CHAIN OF NOTHING: Wells Fargo Fraud Is Causing the Curtain to Fall Revealing Fraud in Foreclosures and Ultimately Mortgage Bonds

“Defendant Wells Fargo’s deceptive and intentional conduct displayed a complete and total disregard for the rights” of the couple, wrote Judge Elliott, a circuit judge in the 43rd Judicial District of Missouri. “Wells Fargo took its money and moved on, with complete disregard to the human damage left in its wake.”


Gretchen Morgenson of the New York times has revived the issues of fraudulent foreclosures in mainstream media by publishing a sharply critical attack on Wells Fargo. Like Elizabeth Warren has done, Morgenson brings attention to two connected policies of the TBTF banks: (1) the the recent revelation that Wells Fargo forced 8 accounts upon each customer of the commercial banking side of the bank — regardless of whether the customer even knew those accounts existed and (2) the obvious similarity with the fraudulent sales of MBS and the fraudulent foreclosures initiated by Wells Fargo.

Senator Elizabeth Warren, who always knows more than she says, made a statement on one of the network news shows that the Banks decided that the best way to make more money was to cheat their customers. She went on to say that the latest Wells Fargo scandal was revealing something that has always been the case with the large banks since the early 1990’s, to wit: that there is a commonality between this one Wells Fargo abuse that occurred over many years and the conduct of the same bank and the other major banks in the global economic crisis of 2008 caused by those banks.

Warren chooses her words carefully. So her use of the word “customers” instead of consumers might be an indication that she was thinking about the “investors” in mortgage bonds as customers of the same bank. Pension Funds and other managed funds were customers of the banks when they gave those banks money for the purchase of mortgage bonds issued by a new business – a REMIC Trust that would use the money to acquire residential mortgage loans. The banks called it securitization. But the rest of us who have analyzed it are quite sure that it was a fraudulent scheme from the very beginning. — And it was not a securitization scheme.

The “new business” did not exist. In most cases the illusion of its existence was created by partially complete written documents that were never used or followed. The new business never had a bank account and never received the proceeds from the sale of the mortgage bonds. This was no ordinary IPO. The “new business” was actually just a proprietary arm of the investment bank that used the false documents to claim a position as Master Servicer — over a Trust that was empty.

Pretending that the “new business” was real, Wells Fargo and other participants in the scheme pocketed the money from the managed funds except for that part that was used to fund the origination of mostly toxic loans. They needed the loans to be toxic so they could foreclose. When they foreclosed they received the first legal document in the entire chain — either a foreclosure judgment or a Trustee’s deed.

CHAIN OF NOTHING: The banks treated the deposits of money from the managed funds as if it were their own. They broke every promise they made to the “investors”, commingled the money and acquired no loans because the loans were already funded at origination by the illegal use of investor (bank customer) money. In all the assignments ever represented over the last ten years, at least, there is zero evidence that any transaction occurred in which the assignee paid anything for the loans said to have been transferred by the words in the assignment. Why would the assignor not insist on receiving money in exchange for the assignment? The answer is obvious — they didn’t own the loan. And following all that back to origination you find that the originator was, in nearly all cases, never paid for the assignment of the loan because the originator did not make the loan. In fact, you find that there was no loan contract between the “borrower” and anyone who advanced money to or on behalf of the homeowner. The investors were left out in the cold while the supposed “intermediary” banks played as though they were the lenders.




13 Responses

  1. Wells Fargo, NA. as trustee for SASCO 2007-BC1, issued limited power of attorney in 4/2012 to Ocwen Loan Servicing, LLc.
    Ocwen filled second foreclosure case in 4/2016. Florida, Santa Rosa county case# 57-2016-CA-000282

    -In lost note affidavit, Wells Fargo states, that : Plaintiff acquired ownership of the Note from BNC Mortgage, Inc. BNC was entitled to enforce the Note when loss of possession occurred.

    -on September 15, 2008, Lehman Brothers Holdings Inc. (“LBHI” or “Plan Administrator”) filed a voluntary petition seeking relief under Chapter 11 of 11 U.S.C. §101 et seq. (the “Bankruptcy Code”). Structured Asset Securities Corporation (“SASCO”) filed a voluntary petition for relief on February 9, 2009. Prior thereto and thereafter, other debtor subsidiaries and affiliates also filed for bankruptcy (collectively, with LBHI and SASCO, the “Debtors”). The Debtors’ bankruptcy proceedings are jointly administered under In re Lehman Brothers Holdings Inc., Bankruptcy Case
    No.08-13555 (SCC) pending in the United States Bankruptcy Court for the Southern District of New York (the“ Bankruptcy Court”).

    -As I searched the bankruptcy court cases # 08-13555, 09-10558, 09-10137, 10-03266, 10-03809, I find many information’s, but none of them prove that Wells Fargo may act as trustee of 2007-BC1 trust.

    -I searched for information`s regarding Wells Fargo allegation, that W.F. acquired the ownership of Note from BNC Mortgage, Inc. Interesting, but as case is opened, I wood like to keep this info for further court proceeding.

    Its unbelievable, that after all those years of knowing that Wells Fargo, Ocwen, Mers committed foreclosure frauds, after all sanctions from government, they do not care and continue.

    My case is just example.

    Thank you for reading.

  2. This was a money-laundering scheme, plain and simple.

    Take “currency” from a group of people (through fund managers, using fraudulent documents), invest that “currency” by originating (I hate that word) fatally defective mortgages on real property, apply insurance policies on the property without the knowledge of the “borrowers”, declare a default (after causing an economic implosion whereby millions would lose their ability to make payments), foreclose the mortgage and steal the house. This is a Win-Lose-Lose situation where the “Banks” are the only winners (with oligarchical government assistance) and investors and borrowers the ultimate losers. The only way to win at this game is to invest in the “Banks” directly (as a shareholder), and even then your investment is controlled on the books when most of the profit is made (certainly not earned) off the books.

    This is, of course, a very basic perspective not covering all angles, but how better to launder trillions of dollars than to steal from one group, lend to another group to create real property, steal that property and sell it at a loss? A loss to the investors is still a gain for the “Bank”.

    Our once great nation is controlled by $$$$$$$$$.

  3. Is now the time that Wells Fargo and the other banks can be exposed for what they have done? Are the Courts ,making their decisions so quickly and always for foreclosure and against the homeowners because they KNOW that it was their pension money which was used in these schemes, and that is the only way for them to get their pension money???? Seems to be a reason why they all should be recused from making the decisions due to their self interest! God help us!!!! Where can the help for homeowners come from?! Not the Courts until the people KNOW what the banks have done to everyone and how they have destroyed this counry

  4. @johngault,

    I also have a pet theory the MERS tracks multiples of “swaps” among the criminals, even as Scalia reduced the retention times the Servicers acted under between “transfers”, thereby allowing criminal banks to essentially, “pile on”.

  5. @johngault,

    Until we discover what, which, when and how much, in “derivatives” are listed within the DTC and DTCC, the “swaps” a bank earns given your example of 600 K, yet derives sale proceeds of 400 K in the credit bid, is open to anyone’s interpretation.

    I do know there are 1200 Trillion presently listed as owing to these fraudulent behaviors and the banks are claiming those “swaps” as assets, already on their books…

    That, my friend, should scare everyone to death…

    It means their “Notional Derivative” based on their “Notion” they can foreclose at will is a foregone (as foreclosed) conclusion.

    In short, the Brexit will be used to undermine the stock market even as the government and banks, through the PPT and CRMPG, have been manipulating said “market”, for years.

  6. So, in short, NG is saying the investor funds funded the loans. Any transfer is false paper with no moolah changing hands to cover the use of those fund. It’s just a made up paper trail.
    If you give me money for X and I use it for Y and the Y is that I used it to make a loan to Joe in the name of abc corp (with whom I have a trickle-down relationship), who’s on first after I create a bogus paper trail to you? Neil always says these facts mean there was no real agreement / loan between abc corp and Joe since the papers signed by Joe don’t reflect the fact that abc corp, the note payee, is loaning nothing to Joe.
    I created a bogus paper trail to what should’ve been a trust with assets, but has none since I spent the money. How much difference does it make, if any, pursuant to the UCC that I spent it funding loans? Is it the UCC or equity or another legal principle that gives me a lien on those loans? Do I have an antecedant debt to the investors (one created by my fraud) and I’m now trying to pay it with what’s left of the security for the loan by alleging an assignment to an empty and or non-existant trust? If it’s cool with the investors, maybe this can be done but they shouldn’t outta be calling it a trust when it isn’t at all, isn’t that so?
    Right after courts started saying no (and the Consent Order) to mers, bankster – servicers started using their mers “officers” /own employees to assign the loan to themselves to foreclose. (Note there is generally no assignment until foreclosure is contemplated). Now they just use those same employees to assign directly to a ‘trust’. What caused this new boldness is what I’m wondering. Just getting away with it? The new POA’s from the allegedly existing trusts to the servicers? If they thought it were cool, they’d have done this earlier. I wonder what happened to make them believe they could just go from MERS to the “trust” ,when for years they didn’t want to. And what all was recognized by the panel or whomever when they made merscorp enter that Consent Order? I’d sure like to see those notes.
    When an assignment is done to a “trust”, how do we even know such an organization exists (even if it had been done correctly)?

  7. MK: “The foreclosures trigger the “default swaps (derivatives)” Oh, I see, sort of. You mean that literally? It’s only a f/c which triggers the swap?
    In your assessment, then, if a lender forecloses on a home with a balance of 600k, uses a “credit bid” – gag- of 400k and nets 402k from the subsequent sale, the swap pays what?? and is that when it pays – after sale or how crucial is the “credit bid” figure? thanks

  8. Shari, I feel it. I’m a lender by background who got out before “mers”. I can’t make loans anymore even if i wanted to because I WILL NOT participate in that bs – I would be the guy getting people to sign docs with m e r s in them. Sorry to hear of your plight, but don’t beat yourself up. Not many Americans are unaware of the mess those people caused. But like you, yes, It’s exactly what they do to homeowners…they wear people out to exhausted compliance. For a look at what thinking courts think of this tactic, see Chambers v Nasco.

  9. i am a Realtor and for the last 4 years, knowing what I know, have had a great dilemma of conscience in continuing to sell homes knowing that the ‘loans” my clients were getting could be leading sheep to slaughter. In my own case, the payments on my primary home were current until WF beat me up for 2 years until I physically collapsed, then payments fell behind and they foreclosed as fast as they could. I lost my home and my health.

    Am trying to find a true lender who is today offering mortgage loans that will not end up in this quagmire.

  10. Reblogged this on Matthews' Blog.

  11. Call it what you like: “front-running”, “LIBOR Fraud”, “Bucketeering”… etc. The point is: the banks are using fraud to “capture” “loans” that never belonged to them, in the first place (they were paid by institutional investors- Pension Plans- on the front-end).

    Once paid, the criminal bankers placed the titles into their own possession in order to collect 20-30 years of payments and interest, as it was delivered, every 30 days…

    Payments, every 30 days, over 20-30 years on a “loan” that was paid, using, “other people’s money”.

    Moreover and likely even more lucrative for the criminal bankers: once “captured”, the criminal bankers use the fact, as described in the article, above: “… the loans… be toxic so they could foreclose.”.

    This is why modifications were described as hinging upon “loans” being “90 days” late (read Bailout, Neil Barofsky, specifically, p. 153, top of first, whole paragraph)… once behind, homeowners were then “dual-tracked”.

    The foreclosures trigger the “default swaps (derivatives)”; the bogus title and bogus “REMIC Trust”, exclude the true “homeowner- investor and occupant” while also allowing the court to deny discovery, as the victim never signed the fraudulent “Trust”; hence, a 3rd party to its contents.

    The investor is “made whole” through an “Investment Conduit- (REMIC)”, that has now become, instead, an “Insurance Fraud-(REMIF)”.

    The victim, of course- the occupant of the dwelling, never knows what hit them and was never intended to know, from the outset.

  12. Neil Garfield’s analysis bears repeating and may be summed, in essence, as follows:

    They needed the loans to be toxic so they could foreclose. When they foreclosed they received the first legal document in the entire chain — either a foreclosure judgment or a Trustee’s deed.

    I wrote a petition attempting to explain as much, some years ago:

    The paper is destroyed and more importantly, the claim of the banks, they own the rights to homes listed, as assets (RES) in an empty “REMIC Trust”; a “Trust” that has zero assets in it, is criminal, on-its-face.

    It is counterfeiting, forgery and fraud.

    If you think a digitized copy of a true, lawful, signed in ink, paper contract is the same as an original, I have an autographed Babe Ruth baseball I wanna sell you…

    I also have the rights to some bridges… and turnpikes… you can buy.

    There are 1200 Trillion owed to the fact, as succinctly summed by Mr. Garfield:

    “They needed the loans to be toxic so they could foreclose.”

    The Criminal bankers’ collection of these 1200 Trillion are predicated upon, again, in the words of Mr. Garfield:

    “… either a foreclosure judgment or a Trustee’s deed.”.

    The fact, these 1200 Trillion are, presently, at this very moment, listed as “assets” on the banker’s books and the fact these 1200 Trillion describe “assets” the banks “own” as “Notional Derivatives”, should give every rational person in this country, reason to question, “what happens next”?

    Because: The “Notional Derivatives”, in question, speak for 1200 Trillions, in “assets” the banks have already counted, while predicated upon the “Notion” …

    “The banks can seize any property they choose, because they are above the Law and there is nothing, any law-abiding citizen can do about it”.

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