Do the Math! How Could Rocket Mortgage “Originate” $338.7 Billion in “Mortgage Loans” and Make a Profit of $9.5 Billion with Only $3.5 Billion in Cash?

The bottom line is that homeowners are mostly successful in defeating the foreclosure attempt entirely by merely issuing timely discovery demands and objections that focus on existence, ownership, and authority over the alleged obligation. They don’t need to plead or prove that that the payment they received was an incentive payment. It just ends up that way. 

The math is so simple and yet the regulators continue to do nothing. It’s simply OK now to lie to consumers about who is lending them money and what risks consumers are assuming without knowing anything about it. There is no incentive at all to make a viable, workable loan that provides the benefit of a bargain to both a lender and a borrower because there is no lender.

What we have instead are “originators” who pretend to be lenders (hence “pretender lenders”) and who are treated as though they are lenders even though they have no lending intent. Their intent is to make a fee which is disguised as the profit on selling a mortgage and note that they never owned. Because it is labeled as a “sale” the word “fee” is avoided. but that doesn’t make it a sale.

To prove the theory of no landing intent, just do the math and lookup Rocket Mortgage.



Rocket Mortgage made $9.5B in profits in 2020

Rocket Mortgage was the selling agent for about $350 Billion in transactions with homeowners. Its commission on those sales was disguised as a sale as if it owned the alleged obligation, note, and mortgage. It is not a lender and it records little or no interest income. In 2020 it was paid around $15 billion to “originate” $350 Billion in “mortgage loans”. That means it received around 5% of every loan “originated.”

The interest rate quoted on the alleged loans was an average of 4.6%. So for starters, if there was a lender, they immediately lost their first year’s income to Rocket Mortgage. They the servicers get paid around 1.5% of scheduled payments received from homeowners plus other fees totaling around 2%-2.5% of all receipts. Do you see where I am going with this?

Then there is an overall default rate of around 6%, plus a substantial shortfall in collateral caused by inflated appraisals at the time of “origination.” That default rate is going to return to such higher rates shortly.

The obvious question is why would you loan $200,000 to anyone under such conditions? Even if you get the homeowner to make the payments, you are losing money after you factor in inflation. Nobody would make that deal and nobody did make that deal under claims of securitization of loans surfaced. Those claims gave everyone a catch-phrase to latch onto.

they needed something to justify the sale of transactions with homeowners and labelling them as “loans” even though they were not in it for the interest income. They were in it for profit from the sale of securities. And by disconnecting any loan receivable account from the transaction, they were able to sell index securities until the market was saturated without ever being accused of selling the same asset over and over again. And because those securities are erroneously treated as though they are not subject to regulation, no disclosure is required end to end.

Each part of the transaction is labeled for the convenience of the securities brokerage firm (investment bank) that started the scheme by issuing its own securities under the name of a nonexistent trust.

Without investors buying those securities, there would have been no securities, and there would have been no “loans” from investment banks who were using every possible device to avoid being labeled as a “lender” who could be liable under Federal And State lending, servicing and other laws governing consumer transactions and which would have revealed the fact that the initial set of investors were purchasing certificates of deposit from the broker who had no right to conduct commercial banking (until it was ratified retroactively after the 2008 crash).

All that money, including the $9.5 Billion paid to Rocket Mortgage and others, the billions paid to “trustees,” “servicers” and sham conduits like MERS, came from “profits” (actually fees) generated by fake sales of consumer obligations where the obligation was never sold, purchased or paid for.

Hundreds of billions of dollars, even trillions were generated as trading profit by the select few on Wall Street who originated these schemes. that is where all the money went after it was siphoned out of our economy.  And somehow someone thought it was a good idea to pretend that the brokers had lost money and then gave them trillions more in “bailouts”, purchase programs etc.

So what did the homeowner get for his/her participation? Well, he/she got paid whatever the payment was in the transaction. The investment bank decided to make that payment as an inducement to sign a note and mortgage without which there would be no securitization claims. And that is why appraisals turned from conservative to fantasy.

The deal was never about the collateral or the loan from the point of view of the investment bank. It was never about any risk of loss because there was never going to be any loss. It was always bout selling securities that they would claim to be not subject to regulation.

But because the investment bank, acting through sham conduits like Rocket Mortgage, lied about its true intent and even lied about its involvement in the transaction with the homeowner, they were able to convince the homeowner to sign the note and mortgage, promising to pay all of the money back that they had received as an incentive payment plus interest, leaving the homeowner with less than nothing for his/her role in securitization profits — and leaving the investment banks laughing as they converted piles of other people’s money into their own bank accounts off-shore, onshore and into the purchase of precious metal distribution centers and other offshore businesses.

Why is this important to know as homeowners?

It is the centerpiece of every defense of every foreclosure where securitization is either directly claimed or is lurking in the background — a situation that encompasses virtually all foreclosures in the U.S. This is because state and federal laws governing the administration, collection, and enforcement of debts have not kept pace with the “innovation” that is falsely called “securitization.”

Foreclosures are conducted under state law. And all states and all other U.S. jurisdictions have, by state statute, uniformly adopted Article 9 §203 of the Uniform Commerical Code, which is the basis for the judicial doctrine that says that a document that says it is transferring ownership of a mortgage or the beneficial interest under a deed of trust is legally nothing (a “legal nullity”) if the underlying obligation has not been sold to the purported grantee. Simply stated any attempt to initiate a foreclosure proceeding by someone who holds a void (“legal nullity”) assignment is wrongful, illegal, and must be denied.

The problem for the investment banks is that their scheme depends entirely upon convincing the public to accept their extra-legal (illegal) scheme in which virtual (pretender) creditors replace actual ones. The law requires real creditors.

The investment bank needs the public to buy that gibberish because the transaction with the homeowner is never recorded or sold as an account receivable on the general ledger of any company, except where the label has been used to conceal the transaction. And that means that at the end of their paper trail they’re left with naming a designated claimant who has no accounts and has no losses for which it could claim a remedy. Hence no claim could be made — let alone any foreclosure proceeding.

The entire scheme depends upon the ability to use legal doctrines that create legal presumptions of fact and law out of what appear to be facially valid documents. Homeowners have worked hard to show that those documents are entirely fabricated, false, forged, and robosigned.

The 50 state settlement and many other settlements have been both administrative findings and tacit admissions of the use of fabricated documents to cover up the lack of ownership of any monetary obligation due from any homeowner and even more — the lack of the existence of any such obligation on the books of any company at the time of foreclosure. And yet despite state statutes that prohibit the use of legal presumptions in favor of a noncredible source, most courts continue to allow their use.

The bottom line is that homeowners are mostly successful in defeating the foreclosure attempt entirely by merely issuing timely discovery demands and objections that focus on existence, ownership, and authority over the alleged obligation. They don’t need to plead or prove that that the payment they received was an incentive payment. It just ends up that way.


Nobody paid me to write this. I am self-funded, supported only by donations. My mission is to stop foreclosures and other collection efforts against homeowners and consumers without proof of loss. If you want to support this effort please click on this link and donate as much as you feel you can afford.

Please Donate to Support Neil Garfield’s Efforts to Stop Foreclosure Fraud.


Neil F Garfield, MBA, JD, 73, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.

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One Response

  1. Good postulating after examining the numbers- you’re right, of course- no one would make any loans, in retrospect, if what you’ve deduced is the end result. It looks to me as if they’ve backed themselves into a corner. How could they do originate 350 billion in loans, and garner 15 billion in fees? The answer is, they couldn’t.

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