Forbes: TBTF Banks have $3.8 Trillion in Reported Loan Portfolios — How much of it is real?

The five largest U.S. banks have a combined loan portfolio of almost $3.8 trillion, which represents 40% of the total loans handed out by all U.S. commercial banks.

See Forbes: $3.8 Trillion in Portfolio Loans

I can spot around $300 billion that isn’t real.

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When interviewing the FDIC receiver back in 2008 he told me that WAMU had originated around $1 Trillion in loans. He also told me that most of them were subject to claims of securitization (i.e., they had been sold). Then when I asked him how much had been sold, he said that Chase had told him the total was around 2/3. Translation: With zero consideration, Chase was about to use the agreement of October 25, 2008 as an excuse to claim ownership and servicing rights on over $300 billion in loans. Chase was claiming ownership when it suited them. By my count they foreclosed on over $100 billion of those “WAMU” loans and, for the most part, collected the proceeds for itself.

Point One: If there really were $300 Billion in loans left in WAMU inventory, there would have been no receivership nor would there have been any bankruptcy.

Point Two: If there were $300 Billion in loans left in WAMU inventory, or even if there was 1/10th that amount, neither the FDIC receiver nor the US Trustee in WAMU bankruptcy would have allowed the portfolio to be given to Chase without Chase paying more than zero. The receiver and the US Trustee would have been liable for civil and even criminal penalties. But they were not liable because there were no loans to sell.

So it should come as no surprise that a class action lawsuit has been filed against Chase for falsely claiming the payments from performing loans and keeping them, and for falsely claiming the proceeds on foreclosure as if they were the creditor when they were most clearly not. whether the lawyers know it or not, they might just have filed the largest lawsuit in history.

see Young v Chase Class Action – WaMu Loans – EDNY June 2018

This isn’t unique. Chase had its WAMU. BofA had its Countrywide. Wells Fargo had its Wachovia. Citi had lots of alter egos. The you have OneWest with its IndyMac. And there are others. All of them had one thing in common: they were claiming ownership rights over mortgages that were falsely claimed to have been “acquired through merger or acquisition using the FDIC (enter Sheila Bair screaming) as a governmental rubber stamp such that it would appear that they purchased over a trillion dollars in residential mortgage loans when in fact they merely created the illusion of those loans which had been sold long ago.

None of this was lost on the insurers that were defrauded when they issued insurance policies that were procured under false pretenses on supposedly non-securities where the truth is that, like the residential loans themselves, the “securities” and the loans were guaranteed to fail.

Simplistically, if you underwrite a loan to an family whose total income is less than the payments will be when the loan resets to full amortization you can be sure of two things: (1) the loan will fail short-term and (2) the “certificates” will fail along with them. If you know that in advance you can bet strong against the loans and the certificates by purchasing insurance from insurers who were inclined to trust the underwriters (a/k/a “Master Servicer” of nonexistent trust issuing the certificates).

see AMBAC Insurance Case vs U.S. Bank

The bottom line is that inside the smoke and mirrors palace, there is around $1 Trillion in loans that probably were sold (leveraged) dozens of times where the debt is owned by nobody in particular — just the TBTF bank that claims it. Once they get to foreclosure, the presumption arises that everything that preceded the foreclosure sale is valid. And its very hard to convince judges that they just rubber stamped another theft.

9 Responses

  1. How can I join the class action? I had a Las Vegas condo foreclosed on in 2009, my WaMu loan was being serviced by Chase dba WaMu.

  2. Right on, RR. The judges are in the bag, too. All for the banks. Who cares? I am out of here by Oct. I would like to know the exact amount the bank/servicer gets at the end of this BS. Recently found additional crimes being committed at the Register of Deeds Office/county level documents.

  3. Charles Reed — can you provide your email?

    To check if WAMU is involved — get prior discharge/satisfaction and look to see if there is a code used. Trace that code.

  4. Good one Neil.

    These were just transfer of already classified Default debt — with or without borrower knowledge. There was a goal and reason for it. If this were not so, the loans would not be subject to the scenario Neil describes.

    And, where did WAMU get the debt from? Who sold it to them? It’s obvious. And who then sold to hedge funds, after the market collapsed, and who does not have to report publicly?

    The private label trusts were just a fake holding place for the false claim of securitized mortgages. These were not securitized mortgages. They never came from an on balance sheet. Thus, could never validly go to an off balance sheet.

    These “loans” were false securitization for false default debt under the guise of a valid mortgage to the borrower. Why was this done? Profit.

    Community Reinvestment Act (CRA). Banks were required to fund low/middle income loans and then sell the loans to the GSEs. Well, the banks did not think that was fair. What profit is in that for them? So they go whining to Congress to fix it. But, then they suddenly stopped complaining. They figured out a way around it.

    And, the GSEs were not happy either. They were stuck with fixed rate loans on which they were not making enough money.

    Solution? Get the loans out into higher paying Fake default security trusts — to which the GSEs then invested in (CRA is supposedly satisfied). . Everyone was then HAPPY. They were all making a bundle with now HIGH interest rates than they would not have otherwise had. The banks were making nice profit on the security underwriting to the fake “shell” trusts.

    That is, until it was discovered that these loans really had no “home.” The market collapsed. Banks got bailed out, and borrowers became trapped with under water homes and high interest rates, and courts that appear clueless. Remember Enron? CEO later said, the plan had to be one that judges would not understand. .

    The fraud continues to date. But, how long until the government gets that the truth will eventually be exposed? Only a matter of time.

    Happy 4th to everyone. This is not a scenario contemplated by our forefathers.

  5. Then New Century, in bankruptcy, had Ocwen moving assets, on behalf of them, claiming rights to collect. I am certain, New Century did not assign anything, Ocwen played this out on their own. Collecting payments that did/do not belong to them and pocketing them, for profit. No one challenging this. Not one shred of paperwork indicating payments were being sent to New Century. But, of course no one seems to care, as long as the “deadbeat” homeowner doesn’t get a free house, but all of these cats can get free houses! This entire scheme stinks to high heavens and I am sure the “notes” have been sold, leveraged and used for payments, over and over. My paperwork has 3 lenders: RBC, Wells Fargo and Credit Suisse….I’ll just bet New Century got lending multiple times this way and now we have multiple foreclosure actions, one completed, with a newly originated loan-under the guise of a modification and we still have accelerations, and “exact duplicates” of original notes, running through the courts. If I weren’t living it, I wouldn’t believe it.

  6. I know my foreclosure judgment allows the note to continue to accrue interest even though it was discharged in a Chapter 7. Huh?
    The courts are robbing us FOR the banks. Or…the U.S. Treasury?
    Can the Treasury take the res because of TARP? Two MBS and two CLO/CMOs were TARP recipients. Throw the UCC out the window, the judges don’t care.

  7. Reblogged this on California freelance paralegal.

  8. I have been telling this here for about 5yrs that this was going on but lawyers want to think they know it all and are unwilling to take information from us on the front line.

    Understand that on Jul 2006 WaMu entered into a mortgage servicing with Wells Fargo for 1.3 million FHA & VA mortgage loans that were a part of WaMu Ginnie MBS valued at $140 billion that were insured by Ginnie.

    Wells was the custodian of records for Ginnie who makes all pooled loans have a remote bankruptcy procedure done, where under UCC3 they endorse the Notes in blank and relinquish them to Ginnie as the underlying collateral for the MBS. However, because the debt cannot be purchased and does not get purchase in these “must” two parties only contracts (lender & borrower) as there cannot be a co-holder of this debt!

    What Ginnie makes happen is that the Notes are forever separated from the debt and makes the Notes non-negotiable, because Ginnie or the lender/issuer cannot act on the blank endorsed Note. The purpose for making the Notes non-negotiable is just for the situation WaMu found themselves in.

    WaMu the bank did not file for bankruptcy as the stop existing on Sept 25, 2008, however, WaMu Inc the bank holding company filed on Sept 26, 2008, in an emergency filing but there was no question as to the loans because the holding company did not make these FHA & VA loans.

    So Wells has illegally foreclosed using forged Titles to place themselves as “holder in due course”. Under UCC9 the non-originator must present to the court proof of purchase to the court to call the debt due, as Wells has admitted that they are not the owners of the debt, and use the cover that Ginnie is an investor which there never are and cannot be by what Congress has allowed them to do!

    Wells has illegally enriched themselves through foreclosures and collection of mortgage payments for a decade!

  9. Judges do not care about homeowners no matter what proof they have. My documents were obviously forged and the note never made it into the trust in time, but judge did not give a $hit.

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