CFPB Cordray Increases Disgorgement from $6 Million to $109 Million Against Lender for Insurance Kickbacks

For more information please call 954-495-9867 or 520-405-1688



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At the end of the day, most everyone knows most everything. Here in a patent insurance kickback scheme that was obviously not disclosed to the borrower, the Judge ordered the lender to pay $6.4 million. On appeal Director Cordray (former Ohio Attorney General) said the administrative trial judge got it wrong. Cordray raised the stakes by ordering the lender to disgorge $109 million.

As our administrative and judicial systems come to grips with the massive fraud, fabrication, and manipulation of their systems they are revealing a callous disregard not only for rules and laws, but for society at large. And while it might be hard to make the connection, this is why Congress passed the Truth in Lending Act — to level the playing field with rescission and other remedies.

The question being asked “in defense” of rescission and other remedies is why should the borrower get a free house. And the answer, obvious to everyone except those in the judicial system, is that even if the debt is erased, the house was far from free for most borrowers. But in most cases, the remedy of rescission COULD result in payment of the original loan where there was misbehavior in origination and transfer of the loan; in fact that is exactly what WOULD happen if the proper party complied with the rescission (giving back the canceled note, satisfying the mortgage on record, and giving the borrower all the money he paid or which was paid on his behalf at origination and up through all the monthly payments).

The real problem for the banks is not that they will get screwed by rescission despite all PR to the contrary. They have no skin in the game: they have neither funded nor purchased any loans. And THAT is their problem. They are not filing lawsuits to vacate the rescission (which is effective by operation of law on the day it was mailed); and the reason is that they have no party that actually has standing. They can’t come in and assert standing based upon the the allegation that they “hold” the note and mortgage because both of those instruments are void since the moment the notice of rescission was dropped in the mail. They can’t assert standing on the basis of an instrument that is void on its face and by operation of law.

So they would need a party to step up and assert that they are the creditor by virtue of having funded or purchased the loan and then that party would need to prove it. They would need to plead that without the note and mortgage they will suffer some sort of damage. And THEN they would need to allege that the rescission should be VACATED because of the statute of limitations or that the loan does not fit the description in the statute — all questions of fact that must be raised during the 20 day window before they are in violation of TILA rescission statutes. They can’t do that because the money that went into the loan came from investors in direct breach of the securitization agreements. So nobody in the chain alleged by the banks and servicers actually has any economic risk or injury from the rescission. No injury=no standing.

The investors are the real “creditors.” But they only have claims in equity that are unsecured because by contract they are barred from raising direct claims against borrowers and they were never in privity with the borrower nor were they ever in privity with the sham nominee entities in the chain. Even huge entities like Countrywide were used as sham conduits to obscure the path of the money and obscure the ownership of the loan. In fact, even the big banks were acting not as lenders but as sham nominees in an elaborate scheme in which false claims of securitization were asserted and litigated as though they were real. The end result was that the “Lenders” never showed at closing and never showed up in court. The banks and servicers used the vacuum created by “securitization fail” (See Adam Levitin) to step in as though they had the right to grab property and money in violation of various contracts, laws and rules governing their behavior.

One of the reasons the banks and servicers performed these acts was the fee income (through illegal kickbacks) they could generate in violation of law, but which were never taken seriously by most people in government. Cordray takes in very seriously. You will see more from him soon.

20 Responses

  1. I am trying to help someone find their Pooling and Servicing Agreement. The information is below:

    M ERS #: 100091805003039211 SIS #: 1-888-679-6377
    Date of Assignment: March 6th, 2012

    Date of Mortgage: 12/10/2004 Recorded: 12/20/2004 as Instrument No.: 2004-255773 In the County of Honolulu, State of Hawaii.

    Property Address : 82-6291 MANIN! BEACH ROAD, KEALAKEKUA, HI 96750

    James Smith: or 443 677 2799. Thanks


  3. I was one of the first to file a complaint with the AG and I got nothing from the settlement.

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

  4. I beg to differ …. I was one of the 1st to file complaints with AG of Illinois. Thousands of people got settlement checks from the AG settlements. Others like myself….enacted our private right of action and took a bite out of crime.

  5. ex- just a reminder we the people are not part of that or any settlement on any claims. on any settlement of any ag office.

    you should know that.

  6. @dandiener – IANAL, and I didn’t research BK law. But I think you have to request a declaratory motion from BK court that the mortgage claim was abandoned, and thereby discharged by the court. Then you can record that as a satisfaction with the court order attached, and request your original promissory note back. The next time the banksters file a NOD, you present your notice of satisfaction and their NOD to the state Atty Gen’l for prosecution.

    … unless the Atty Gen’l signed a ‘settlement’ with the banksters, in which case you’re really hosed. But, you have no question WHY you’re so hosed any more …

  7. TIME TO FIND ALL I & I agreements people. this will show that the insurance company is really the ones responable for payments to trust, not the property owner. us.. so in other words if the insurane company payed off loans , because of non-payment of borrower

    then the only ones that lost money on deal is them. insurance company, and would be the only ones that could come after the borrower. and that would be unsecured.

    The I&I Agreement provides that FGIC (the Insurer) is a third-party beneficiary
    of, and shall have all of the rights provided for in, the Operative Documents. I&I Agreement §
    2.02(k). The I&I Agreement defines Operative Documents to include, among other
    documents: the 2006 HE-1 Notes; the Mortgage Loan Purchase Agreement (the MLPA) dated
    as of March 30, 2006 among GMACM, RAMP, Walnut Grove and JPMorgan; the Servicing
    Agreement dated as of March 30, 2006 among GMACM, the 2006-HE1 Trust and JPMorgan;
    the Indenture dated as of March 30, 2006 between the 2006-HE1 Trust and JPMorgan; and the
    Custodial Agreement dated as of March 30, 2006 among GMACM, JPMorgan, and Ally Bank.
    I&I Agreement § 1.01. Pursuant to the I&I Agreement FGICtermed the Enhancer under
    certain of the Operative Documentsinsured $1,274,156,000 aggregate principal amount of the
    2006-HE1 Notes.
    67. FGIC issued financial guaranty insurance policy number 06030037 for the 2006-
    HE1 Notes. The Policy increased the marketability of the 2006-HE1 Notes by mitigating risk for
    potential investors and making the 2006-HE1 Notes eligible to be rated triple-A by the rating
    agencies as of their date of issue.

  8. B. GMACM’s Securitizations and Financial Guaranty Insurance Generally
    (1) Financial Guaranty Insurance Policies
    53. To increase the marketability of its RMBS, GMACM from time to time sought
    credit enhancement for its securitizations from FGIC, a financial guaranty insurer, in the form of
    financial guaranty insurance policies. Such financial guaranty insurance policies were generally
    issued to the indenture trustee for the insured securities, for the benefit of the holders of the
    insured RMBS, to insure the risk of shortfalls in cash available to the trust to repay the insured
    – 16 –
    54. In a typical GMACM-sponsored securitization, including the 2006-HE1
    Transaction, GMACM, as servicer, remits proceeds from the mortgage loans backing the
    securitization to the indenture trustee, along with a servicer’s certificate that details the
    distributions to be made. Then, in accordance with the servicer’s certificate, the indenture
    trustee allocates those funds to the payment of principal and interest due on the RMBS, as well
    as the payment of fees to GMACM and other participants, and in some cases to reserve funds
    and other uses.
    55. The primary source of the funds administered by the indenture trustee is the
    remittance of payments on the underlying loans. Delinquencies by borrowers in making their
    mortgage loan payments, by definition, will reduce cash flows to the trust, which will directly
    impair the ability of the trust to meet its obligations. Delinquencies, if not cured, will eventually
    result in mortgage loan charge-offs, which reduce the aggregate principal amount of the loan
    pool supporting the RMBS. In this manner, high levels of mortgage loan delinquencies and
    defaults can lead to shortfalls in cash available to pay RMBS investors. Such shortfalls result in
    claims on FGIC’s policies.
    56. Under the terms of a financial guaranty insurance policy, like the one FGIC issued
    here, the insurer unconditionally and irrevocably guarantees to the indenture trustee for the
    benefit of the holders of the insured RMBS that, if there is a shortfall in cash available to it to
    make required payments on the insured securities, the financial guaranty insurer will pay the
    amount of the shortfall to the indenture trustee for the benefit of the holders of the insured
    – 17 –
    (2) Securitization Sponsor’s Disclosures and Representations and
    57. The risk FGIC assumed when it agreed to issue a policy for RMBS depended
    upon the credit quality of the underlying mortgage loans, which in turn depended on the
    underwriting practices of the loan originators and the characteristics of the loans. If, for instance,
    GMACM and other loan originators employed substandard underwriting practices, the
    underlying mortgage loans would be of inferior credit quality. Consequently, the credit risk
    i.e., the risk of delinquency or defaultof the underlying mortgages, and of the mortgage
    portfolio as a whole, would be materially increased.
    58. Accordingly, FGIC generally required securitization sponsors, like GMACM, to
    provide substantial disclosures and representations and warranties about the characteristics of the
    underlying mortgage loans, including representations about the standards and procedures used to
    underwrite the loans. Although a securitization may include mortgage loans that the sponsor did
    not originate itself, the sponsor is nonetheless typically required to make representations about
    those loans as well, thereby assuming the risk that those representations might not be accurate.
    59. Although the characteristics of the mortgage loans and the loan underwriting
    standards used were critical issues for FGIC, FGIC was not under a contractual duty, nor in a
    position, to evaluate those issues directly by re-underwriting the loans, due to the massive
    volume of paperwork involved and the time frame allocated to FGIC to complete the transaction.
    GMACM’s disclosures, however, together with its representations and warranties, were intended
    to allow FGIC to assess the credit risk inherent in the mortgage loan pool before deciding to
    commit to the transaction.
    60. GMACM’s representations and warranties in its RMBS transactions regarding the
    characteristics of the loans included in the mortgage loan portfolios, and the underwriting
    – 18 –
    standards used to evaluate those mortgage loans, are particularly vital because each loan pool
    comprised thousands of mortgage loans, each of which was in itself a complex legal transaction.
    Each loan file typically contains (or at least is supposed to contain) a mortgage application, a
    credit report, income and employment verifications, an appraisal, the lender’s internal
    documentation and a wide variety of other documentation necessary to support proper loan
    underwriting decisions. Moreover, in seeking financial guaranty insurance from FGIC for the
    2006-HE1 Transaction, GMACM demanded that FGIC commit to the pricing and other material
    terms within a very limited time frame. Both GMACM and FGIC understood and intended that
    FGIC would rely on the information supplied by GMACM as sponsor, as well as GMACM’s
    representations and warranties concerning that information, in assessing the credit risk of the
    mortgage loan pool.
    61. Further, on information and belief, for each of its securitizations, GMACM as
    sponsor supplied the same data it provided to FGIC to one or several rating agencies in order for
    those agencies to create expected loan level default and loss estimates. The loan level default
    and loss estimates were then used by the rating agencies to create cash flow projections and
    potential loss estimates for the entire transaction. Finally, the rating agencies delivered to the
    sponsor and to FGIC a private credit assessment for the transaction (sometimes referred to as a
    shadow rating) without considering the effect of FGIC’s policy. The shadow rating provided
    an overall evaluation of the likelihood of default on the securities FGIC would be insuring in the
    securitization. As sponsor, GMACM arranged for the shadow rating to be provided to FGIC
    knowing that it was an essential condition to FGIC’s willingness to issue a financial guaranty
    insurance policy.


  9. Free house is equal to Nazi propoganda that was used to try and exterminate Jews Gays Handicapped both physical and mental Gypsies during world war 2.

    “Arbeit Macht Frei” Welcoming phrase to Auschwitz Concentration camp.


  10. When Mr Cordray was the AG for Ohio he took a very hard stance against the Pretender Lenders and has written quite a few excellant Amicus Briefs on the subject. I suggest to any other Ohioan in foreclosure that they might want to search out these Brief’s for some great fighting ideas.

  11. @iwantmynpv,

    LOL, you are correct. 2 years and 170 signatures later I have decided to move the petition to another forum.

    Unfortunately, the petition was beginning to gain momentum and I was forced to undergo heart surgery, so it kinda fell by the wayside.

    I have since had another surgery and admit, even before becoming ill, I don’t do well with social media, computers and the like.

    I am thinking I may re-work it a bit and then re-release it.

    Any suggestions to enhance it or make it easier to understand are very much appreciated.

  12. Michael, two years for 170 signatures is not very impressive. That is why the banks get away with this…

  13. A Creditor’s Meeting May Not Involve Creditors

    Your creditors probably won’t all show up to ask you questions, so you don’t have to worry about facing a panel grilling you for information about your finances. In all likelihood, none of your creditors will show up at all. It’s usually not worth their time or effort, because the trustee will probably ask the same questions they would.

    Bankruptcy law doesn’t require them to appear at 341 meetings.

  14. Watch “inside job”

  15. I read these comments and i ask myself where do you place the blame
    Where should we place the blame

  16. @dandiener1,

    I don’t understand why my petition doesn’t always print properly. Sorry.
    Here is another attempt to print it:

  17. @dandiener1,

    I encourage everyone to read, “The Web Of Debt”, by Ellen Hodgson Brown.

    Hedge funds presently control the terrain and in most instances, they have amassed enough wealth, individually, or, in combinations, to manipulate market forces and even the financial well-being of entire countries.

    They have done so in Asia, Russia and Mexico during the nineties, for example. In fact, the hedge funds and currency raiders so thoroughly destabilized Asian economies, most notably, Japan, that their predatory behavior directly threatened American economic interests.

    Consider it a different kind of “domino effect” whereas the first described American “client states” knocking one another over once they elected to support Communism, this new “domino effect” threatened to spread defaults through the Capitalist system of those same “client states” once the pigs on Wall Street had plundered their economies.

    Ben Bernanke, a junior economic terrorist, employed by the intentionally mislabeled “federal reserve”, during these events, earned his nickname as a direct consequence to his solution to the destruction Western Capitalists visited upon Asia during the fallout.

    His nickname is: “Helicopter Ben”. His solution to the problem created in Asia by Wall Street was to print hyper-inflationary, federal reserve notes in quantities sufficient enough to essentially “airlift” to the scene of the crime.

    So, when a Japanese Bank was beginning to fail, and, thereby threaten to default on debts owed to Western Capitalists, “Helicopter Ben” would load an airship with American Dollars and “hover” over the stricken Asian Bank, pitching bales of American Dollars out the window until the bank was considered “solvent” again.

    Of course, everyone in the world knows Wall Street is an abomination and criminal enterprise. The American electorate, on the other hand, is more concerned with the likes of the Kardashians and the present-day bear-baiting spectacles provided by reality TV.

    The quick answer to your 1st question is “Yes”; undoubtedly the big banks are manipulating hard currency assets, precious metals, etc.

    Your second question: Is this one “reason” for the massive numbers of foreclosures?, may be answered thus:

    The foreclosures are a deliberate attack on the sovereignty of the US. The Fraud is many-faceted.

    First, the banking pigs used pension plan funds (investor money) to satisfy the loans before they even left the closing table. Then, those loans were never properly transferred, as per the law, into legitimate “trusts”. In fact, the trusts are empty, the investors have no legal claim on the mortgages they were told were used to create the trusts in the first place.

    This is why investor settlements are commanding such large numbers.

    Second, because the titles are now hopelessly fraudulent, this economic attack goes to the very heart of the American Middle Class and their perceived conviction they could one day improve their economic outlook, through, “Home Ownership”.

    Third, the endgame is to capitalize on 682 Trillion Dollars in “Notional Derivatives” that are simply “Naked Short-Sales” taken as bets against any given borrowers’ ability to pay their loans.

    Of course, we know JP Morgan manipulated precious metals. The recent kerfluffle over aluminum comes to mind, if memory serves.

    Of course, we also know the amount of Gold is not infinite and we also know the amount available, and, the rights to it, have been counterfeited ad infinitum.

    As such, those fraudulent shares to counterfeit gold are not entirely dissimilar to the homes of the American Middle Class. In fact, I wrote a petition to say exactly that:

    Counterfeit Fortunes fo#314F193

    Your last question, although paraphrased is: “Who profits”?

    Presently the government has elected to bail itself and the fraud that is the intentionally mislabeled “federal reserve” out of the situation they themselves have created.

    When the Bailout was enacted, the government betrayed the victims in order to conduct “business as usual”.

    The government, We may believe, has done so in order to protect the Sovereignty of the American Dollar as “The International Reserve Currency”.

    For example, the banking pigs have explained, a la chicken little, that the banks must be saved or the entire international financial system will go down in flames.

    This isn’t true… Unless … you are a banking pig.

    Remember, F&F, once traded by the banking pigs as “Private” companies, now belong to the US Taxpayer after being taken into conservatorship in 2008. The numbers of dollars and mortgages involved are staggering.

    So much so, that the bets taken against them as listed by the DTC and DTCC are not even allowed to be published.

    So, the same banking pigs that destroyed the economy and are stealing homes through fraud are now being allowed to profit further because our government bought their false bill of goods and the notion it is OK for a foreign parasitic, criminal, privately-owned banking cartel to use American Homes to launder drug and terrorist money.

    This is a government of “We The People” and We have squandered our birthright. No single man – or, at least, in the absence of Andrew Jackson- can or will defy this international deceit.

    Google Nicholas Biddle and the second national bank. Also, ask Presidents Garfield, Harrison, McKinley, Lincoln, JFK how well they managed in their attempts to do so.

    Instead, it is up to US. Put down the “Honey Boo-Boo”, step away from the Kardashian, wake up!

  18. MK…

    Do you suspect, or see any proof, that Big Bank foreclosure profits are being used to acquire and hold precious metals at very low prices… thereby keeping down while positioning themselves for stability (solvency) in the event of further devaluation of US currency? Is this one “reason” for the massive numbers of foreclosures?

    Whose pocketing the money. … the banks, the “mortgage servicers”/”the banks”, the “investors”, our “government “?

  19. Take HSBC as an example: They are using American mortgages to launder money that can be traced to terrorists and they are using American mortgages to launder money that can be traced to drug cartels.

    Is it any wonder, therefore, no true “Lender” will step forward?

    As a card-carrying member to the international deceit that is the international central banking system, Hong Kong Shanghai Banking Corporation, “HSBC”, is just one of many that is participating in a scheme to undermine the middle class here in America and throughout the world.

    They have done so in the absence of regulatory oversight through subprime lending, followed thereafter by any number of frauds- not the least of which, fraudclosure, wherein they claim ownership of title while the true “Lender” and his/her identity is denied to their intended victims.

    As such, they are simply “economic terrorists”.

    Their ultimate goal is to collect on 682 Trillion Dollars in “Notional Derivatives”, taken as “short-sale-bets” on the ability of borrowers to pay their mortgages… they have done these bogus deals here in the US and across the spectrum of borrowers worldwide.

    Like the true “Lenders”, any knowledge of these “short-sale” derivatives bets is denied to the intended victims as well.

    Our country is under assault and our banking system, marshaled by the intentionally mislabeled “Federal Reserve” (neither “Federal- while privately-owned”, nor possessed of ANY “Reserve- our money is created on computer screens, out-of-thin-air”) is the primary culprit.

    In short, a foreign presence now manifests as chief parasite athwart the financial well-being of our country and our agencies of law enforcement seem altogether unaware it is their intent to rob us of our birthright.

    Take HSBC as an example: they are British-owned Bank.

    The international deceit that is the central banking system is the creation of British Bankers.

    The intentionally mislabeled “Federal Reserve” is also the creation of British Bankers and their original deceit – the Federal Reserve –
    has been replicated and presently does business as the IMF and World Bank.

  20. In the process of fighting foreclosure, I filed a Chapter 7 bankruptcy. Other than the debt associated with my home, I had less than $5,000 of other declared, unsecured debts, which I could and will pay. The sole reason for declaring BK was to flush out the “real creditors” at the statutory “creditors meeting.”

    To do this, I listed as “unsecured creditors” every party (including the “foreclosing entity”, their predecessors in interest (all named parties in every recorded assignment ), every attorney from the closing attorney to the foreclosing attorney, the “originating mortgage broker,” their appraiser, the “pretender lender”, two sucessive mortgage servicing entities, etc…. in other words, every party I could determine who had at some time in the past asserted an interest in my property.

    My efforts in smoking out my current creditor were unsuccessful. None of the parties showed up at the “creditors meeting.” Instead, the foreclosing attorney filed for a “hearing to lift the stay of foreclosure”. They had no intent to present their “secured creditor claim” to the BK trustee.

    As a Pro Se BK filer, I prepared a letter to the court addressing this matter and also addressing multiple standing issues…. And *I * showed up at the “creditors’ meeting.” When my case was called, I asked the trustee to allow me to discuss my case after she had processed everyone else in the room.

    This all worked out very well… I learned more than I ever wanted to learn about the process of law..
    especially as it relates to BK.

    When the trustee heard what I was reporting, she scheduled a personal meeting to gather more facts.

    At that meeting, as best I could, I laid the whole ugly mess I had been struggling with for more than two years before her involvement in my BK case.

    She finally pushed away from the table where we were reviewing the documents. She stopped asking questions and said “The judge doesn’t like this kind of thing! I know the attorney representing the ‘creditor.’ Let me call him and I’ll get back in touch with you.”

    My past experience in sales prompted me to stop talking, say thanks, and leave her office.

    Within 24 hours I received an email from the trustee informing me that the hearing to request a lift of the stay of foreclosure had been “indefinitely postponed.” The following day I received a confirming email from the attorney.

    The upshot of this is, after several months of waiting, the judge discharged *all* of my unsecured debts, as listed.

    It’s not over … 3 foreclosure attempts have been initiated and withdrawn since the BK discharge.

    I’ve sent a rescission letter and am waiting for what happens next. Meanwhile, I’m preparing a Quiet Title action.

    But, the main reason I’ve shared all this, is to ask this forum a question…..

    Is there any BK case law or finding that the purposeful absence of creditors from the “creditors’ meeting” removes a defense from them from their continuing claim of standing to pursue foreclosure?

    I look forward to reading your responses.

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