bank of America and Deutsche Bank.

    The fact they were able to emerge unscathed from a financial crisis that wiped out $19.2 trillion of household wealth in the US and as many as 8.8 million jobs has become part of the legacy of the financial meltdown.

    “The downside is very, very minimal for the people who decide to take risks in these institutions,” said Anat Admati, professor of finance and economics at Stanford Graduate School of Business and co-author of The Bankers’ New Clothes: What’s Wrong With Banking and What to Do About It.

    “It’s clear that the ones at the top got the most in terms of compensation and suffered few consequences from these decisions,” she added.

    Four of the executives, Thomas Marano, Jeffrey Verschleiser, Michael Nierenberg and Jeffrey Mayer, have been accused of making false statements in disclosures to federal regulators in a lawsuit brought by the Federal Housing Finance Agency, which oversees government-owned mortgage giants Fannie Mae and Freddie Mac. They are among dozens of people and companies named in the lawsuit.

    All four denied all the allegations in a 179-page response to the lawsuit.

    Read the rest here:

    Any question…?

  28. christine I wish I could write as well as you because what you said is so spot on. I believe that because the Federal Government is so involved in the Frauds it dragging its feet in some hope that this just dies down.

    I believe in my heart at at the center of the crimes is the government agencies who allowed these securities to take in contracts that are without a purchase of debt, meaning that there was a separation of Note and debt so the Note no longer exist as a Note because it has no reason exist.

    Loans cannot be called due if you not owe a debt, and some bank that not owed a dime simply cannot claim control over a property and have it foreclosed! This is the crap Ginnie Mae did in ordering properties by fraud of having servicers/bank approach the court as the “holder in due court” and had MERS ROBO sign the assignments, which allowed these administrative foreclosures!

    Easy to prove the crime because out of 800,000 non processed modifications of FHA, VA & USDA loans 100% of them will still have a blank endorsed Note forever. The blank Note shows for a fact that a Wells Fargo could not have been the owner of the debt!

  29. exactly christine, what about our injuries. we have been maligned throughout this crisis, painted as deadbeats. personally i am sick of it.

  30. “Once again we have agency determination of wrongdoing and still we have a judicial system that is more concerned with validating the illegal mortgages and validating illegal foreclosure judgments and validating illegal foreclosure auctions and validating deeds issued from illegal foreclosure auctions and validating evictions of homeowners who legally should be declared the owner of the home free and clear of any encumbrance and frankly free and clear of any debt which by now has been paid multiple times by third parties who have no interest in pursuing the homeowners for payment.”

    Regulatory agencies are in a catch 22 situation: they didn’t regulate at the onset since they no longer had that authority, they didn’t regulate in the midst of 4 million foreclosures and they are trying to fix it after all the wrongs have been committed. What’s the solution, when

    1) People committed suicide or suffered heart attacks or what not? Can’t bring them back, right? How do you compensate for that?
    2) The house was foreclosed on, sold at auction, flipped a few times and some family has been living in it for 2 or 3 years or even longer? Kicking them out ain’t gonna fix it either for the previous owners, right?
    3) Entire lives were completely torn. How does one fix that?

    All they can do at this juncture is stop everything from this point forward by demanding a nationwide moratorium until everything has been untangled and adequately compensate retroactively those who lost. What kind of value are they going to put on the pain, the heartaches, the fears, the losses? The problem with humans is that, whether a system works or not, they have that need to tweak it and see if it could be improved… if someone couldn’t be profiting more from it, if…

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