Royal Bank of Scotland Trained Employees on How to Forge Signatures

Fraud for the first time in history has been institutionalized into law.

It is foolishness to believe that the banking industry is trustworthy and that they have the right to claim legal presumptions that their fabricated documents, and the forged documents are valid, leaving consumers, borrowers and in particular, homeowners to formulate a defense where the banks are holding all the information necessary to show that the current foreclosing parties are anything but sham conduits.

Here we have confirmation of a practice that is customary in the banking industry today — fabricating and forging instruments that sometimes irreparably damage consumers and borrowers in particular. Wells Fargo Bank did not accidentally create millions of “new accounts” to fictitiously report income from those accounts and growth in their customer base.

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Across the pond the signs all point to the fact that the custom and practice of the financial industry is to practice fraud. In fact, with the courts rubber stamping the fraudulent representations made by attorneys and robo-witnesses, fraud for the first time in history has been institutionalized into law.

RBS here is shown in one case to have forged a customer’s signature to a financial product she said she didn’t want —not because of some rogue branch manager but because of a sustained institutionalized business plan based solidly on forgery and fabrication in which employees were literally trained to execute the forgeries.

The information is in the public domain — fabrication, robo-signing and robo-winesses testifying in court — and yet government and the courts not only look the other way, but are complicit in the pandemic fraud that has overtaken our financial industries.

Here are notable quotes from an article written by J. Guggenheim.

Once upon a time, in a land far, far away- forgery, fabrication of monetary instruments, and creating fake securities were crimes that would land you in prison.  If you forged the name of your spouse on a check it was a punishable crime.  The Big Banks now forge signatures and fabricate financial instruments on a routine basis to foreclose on homes they can’t prove they own, open accounts in unsuspecting customer’s names, and sign them up for services they don’t want.  If this isn’t the definition of a criminal racketeering enterprise- what is?

RBS, following the Wells Fargo Forgery model, conceded that a fake signature had been used on an official document, which means a customer was signed up to a financial product she did not want.  RBS’s confession comes only two weeks after whistle-blowers came forward claiming that bank staff had been trained to forge customer signatures. [e.s.]

The confession comes only two weeks after The Scottish Mail on Sunday published claims by whistle-blowers that bank staff had been trained to forge signatures.

At first, RBS strenuously denied the allegations, but was forced to publicly acknowledge this was likely a widespread practice. [e.s.]  The bank was forced to apologize publicly after retired teacher Jean Mackay came forward with paperwork that clearly showed her signature was faked on a bank document.  The great-grandmother was charged for payment protection insurance (PPI) back in 2008 even though she had declined to sign up for the optional product.

At first the bank refunded her fees but refused to admit the document was forged.  [e.s.]A forensic graphologist confirmed the signatures were ‘not a match’, forcing the bank to concede and offered her a mere £500 in compensation for their fraudulent act.

Forensic Graphologist Emma Bache, who has almost 30 years’ experience as a handwriting expert, examined the document and said the fundamental handwriting characteristics do not match.

The Banks in Britain, Australia, New Zealand and Canada, along with the United States include forgery and fabrication in their business models to increase profits.  Why shouldn’t they?  There is NO THREAT because they know they will not be held accountable by law enforcement or the courts- so they continue to fleece, defraud, and steal from their customers.

Homeowners must force an urgent investigation into claims of illegal practices by the banks.  Wells Fargo is not doing anything that CitiBank, JPMorgan Chase, Bank of America and others aren’t doing.  To remain competitive in an unethical marketplace, you almost have to resort to the same fraudulent tactics.[e.s.]

However, whistle-blowers have now revealed that managers were coached on how to fake names on key papers.  Whistle-blowers said that staff members had received ‘guidance’ on how to download genuine signatures from the bank’s online system, trace them on to new documents then photocopy the altered paperwork to prevent detection.  When in fact the bank taught its employees how to engage in criminal conduct.

Although clearly against the law, the whistle-blowers claim it was “commonly done to speed up administration and complete files.”  Just like American banks forge notes and assignments to ‘speed up foreclosures and complete files.’  They claim the technique was also used to sign account opening forms – and even loan documents. [e.s.]


According to, the “criminal offense of forgery consists of creating or changing something with the intent of passing it off as genuine, usually for financial gain or to gain something else of value.” This often involves creation of false financial instruments, such as mortgage notes, assignments, checks, or official documents. It can also include signing another person’s name to a document without his or her consent or faking the individual’s handwriting.  Forgery often occurs in connection with one or more fraud offenses. 

Another Pennies on the Dollar Settlement

Editor’s Note: like the post before this one, it is astonishing how these settlements fall so far short of the actual damage that was created by the banks by their intentional illicit and criminal behavior.

This one “relates to conduct at Greenwich Capital, the R.B.S. unit that bundled mortgages into securities and sold them to investors. Nevada found that R.B.S. worked closely with Countrywide Financial and Option One, two of the most aggressive lenders during the boom.” They were categorized as sub-prime even if the borrower was not sub-prime. That way they loaned less of the investor money at a higher nominal rate, charged the borrower for additional underwriting risk when there was no underwriting at all, and kept the excess interest, the excess funding that should  have gone into standard loans properly underwritten according to industry standards.

The trap was teaser rates that borrowers could never decipher: “From 2004 through 2006, R.B.S. packaged $90 billion of these loans, many originated by Countrywide. The mortgages typically began with an artificially low interest rate that rose significantly after a year or two. Under the terms of these loans, borrowers could choose to pay only a fraction of what they owed monthly, resulting in a rising principle balance.”

And the media is all about how the housing problem is ending. That is nonsense. It is coming to a head, but the peak won’t be until perhaps 2014.

Bank Settles Over Loans in Nevada


The Royal Bank of Scotland agreed to pay $42.5 million late Tuesday in a settlement with the Nevada attorney general that ends an 18-month investigation into the deep ties between the bank and two mortgage lenders during the housing boom.

Most of the money paid by R.B.S. — $36 million — will be used to help distressed borrowers throughout Nevada. In addition, R.B.S. agreed to finance or purchase subprime loans in the future only if they comply with state laws and are not deceptive.

The settlement between the bank and Catherine Cortez Masto, Nevada’s attorney general, relates to conduct at Greenwich Capital, the R.B.S. unit that bundled mortgages into securities and sold them to investors. Nevada found that R.B.S. worked closely with Countrywide Financial and Option One, two of the most aggressive lenders during the boom.

Officials working with Ms. Masto say that they examined R.B.S.’s activities from 2004 to 2007. During those years, the bank provided funding for more than $100 billion of risky loans, many made by Countrywide and Option One. In 2005 and 2006, R.B.S. was the third-largest securitizer of subprime mortgages and adjustable-rate loans.

“I remain committed to enforcing Nevada’s laws against the players — including those on Wall Street — that contributed to and profited from reckless and deceptive mortgage lending in Nevada,” Ms. Masto said in a statement. “The payment from R.B.S. will alleviate some of the injury to the Silver State and its residents. The changes to its securitization process should help make sure that we do not go down this road again.”

In agreeing to the settlement, R.B.S. neither admitted nor denied the acusations.

During the investigation, Nevada officials examined more than one million pages of documents and interviewed former R.B.S. employees and borrowers. Ms. Masto’s office concluded that the bank had essentially created joint ventures with Countrywide and Option One and that its financing enabled those lenders to make reckless loans that were unlikely to be repaid.

The attorney general also examined whether R.B.S. reviewed the mortgages bought from Countrywide and concluded that the bank bundled and sold loans even after identifying them as problematic. Moreover, at Countrywide’s request, the bank limited the number of loans it reviewed, the attorney general’s office said.

Nevada has been hit hard by the foreclosure crisis. Some 60 percent of borrowers in the state have mortgages of greater value than the properties underlying them, according to Core Logic, a real estate data company.

Ms. Masto’s case comes after several others brought recently by state regulators against firms involved in mortgage securities. Earlier this month, the New York attorney general sued Bear Stearns over its conduct during the boom, and last week, the Massachusetts securities regulator sued Putnam Advisory, a unit of Putnam Investments, for misleading investors who bought a collateralized debt obligation it was managing. Officials at both firms rejected the allegations and said they would vigorously defend themselves in court.

Some securities lawyers say that it is easier for state officials to bring successful actions against banks for questionable activities than it is for federal investigators. That is mostly because of stringent requirements under federal securities laws.

“This strategy sidesteps the need to prove intent to defraud and to detail fraud allegations as is required for similar actions under the federal securities laws,” said Lewis D. Lowenfels, an authority in securities law in New York. According to the Nevada attorney general’s office, R.B.S. was among the larger bundlers of a risky type of loan known as a pay-option adjustable-rate mortgage. From 2004 through 2006, R.B.S. packaged $90 billion of these loans, many originated by Countrywide. The mortgages typically began with an artificially low interest rate that rose significantly after a year or two. Under the terms of these loans, borrowers could choose to pay only a fraction of what they owed monthly, resulting in a rising principle balance.

R.B.S. also worked hard to keep Countrywide generating loans for the bank’s securities, investigators said.

Ms. Masto’s office said that R.B.S.’s mortgage funding operation was widespread across Nevada, which is why most of the settlement will go to borrowers who have suffered harm.

Eating the Potato Stops the Game

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“We could have lower inequality, a more balanced financial system, and higher economic growth. But if we allow things to carry on the way they are, we are going to have not only an unbalanced economy, but unbalanced politics, with the financial sector really distorting both our economy and our democracy,” he said.  Stiglitz is a former chief economist of the World Bank, and won the Nobel Prize in 2001. He has recently written a new book, ‘The Price of Inequality’. 

Editor’s Notes:  

The principle is so simple that it is hard to imagine why our national leaders and even the top 1% don’t get it. They continue to bully and intimidate the other 99% into near poverty in a form of economic slavery — and then expect the same people to support an economy that is 70% driven by consumer spending. This proves the assertion that you don’t have to be smart to have money and the corollary that even if you have money, it doesn’t make you smart.

There is simply no doubt amongst any historians or economists or even anthropologists that when income and wealth inequality gets too large, the society converts from being a world of opportunity to a world of slavery and crashes because while there is plenty of capital around to build  and make things, nobody has any money left to buy what the Holders of capital want to sell.

All ideological misrepresentations aside, there is an inescapable fact of history that the economy and the stock market tend to do better under the anti-business pro union administrations than they do under the pro-business anti union administrations. Look it up yourself. You can rationalize the facts but you can’t change them.

And again, the principle is so simple that even a young child gets it. It’s like the old game “Hot Potato.” It keeps going as long as the potato is hot and it gets passed around. The game abruptly ends if someone eats the potato. The 1% ate the potato and have closed their eyes to the consequences of their own actions. If you want money circulating making money for lots of people then make sure the people at  the bottom get a fair share of it by whatever means are necessary to get money into their hands. They spend every cent they get and they spend it with people, stores and companies that spend most of the money they get from the consumers. This makes rich people richer while at the same time maintaining a society is that is stable. Pushing money into the lower strata of the society is simply good business and good politics.

The United States and other countries have turned these simple principles and facts on their head. The result is stalled economies, crashing societies and arguments over ideology that is classically rearranging chairs on the deck of the Titanic. The ship is going down and all this needed is a little more air at the bottom so it won’t sink.

The massive theft of wealth from the middle class pushed those families down from middle class to lower classes. Debt was substituted for income which has been flat for more than 30 years. Exactly why is anyone surprised that the economy crashed when the borrowers couldn’t borrow any more money because they simply didn’t have the income to even make the first payment on the debt. The Banks answer we need more debt. It isn’t enough that their debt derivative instruments amount to ten times all the actual money in the world, they want more. Who do they think is going to pay this debt?

And where are the referees in this “game.” Why were they pulled of the playing field and why are they not swarming all over all the players making sure the play is fair? Oh right, that would be government regulation and everyone knows government regulation is a bad thing. So let’s get rid of all government regulation. Start with murder and work your way down. See where that gets you.

Banks Risk Distorting Our Democracy: Stiglitz

By Kathy Barnato

Under-regulated and over-powerful banks weaken the global economy and lead to higher inequality, Nobel prize-winning economist Joseph Stiglitz told CNBC.

Joseph Stiglitz
Franco Origlia | Getty Images
Joseph Stiglitz, the Nobel prize-winning economist and former chief economist at the World Bank.

Highlighting the Libor [cnbc explains] -fixingscandal that has hit UK banks Barclays[BARC-GB  162.85    -2.75  (-1.66%)   ] and Royal Bank of Scotland [RBS  6.771    0.171  (+2.59%)  ], Stiglitz said reforming financial markets was the single most pressing issue facing the global economy.

“A lot of inequality, especially at the top, does not come from people really making the size of the pie bigger, making our economy work better, it comes from what we call rent seeking, trying to seize a bigger slice of that pie through things that actually make our economy weaker,” Stiglitz told CNBC’s ‘Worldwide Exchange‘ on Friday.

Stiglitz said he supported a “much stronger version” of current financial market regulation, with the sector forced to focus on its core purpose of providing credit. He said banks [.DJUSBK  194.95    3.81  (+1.99%)   ] should be told: “You can’t engage in these kinds of speculative activities, these non-transparent CDS[cnbc explains] , these gambles on the market — they are not your business.”

He added that over-mighty banks not only distort the economy, but also distort politics. He said the 1999 repeal of the U.S. Glass–Steagall Act, which enforced the separation of investment bank activity from commercial bank activity, was due to lobbying by the financial sector.

“That was the influence of the banks again… They lost money on a lot of their real financial investments, but their political investments really paid off! Not for shareholders and bondholders, but for the bank managers, who have done very well in the last few years,” he said.

Without reform, both Europe and the global economy will be “weak” in five to 10 years’ time, said Stiglitz.

“If we continue on the current course, the financial system will not be serving the rest of our economy, the economy will be weak. Inequality will be greater, and we are paying a very high price for this inequality.

“We could have lower inequality, a more balanced financial system, and higher economic growth. But if we allow things to carry on the way they are, we are going to have not only an unbalanced economy, but unbalanced politics, with the financial sector really distorting both our economy and our democracy,” he said.

Stiglitz is a former chief economist of the World Bank, and won the Nobel Prize in 2001. He has recently written a new book, ‘The price of inequality’.

To view Joseph Stiglitz’s appearance on CNBC, click here

— By’s Katy Barnato





Bankruptcy Trustee Accuses banks of Manipulating “Margin Calls” on Mortgage Bonds

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EDITORIAL COMMENT: WELL it looks like this is not over yet. The accusations are right on target — the more they drill down the more they find which is what we have been saying on Livinglies for 3 1/2 years. That’s what we keep doing in our COMBO title and securitization analysis and what we are teaching lawyers in our seminars.

Maybe the judiciary will wake up and realize that all these title and securitization reports should not be the burden of homeowners to produce. Maybe they should realize, in line with existing law, that the party seeking affirmative relief is the pretender lender who wants to forcibly take a home away from otherwise good citizens. Maybe Judges will realize that the party seeking affirmative relief is the plaintiff no matter what foreclosure procedure is invoked and that party must plead and prove a foreclosure case just like banks have been doing for centuries.

Maybe everyone will realize that just because the borrower stops paying doesn’t mean the payment was due or that the creditor didn’t get the money and that the declaration of default and all that comes after that is a farce without the laughs. Deutsch was Trustee for most of these pools, followed by US Bank. We already know they lied, cheated and stole at all levels of the fake securitization that was never backed up by actual transfers, and that that the original mortgages were fatally defective. Acknowledging that fact will cause pain only to Wall Street which in all events MUST go through the pain of shrinking back down to a proper size of 12-14% of GDP instead of its current reign of 50% of all measured services and products produced by the United States.

Maybe the narrative wil finally shift to the truth. It isn’t borrowers who are delaying the inevitable foreclosure. It is the banks that are delaying the inevitable collapse of the entire foreclosure and mortgage structure and the reduction not just of principal due on the mortgages, but a reduction in the real value of assets on their balance sheets and hence their power and market-share in what SHOULD be a free market.

Banks Sued in Thornburg Bankruptcy


WILMINGTON, Del. (Reuters) — The bankruptcy trustee for Thornburg Mortgage has sued Goldman Sachs, Barclays and other big banks for a combined $2.2 billion, blaming them for its bankruptcy.

The trustee filed four separate lawsuits, the most extensive of which blames a “collusive scheme” by units of JPMorgan Chase & Company, Citigroup, the Royal Bank of Scotland, Credit Suisse and UBS for driving the company into bankruptcy.

The trustee, Joel Sher, accused the five banks of acting together to use a series of unjustified margin calls to extend their control over Thornburg, which was once a leading provider of “jumbo” home loans.

The lawsuit seeks to recover $2 billon for fraudulent conveyances and transfers by the banks, which had financed Thornburg’s mortgage-backed securities.

The trustee said the banks eventually drove Thornburg into Chapter 11 in May 2009. It sought protection from creditors with $36.5 billion in assets, making it one of the largest bankruptcies during the financial crisis.

Citigroup said the lawsuit was without merit. Credit Suisse and UBS declined to comment. JPMorgan and RBS did not immediately return a call for comment.

Mr. Sher was appointed to run Thornburg after the company’s executives were accused of using Thornburg’s staff and offices, without creditors’ approval, to start a new company.

The trustee also sued Barclays, claiming it improperly seized mortgage bonds from Thornburg in 2007 by undervaluing the securities in a series of margin calls. The trustee is seeking at least $94 million.

Barclays declined to comment.

Mr. Sher sued Goldman Sachs, seeking at least $71 million and accusing the bank of scheming to seize hundreds of millions of dollars of investment-grade mortgage bonds that Thornburg had pledged as collateral.

Goldman Sachs declined to comment.

The final lawsuit claims Countrywide Home Loans, which was acquired by Bank of America, breached representations and warranties on the loans it sold to a unit of Thornburg.

That lawsuit was also brought on behalf of a group of investors known as the Zuni Investors, who were represented by David Grais of Grais & Ellsworth.

Mr. Grais has brought numerous “putback” lawsuits that seek to have originators like Countrywide repurchase mortgages that fell short of promised standards.

Bank of America did not immediately return a call for comment.

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