Banks Still Out Cheating Their Customers and Everyone Else

It is easy to think of the mortgage meltdown as a period of time in which the banks went wild. Unfortunately that period of time never ended. They are still doing it. The level of sophistication it takes to do the kinds of things that banks have been doing for the last 20 years is probably beyond the knowledge and experience of any of the regulators. In addition, it is beyond the knowledge and experience of most consumers, lawyers and judges; in fact as to non-regulators, bank behavior makes no sense. After having seen the results of what are euphemistically called subprime mortgages, Wells Fargo is plunging back in and obviously expecting to make a profit. Apparently the quasi governmental entities that issue guarantees on certain mortgages will allow these subprime mortgages. Wells Fargo says it now understands the parameters under which the guarantors (Fannie and Freddie) will approve those mortgages without a risk that Wells Fargo will be required to buy them back.

That is kind of a mouthful. We have thousands of transactions that are being conducted that directly affect the ownership and balance of various types of loans including mortgage loans. The picture presented in court is that the ownership and status of each loan is stable enough for representations to be made. But the truth is that the professional witnesses hired by the bank’s foreclosure actions only present a slice of the life of a loan. They neither know nor do they inquire about the rest of the information. For example, they come to court with a a report showing the borrower’s record of payments to the servicer but they do not show servicer’s record of payments to the creditor. By definition they are saying that they only know part of the financial record and that consists of a made for trial report on the borrower’s activities. It does not show what happened to the payments made by the borrower and does not show payments made by others —  like loss sharing with the FDIC, servicer advances, insurance, and other actual payments that were made.

These payments are not allocated to any specific loan account because that would reduce the amount claimed as due from the borrower to the creditor — as it should. And the intermediaries and conduits who are making claims against the borrower have no intention of paying the actual creditors (the investors) any more than they absolutely have to. So you have these intermediaries claiming to be real parties in interest or claiming to represent the real parties in interest when in fact they are representing themselves.

They cheat the investor by not disclosing payments received from insurance and FDIC loss sharing. They cheat the borrower by not disclosing those payments that reduce the count receivable and therefore the account payable. They cheat the borrower again when they fail to show “servicer advances” which are payments received by the alleged trust beneficiaries regardless of whether or not the borrower submits monthly payments.  (That is, there can’t be a default in payments to the “trust” because the pass through beneficiaries are getting paid. Thus if there is any liability of the borrower it would be to intermediaries who made those servicer payments by way of a new liability created with each such payment and which is NOT secured by any mortgage because the borrower never entered into any deal with the servicer or investment bank — the real source of servicer advances).

Then they cheat the investor again by forcing a case into a foreclosure sale when the borrower was perfectly prepared, willing and able to enter into a settlement agreement that would have paid the rest are far more than the proceeds of a foreclosure sale and final liquidation. Their object is to maximize the loss of the investor and maximize the loss of the borrower to the detriment of both and solely for the benefit of the intermediary or conduit that is pulling the strings and handling the money.  And they are still doing it.

The banks have become so brazen that they are manipulating currency markets in addition to the debt markets. While we haven’t seen any reports about activities in the equity markets, there is no reason to doubt that their illegal activities are not present in equity transactions. For the judicial system to assume that the Banks are telling the truth or presenting an accurate picture of the  transaction activity relating to a particular loan is just plain absurd now. The presumption in court should be what it used to be, at a minimum. Before the era of securitization, most judges scrutinized the documentation to make sure that everything was in order. Today most judges will say that everything is in order because they are pieces of paper in front of them, regardless of whether any of those pieces of paper represents an accurate rendition of the facts related to the loan in dispute. Most judges in most cases are rubber-stamping judgments for intermediaries and thus are vehicles for the intermediaries and conduits to continue cheating and stealing from investors and borrowers.

The latest example is the control exercised by the large banks over currency trading. Regulators are clueless.  The banks are no longer even concerned with the appearance of propriety. They are cheating the system, the society, the government and of course the people with impunity. They are continuing to pay or promote their stocks as healthy investment opportunities. Perhaps they are right. If they continue to be impervious to prosecution for violating every written and unwritten rule and law then their stock is bound to rise both in price and in price-to-earnings ratio. They now have enough money which they have diverted out of the economy of this country and other countries that they can create fictitious transactions showing proprietary trading profits for the next 20 years.

This is exactly what I predicted six years ago. They are feeding the money back into the system and laundering it through the appearance of proprietary trading. It is an old trick. But they have enough money now to make their earnings go up every year indefinitely. On the other hand, if the regulators and investigators actually study the activities of the banks and start to bring enforcement actions and prosecutions, maybe some of that money that was taken from our economy can be recovered, and the financial statements of those banks will be revealed and smoke and mirrors. Then maybe their stock won’t look so good. Right now everyone is betting that they will get away with it.

New forex lawsuit parses data to make case

Yesterday, 03:13 PM ET · JPM

  • There have been a number of suits against the global banks over claims of forex manipulation, but this latest by the City of Philadelphia Board of Pensions and Retirement is the first to include research highlighting unusual movements in major currencies.
  • Using data compiled by Fideres, the plaintiffs analyzed daily trading right around the 4 PM fix of currency prices … curiously, anomalous price movements became rarer and less pronounced after the initial reports of rigging surfaced last summer.
  • Morgan Stanley has spent some time looking at euro/dollar spikes at 4 PM and also concluded they were unrelated to economic events. Instead of collusion though, Morgan pins the blame on computerized trading programs.
  • The seven banks sued by Philadelphia which is seeking damages as high as $10B: Barclays (BCS), Citigroup (C), Deutsche Bank (DB), HSBC, JPMorgan (JPM), RBS, and UBS.

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13 Responses

  1. Since banks are only reporting the part of the story that benefits them, and unless the alleged borrower buys audits, how can these books be compelled thru discovery? i have a judge who granted my motion to compel, the bank provided a couple of reams of garbage, disclosing no third party payments of any type that would offset the amount owed. how do I convince the judge as to the incompleteness of their response to his order?

    Aloha, Kevin

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  2. Certified Documents: Question? When I put together a Qualified Written Request (QWR) and I request Certified Copies of a Deed of Trust and the Note, they are suppose to send me certified copies. How can I ensure that they are copies of the original documents since they are suppose to have the original documents? What prevents them from getting a notary in their office to falsify documents? How can I ensure that they have the original documents?

  3. NG, you said:

    “Thus if there is any liability of the borrower it would be to intermediaries who made those servicer payments by way of a new liability created with each such payment and which is NOT secured by any mortgage because the borrower never entered into any deal with the servicer or investment bank — the real source of servicer advances).”

    Glad you’re finally saying third party payments aren’t secured by the mtg (or dot), etc. But I’m wondering about the investment bank being the real source of svcr advances. Maybe that’s true on some loans, but it’s not on FNMA loans. The servicer makes the advances and then is reimbursed by fnma. And significantly, hope you read our comments, as I’ve said, the borrower pays for that guarantee by way of the “g fee” which is calculated into the interest rate charged the borrower. This is how I see it: Let’s just say the cost of the money to the borrower could be 6%. But FNMA wants 20 basis points per month for its guarantee and the person pulling the strings, setting the rate to borrowers, knows FNMA is going to figure that 20 basis points into what they will pay for the loan. The ‘rate setter’ prices the loan so that it covers the g fee to FNMA, so the borrower must pay something north of 6% to cover that. So not only are these payments not being disclosed and applied, the borrower has actually paid for the guarantee, which put mildly, is insult to injury.
    Who pays the advances on non GSE’s or even why or if anyone does, got me. But for whatever reason someone does or whom that is, they they are legally volunteers, imo, unless there are facts unknown to us (like more guarantees on non-GSE loans). As far as legal matters / contracts go, here is a def of volunteer:

    “a. A person whose actions are not founded on any legal obligation so to act.
    b. a person who intrudes into a matter that does not concern him or her, as a person who pays the debt of another where he or she is neither legally nor morally bound to do so and has no interest to protect in making the payment.”

    After reading this again, I’d have to concede FNMA may not be a volunteer – as to the cert holders, because it has, thru the prospectus, guaranteed the MBS’s – it has an obligation to keep the cert owners whole. Seems more that FNMA has made itself legally a co-obligor (if not the primary obligor on the MBS’s), which, then, is still a volunteer as far as the borrower is concerned. The interest which FNMA has to protect is honoring the guarantee it voluntarily made (and charged the borrower to do so). The g fee, by way of the rate charged to the borrower, would be a part of the a.p.r. determination in the Reg Z disclosure, but I’m thinking it’s yet dishonest to not disclose that the borrower is paying for FNMA’s guarantee to a party, whom at the time of the loan origination, is a third party, the guy FNMA knows is going to end up with the (alleged) interest in the borrower’s loan.???

  4. In my husbands case $400.00. He didn’t accept!
    But if you look at the back of your 09 statements, you might just be surprised to find that number …. fees.

  5. Louise the whistleblowers would be few and far between because the ones that know are at the top. Each level of banking will know just enough to do their part. Like little coggs in a watch
    However now the pig im the poke is known to in fact be a cat in a bag why are there no real investigations and the Ones that were conducted ended being handling by Rusk consulting to send out rubber checks and for a ” give us your signature for $350 bucks , and where did THAT number come from?.

  6. We need more whistleblowers who used to work at the big banks. I took my money out of the big banks a long time ago.

  7. “The banks have become so brazen that they are manipulating currency markets in addition to the debt markets.”

    Whose fault is it? People keep banking with them, living on credit and reelecting the same incompetents whose salaries they pay to further banks agenda and enrich themselves in the process. If you’re going to hand the stick to your tormentor, fully aware that his intent is to beat you up with it, don’t complain afterwards if he used it exactly for that purpose!

  8. If I had to manage a system this corrupt to the core, and still not further harm the people who rely on it day to day, what would I do.

    I’d put people of moral character in positions in the system, and let them learn both sides of the corruption, the good things that should be done and the bad things that aren’t being done.

    Then I’d let them sit and participate with immunity for what they do, because they are keeping track of the activity they’ve done so it can be backed off.

    Then until one day, I reveal this great big ‘rapture’ and have this wonderful list of names (peoples brothers, and sisters, and moms and dads, and cousins and uncles, US Citizens or not, yes they have family and friends, but I’d have their name and I’d know what they’ve done) I’d remove all the corrupt people, and all of a sudden the prosecution that should have happened; that we were waiting for it to happen; that was ‘deferred’ due to the consequences of pulling the culprits without a replacement; well that day of reckoning would be here and in a clean sweep all those folks would be gone and our system would reset with the people already in place.

    Yes some would have seemed like bad guys and had the public persona that they do bad things, but I’d know they were ‘deep cover’ to fit in and be witnesses, I’d know I’d have removed every one who operated with impunity.

    Judges are easy to remove, their signature is on all those orders that corrupted titles, and all you have to do is ‘audit’ the case and see if they had the information they needed to ‘not’ give the property to the bank, and even if they said ‘well the homeowner didn’t argue the case right’, it was their job when they accepted the ‘contract’ to hear the case, to deliver ‘justice’ according to the ‘business’ they are running and if they are participating in RICO or Foreign and Corrupt Practices, for their own personal benefit or gain (That’s as bad as insider trading or any other slanted decision for financial gain), they’d be replaced with judges that were trained in the Rule of Law, so no need to put someone ‘deep cover’ beside them, just clean out that court room and put in a new set of faces, and hands and feet.

    That’s what I’d do, and I am creating that reality where ‘another part of me’ is doing just that, working on removing all of those that do not serve the whole (and I’m not talking hive mind or collectivism, I’m talking respect for the separate parts of the whole without trespass on our free will).
    Have to be careful with their words because they seem to claim to own certain words and the definitions they are associated with, and I don’t have time to redefine what I’m stating to their liking.

    If I were managing this system, I’d executive order around some parts of the corruption even if the populace who doesn’t pay attention to most things, don’t know why I did certain things, and I’d have some private injunctions written that aren’t released until it’s time, and I’d put in place ‘The replacements’ (isn’t there a movie with that title), and I’d pull in reinforcements in case my military did not obey my order and wanted to keep the people who did this to us at home with their families because they are US Citizens and own a gun and being military they don’t know there is another reason for removing them from the system, they’ll just assume the government is attacking US Citizens or gun owners when the problem being cleared is greater than that.

    Anyway, when the stuff finally happens no one would know why, and history will probably write it up as a corrupt leader removing innocents under the disguise of taking guns, or some false flag, or some attack on innocent US Citizens, when in the cosmos, we’d have to know these people caused great harm and a backwardation of our society from having home and shelter to being homeless and without jobs, and without a means to get food, clothing or shelter in a land of plenty.

    I read how some government agents killed the queen bee of a family’s bee hive because it was resistant to Round Up. See if we were to pull those people, and they have guns and are US Citizens and have families, and we were to put there somewhere like a FEMA camp for destroying the life of a ‘queen’ (yes it was a bee but it was created and had a right to life), then folks would be ready to grab their guns and go shooting what they perceive is the enemy and in this war, this last war, no one will know who the enemy is or why they are shooting at anyone.

    And in this war, people’s family members will be removed and they will not know what their family members have done and why they are being removed.

    This will be interesting times, indeed.
    The wheat separated from the chaff, and only the reapers will know who is who.

    Trespass Unwanted, Creator, Corporeal, Life, Free, Independent, State, In Jure Proprio, Jure Divino

  9. The only ” oversight” we have left lies within the law snd its application. Something else Neil said a long time ago- one house at a time.

  10. Top candidate to head HSBC Deutche Bank etc…….. This guy has all the traits to become a CEO of a major Bank.


  11. Let look at what happen on the government’s side of this and what they are getting out of it. The damage to the Federal Gov does not take place until the receipt of the insurance claim is paid to the claimant.

    JPMorgan just paid out $614 million to HUD saying it had bad underwriting and falsified documentation to obtain insurance. However these two items maybe be against the rules but they did not cause the losses and in cases unknown and and are still paying a payment it put money in the pocket of the government and investors because it created more securities and insurance premiums paid by these loans.

    What against the rules were bad underwriting and falsifying some approval of the loan, but what against the law were creating forgeries and delivering these forgeries. Next we have theft by deception when the foreclosure sales take place, and then it top off by the submission of the insurance claim against the Fed Gov, and the collection of those fund is the realization of the damages.

    The Fed Gob is covering up what Ginnie Mae allowed to take place, when it winks and nods on these foreclosures, while not clearing out these securities of badly underwritten file or falsified documents, as they still make payment supporting the pools they made, plus now the lender is on notice that as long as the payment is paid, that there is no damage realized and only gains are made. As long as the lender does not attempt to collect on the insurances there is no foul!

    Clearly there are more people to pay because of the actual reason for these settlements, as we got the homeowners and the states the properties are located to include the Fed Gov. But by the Fed Gov in the Justice Dept making the bad underwriting and falsifying initial documents they are cutting out the other victims, and cutting other agencies in States for claims and the lender can act as if there are not real people that were hurt by these actions!

  12. I got a 1099 for $1k from BoA. The only problem is that I never got the $1K.


  13. Even after one year, Bank of America still doesn’t want to endorse the insurance proceeds check that has its name on it. We just don’t know what to do as the attorney’s want $4000 retainer fee to get this matter resolved.

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