Why Are We Still Dealing with Aurora and Lehman?

Keep in mind that Aurora is a subsidiary of Lehman. They are both in Bankruptcy but are being kept technically alive in BKR court for the sole purpose of making actions appear to be legitimate attempts to collect a debt.

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Aurora was “employed” by Lehman who had merely used money on deposit from investors to fund the loans. Lehman was theoretically then the party who owned the debt by reason of having paid for it. In turn, according to the certificates purchased by investors, Lehman owed a stream of revenue payable to investors that was indexed on a changing portfolio of loans that were poorly underwritten because nobody cared whether they performed or not.
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By selling its own promise to pay in lieu of the borrower’s promise to pay they secured the funds to fund what appeared to be a loan. The profit incentive was in other transactions, whether real or fake, that produced enormous profits far exceeding the loan. And yet millions of foreclosure actions have been filed “on behalf of certificate holders.” The holders of the certificates are never identified and the certificates are never described because there is no conveyance of any right, title or interest in any loan. 
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The borrower thought this was a loan transaction for good reason. But, as I have carefully alluded in the past, the loan was not actually a loan from the Lehman perspective. The money for the “loan” was merely a cost of doing business to make money in the securitization markets. All attempts to enforce the loan through foreclosure were veiled attempts at receiving more revenue, since Lehman, within 30 days of funding the loan, had pocketed far more than the principal amount of the loan from several tiers of investors.
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So in dealing with Aurora or Lehman keep in mind that that neither of them has the loan or the servicing rights on their bankruptcy schedules. Lawyers simply use inferences and legal presumptions to create an illusion despite the fact that neither of them has any present right, title or interest in any particular loan.
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Thus practitioners and pro se litigants should at all times object to any such implied ownership or administrative rights since none are supported by actual facts.
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For more information on the amount of money taken in by Lehman (and other brokerage houses) use the search engine on this blog. But you can start with the second  tier yield spread premium (YSP). In oversimplified terms, Lehman was promising a 5% return to investors on the amount they invested while originating “loan” transactions at a much higher rate to borrowers. In this example the blended rate signed for by “borrowers” is 10%.
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Hence Lehman could take in $1,000 from an investor and only lend out $500, pocketing the difference. In dollars, 5% of $1,000 is the same as 10% of $500. The end result is that Lehman immediately gets paid all of the loan amount plus the amount as as profit. The difference is shown as a “trading profit.” On its own books of account the loan ceases to be carried as an asset subject to a reserve for bad debt. The net legal and actual result is that neither Lehman nor its investors are owners of the debt. The debt has legally vanished.
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The courts won’t accept this fact. So they allow into evidence fictitious documents reciting nonexistent facts about transactions that never happened in order to allow the brokerage firms to use conduits to reconstitute the apparent existence of the debt and their right to enforce it — all without ever alleging or proving that without such enforcement any of them would have lost any money.
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The fine paid on behalf of Aurora, which has virtually no assets left, is based upon allegations of misconduct all associated with “underwriting” loans for the purpose of making the loans, not getting repaid by the borrower.
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Only Aurora and Lehman knew that repayment was irrelevant except as corroboration of the lie they had told investors — that this was entirely a diversification of risk strategy for conventional and well-underwritten loans in accordance with industry standards.
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And of course there was the lie they told borrowers through their conduit “originators” — that the lender had a risk of loss and therefore would not lend money that couldn’t or wouldn’t get repaid.
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As long as most borrowers kept making payments to people that were not entitled to collect such payments they were tacitly admitting to the fact that they owed payments to such parties even though they didn’t. The strategy was brilliant even if perfidious.
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The reason the fine was paid on behalf of Aurora is that it corroborates the false narrative that Aurora or Lehman were the true owners of the debt and that any actions taken to enforce the “loan” were valid and authorized. They weren’t authorized. And the proceeds of such collection and enforcement schemes never went to investors who had actually supplied the capital required to originate or acquire the loan. All such schemes were merely disguised efforts to obtain more revenue. This left the investors and the borrowers holding the proverbial bag.
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Unfortunately the political decision from the top down was to protect the banks rather than the investors and homeowners. But aggressive and persistent defense of foreclosure actions in court usually results in a satisfactory result for the homeowner.

11 Responses

  1. Consumer Protection Laws
    Both New Jersey and federal law offer extensive protection from consumer fraud, deceptive sales practice, inaccurate credit reporting and defective products. They also provide for judicial enforcement of warranties. For example, the Consumer Fraud Act was enacted by the Legislature in 1960 for three reasons: (1) to compensate consumers who have been harmed by deceptive sales practices; (2) to deter fraud through the award of triple damages; and (3) to attract skilled lawyers to represent consumers by making a merchant which has engaged in deceptive practices pay the victim’s attorneys fees, even though their loss may have been minor. Other laws afford consumer protection as well, such as the Uniform Commercial Code, the Lemon Law, the Magnusson-Moss Warranty Act, the Fair Credit Reporting Act, the Fair Foreclosure Act and the Fair Debt Collection Practices Act.

    These are some of the major laws which protect New Jersey consumers.

    Consumer Fraud. New Jersey has some of the strongest consumer protection laws in the country. The chief protection is the Consumer Fraud Act, which prohibits deceptive sales practices. This includes both affirmative misrepresentations and omissions of important facts. If you prevail, you will be awarded three times your damages and the defendant will have to pay your attorneys fees. The consumer Fraud Act prohibits deceptive sales practices in almost all industries. There are specific regulations which go beyond even these protections, with specific regulatory requirements in:
    Auto sales, leasing and repair
    Home improvement contracts
    Health club contracts
    Employment agency contracts
    Real estate sales and services
    Internet dating agencies
    Banks and lending institutions
    Kosher and halal foods
    Personal information security
    Telecommunications
    Information services.
    Pet purchases (the “Puppy Lemon Law”)
    Home appliance repair and service
    Warrantees. Contract law and the Uniform Commercial Code protect purchasers of all types goods. However, the federal Magnuson-Moss Warranty Act goes even further, and requires the company to pay your attorneys fees if it fails to live up to its warranty.
    Lemon Law. New Jersey’s Lemon Laws protect the purchasers of new and used automobiles with persistent defects which the dealer cannot (or will not) fix.
    Credit Reporting. The Fair Credit Reporting Act provides a remedy when creditors or other institutions provide false information to a credit reporting agency.

  2. @ ANON, Ian & ALL

    On the SECURITIZATION-TO-SERVICING model, once Glass-Steagal safeguards, prohibitions & restrictions were lifted by the Legislature, the whole AMALGAMATION of the BANK-INSURANCE-SECURITIES industries conflated the DISTINCT ACTIVITIES: facilitating, on the one hand, the broad commerce ACTIVITIES that BANKS-IN-NAME-ONLY pursued; while on the other hand, blurring and burying CONSUMER PROTECTION LAW(S) that the “BANK-INSURANCE-SECURITIES & GOVERNMENT COMPLEX” turned a BLIND EYE to/at.

    However, under the umbrella branding of “WELLS FARGO” (“WELLS”) as the example, WELLS created many iterations of its moniker/brand: mirroring all other entities in the “BANK-INSURANCE-SECURITIES & GOVERNMENT COMPLEX” machine that intentionally blurred the lines on CONSUMER PROTECTION LAW(s) — to the severe detriment of consumer/homeowners.

    Yes, there is no doubt that the Legislature established many laws, regulations & rules specifically governing BANKING ACTIVITIES, e.g., as a DEPOSITARY, intended to protect DEPOSITARY ACTIVITIES that the “BANK-INSURANCE-SECURITIES & GOVERNMENT COMPLEX” have blurred under the auspice of entitlement(s) as a BANK-IN-NAME-ONLY: especially as it concerns violation of CONSUMER PROTECTIONS.

    Nonetheless, it is the factual ACTIVITIES that establish the CAPACITIES of the antaganist(s), thereby triggering CONSUMER PROTECTION(s) specific to each state.

    At the end of the day, in Kalifornia CONSUMER PROTECTION LAWS such as Financial Code section 22750 protect consumers from demands by “BANK-INSURANCE-SECURITIES & GOVERNMENT COMPLEX” ACTIVITY (servicer(s)) for amounts not due, i.e., the manufacturing of a purported default: with a resulting PENALTY of the VOIDING of the purported CONTRACT, Thus, everyone MUST drill down on their state-specific consumer protections.

  3. Thanks Ian —

    Kalifornia — Are you saying the government is permitting securitization to servicing – even though in violation of banking laws?

    It is true that the “servicer” is the only party acting – and under the fraudulent securitization. We know that and we can’t get it understood in Courts.

    If the government is permitting this — we have BIG problems to fix it.

  4. ANON- I just forwarded Quora page to your email. Let me know that you got it-

  5. @ IAN & ALL

    ACTIVITY MATTERS!!!!

    CAPACITY MATTERS!!!!

    MULTIPLE ACTIVITIES = MULTIPLE CAPACITIES!!!!

    A BANK IS A DEPOSITARY — NOTHING MORE than a BAILEE!!!!
    A BANK IS A DEPOSITARY!
    A BANK IS A DEPOSITARY!

    A DEPOSITARY ACTIVITY IS NOT A SERVICER ACTIVITY!
    A DEPOSITARY ACTIVITY IS NOT A SERVICER ACTIVITY!
    A DEPOSITARY ACTIVITY IS NOT A SERVICER ACTIVITY!

    ALL BANKING ACTIVITY is governed by SEPARATELY DISTINCT laws, regulations & rules on DEPOSITARY ACTIVITY NOT the SECURITIZATION-TO-SERVICING ACTIVITY model in play to present.

    Even in the present-day context of foreclosure, the term “SHADOW BANKING” is a misnomer, because there is NO such ACTIVITY recognized AS A MATTER OF LAW, i.e., SECURITIZATION-TO-SERVICING ACTIVITY.

    To reiterate, in the context of foreclosure ACTIVITIES by a purported SERVICER (a BANK-IN-NAME-ONLY), it is the distinguishing of the CAPACITIES of the antagonist(s)’ ACTIVITIES that the Legislatively established LAW dictates as a NON-BANKING ACTIVITY, to wit:

    12 CFR § 225.28 – List of permissible nonbanking activities.

    Please verify and edify @:

    https://www.govinfo.gov/app/details/CFR-2012-title12-vol3/CFR-2012-title12-vol3-sec225-28

    A factual example of THREE ACTIVITIES distinctly established, and separately governed, are:

    Wells Fargo & Co. is a BANK HOLDING COMPANY: a NON-DEPOSITARY CAPACITY parent entity of a bank, governed by distinct bank-holding-company laws, regulations & rules because of its ACTIVITY;

    Wells Fargo Bank, N.A., is performing ACTIVITIES in the CAPACITY of a BANKING DEPOSITARY: an entity governed by banking laws, regulations & rules; subordinate to & held by Wells Fargo & Co. as a BANK HOLDING COMPANY; and

    Wells Fargo Home Mortgage is a WHOLLY SEPARATE CORPORATION engaged in NON-BANKING ACTIVITIES as a PURPORTED SERVICER under the present-day SECURITIZATION-TO-SERVICING model: governed, in part, by the law, regulation & rule of the CFPB —> but in conjunction with
    CONSUMER PROTECTION LAWS <—.

    EVERYONE, please stop referring to the antagonist(s) as either a bank, creditor, and/or lender, because the ACTIVITIES are NON-BANKING pursuant to the Legislatively established LAW, to wit:

    12 CFR § 225.28 – List of permissible nonbanking activities.

    Thus, because the antagonist(s)' ACTIVITIES are NON-BANKING AS A MATTER OF LAW, it is CONSUMER PROTECTION LAW that GOVERN (period): specifically, the CONSUMER PROTECTION LAW in the state of the homeowner/BAILOR of the NOTE under the present-day SECURITIZATION-TO-SERVICING model.

  6. Ian — Yes, I have been saying for years. 95% of the crisis loans were refinances (but some new purchasers got caught up by previous owner’s bank fraud). Nothing paid off by refinance by the borrower. This was nothing more than the previous debt collection credit card fraud. It was just an extension of what was already happening with credit card fraud. It was a just “transfer” of debt collection rights — when there should be NO debt collection. Borrowers paid for a refinance — it never happened. Nothing paid off by borrower – nothing – despite a recorded refinance.

    And we wonder why the Courts and documents are so screwed up? The government knew – and they had no choice but to bail out the bank fraud – or, possibly, face an economic collapse (or did they have a choice??) . That economic collapse has been held in abeyance for over 10 years by manipulation of interest rates. When it actually hits — there will be no more cover up. It will be over. Collapse we will have. I find astounding that all politicians are afraid to address.

    Exactly Ian – as to mortgage servicing rights.

    I am not done. What I have is incredible. With each day, month, year, and decade – there is more fraud disclosed.

    Neil has always been right on — no consideration paid. But, Neil – you need to ask WHY????? Why was there no consideration paid? Because – nothing was paid off BY THE BORROWER at refinance. .

    This was ultimate fraud upon the American public. And, as to judges — the “banks” get top law firms to go against the little guy. Judges cannot project themselves as going against the big “smart” law firms – by siding with the (perceived) “stupid” little guy. An ego trip — “not going to get me” – judges will rule. I know one attorney who told the court — “I know hundreds of smart people, and they agree with me. ” Are you kidding me? .This was supposed to convince the judge???? Law doesn’t matter?

    Ian – please provide the exact website. Not technically adept.

    Thanks. .

  7. They buy the servicing rights and “counterfeit” the necessary documents and assignments, slight-of-hand, to make everything look legitimate. AWL-Countrywide, when BOA bought servicing rights for approximately $450.00 per loan and then foreclosed on over a million folks, using the servicing platform. This in my opinion is why they use the servicing platform. There is no securitized loan. They conjure up paperwork to make it look like we are in default, then under the PSA they can accelerate and foreclose. The judges just turn a blind eye to the fact that the servicer has no loss, the “alleged” trust has no loss, as it was never in the trust (any losses were had at the behest of the seller, depositor of the trust). When a foreclosure commences and the deed and note are merged, it is “dead”…belongs to no one, consideration was never paid and rights were not transferred for them to perform any act, on behalf of anyone. All the judge needs to do is ask for a receipt of payment…In ten plus years, State Courts, District Courts, Bankruptcy Courts, Federal Courts and Special Proceedings, I have never seen one receipt for losses-injury claimed. The assignments in and of themselves tell a story.

  8. To all- I’ve been answering questions on Quora and lambasting the banks for a year or two now. Also poin to my out he difference between banks and servicers, as well as anything else I can answer, and if I do t know the fine details I just wing it.
    Sign up to Quora and jump in, answer all real estate, mortgage, securitization questions and correct all the “experts” who still follow the official narrative like sheep.
    There are questions there this morning, didn’t have time to tell them the difference between lenders banks servicers etc

  9. The ACTUAL REALITY is that the USA Inc. is Guilty and Corrupt as all HELL ….. REAL SWAMP DRAINING ……. The WHISTLE is BLOWN ( Swamp Fox ) https://toxiczombiedevelopments.wordpress.com/subprime-predatory-the-land-and-mortgage-scamming-of-the-last-century/

  10. As ANON points out repeatedly for years now, almost all of the securitized mortgages were refinances, where the homeowner/borrower had no idea what, if anything, was being paid off, and if there was actually anything to payoff except in their mind. If homeowner/ borrowers had an actual traditional mortgage, they would receive a blue Ink satisfaction of mortgage, whereas all subsequent payoffs were in photocopied black ink.
    And if you read Defailt Servicing News, or another national trade journal for the servicing industry, you’ll never see anyone buying mortgages, just mortgage servicing rights. This does t jive with the assignments of mortgage via MERS, or anyone else it appears.

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