Neil Garfield Show Next Week
For further information please call 954-495-9867 or 520-405-1688
================================
see UBS, SUNTRUST Fail to Escape Liability to Investors.
We are starting rising activity by investors who are drilling down on their “investment” that was not just handled negligently but was the largest fraud of its kind in human history. Investors are starting to realize that they were screwed the moment they deposited money with the investment banks. Those Banks took the money as an involuntary gift, and the proceeds were partially used to pay for mortgages to cover-up the fraud. And the worse the loan the better for the banks; because when you are telling the investor that the return is 5% and you are giving 10% loans that will likely default, you only have to lend out half the money that the investors gave you (provided of course that the loan fails).
The only theoretical risk for the Banks, they thought, was if the bad loans didn’t default. Well that was no problem. Anyone paying more than 7-8% is probably going to have a problem keeping the mortgage current once they start paying the full amount die for PITI (principal, interest, taxes and insurance). And since they knew they had flooded the market with money and the effect of the flood was housing prices floating at twice their value, they could bet on the market crashing. So it all worked out fine for them — or so they thought.
Fund managers who were buying the mortgage backed securities initially refused to believe they had been so stupid or refused to disclose it to keep their jobs. The evidence is piling in and all analyses point to the same thing — the fund managers who did the research and the due diligence all concluded that the pricing of the mortgage bonds was delusional and the infrastructure was a disaster. The fund managers who relied upon the reputation of the sellers (Wells Fargo, BOA, Citi, Chase etc.) had their clocks cleaned by Wall Street sharks.
It has taken years for the truth to come out but the investment community is kind of like Facebook — once information is out, everyone knows it. And investors of all sorts are suing the banks who were sliding pure crap into the loan pools that the investors thought were so safe. Just take a look at SunTrust cases. They insist that they originated the loan but somehow immediately after the closing they were only the servicer — something you don’t fund out until you press them against the wall in litigation.
So now ResCap is mad they got duped into buying worthless paper. And like hundreds of other investors is bringing claims for malfeasance and misfeasance in the management of the money given to the banks and the representations about what kind of loans the investors were getting. What they still have not quite realized is that the investors made the loans but didn’t have a single document to assert a claim for collection or a claim of being secured by a mortgage. All that went to the banks. Why? Because that was part of the fraud. Approximately $13 trillion of American wealth disappeared by virtue of this game. But now the banks are starting to feel the heat. It won’t be long before they are fully cooked — and all the efforts by the government to prop up these banks will have failed the moment when the ratings companies state that the value of those holdings in derivatives are zero or nearly zero. That’s when the balance sheet becomes clear.
Filed under: foreclosure |
@ jg,
I should explain I am a builder and not a lawyer, but…
I have been told if the loans never entered legal trust with broken chain of title, that makes them “unsecured”.
mk: “My point is: the loans never entered legal trust; as such they are no longer “bankruptcy remote”, hence “Unsecured loans”…”
Huh? Now you for sure lost me there. How is a loan now unsecured because it ‘never entered legal trust’??
@ jg,
As per “Crushing Tax Burden”:
My point is: the loans never entered legal trust; as such they are no longer “bankruptcy remote”, hence “Unsecured loans”…
Also, as never entered into legal trust, the originators have hidden them from the full amount of taxes due on them.
After all, if they didn’t enter trusts, they didn’t lawfully get a reduction on taxes owed to them, SINCE THEY WERE ORIGINATED, as conferred upon them through lawful, “Pass-through Certificates”.
The RICO players have eluded the TAX MAN as was part of their original intention (IMHO).
In fact, I remember reading that RICO was originally enacted to keep organized crime from insinuating themselves into the mortgage business in the first place…
After all, the gangsters needed a steady flow of legitimate income through which they could launder the proceeds from their illegal activities…
In other words, “everything old is new again”.
For those that would like to suggest corporatists and banking filth pay their taxes, please send me whatever it is that you are smoking because I know I need a break from reality probably even more than you…
@ jg,
Sorry, I was redundant in my closing paragraph.
The first sentence should have said: We need to know who it is that actually claimed to originate the loans…
@ jg,
I agree with all you have said and believe the true “pay-off” for those of us who have been abused by what I also feel is organized criminal behavior may be an ability to collect on the insurance swaps (derivatives) third parties intend to collect.
After all, our “pledge” to pay a mortgage was used by third parties, unknown to us at closing, as leverage to purchase derivatives…
The tanker (the house) was supposed to stay afloat, but somebody, somewhere borrowed money to BET it would hit the rocks (go into default).
My thesis is: the house was intentionally shown as in default after the 90 days whether it truly was or not.
The “crushing tax burdens” are those that should be levied against originators that deceived the investors, borrowers and the TAX MAN.
After all, there was a 90 day window during which the lending bank was supposed to enter the loan into the secondary market in order to render it “bankruptcy remote” by placing the loan into a “legitimate” REMIC trust.
The trust allowed the “lending bank” to enjoy tax reductions garnered through “Pass-Through-Certificates”. Failure to adhere to these protocols, IMHO, void the loans and place the tax burdens on the originators who failed to act lawfully.
This is why it is ultra-necessary to have access to proper discovery… We need to know who it is that actually funded the loans… We need to know who it is that deceived the TAX MAN… We need to know who used illegal (tertiary financing) to fund the “loan”… we need to know who stands to gain by BETTING AGAINST the borrowers’ ability to pay…
We need to know who the players in what are any number of RICO scams, actually are.
okay, but aren’t “crushing tax burdens” damage, just like the 200k loss in my example when the secured party tries to satisfy its indenture with the proceeds from the sale of the underlying collateral (the real estate)?
There’s little doubt left that a borrower default benefits someone other than a note owner or a secured party (here the trust investors imo). But, if the psa’s allow for modification, is default a condition?
By the way, I stand by what I said about how one would become a secured party and another would become an indentured party. But I don’t know what the UCC might say about taking funds earmarked contractually for a REMIC trust or any other purpose and using it to fund loans and then purporting to sell those loans to the guy or guys
whose money was used to fund them. Maybe nothing.
Other laws must surely address this kind of mullarkey, though. Like securities laws or even some common law ones. If the banksters have done what I described, it smacks of RICO but maybe that’s a claim for the investors. Other stuff those guys did may make for some borrower Rico claims imo.
To the extent the PSA’s called for delivery etc and to the extent it didn’t get done, unless the trustee is protected by got-me-what, imo he stands guilty of breach of fiduciary and gross dereliction of duty. To the extent a trustee did more than not seeing to the terms of the psa, as in he knew what was going on and worse if he knew it could harm his fiduciaries, he should be tarred and feathered and imo is liable for all damage incurred as a result of these things. If homeowners could make a strong enough case that they were intended third party beneficiaries of securitization, they may have a path to their own causes of action against those trustees.
The good news is: the rest of the world knows Wall Street is a criminal operation.
The bad news is: If We The People don’t hold the criminals accountable, kiss the dollar goodbye as the international “Sovereign” currency against which all others are “pegged” to it in order to establish the value of those foreign currencies.
Once upon a time the dollar was “pegged” to gold with 32 American Dollars, as per the Bretton Woods Agreement (1942, I believe), established as the amount agreeable to all other countries that participated as signatories to that Agreement.
So… possession of actual US Dollars was necessary when other countries wanted to purchase gold…
In the 70s this paradigm shifted when President Nixon closed the American “Gold Window” and, instead attached US Dollars to Saudi Oil…
It may be remembered by some, once upon a time, Saudi Arabia was the Chairman of OPEC… but, that is a long story.
@ jg,
In answer to your question;To whomever lays claim to ownership of the credit default swap.
My pet theory is that loans were traded like baseball cards using the electronic boutique that is the MERS and servicing companies placed naked short sales (BETS predicated upon counterfeit titles) against performance on the underlying loans.
Of course, the credit default swaps, collateralized debt obligations and synthetic collateralized debt obligations (the derivatives) were paid out as insurance once the 90 day transfer threshold necessary to authenticate the possession of the loans as owned by the trusts was passed.
Barofsky, in his book, “Bailout” explains it was common practice on the part of those that manipulated the terms and conditions of HAMP etc. to tell distressed borrowers to intentionally skip 3 months payments BEFORE they would be considered for modification.
In fact, on our primary residence, my wife and I were told exactly that by Wells Fargo masquerading as ASC…
I find it likely those 90 days then triggered insurance, guarantor money, TARP etc. and the loan was then paid in full…
And on a rental property, Bank of America put us in foreclosure while the loan was current.
So… my takeaway is: whether in default or not, the banks claimed it to collect on their “short-sale bets”: the derivatives.
Another of my pet theories is this is the reason none of the actual claimants to the notes is willing to step forward: for, to do so will instigate crushing tax burdens and (hopefully someday) incarceration for fraud.
Michael Keane, you appear to have written well an insightful look at the shananigans of WS. I have to say, gratefully acknowledging that, that it’s over my head. I did try to keep up. For instance, you said:
“In the example, above, the tanker is supposed to stay afloat… at the same time, should it not perform properly (crash, rupture, destroy the ocean) insurance will need to be paid… ”
jg: to whom?
I can only, because that’s all I’m capable of, take all you’ve said, and then looking thru a diff prism, believe there’s no real connection between the borrower’s payment and the loans allegedly bought by “trusts”. I’m getting that because I think you are saying WS had
a vested interested in whether or not the borrowers paid. If the transactions were true sales, which would put the risk of non-payment on the trusts, WS would have no interest in the matter of payment.
Alternatively, it might be that WS merely found a way to make a bet
on a matter which didn’t involve them, like if I make a bet on the
Steelers v the Raiders game. But I’m not savvy enough to do know which is more likely true. But I think if it’s the latter, WS and its cronies, once these deals took off, would’ve more than ever been motivated to create junk to bet on.
I’m still personally angry that a regulated insurance co such as AIG was able to and did waive subrogation. I can only think (how could it be otherwise?) that was to the very real detriment of its shareholders (in addition to violating insurance rules imo) It looked to me, when I was “on it”, like AIG took third party (or people who should’ve been third parties by the mechanics of securitization) monies for what amounted to bets while retaining NO right to stand in the shoes of one party in
the deal to get back any monies paid out. And yet, not only no
prosecutions that I know of, AIG was the recipient of monstrous largesse by ours truly.
The shortfall to INTERNATIONAL FINANCIAL MARKETS, based on “NOTIONAL DERIVATIVES” is estimated to be 682 TRILLION DOLLARS.
People far smarter than I have compelled recognition of that number.
DERIVATIVES are a “swap” used to defray the cost to the person or entity buying them on the liability they are seeking to distance themselves from…
As “swaps”, they are an attempt to transfer risk.
The first derivative, listed in the book, “Fool’s Gold” was created, if I recall correctly, by a 20-something-year-old employee of JP Morgan; the derivative they sold was a “swap” bought by Exxon to get them out from under the liability, SHOULD one of their tankers crash, rupture and despoil the ocean in the vicinity of the accident.
So… In other words, they are a type of insurance policy designed to be placed AGAINST performance on the underlying asset…
In the example, above, the tanker is supposed to stay afloat… at the same time, should it not perform properly (crash, rupture, destroy the ocean) insurance will need to be paid…
So… the 20-something-year-old, “swapped” Exxon out from under the consequences of a potential catastrophe and replaced them with people willing to BET the catastrophe wouldn’t occur… and… perhaps more importantly… the BET also ASSUMED, SHOULD IT OCCUR, EXXON WOULD MAKE GOOD ON REPARATIONS.
I could be wrong, but I think I remember hearing that the victims to the EXXON Valdez disaster are still waiting for their money.
Fast forward a couple of decades to the current disaster that is the wreckage (the “BUST CYCLE”) left in the wake of Wall Street’s speculation (THE “BOOM CYCLE”) in subprime lending…
Derivatives nowadays are a deliberate bank contrivance used to hedge their bets…
A best example may be Goldman Sachs using their own money to place bets against the subprime garbage they created even as they were telling others (Your Pension Plan Representative, for example) to muster and spend every nickel they could find to buy that very same garbage…
So… Wall Street (large industrial banks), in the absence of Glass-Steagall (thanks to Democrat President Clinton and three Republican Senators: Graham, Leach, Blighley) was permitted to infiltrate and insinuate themselves into the borrowing habits of ordinary citizens (unlike the more-sophisticated citizens one might find investing on Wall Street) through the mechanism of “SUBPRIME LENDING”…
Of course, We all know how that turned out… some of us better than others…
…And, I agree with Mr. Garfield that the banks should have AND DID KNOW BETTER THAN EVERYONE ELSE.
In fact, I believe the banks, through monthly remittance reports, recognized the trends in the subprime market long before anyone else did, with possible exceptions found in the likes of Michael Burry, Steve Eisman and others found in Michael Lewis’ book, “The Big Short”.
In other words, whether by accident (yeah… right), or design, the banks, tied to the subprime mast, learned they were heading for the rocks, with catastrophe imminent… so, they developed insurance swaps (derivatives) to bail themselves out…
The results may best be described as a “self-fulfilling prophecy”; the loans have to default or the banks will be PROVEN in their insolvency.
This is why the banks want the foreclosure above all else.
In other words, in order to salvage their positions on subprime loans, the banks have determined to re-float their boat through collections on 682 Trillion Dollars in “Notional Derivatives”.
In the meantime, because present-day derivatives are essentially a BET that performance (the payment) on the underlying asset (your house) will fail, they are best described as a “short sale”.
A “short sale” is a bet made, WITH BORROWED MONEY, that an event will occur. As such, as regards THE VALUE OF INTERNATIONAL DERIVATIVES (682 trillion) , IT IS A BET MADE THAT BORROWERS WILL DEFAULT ON THEIR MORTGAGE PAYMENTS.
A “naked short sale” is when the gambler has none of his/her skin in the game and it is pure speculation using “other-people’s money”.
Readers of Mr. Garfield may recognize the bets made against the underlying assets as “naked short sales” wherein money from third parties’ (tertiary financing) was used to satisfy “the loan” well before the “borrowers” ever even sat at the closing table…
If I understand his thesis correctly, he has stated that investor money was used to pay the “loans” while the “originating banks” are merely puppets that reserved for themselves the right to collect the interest as “servicers” on the loans.
From personal experience, I agree that undisclosed third parties certainly did as much as regards the loan on my primary residence.
And, while I wouldn’t presume to speak for Mr. Garfield, I also believe, with so many others, there is even more to it than that…
I believe those claiming rights to foreclose have simply defrauded the courts while “counterfeiting” their rights to title, “standing” and “capacity” as “Holders in Due Course”.
From personal experience I know the security instruments, the ultra-necessary notes, alongside the mortgage (administrative lien portions- terms, rates, payments due, amount of loan, etc.) were destroyed by the thousands…
I used to sell a service where we copied those docs to disc and then we burned, shredded and tossed those docs in the dumpster.
As a result of visiting mortgage lenders, it is no far stretch for me to say, once I left the building, those mortgage lenders went out and bought desk-top scanners and had their employees perform the same service, “in-house”, while they were not busy selling loans.
If the home is defended properly, in a fair hearing, with all actors being equal, in the face of actual evidence… the “short sale” should fail and the foreclosure SHOULD also fail to “Pay-off”.
At the moment, that isn’t the case…
At the moment, the affairs of the privately owned DTC and parent company, DTCC, are beyond any regulatory reporting or oversight…
That’s right, the same private bankers aboard Her Majesty’s ship, “INSOLVENCY”, those that created the shortfall and shipwrecked the economy of every country on the planet, are also the masters of the privately-owned companies (DTCC and DTC) responsible for reporting and accounting on International Derivatives.
I have described “Her Majesty’s ship” as the “INSOLVENCY” because central banking is a creation of the English and it goes, hand-in-hand with “free trade agreements”.
Each are part-and-parcel of the phony Aristocracy that was shown the door during the American Revolution… each have been re-applied in this country with a vengeance…
We The People have squandered our birthright and Renounced the sacrifices made by generations before us.
It is a national disgrace…
Shalom A-Man. How are you bud?
Lauren, good for you. Fight tooth and nail.
good catch. thanks
@lauren – Persist. I have friend in CA who persisted and claim was ruled as abandoned. A couple of years later an agent (OCWEN) of an agent (BAC) substituted a new DOT trustee in order to pursue foreclosure against the abandoned claim of ABC (who was in Chapt 11 BK at time of ‘substitution’). Hopefully the CA judiciary will respect the statute of fraud with respect to title-affecting documents, even though it was not my experience with them.
I was impressed by your pleadings, albeit I only did a cursory scan. Focus on discovery of the business documents chronicling the transfer of beneficiary interest of the note by transit or bailment, and purchase and sale of loan. Bear in mind that questions of jurisdiction precede questions of equity because the banksters in CA have been successful in reversing that order of consideration. I can’t speak for Illinois.
I am not an attorney, and you would be a damned fool to act on any consideration presented by me without the advice of counsel and member of a state cabal known as the State BAR.
Wait until the Judges find out who the real deadbeats are. Who stole their pensions. Everything is alleged.
NEVER AGAIN
the lawsuits are part of the unfolding agenda… for they will catalyze the bankruptcy of the banks which will in turn, bring about the seizure of all funds in the banks now that a law was passed which states that any depositor is a “creditor of the bank. and then guess who gets paid first in a banks bankruptcy? the derivatives…. new law or so ive been told.
this was planned all along to achieve plausible deniability for the banks…. “Oh, the lawsuits caused our bankruptcy…” and if you buy that, ive got some swamp land for you in florida….
my overarching thesis is that the fiat monetary system had an expiration date – 599 fiat systems in history have all failed – they are unsustainable – so the ‘best and brightest’ on wall street carefully planned a controlled collapse of the system with them on top of course securing all the assets of other earth for pennies on the dollar thus acquiring and controlling everything We the Sheeple need to live: food, water, jobs, money, gas, energy, etc etc etc…
all we can hope for is a fundamental tenet of physics: to every action, there is an equal and opposite reaction. therefore, there is an equal amount of GOOD out there just awaiting our recognition of this fraud of enormous magnitude.
thank you for all that you do in exposing the corruption and fraud.
im in chapter 11 pro-se and filed 5 adversarial lawsuits on 1-15 against chase, bac and 3 other crooks for fraud, libel, RICO (based upon the Slorp opinion) etc.
for if not me then who? for when you are aware of injustice and do nothing, you aid and abet the criminals….
by the way, i believe the final goal of the banksters is total world control of the monetary system with them introducing a new perhaps gold-backed currency.
we’ll see. until then, keep up the good fight and let me know if there is ANY form of help to a pro-se in bankruptcy.
warmest wishes,
lauren
On Thu, Feb 5, 2015 at 2:02 PM, Livinglies’s Weblog wrote:
> Neil Garfield posted: “Neil Garfield Show Next Week For further > information please call 954-495-9867 or 520-405-1688 > ================================ see UBS, SUNTRUST Fail to Escape Liability > to Investors. We are starting rising activity by investors who are drilling > down “