Why Fabrications? Why Forgeries?

In an increasing number of foreclosure cases, homeowners are going head to head with the lawyers who file claims on behalf of entities on the basis of fabricated and/or forged instruments that in many cases were also recorded in county records. Lawyers like Dan Khwaja in Illinois are getting clearer and clearer about it. They hire experts who understand exactly how the notes are mechanically created and the endorsements are not real signatures.

The key question is why would the notes have been fabricated and forged when there actually was a closing and a note was actually signed? We’re talking about the financial industry whose reputation depends upon safeguarding all signed documents. If they didn’t safeguard the documents and instead destroyed them or “lost” them, why was that allowed to happen?

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So we have a case in Illinois where lawyers filed a judicial foreclosure on behalf of Bank of New York/Mellon (BONY) as trustee (i.e. representative of) “holders” of certificates. The lawyers attach a copy of a note and indorsements. Khwaja hired an expert who found quite definitively that the note and the endorsements were all fabricated (forged). Khwaja has filed a motion for summary judgment.

Here is my analysis:

The lawyers who filed the claim have a serious problem. If they cannot convince the judge that they have no need to respond they are dead in the water. They must either pay someone to commit perjury or seek to amend with an actual original note. In view of prior studies that show that most (or at least half) of all notes were “lost or destroyed” immediately following the “closing” combined with your expert on hand, coming up with the original note is not an option.
And that brings us to the question of “why?” If there really was a closing at which the borrower signed documents, why do they need fabricated documents? To me, the answer is simple. In order to sell the same loan multiple times they needed to convert from actual to imaged documents. The actual one had to disappear. And the handful of megabanks who had a virtual monopoly on tens of millions of mortgage transactions made it “custom and practice” to use images rather than actual documents. [This practice has spilled over to property sale contracts where neither party gets an original].
And we have the additional issue which is presented by the foreclosure complaint. It says that BONY appears on behalf of the holders of certificates. The simple question is “so what?”
Being holders of certificates means nothing. It leaves out any assertion that the holders of the certificates are owners of the certificates, or anything that might identify those “holders”. So the proceeds of foreclosure could then go to whoever was chosen by the parties actually pulling the strings.
They are asking the court to fill in the blanks. They want the court to draw an inference without ever stating the fact to be inferred, to wit: the holders of the certificates are owners of the certificates who are therefore owners of the debt, note and mortgage. There simply is no such allegation nor any exhibit indicating that is true. The reason is that it is not true.
So who is really the Plaintiff? Supposedly not BONY who is appearing in a representative capacity.
If “sanctions” were applied against the “Plaintiff” BONY would claim it is not the actual party and that the unidentified “holders” of certificates are the proper party or perhaps an implied trust.
So then is it the certificate holders, represented by BONY? But they don’t have any right, title or interest to the subject debt, note or mortgage. The prospectus and certificate indentures make that abundantly clear in most cases.
Examining what happens after a foreclosure is “successful” provides clues. Neither BONY nor any certificate holder ever receives the actual money from the proceeds of the purported sale of the property.
So who does?
As the one party with actual control over the loan receivable, the investment bank that created the “securitization” scheme is the only party that comes close to being an actual creditor. But here is their problem: that loan receivable has been sold multiple times. This not only leaves them with no claim to the debt, but a surplus of funds over and above the amount due on what was the loan receivable. It’s basic accounting and bookkeeping. And if that were not true the banks would not be doing it.
So in the real world it is the investment bank that gets the proceeds of a foreclosure sale. But they do it as the “Master Servicer” of an implied (and nonexistent) trust. The money simply disappears.
In order to get away with selling the debt multiple times they had to make each sale a non recourse sale. And they did that. So the buyers of the debt, note and mortgage had no actual legal title to the debt, note and mortgage and no recourse to the borrower to collect on the unpaid debt.
THAT leaves NOBODY as owner of a debt that has probably been extinguished and reveals the paper issued to buyers/investors as essentially the issuance of cash equivalent instruments (also known as currency). And THAT is the reason the banks, after  two decades of this nonsense, have yet to come to court and simply say “here is proof of our funding of the origination or purchase of the debt, note and mortgage.”
If they did, they would be admitting to lying in millions of foreclosure cases over at least a 15 year period of time. Their scheme effectively concentrated the risk of loss on investors and borrowers while literally retaining all the benefits of supposed loan transactions for the sole benefit of the intermediaries, who then leveraged loans multiple times.
This translates as follows: the money taken from investors is an unsecured liability of the investment bank. To be sure that has a value — but not a value derived from loans to homeowners. THAT value was taken by the investment bank who cashed in on it already.
Note: For certain second tier investment bankers there were transition periods in which they were at actual risk. Examples include Lehman and Bear Stearns. But the top tier was able to sell forward on the certificates and never commit a single dime of their own money into the securitization scheme even in transition. But by pointing to Lehman and Bear Stearns they were able to convince policy makers that they were in the same position. This produced the “bailout” which was essentially the payment of even more money for losses that did not exist.
In an odd twist of irony, Wells Fargo was the only party (2009) that admitted to no loss but was forced to take bailout money so that other “less fortunate” parties would not be singled out as weak institutions.
In truth the AIG bailout and similar bailouts were merely payments of extra profits to Goldman Sachs and some other players, leaving investors and borrowers stranded with nearly worthless investments and collapsed markets for both homes, whose prices had been inflated by over 100% over value, and a nonexistent market for the bogus certificates that the Fed chose to revive by its purchasing program of “mortgage bonds” that were neither bonds nor backed by mortgages.
Despite the complexity of all this, on a certain level most people understand that the banks caused the misery of the meltdown and profited from it.  They also understand that it is still happening. The failure of government to deal appropriately with the existential threat posed by the megabanks clearly played into and perhaps caused the social unrest around the world in the form of “populist” movements. And until governments deal with this issue head-on, people will be looking for political candidates who show that they are willing to take a wrecking ball to the banks and anyone who is protecting them.
In the meanwhile, an increasing number of homeowners (again) are walking away from homes in the mistaken belief that they have an unpaid debt to the party named as the claimant against them.

16 Responses

  1. ANON.

    Yes I also noticed I have to enter my name and email every post for about the last week. Never had to do that in last 10 years I’ve been here. Pain in ass. But it’s why I asked if you entered wrong email since I did that one time a few years back when I was using a new device. Good to see you here and back posting.

  2. Went through — But, Neil, never had to reenter email and name with each post. Is this new?? Again, asking for email and Name with EACH post. Perhaps, my error — does everyone have to reenter email and Name with each post? Been here for very long time. Never had to do that — once originally entered — that was it. Is this new? Must be careful to not enter true name by prompt – if you don’t want it there. Is everyone getting this prompt for every post they want to make? Yesterday, my posts did not even appear until next day. And, that was after multiple attempts.

  3. Ian and Java — thank you. I am trying again now. Email address is fine — but, don’t know if that has been intercepted. It has been intercepted in the past. Hoping this goes through. I contacted Neil, and he says it is not being blocked by him.

    OK — tried to send and same problem. This may post later — but it is not posting at time I send — Repeatedly asked me for email and name.
    Either I am intercepted – or this site is.

  4. ANON – check your email address if the correct address you signed up with here. I had another email one time that was entered and I thought I was being blocked too but turned out I was using the wrong email address. Otherwise there is NO reason you should be blocked from this site. If this is the case, please unblock ANON otherwise you can block me for good as well.

  5. To all-
    It seems as though ANON has been blocked from this site, although it may be a technical glitch.
    It she has been blocked, she asked me to say Goodbye to you all-

  6. To all- ANON just informed me that she has been blocked from this site. I cannot fathom why she has been blocked.
    She says goodbye to all of us.
    Well this certainly sucks.

  7. @ Ian ,

    It’s simple , They’re all using “The Producers” model for their fraud.

  8. Perfect timing once again! Showing these patterns of deception plainly on the documents themselves aside from the actual proven counterfeit note in this case to have elected officials address.

  9. ANON- perhaps you remembef “raja” on this site, he did his voluminous research on mortgage, and found (conclusively) that it was included in 94 “trusts”, for a total of some $45,000,000. As I recall, he showed up for court with a Chevy S-10 and the bed of the truck was filled from front to back and side to side with all of his corroborating documents. He dropped off the site after his court date, leaving me to assume he was under a gag order. I spoke w him twice up to that point, but not afterward.
    One loan, 45 million dollars in investor money. Unconscionable, not the way I run my business or live my life, which is perhaps the main reason I find the whole thing reprehensible.

  10. neidermeyer — get that. But that is not the WHY question. How did happen in the first place? Covering up is a given.

  11. @ ANON ,

    To answer “Why?” … “because they can” ,, the Federal Reserve , their member banks and the government are one and the same… and they require… REQUIRE a continually expanding amount of fiat/credit to maintain the illusion… one hand will not slap the other… they are partners.

  12. Neil — you come close — and then deviate. Quote – ” And that brings us to the question of “why?” If there really was a closing at which the borrower signed documents, why do they need fabricated documents?”

    Absolutely. But you simply do not follow through with this. Your explanation is vague. Not enough. You need need to go further.

    CONTINUE TO ASK THE QUESTION WHY??? Don’t theorize. The explanation is right in front of you. Only reason for fabricated documents is fraud — HOW DID THE LOANS GET FROM GSEs to private trusts to which GSEs invested in top tranches?? Impossibility — but that is what happened.

    You are so close — but no cigar.

  13. Actually, what really happens is much worse:
    “The only money in the world is gold, everything else is credit.” – J.P. Morgan. You do have a credit report, don’t you?
    1st problem: What has happened is the issuance of “fiat currency” – make believe money. So, you have promissory notes that can be created at any time, in any amount. But aren’t banks supposed to balance their books every night? Where does the money, accounting wise, come from? It comes thru your birth certificate whereby the Fed funds your “Cestui Que Vie trust” (All Caps name, capital deminutio maxima) after your birth, with them managing it as trustee..
    2nd problem: if they endorse a document ON THE BACK, it is proof that it was transferred into a security. They then lose their ownership rights against the title.
    3rd problem: there is only ONE bank.( ref: Karenhudes.net, Doc. of Law at Yale, 20 year legal counsel for the World Bank), and that is in Europe.
    4th: I have proof that the “money” doesn’t even go to a bank from the Fed – it goes to the title company that sends it to “Wall Street”.
    5th: problem: we used to have allodial title in America. Now we don’t. We have equitable title. So who has allodial title? That is in Europe as well. All this, and you, are under the the corporation of the “UNITED STATES” (Title 28, Section 3002, subsection 15), that is owned in Edinburgh, Scotland, for now. (They change everything about every 15 years).
    So back to the essay: They can NEVER reveal the truth: that you are a serf in a colony controlled by Europe. This is a completely corrupt and evil system and most of the judges know it and rule in its favor. And they get rewarded too. Once one sees all the proof and contemplates this for a while, it all makes sense.

  14. We used to have a guy on here who actually did destroy some of the notes and other documents. He was from NJ. I believe that my Note (if it survived) was left in a parking structure in Long Island after American Brokers Conduit went belly up and some of its top guys were charged with some kind of fraud. One went to jail.

  15. The fraudclosed homeowner actually should receive the money their signature produced.

  16. Bank Of America attorneys bring in fictional representatives to commit perjury they don’t really know anything about the notes or the endorsements and couldn’t answer questions im my case like where was the note in custody who signed it, what’s the title of the signer and I couldn’t tell that this was a hoe and Shr actually told the judge that this was not real signature but just a stamp.

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