HuffPost Reveals Secret Internal Documents Showing Fraudulent Intent by Bank CEO’s

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And now the real facts are coming out as people start worrying about going to jail for perjury and violations of Federal and State laws, rules and regulations. This isn’t just a leak. To quote from the movie “Absence of Malice” — “the last time we had a leak like this, Noah built himself a boat.” This article by Richard Eskow lays out the true facts which are in actuality only the tip of this iceberg.

The important thing about all this is that lawyers should remember that MERS is simply emblematic of the behavior of the banks, to wit: while some loan documents have MERS from the beginning, nearly all of the claims of securitization involve some form of parallel database system to hide the real parties in interest. Chase Bank, for example, stopped using MERS and started using its own system, modeled on MERS. Other banks simply relied upon a more informal method of transferring loan documents around “like a whiskey bottle at a frat party” for no reason other than to present a confused claim of ownership and balance of the debt — resulting in an apparently successful reliance on the predisposition of courts to look only at when the borrower stopped paying and ignoring the authorization of the party claiming rights to enforce collection and enforcement.

In addition, I have found evidence in a number of cases where the MERS system was used AFTER a loan closing in which MERS was never mentioned. Because of the publicity, the tracks leading to MERS were “erased”, but the practice continued in one form or another.

What has escaped the Courts until recently is that the convoluted actions undertaken by banks are part of a larger plan to defraud the Courts themselves, the borrowers and government agencies AND the initial fraud on investors, insurers (except apparently AIG, who obviously appears to be part of the scheme through its ownership of MERS).

By ruling for the Banks the Courts have become complicit in the larger fraud that resulted in millions of wrongful foreclosures and trillions of dollars that were taken from investors and intentionally misdirected away from REMIC trusts and put to use funding loans directly. The Courts are putting their stamp of approval on fraudulent conversion of investor money and fraudulent conversion of money and title that should have gone to the REMIC trusts.

If the concept of securitization had been followed, if the documents were not drafted as “fraud friendly” (see below) and if the actions of the banks were not fraudulent from beginning to end, many loans would never have been made, most loans would have been properly underwritten, and nearly all closings would have contained full disclosures protecting both the lender investors and the borrowers. Further, the industry standards of workouts (modifications) would have resulted in modifications that would have been economically viable; and the loans themselves would have been approved based upon the economic reality of honest appraisals in which price and value were roughly even with each other.

“These documents, which include training materials, PowerPoint presentations, and videos, suggest that the industry made a conscious attempt to bypass local jurisdictions and automate processes — in what can best be described as a fraud-friendly way.”

“Documents obtained from an industry-wide venture reveal that the nation’s leading mortgage lenders colluded to create a false-front company, driven by a back-end database, specifically for the purpose of bypassing local jurisdictions’ taxes and filing requirements. These banks were later to hire low-paid temp workers specifically to process foreclosures (JPMorgan Chase called them the “Burger King kids”).”

“MERS’ backers created something called “MOM” — MERS as Original Mortgagee — ensuring that the bank which originated the loan would never be a matter of public record.”

“…”innovative financial instruments,” many of which were falsely certified as “AAA” grade by ratings firms before being fraudulently misrepresented and sold to unwary investors.”

“…each bank was able to enter into foreclosure and other legal processes without disclosing its own identity or the fact that the ownership and administration of a loan had changed hands. Bank or servicing company employees had two jobs: their real ones, and their make-believe one as “officers” of MERS.” [Editor’s Note: “Pretender Lenders”]

“By pretending to hold the loan, MERS is able to file papers on behalf of whoever is holding the title today — or may hold it tomorrow. Changes in ownership are invisible to the courts and recorders of deeds. It’s a false [claim] which bypasses centuries of legal protections and property holders’ rights.”

“If borrowers want to challenge the legality of a foreclosure action, they are entirely dependent on MERS itself to provide that information.”

And we have previously reported how honest and decent employees of the Pretender Lenders (on the loans) and Pretender Menders (on the servicing and modification recognized the problem and were greatly concerned that the scheme was in violation of laws governing lending and servicing. We know of 9 attorneys who quit their jobs rather assistant the drafting of documents that were, in the words of this article “fraud friendly.”

Exchanges drawn from the online “MERS Forum” in 2010 showed that homeowners and bank employees alike were troubled by this. Consumer advocate Nye Lavalle began raising questions about the legality of MERS on this forum more than a decade ago. Even bank employees were concerned. Someone who worked for a bank or its designee wrote the following (copied here verbatim, including errors):

(SUBJECT) Lost Note Affidavits & Beneficial Interests [from 2003]

I was recently told that the manner in which our firm was filing foreclosure actions in FLA was problematic in that MERS was claiming to hold the note and be the only beneficial party with an interest in restablishing the note, when we all know that servicers, investors and the GSEs hold the interests and the payments eventually go to them.

Also, my research of MERS info and procedures shows that MERS never holds any docs including the note and does not have any beneficial interest in the note. Can we be in violation of any applicable laws or putting ourselves indivudally or as a company for claims by borrowers claiming that MERS is not the owner or holder in due course for the loan? I’m troubled by this. Can you help?


The response from MERS Corporate Counsel, in its entirely, was as follows: “Please contact us directly to discuss your concerns. Thank you.”

Yves Smith is also mentioned in the article as having details of the MERS defeat in Pennsylvania.

But the takeaway from this article is that the media starting to investigate what will turn out to be the biggest corruption scandal in human history. We will have to wait for the media to catch up with our facts and ask the central question: Where did the money go?

30 Responses

  1. FBI, U.S. Justice Department & courts are all in on this national MAFIA. Here is proof;


  2. Can someone tell me what this type of filing means in laymans terms SEC 15d-6

    WASHINGTON, D.C. 20549

    FORM 15


    Commission File Number 333-122688-17

    Residential Asset Securities Corporation, as depositor for RASC Series 2006-EMX1
    (Exact name of registrant as specified in its charter)

    8400 Normandale Lake Blvd., Suite 250,
    Minneapolis, Minnesota 55437,
    (952) 857-7000

    (Address, including zip code, and telephone number, including area code, of
    registrant’s principal executive offices)

    Home Equity Mortgage Asset-Backed Pass-Through Certificates, Series 2006-EMX1

    (Title of each class of securities covered by this Form)


    (Titles of all other classes of securities for which a duty to file reports
    under section 13 (a) or 15(d) remains)

    Please place an X in the box(es) to designate the appropriate rule
    provision(s) relied upon to terminate or suspend the duty to file reports:

    Rule 12g-4(a)(1)(i) |_| Rule 12h-3(b)(1)(i) |_|
    Rule 12g-4(a)(1)(ii) |_| Rule 12h-3(b)(1)(ii) |_|
    Rule 12g-4(a)(2)(i) |_| Rule 12h-3(b)(2)(i) |_|
    Rule 12g-4(a)(2)(ii) |_| Rule 12h-3(b)(2)(ii) |_|
    Rule 15d-6 |X|

    Approximate number of holders of record as of the certification or notice
    date: 3

    Pursuant to the requirements of the Securities Exchange Act of 1934
    Residential Asset Securities Corporation, acting solely in its capacity as
    depositor for the above-referenced Trust, has caused this certification/notice
    to be signed on its behalf by the undersigned duly authorized person.

    Date: January 11, 2007 By: /s/ Mark White
    —————————— ——————————
    Name: Mark White
    Title: Vice President

  3. Reply to mycookiejar and Charles….I was pro se, with weak help…Fought for nearly a year, painfully….Judge basically said, too bad, you lose, even though the assignment was 4 and a half years late. U.S. Bank was the foreclosing bank, but they really didn’t own it. Amazing…. .I didn’t have the formula for success….I wonder if anyone really does. Since most cases are settled and seem to be non disclosure settled… It helps no one else in these situations when that is done. I do understand why you would just like to be over with it though. I was exhausted, burned out, and disgusted with the whole process, mostly because I did not know how to present my case effectively…. It was really about three years of non stop stress and, at the same time, bleeding out the last of the little money I had left from BK. I am still studying and collecting! It is not over…..I was foreclosed on , officially on jan 1st 2012. It was a lifetime ago.

  4. SEC has a whistleblower program which is about financial industry, and as in the case of the bank they are selling these Mortgage Backed Securities (MBS) and in what I submitted is that the alleged underlying security does not exist and the loan cannot be foreclosed because there is a separation from the Notes and Debts due to the fact that there was not purchase of the loans.

    WaMu is the best example of the dysfunction of the Ginnie MBS because the bank could not pay its bill and the MBS should have been declared in default which would have exposed the crime and is why this was not done.

    Someone else is paying the bill for the lender/issuer and that cannot be done, as the home payments that are going to pay the investors is not contracted for that purpose. The FIDC sell to JPMorgan of the WaMu asset covered over the fact that Wells Fargo was mortgage servicing WaMu loans but the bank was declared a “failed bank”!

  5. Charles, what whistleblower program are you talking about?

  6. SLAP! SLAP! Oh Neil, can I? The Gals have my bail money, old and musty, but uncashed. I’m thinking about cashing it in. It would be worth it to get another pervert off the streets.

  7. mycookiejars if I would have hired an attorney I would have not learned what I have by going through the fire. I would have but like you cookie and probably not understand what actual happen because it would not have concerned me.

    But going through the foreclosure was the best education of my life and will pay off, because I became a student of the full process and not from an uneffected party. There a different in donating food to the poor than having to eat the food so rich person has given. Neither one can fully know what the other life is like unless they lived it.

    So I quickly learned that what was going on in the Ginnie Mae MBS was criminal and President Obama had develop a new Whistleblower program at the SEC. I expect to be rewarded for collecting billions back to the US Federal Government and that millions are going to be helped from the discovery that I made. Your entire problem is the amount that being received, but I got no problem you being rich because your sleeping with a guy that worth $1.4 million as being on your back ain’t easy work if you doing it right.

    I am not pulling the Vet card, I am pulling the entire damn deck out! My goal is to get all 50,000 VA home loan home owners back there homes or restitution and getting rich is a by-product of very hard work and time!

    Now get back to doing what ever it is that you do, and let your Attorneys handle the legal advise and work!

  8. One last thing Charles, had you hired an attorney back in 2011 there was a good chance you would still be in your home today, and not In la la land.

  9. So now its the poor me I’m a vet card? Give me a Break! The only thing that pea brain of yours can process is how to make big money! Its the same thought process drug makers use. Big Pharma or Meth Lab … Makes No Differance!

  10. Louise, I emailed Dwight the day he wrote the message, but no return message from him yet as to what he wanted.

  11. mycookiesjar all those years in the military protecting your rights to make all that money when terrorist where trying to kill me was enough shoveling shit as an Infantry soldier!

    Now I am looking at fighting another group of terrorist in the banking system.

  12. So what you’re saying then Charles is that you’re to Good to shovel shit and get dirt under your nails? You’d rather live off us instead of working with us? Because your High Class or a high class wanna be? When the shit hits the fan I know my family will eat.

  13. Charles, you are wasting your time with little Ms. non compos mentis. She just sucks up your time and energy and does not give anything back except craziness. Please answer Dwightns”s latest E-mail. I think you will have something valuable to say.

  14. Not talking about racism but a class issue….get the different!

  15. And Charles, don’t try to play the racist card again. I am a white farm girl with a sign I my lawn campaigning for a low income black female canidate running for State Rep.

  16. WOW! You take the cake Charles, for Jumping to Conclusions with no basis of fact. Grasping! Thanks for the laugh! OMH! Busting a Gut! Prove Up!

  17. mycookiejars bankruptcy laws don’t apply in the case of the 1st position home loan as a BK court had not authority to determine the matter. Now there is currently the argument of loans pooled by GSE blocking US Constitutional Rights by not allowing full due process in non-judicial states.

    You never had to shovel shit and you never will shovel shit, so let get that off the way. Your married to a millionaire and you don’t need to work, so let put that out there. Plus shoveling shit does not pay well!

    It people like you that don’t understand what people are going through because you got money to hire a attorney for crossing the street. It people had the money to hire an attorney that knew how to combat this issue they would have but these attorney did not exist! What part of there no money to win on the state level don’t you understand?

    We are fighting $1 trillion dollar corporation with an attorney that not studied in this area, and there not been a history of these case as this crisis is a first. Attorney that are taking on these case don’t have the types of practices to be able to financial compete with a $1 trillion dollar bank.

    You need to stay in the rich wife lane, and have your attorneys write in here because your not handling your legal affairs because your husband has hired your team!

  18. Its attitudes like yours Charles that leads to defeat. Federal Laws are in play here to. “Proof of Claim”. Last I checked BK is a viable and affordable option to stop a fc. I would shovel shit n flip burgers on the side if it meant saving the home. I sure wouldn’t sit around waiting for someone to do it for me.

  19. Did you hire an attorney? People who are worth $1.4 million hire attorney because in the case of real estate problem we experienced since 2007 are not the type of real estate law the attorney were or are knowledgeable in.

    Here we are in Oct 2014 and someone asking the guy did he hire an attorney as if it mattered or not because at this point they are already foreclosed. So that we know the person is foreclosed, what attorney are they suppose to get to get the property back and with what money?

    I get it that we all want to be relevant but some have nothing to contribute because it not there battle. I understand that there is no format for the narrow issue some are facing, and hope the best, but to constantly criticize others or keep asking people if they hired an attorney does no good because your financial situation is unlike 99.9% of the people searching for help.

    Attorneys for the most part have not caught up to what going on because most of this is at the state level and there no big money to win, and the time it would take to win is not worth the payment schedules you could get an attorney actual work hard for you. Your probably better off taking that money and playing the Lotto!

  20. Sunman, did you hire an attorney? When did they fc? Did you have a DOT or Mortgage?

  21. sunman doing my best to change that situation for all the WaMu loans that were pooled. 32yrs of owning a home and they act like you were some bum that never had a job. The day is coming that they are going to have to deal with the facts!

  22. Charles…Had one of those Wamu loans myself. My loan was not assigned until I was foreclosed on, four and a half years later….Hmmmm. Thought they only had 90 days to perfect the trust, and that the transaction was void if not completed in that time. Still, they took my home of 32 years.

  23. Plant acorns… lots of acorns… we need more trees… it will be a terrible pity, once the hangings start, if we run out of limbs to hang these PIGS from.

  24. The FDIC allowed this crap to happen with the Washington Mutual Bank securities pooled loan. The AIG trial is the blueprint for all these government insured loan that were foreclosed with blank endorsement because due process was not allowed and they were foreclosed for the Fed Gov who was unjustly enriched! You got to love the old crook Hank Greenberg for dropping these bread crumbs all the way to the exact court to present a claim!

  25. Absolutely, the banks will blame the attorneys. Let the finger pointing begin. BTW, how is the AIG trial going? Some real good dirty laundry being aired there.

  26. And what say the FDIC

  27. Wait until the attorneys representing the banskters start going to jail. The Banskters will probably maybe blame them.


  28. Noah built an Ark. If you haven’t noticed the wider isles and less product availability, rising prices… Take Another Look. For years we’ve had more imports than exports. The banks were over 40 percent of our GDP. Stock Up! Make New Friends and Keep the Old, one is Silver and the other Gold. HEADS WILL ROLL!!

  29. Wow, just we thought all along. MERS has to go. It circumvents state laws and is just plain NFG.

  30. The plaintiffs, uh huh.

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