BOA Settlements: $70 Billion and Counting


Reuters published an article on the situation late Friday, BofA settles claims of “misleading shareholders about its exposure to risky mortgage securities and its dependence on an electronic mortgage registry known as MERS.”

So, yes, it’s just another settlement for BofA, which is probably really used to this kind of development.

“The bank has spent more than $70 billion since the financial crisis to resolve legal and regulatory matters, including those tied to its purchases of Countrywide in July 2008 and Merrill Lynch & Co six months later,” the article states.

So here are my questions:

  1. Where is BOA getting the money to pay for these settlements, fines and damages?
  2. We have many billions of dollars of reported settlements with “investors.” (and probably a lot more unreported “off-balance sheet” settlements). How are the proceeds of these settlements allocated if the investors are the end parties in interest on the alleged loans and pass through certificates. If they have been paid, is that reflected in the ending balance of individual loans? If not, why not?
  3. If the loan balances have indeed been paid down by “settlements” why is it so difficult to get principal reductions which would only reflect the fact that the creditors have already been made whole or at least partially paid?
  4. If the loans have been paid off in whole or in part, who is getting the excess and why — in the case of foreclosures and simply collections? The way this is playing out it seems that the investors are getting hush money while the banks pursue the huge rewards of getting “recovery” of servicer advances they never paid out of their own money and loan money that they never advanced out of their money or credit.
  5. Have the pass through certificate holders assigned their rights to the banks that pay them settlements? If not, why are the servicers taking most of the proceeds of a foreclosure sale?

The fundamental problem here is that the courts have been loathe to get into the complex world of financial instruments. The courts would rather simplify the matter even if it leads to the wrong result. So let’s simplify in another way. Is it right to allow the perpetrators of a fraud upon investors to reap the benefits of their fraud? Why does the “free house” myth even come in to play when the creditors have been paid and the intermediaries are soaking up everything in sight without expending a dime on the loan origination or the loan acquisition?

And then the real question — on whose behalf are these foreclosures being filed? Is it the empty trust that never operated? Is it the pass through certificate holders in the empty trust that never operated? Or is it the servicers and other conduits and sham corporations and entities who want virtually the entire proceeds of a foreclosure sale?

38 Responses

  1. a gentle reminder that there is a follow up call to Neil tonite…

    Garfield’s Goose & Friends with your host, greg

    (every Thursday night starting 15 minutes right after Neil’s show)

    Call in at (724) 444-7444 (then use Call ID: 139335) then “0” for guest
    and/or use your computer to blog/type at
    6:45 PM Eastern Thursdays (for 60 min)

    please use the phone line to speak and ask questions
    computer access will only allow you to hear and type into the blog…


  3. Hey all, so I like to chime in once and awhile and I think this is hugeish for Cali folks but what that means god only knows.
    good friend forced to sell thanx to a pick a pay,Americas Wholesale Lender,AKA Countrywide with 70k in closing costs on 1.275,000 and every single page said prepared by JIGGER JUMAMIL,I found two JIGGERS in the world,just saying.
    When the payment adjusted and they couldnt pay the 9 k per month and had to sell after B of A refused to work with them they had paid 450k in interest only.
    Ok the women across the street Sothebys realtor and the manager of her branch,colluding with a lawyer/pro golfer who also gets farm subsidies on a farm that doesnt exist railroad my friend into selling at a million under what she could have got.
    Gets better,never sold or purchased a home before they put her into a ten day escrow and her agent is out of town for five of em,the escrow company and title company drag a non principle into the escrow as a diversion saying that a quitclaim deed was not properly done and then when I tell her to ask for wire transfer receipts for monies in and from where and the same going out……..THEY STOP TAKING HER CALLS…. they stop taking the fucking sellers call and close the escrow anyways not answering her questions and claiming they paid the jiggerwholesale rubbish off.
    I begged her to cancel this garbage and she was so wrecked by it all that she refused and thought she would lose the equity that was there ok.
    I personally have not seen this ever,meaning they all know and knew,Title,escrow,realtors,straw buyer/lesbian pro golfer aka straw buyer who has 50 LLCs nationwide who also charged this women 3500 to stay an extra 10 days then yells at her to get the fuck out of my house.
    They rob this women and now want her to pay tax on what wasnt given to her.THERE WAS NO BALANCE AND REALTORS KNOW THIS GOING IN.
    Can someone help with this or at least tell me Im not high,and that this is not allowed in America,and that somefucking body gives two shits.
    Whatcha think.

  4. Christine and Dwight,

    I covered this in an earlier post…they obfuscate throughout discovery with redacted information and thousands of pages which have nothing to do with specifics to the holder of the debt. Has this journey been easy? You know the answer to that question.
    The attorneys for the servicer and the banks purjured themselves and you need to pound them and remind them that is a felony and they can be disbarred permanently. You can also demand they be sanctioned.
    I read several court cases where the judges are ruling in favor of the homeowners. There are tons of reversals and remands. The attorneys for the bank are eternally confused, unprepared and continually missing deadlines. Judges don’t overlook a consistent pattern of that type of behavior.
    You also have the option of hiring an accountant to view your ‘accounting’ as well as a forensic document analyst to examine the note as they are very familiar with these cases and what the bank is hiding. They are very pro homeowner and work hard to get the results you need. And they enjoy testifying before judges. You can even have a v.p. or high ranking officer of a reputable mortgage company as they would testify it takes a matter of hours to a few days to get ALL loan documentation…NOT YEARS.
    Intentionally bringing fraud upon the court is a criminal offense( I think many of these cases will begin to go criminal) and will result in disbarment.
    You also need to research the judges background and history as attorneys file complaints against the ones who continually rule against their client…you need to move your case to a judge with a history of being fair and impartial and all attorneys know well who they are.

  5. I also have a note your honor, so am a holder of my note. and also they made 3 certified copys of my note, and how do we know how many more copys are out there, if you your honor is saying a copy is as good as the originals. so how many more banks ,thief’s, or anyone can come up later to say I hold your note???

  6. I agree with you, Dwight, the judges are still programmed to rule against the homeowner.

  7. BLD, on November 4, 2015 at 12:31 pm said:

    Have one party willing to settle out of court and a big bank that cannot produce an accounting. They have gone silent.”

    You make my 4 year-long case: produce the accounting. Easy argument to make when attacking the servicer first, long before defaulting. Much more difficult to prevail on with the unclean hands of the defaulter…

    Attack first. I know it works. First hand too.

  8. Even when you get discovery, the banks don’t answer the relevant questions regarding the funding at origination, the sales, purchases and transfers with proof of transactions, etc.

    The courts don’t seem to care, they only want to focus on the “holder” of the note aspect …in the judges opinion, the holder of the note has the right to foreclose. This alone satisfies the standing requirement in the judges mind. When is the last time we’ve seen a court demanding to see proof of who actually owns the subject loan? They don’t care.

    So even if this borrower goes through the discovery phase, it still doesn’t guarantee that they get the answers to their questions.

    If the bank is not the originator they will simply object to the questions and the judge will agree ..that they have the note and they show a default.

    Unless I’m missing it … I don’t see cases where the courts are demanding proof of ownership of these loans, they all rely on the principle that a mere “holder” is entitled to enforce and foreclose.

  9. I hope they get their day in court and actually get discovery. Unfortunately, my fearless forecast is that a confidential settlement will happen. The only way we can tell if the homeowners kept their home is through the property records.

  10. Illinois Appellate Court reverses trial court ruling on foreclosure standing

    Maurice Wutscher LLP
    Maurice Wutscher LLP logo
    Daniel B. Nora
    USA November 3 2015
    The Illinois Appellate Court, First District, recently reversed a trial court’s ruling that lack of standing in a mortgage foreclosure case was not an affirmative defense. The Court further remanded the case to allow the borrowers to take discovery, which the Court held was improperly denied by the trial judge.

    A copy of the opinion is available at: Link to Opinion.

    A mortgagee filed a foreclosure action, alleging that the borrowers failed to make payments when due. In response, the borrowers filed an answer, which included affirmative defenses of alleged lack of standing and alleged lack of capacity to sue.

    At the hearing on the mortgagee’s motion to strike the borrowers’ affirmative defenses, the trial judge stated that “a claim or assertion that plaintiff cannot maintain a cause of action is not an affirmative defense under any definition of affirmative defense.” The judge further stated that “[a challenge to standing] doesn’t say this plaintiff has a cause of action, but [the defendant] can avoid the effect of that cause of action by some other affirmative matter. That’s what an affirmative defense does.” The trial judge continued, “what you’re saying is this plaintiff doesn’t have a right to sue. That’s a basis for dismissal, not an assertion of a defense.”

    The trial judge reasoned that lack of standing might be an “affirmative matter,” but that “it just simply is not an affirmative defense.” Accordingly, the trial judge struck the defenses from the borrowers’ answer with prejudice and did not grant leave to replead.

    Shortly thereafter, the mortgagee filed a motion for summary judgment which was granted, and an order of foreclosure and an order of possession were entered in favor of the mortgagee. The borrowers appealed.

    On appeal, the Appellate Court noted that the Illinois Supreme Court has made clear that a challenge to standing in a civil case is an affirmative defense. Greer v. Illinois Housing Development Authority, 122 Ill. 2d 462, 508 (1988). Over the past two years, the Appellate Court noted that it has held on at least six occasions that the assertion of lack of standing in a foreclosure action is an affirmative defense that not only can be raised in an answer, but must be, or else is waived. See e.g., Aurora Bank FSB v. Perry, 2015 IL App. (3d) 130673, ¶ 18.

    Thus, the Appellate Court held that the trial judge’s ruling was inconsistent with established, binding precedent, and that the trial judge erred by striking the borrowers’ affirmative defense for lack of standing as a matter of law.

    Even though striking the affirmative defense was clearly erroneous, the Appellate Court noted it still had to determine whether the trial judge erred in granting summary judgment in the mortgagee’s favor. The Court noted that it is mortgagee’s burden in a mortgage foreclosure case to make out a prima facie case that it is entitled to enforce the underlying instrument. However, the foreclosure defendant has the opportunity to rebut that showing.

    Here, the Appellate Court held that the borrowers were denied that rebuttal opportunity, as they never had an opportunity to explore their defenses in discovery. As the Court put it, “the events leading up to the trial court’s ruling essentially amounted to summary judgment by ambush.”

    Although the trial judge’s decision to not let the borrowers pursue any claim for lack of standing beyond the pleading stage was an error of law, the more concerning issue for the Appellate Court was that the trial judge then prevented the borrowers from taking any discovery on their defenses, or getting a clear evidence of the mortgagee’s right to enforce the note.

    Specifically, mortgagee’s motion for summary judgment was supported by the affidavit of a vice president for loan documentation (“Affiant”). In her affidavit, Affiant asserted that she had reviewed various records that supported her averments. However, none of the records were attached to her affidavit.

    As the Court noted, Ill. S. Ct. R. 191(a) requires that affidavits submitted in support of motions for summary judgment “shall have attached thereto sworn or certified copies of all documents upon which the affiant relies[,]” and requires that Affiant identify and certify the records forming the basis of the attestations.

    The Appellate Court further noted that, despite the borrowers’ attempts to obtain the records relied upon by Affiant, none of the records were provided prior to the trial judge when ruling on the mortgagee’s motion for summary judgment. Moreover, after granting the mortgagee’s motion for summary judgment, the trial judge then granted the mortgagee’s motion to strike the borrowers’ outstanding discovery requests and notice of deposition of Affiant.

    According to the Appellate Court, the cumulative effect of the affirmative defense being improperly stricken, the denial of the borrowers’ requests for discovery, and the mortgagee’s failure to produce the required evidentiary records, resulted in the borrowers being denied the opportunity to defend.

    As the Appellate Court reasoned, to uphold the trial court’s action would require a conclusion that supplying a note indorsed in blank is sufficient to defeat any fathomable defense that a borrower may have to standing, and that no set of facts could entitle a borrower to any relief under those circumstance. Supplying a note in blank, however, is only prima facie evidence of ownership that could potentially be rebutted.

    Accordingly, the Appellate Court reversed the trial court’s judgment and held that, on remand, the borrowers were entitled to take discovery on their challenge to the mortgagee’s standing and to replead their affirmative defense if necessary.

    Maurice Wutscher LLP – Daniel B. Nora

  11. Greg- the most recent post on that site was in Feb 2013. Is it still viable? Is there another link? Thx

  12. Association of Foreclosure Defense Attorneys

  13. No.
    Have one party willing to settle out of court and a big bank that cannot produce an accounting. They have gone silent.

  14. Good Advice BLD! !!!

  15. our government administrators are crack (Cash) addicts and we supply the crack! time to stop supporting their addiction….

    oh.. while you are at it – Google “Friendly Creditor”


    i think what is going on is that internal to the banks, they all agree to accept unsecured debt notes from each other and negotiate them as cash, and have a “gentleman’s agreement” to never come back to collect on them, rather, to keep re-using them through derivatives and amplify their concocted money – which of course because they are banks, can write checks against these bogus book entry accounts without getting caught…

    of course this creates a GIGANTIC LIEN against the people via their government held by the owners of the Federal Reserve – which is why you can only purchase the USUFRUCT of a thing and NEVER the WHOLE THING – because somebody else already is the equitable owner -you would have to buy out their interest – AND THEY ARE NOT SELLING!

  16. what do politicians in congress do when a bill comes up which might make them more accountable to the American People or crimp their hi-flying style and they don’t want it to pass?

    what should the American People do when their elected officials or hirelings are doing things which violate or impair their rights or do things which they abhor?


    Mike, the above link about an article by Bill Federer, a Christian historian makes the case that “the people” of the US is a unique “sovereign” established at the formation of our nation. … unique, when compared with other governments, formed before or after 1778.

    ….. the link that you click on IS an URL.

    The link/URL you posted on LL earlier was incomplete. You did not cut and paste it correctly and you left off the http:// portion of the URL you copied… in addition to the ‘j” in judicial.

    Did I send you that article? I tried to post the URL on LL to “correct” your typo, but was unable to “cut and paste” it.

    If you can do that, I’m sure others on LL will appreciate it.

  18. @dandiener1,

    Thanks, big Dan,

    But I don’t know what a “URL” is. If I knew how this computer nonsense worked I would be somebody.

    I will look into “Federer” but I feel I already know what it is.

    Thank You again

  19. Dwight,

    IF your loan existed, WF purchased loan portfolio for pennies on the dollar and is a debt collector intending to collect the original loan amount.
    A copy of the note means nothing. WF unlawfully foreclosed on you and you should sue them for damages. Report any attorney involved to the state bar. What year were you foreclosed?
    You should also attack the accounting…they will not be able to produce a legitimate one. They only possess fraudulent paper work and anything they ‘reproduce’ is fraudulently recreated.
    These servicers do not hold the note nor are HIDC.

  20. Michael Keane… Your URL is incomplete, but it’s a very revealing article.

  21. Michael Keane…

    Google Federer Wnd sovereign

    This is in response to your recent posting here.. .. Another answer to “Who’s on first?”




    We The People must blame ourselves.

    This is our property.

    This is our government.

    End “Citizens United”.

    End “dark money”.

    Break up the banks.

    Senator Sanders 2016.

    Or, elect another @ss clown like Trump, or HillBillary.

    The banks gotta go…

    Real Simple.

  24. The owners of Fannie, Freddie, the intentionally mislabeled “Federal Reserve, the IMF, the World Bank, the DTC, the DTCC, the SEC, the IRS, your electoral process… are ALL the same.

    F&F were owned by the private, criminal, banking cartel prior to being taken into “conservertorship” by the Obama administration in 2008.

  25. a google search of doctoral candidates’ thesis within the past year on the topic of foreclosure…

  26. Ian you think the 2008 collapse of Washington Mutual Bank might have something to do with that gap? Chase supposedly purchased some of the loans but not all.

    In my case the last known HIDC was Washington Mutual ..but the MERS website and Fannie Mae website both claim Fannie Mae purchased July loan in 2004 …

    Wells Fargo took over as servicer of my loan and then foreclosed as Holders …

    My bunch is that my loan was sold off as a MBS but for some odd reason no trust was ever associated and named for mine … And when Washington Mutual went under …Fannie Mae told Wells Fargo to foreclose in WF name … I’m trying to figure out why Fannie didn’t just file the complaint in their own name if they really owned it.

    My bunch is that Fannie Mae has no proof that they ever purchased it from Washington Mutual …they had a copy of the note, thats all. So the easiest way for them to foreclose is to send the servicer as holder.
    That way nobody asks to see proof of purchase.

    Strange that over the years we noticed a mysterious Trust Bank of Ohio named as first mortgagee on our homeowners insurance policy. Nobody knows how or why it is there…been there for years.

    I’m wondering if my loan could have been in a trust that they have no proof exists ..anyone have any thoughts on this?

  27. I think we can boil it all down to stealing whatever they can steal no matter from whom or how much. The theft is ongoing as we speak.

  28. google “p938” and “20xx” (the year of your alleged REMIC trust)

    you will get a hit on the PDF report with contact info for your so-called trust, including CUSIP#, etc.

    save it to your PC

    you may need to lookup and save the following year’s report if it was executed late in the year…

    just search the document for your specific trust (e.g. 2004-he8)

    now you know who to contact for information on proof that your mortgage is really in there and when it allegedly was placed there

    read the instructions for requesting info on pages 1-2

    example ––2004.pdf

  29. Neil- duri g QE 2 & QE 3, the FED announced that it was buying $85-100 billion per month of MBS. I searched the FOMC reports but couldn’t find out which MBS they were buying.
    That, coupled with the IRS 938 (REMIC) reports, have all REMICS from inception thru 2015, with one exception- 2008 is blank. And after 2008, the number of REMICS reporting drops by thousands.
    While i am at it, in a number of MBS investor or monoline insurors’ lawsuits, the judges declare that the underlying mortgages are “defective and une forceable”. Yet I can’t discern which mortgages specifically the judge is referring to. That would be good info for an atty or pro se.

  30. The largest purchaser of certificate offered through private placement memorandum = ?

    Somebody already got it right.

    Hey, did Christine Bob get the boot again?

  31. Mike Healey, there’s just an extra “http” in front of the link. Here’s the working one:

  32. The article does not come up when clicked on, please correct it, thanks

  33. answer to the “real” or rather unreal alleged servicer who is also the lender, façade trust and trustee and everyone who is a part of this corrupt operation including our government. sure the courts want to keep it simple and ignore the real facts because they are a part of the problem. not unless you are in south florida and either the judges are too old to read the alleged facts or they got their head in the rum.

  34. Mr Garfield questions:

    “on whose behalf are these foreclosures being filed? Is it the empty trust that never operated? Is it the pass through certificate holders in the empty trust that never operated? Or is it the servicers and other conduits and sham corporations and entities who want virtually the entire proceeds of a foreclosure sale?”.

    Answer: All of the above.

    Also, the foreclosures, predicated upon any number of criminal frauds, were designed from the outset to collect on the short sale bets.

    There are over 1200 Trillion Dollars owed an international banking cartel based on “derivatives”. In large part, those derivatives payoffs are contingent upon foreclosures.

    Audit the DTC.
    Audit the DTCC.
    Audit the Fed.

    We want our country back.

  35. Study the GSE Business Model and you will find the answers to your questions.

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