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VIDEOS YOU MUST WATCH! IT ALL BEGAN w/ MARCY KAPTUR

VIDEOS YOU MUST WATCH! IT ALL BEGAN w/ MARCY KAPTUR

Back in January 15, 2009 Marcy Kaptur told Foreclosure Victims “Don’t Leave your Home” because we will find out that they don’t have the mortgage.

“They can’t find the paper up there on Wall Street”

You can feel it through her passion she knows what she’s talking about. I have a feeling I may know who might be consulting her 🙂

Go to 3:05 where they clearly mention the problems with MERS

Barry Ritholtz goes at it with Diana Olick

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in assignment of mortgage, foreclosure, foreclosure fraud, foreclosures, mbs, MERS, MERSCORP, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., note, robo signers, scam, securitization, servicers, STOP FORECLOSURE FRAUD, Trusts, Wall Street1 Comment

WHAT LPS & THE MILLS DON’T WANT YOU TO KNOW…WHO REALLY OWNS THE NOTE!

WHAT LPS & THE MILLS DON’T WANT YOU TO KNOW…WHO REALLY OWNS THE NOTE!

Below is a document that Lender Processing Services, Inc. or it’s many subsidiaries submits by wire transmission to the foreclosure mill with instructions NOT to name the actual owner of the note on the foreclosure but in the name of the servicer!

“FORECLOSURE SHOULD BE IN THE NAME OF ”

It clearly states the names of the real parties:

  • SERVICER
  • TRUST
  • TRUSTEE/NOTE-OWNER
  • BORROWER

A foreclosure is rarely commenced under the “Real Entity.” So why do they keep this from us when they knew all along the real parties of interest? This was only discovered during an actual case or we would have never found this.

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in assignment of mortgage, chain in title, conflict of interest, CONTROL FRAUD, DOCX, foreclosure, foreclosure fraud, foreclosure mills, foreclosures, forgery, investigation, Lender Processing Services Inc., MERS, MERSCORP, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., note, racketeering, RICO, scam, securitization, servicers, STOP FORECLOSURE FRAUD, stopforeclosurefraud.com, Wall Street7 Comments

SECURITIZATION Might Be The Scope Of Mortgage Issues

SECURITIZATION Might Be The Scope Of Mortgage Issues

Again… look towards the “Common Thread” chances are MERS is involved if they’ve been securitized . Remember every loan needs a “MOM

FBI crackdown on fraudulent mortgages may underestimate scope of problem

by CHRISTINE RICCIARDI
Tuesday, September 14th, 2010, 1:00 pm

When the Federal Bureau of Investigation began Operation Stolen Dreams in March 2010, the government’s largest mortgage fraud takedown, the FBI estimated about $2.3 billion of fraudulent mortgages were originated in 2009. However, recent estimates from a source monitoring the operation indicates that number is now closer to $14 billion.

The numbers were put together recently by an European investment bank in the run-up to a mortgage fraud conference in the U.K. next month. It found that mortgage fraud in the U.K. stood at $120 million in 2009.  “The phenomenon, though worrying and one that certainly requires strong intervention from authorities, is not of the same scale as in the U.S.,” said the source. “Securitization is therefore well protected from this issue.”

Continue to…House Wire

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© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in foreclosure, foreclosure fraud, foreclosures, investigation, mbs, MERS, MERSCORP, mortgage, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., Mortgage Foreclosure Fraud, originator, Real Estate, RICO, scam, securitization, servicers, sub-prime, trustee, Trusts, Violations, Wall Street1 Comment

Congress Needs To ZERO IN On A “Common Thread” To Fannie, Freddie Mortgage Crisis

Congress Needs To ZERO IN On A “Common Thread” To Fannie, Freddie Mortgage Crisis

Anyone can see the “Fiction” that was set into place from all the institutions in this article below. Each one of these named parties as a shareholder utilizes Mortgage Electronic Registration Systems, Inc., yet Washington never mentions this MERS device.

All this talk of false and misleading loans blah blah blah …I mean grab the bull by it’s nuts and put these criminals behind bars. Not just seek refunds! This clean up should also seek Racketeering Indictments.

Congress Seeks Fannie, Freddie Exit as Banks Eat Soured Loans

By Dawn Kopecki – Sep 15, 2010 1:00 AM ET

U.S. lawmakers will grapple today with how to end the bailout of Fannie Mae and Freddie Mac after two years and almost $150 billion, and who pays the bill for bad loans made during the housing boom.

Regulators who seized control of the two mortgage lenders in 2008 are under pressure to stem losses for taxpayers and recoup money from banks that sold faulty loans to Fannie Mae and Freddie Mac — all without hindering the housing market’s recovery. Assistant Treasury Secretary Michael Barr and Edward DeMarco, acting director of the Federal Housing Finance Agency, are scheduled to testify today on their progress at the House Financial Services Committee.

The Obama administration and Congress are weighing the future of the two companies as part of an overhaul of the U.S. housing finance system. Fannie Mae, based in Washington, and Freddie Mac, based in McLean, Virginia, lost $166 billion on guarantees of single-family mortgages from the end of 2007 through the second quarter, according to the FHFA. Treasury Secretary Timothy F. Geithner has promised a comprehensive proposal by early next year.

“The biggest problem in the economy is that we have three or four million too many homes,” said Chris Kotowski, a banking analyst at Oppenheimer & Co. The solution “will take another two or three years to work out until we sop up the excess supply,” Kotowski said.

Loan Clean-Up

The clean-up includes seeking refunds from lenders who sold loans based on false or misleading information, and the two government-backed firms aren’t the only ones demanding buybacks. The Federal Reserve, private mortgage investors and mortgage insurers are combing through loan documents for faulty appraisals, inflated borrower incomes and missing documentation that would support a refund request.

As of the end of the second quarter 2010, Fannie Mae had $4.7 billion in outstanding repurchase requests, and Freddie Mac had $6.4 billion in outstanding repurchase requests. DeMarco said in his prepared testimony that outstanding repurchase requests continue to be “of concern.”

Continue reading…BLOOMBERG

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© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in bank of america, chain in title, CitiGroup, concealment, congress, conspiracy, CONTROL FRAUD, corruption, Credit Suisse, fannie mae, federal reserve board, foreclosure, foreclosure fraud, foreclosure mills, foreclosures, investigation, MERS, MERSCORP, mortgage, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., RICO, scam, servicers, settlement, stopforeclosurefraud.com, sub-prime, trustee, Trusts, us bank, Wall Street2 Comments

It All goes Back in the Box

It All goes Back in the Box

We can learn a thing or two about a simple game called Monopoly!

In the end .. it all goes back in the box …

Editing done by me.

“What we do for ourselves dies with us. What we do for others and the world remains and is immortal.” -Albert Pine

Speech is by John Ortberg

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in chain in title, CONTROL FRAUD, corruption, deed of trust, Eviction, FED FRAUD, foreclosure, foreclosure fraud, foreclosures, mbs, mortgage, scam, securitization, stock, stopforeclosurefraud.com, sub-prime, svp, tarp funds, TAXES, trade secrets, Trusts, Wall Street0 Comments

10 bailed-out banks spent $16.3M lobbying in 1H

10 bailed-out banks spent $16.3M lobbying in 1H

mostly “MERS SHAREHOLDERS”

Top 10 bailed-out banks spent over $16 million in 2010 first half lobbying on financial reform

Eileen Aj Connelly, AP Business Writer, On Tuesday August 31, 2010, 7:00 pm EDT

NEW YORK (AP) — The 10 banks that received the most bailout aid during the financial crisis spent over $16 million on lobbying efforts in the first half of 2010, as the debate over financial regulatory reform reached its height.

Disclosure reports show that the banks that got the most government help in late 2008 and early 2009 also invested the most to influence members of Congress, the White House, the Federal Reserve, Treasury Department and a long list of federal agencies as new rules were enacted governing Wall Street and the nation’s financial system.

“I’m not shocked that they spent that much money because I saw them every day,” said Ed Mierzwinski, consumer program director at U.S. Public Interest Research Group, who said more than 2,000 lobbyists worked on the financial reform bill.

The sweeping law signed by President Barack Obama in July topped 2,300 pages, and outlined broad rules for issues ranging from derivatives trading to the fees merchants are charged for processing credit and debit card transactions. It also covered the creation of a consumer financial protection bureau. Banks are continuing efforts to try to shape many of the new rules that are still being finalized.

The $16.32 million spent in the first half of 2010 was 26 percent higher than the combined $12.94 million they spent in the first half of 2009.

In prior years, the spending crept up at a much slower pace: 2009’s total was about 2 percent higher than the nearly $12.7 million spent in the first half of 2008. And that was only 3.7 percent above the $12.25 million spent in the first half of 2007.

Leading the pack this year was JPMorgan Chase & Co., which spent $1.52 million on lobbying in the second quarter, on top of $1.51 million in the first quarter of 2010, for a total of $3.03 million, according to disclosure reports filed with the House of Representatives clerk’s office.

Citigroup Inc., the largest bank recipient of government funds during the crisis in late 2008 and early 2009, was second. The New York-based bank spend $1.47 million on lobbyists in the second quarter, after spending $1.31 million in the first quarter for a total of $2.78 million.

And Wall Street titan Goldman Sachs Group Inc. was third, with $1.58 million spent in the second quarter, on top of $1.19 million in the first quarter of 2010.

All three banks declined to comment on their lobbying spending, which went toward hiring advocates to discuss the legislation with lawmakers and regulators. Lobbying figures do not include any campaign contributions that banks or their employees might also have made.

Mierzwinski said the big win for consumers was the financial protection bureau, which banks tried to remove from the law. The financial industry was in a weakened position during the debate, however, because of public anger over the economy’s collapse and publicity over issues like Wall Street bonuses. Nevertheless, banks were rewarded for their efforts, he said. “They did manage to make changes.”

Bank of America Corp. and Wells Fargo & Co. both also spent more than $2 million in the first half of the year. Spending far less were PNC Bank, US Bancorp, Capital One Financial Corp. and Regions Financial Corp. The American Bankers Association, the main trade group for the industry, also lobbied heavily, spending $4.2 million in the first half of 2010.

Consumer advocacy groups had their own lobbyists working the Capitol’s halls during the finance reform debate as well, but their spending was dwarfed by the banks — a total of $792,000 in the first half of the year for four of the top organizations. The Center for Responsible Lending topped the list, with $335,000 spent in the first six months of the year. U.S. PIRG tallied $227,000. The Consumers Union listed $150,000 and The Consumer Federation of America spent $80,000.

Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, said the heavy spending in part reflects the number of people needed to discuss issues with 535 members of Congress. One sentence in a law regulating the financial markets can have a big impact on a company’s profit, she noted, and the industry made sure they had experts on hand to discuss every aspect with lawmakers.

“We’re talking billions,” Sloan said. “So the lobbying money is the most effective money you’ll spend.”

“It’s not that I don’t think that many would have preferred a different outcome,” she added. “But I doubt that any of those banks didn’t think it was worth it to have those lobbyists.”

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in bank of america, capital one, CitiGroup, concealment, conflict of interest, conspiracy, CONTROL FRAUD, corruption, Economy, foreclosure, foreclosure fraud, foreclosures, geithner, goldman sachs, MERS, MERSCORP, mortgage, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., Mortgage Foreclosure Fraud, scam, servicers, STOP FORECLOSURE FRAUD, sub-prime0 Comments

EXCLUSIVE | ‘MERS’ DEPOSITION of SECRETARY and TREASURER of MERSCORP 4/2010

EXCLUSIVE | ‘MERS’ DEPOSITION of SECRETARY and TREASURER of MERSCORP 4/2010

Could this deposition hold the key to take all of MERS V3 &  MERSCORP down!

There is not 1, 2 but 3 MERS, Inc. in the past.

Just like MERS et al signing documents dated years later from existence the Corporate employees do the same to their own corporate resolutions! Exists in 1998 and certifies it in 2002.

If this is not proof of a Ponzi Scheme then I don’t know what is… They hide the truth in many layers but as we keep pulling and peeling each layer back eventually we will come to the truth!

“A Subtle Stranger” Orchestrates a Paradigm Shift

MERS et al has absolutely no supervision of what is being done by it’s non-members certifying authority PERIOD!

SUPERIOR COURT OF NEW JERSEY
CHANCERY DIVISION – ATLANTIC COUNTY
DOCKET NO. F-10209-08
BANK OF NEW YORK AS TRUSTEE FOR
THE CERTIFICATE HOLDERS CWABS,
INC. ASSET-BACKED CERTIFICATES,
SERIES 2005-AB3
Plaintiff(s),
vs.
VICTOR and ENOABASI UKPE
Defendant(s).

___________________________________________
VICTOR and ENOABASI UKPE
Counter claimants and
Third Party Plaintiffs,
vs.
BANK OF NEW YORK AS TRUSTEE FOR
THE CERTIFICATE HOLDERS CWABS,
INC. ASSET-BACKED CERTIFICATES,
SERIES 2005-AB3
Defendants on the Counterclaim,
and
AMERICA’S WHOLESALE LENDER;
COUNTRYWIDE HOME LOANS, INC.;
MORGAN FUNDING CORPORATION,
ROBERT CHILDERS; COUNTRYWIDE
HOME LOANS SERVICING LP,
PHELAN, HALLINAN & SCHMIEG,
P.C.,
Third Party Defendants
——————–

Deposition of William C. Hultman, Secretary and Treasurer of MERSCORP

[ipaper docId=36513502 access_key=key-1ltln0ondmrqe0v9156u height=600 width=600 /]

Does MERS have any salaried employees?
A No.
Q Does MERS have any employees?
A Did they ever have any? I couldn’t hear you.
Q Does MERS have any employees currently?
A No.
Q In the last five years has MERS had any
employees
?
A No.
Q To whom do the officers of MERS report?
A The Board of Directors.
Q To your knowledge has Mr. Hallinan ever
reported to the Board?
A He would have reported through me if there was
something to report.
Q So if I understand your answer, at least the
MERS officers reflected on Hultman Exhibit 4, if they
had something to report would report to you even though
you’re not an employee of MERS, is that correct?
MR. BROCHIN: Object to the form of the
question.
A That’s correct.
Q And in what capacity would they report to you?
A As a corporate officer. I’m the secretary.
Q As a corporate officer of what?
Of MERS.
Q So you are the secretary of MERS, but are not
an employee of MERS?
A That’s correct.

etc…
How many assistant secretaries have you
appointed pursuant to the April 9, 1998 resolution; how
many assistant secretaries of MERS have you appointed?
A I don’t know that number.
Q Approximately?
A I wouldn’t even begin to be able to tell you
right now.
Q Is it in the thousands?
A Yes.
Q Have you been doing this all around the
country in every state in the country?
A Yes.
Q And all these officers I understand are unpaid
officers of MERS
?
A Yes.
Q And there’s no live person who is an employee
of MERS that they report to, is that correct, who is an
employee?
MR. BROCHIN: Object to the form of the
question.
A There are no employees of MERS.

RELATED ARTICLE:

_____________________________

MERS 101

_____________________________

FULL DEPOSITION of Mortgage Electronic Registration Systems (MERS) PRESIDENT & CEO R.K. ARNOLD “MERSCORP”

_____________________________

DEPOSITION of A “REAL” VICE PRESIDENT of MERS WILLIAM “BILL” HULTMAN

_____________________________

HOMEOWNERS’ REBELLION: COULD 62 MILLION HOMES BE FORECLOSURE-PROOF?

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in bac home loans, bank of america, bank of new york, chain in title, concealment, conflict of interest, conspiracy, CONTROL FRAUD, corruption, countrywide, foreclosure, foreclosure fraud, foreclosure mills, foreclosures, insider, investigation, lawsuit, MERS, MERSCORP, mortgage, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., note, originator, R.K. Arnold, racketeering, Real Estate, sanctioned, scam, securitization, servicers, stopforeclosurefraud.com, sub-prime, TAXES, trustee, trustee sale, Trusts, truth in lending act, unemployed, Violations, Wall Street4 Comments

FORECLOSURE FRAUD Personally CAUGHT by JUDGE SCHACK! Dismissed with PREJUDICE!

FORECLOSURE FRAUD Personally CAUGHT by JUDGE SCHACK! Dismissed with PREJUDICE!

2010 NY Slip Op 51482(U)

ARGENT MORTGAGE COMPANY, LLC, Plaintiff,
v.
DAPHINE MAITLAND, ET. AL., Defendants.

41383/07.

Supreme Court, Kings County.

Decided August 19, 2010.

Melissa A Sposato, Esq., Law Offices of Jordan Katz, PC, Melville NY, Plaintiff.

No Appearances, Defendant.

ARTHUR M. SCHACK, J.

In this mortgage foreclosure action, plaintiff’s motion for an order of reference for the premises located at 732 Hendrix Street, Brooklyn, New York (Block 4305, Lot 22, County of Kings) is denied with prejudice. The complaint is dismissed. The notice of pendency filed against the above-named real property is cancelled. Plaintiff’s successor in interest, AMERICAN HOME MORTGAGE SERVICING, INC. (AHMSI), lacks standing to continue this action because the instant mortgage was satisfied on April 26, 2010. Plaintiff’s counsel never notified the Court that the mortgage had been satisfied and failed to discontinue the instant action with prejudice. I discovered that the mortgage had been satisfied by personally searching the Automated City Register Information System (ACRIS) website of the Office of the City Register, New York City Department of Finance. AHMSI’s President and Chief Executive Officer or its Executive Vice President, Chief Legal Officer and Secretary Jordan D. Dorchuck, Esq., its counsel, Melissa A. Sposato, Esq. and her firm, Jordan S. Katz, P.C., will be given an opportunity to be heard as to why this Court should not sanction them for making a “frivolous motion,” pursuant to 22 NYCRR §130-1.1.

Background

Defendant DAPHINE MAITLAND (MAITLAND) borrowed $392,000.00 from original plaintiff ARGENT MORTGAGE COMPANY, LLC (ARGENT), on August 4, 2006. The loan was secured by a mortgage, recorded by ARGENT, at the Office of the City Register of the City of New York, New York City Department of Finance, on August 23, 2006, at City Register File Number (CRFN) XXXXXXXXXX. Defendant MAITLAND allegedly defaulted in her mortgage loan payments with her June 1, 2007 payment. ARGENT commenced the instant action with the filing of the summons, complaint and notice of pendency with the Kings County Clerk on November 8, 2007. Plaintiff’s counsel, on April 14, 2009, filed the instant motion for an order of reference with the Court’sForeclosure Department. After reviewing the papers, the Foreclosure Department forwarded the instant motion to me on August 16, 2010.

On August 16, 2010, I searched ACRIS and discovered that AHMSI, the successor in interest to plaintiff ARGENT, executed a satisfaction of the instant mortgage almost four months ago, on April 26, 2010. The satisfaction was executed in Idaho Falls, Idaho, by Krystal Hall, Vice President of “AMERICAN HOME MORTGAGE SERVICING, INC., AS SUCCESSOR TO CITI RESIDENTIAL LENDING, INC. AS SUCCESSOR TO ARGENT MORTGAGE COMPANY, LLC,” and the satisfaction was recorded at the Office of the City Register of the City of New York, on May 10, 2010, at CRFN XXXXXXXXXXXXX.

Successor plaintiff AHMSI is one of several companies controlled by billionaire investor Wilbur L. Ross, Jr. through his firm, W. L. Ross & Company. Louise Story, in her April 4, 2008 New York Times article, “Investors Stalk the Wounded of Wall Street,” described Mr. Ross as “a dean of vulture investing.” She wrote:

Almost two centuries ago, as Napoleon marched on Waterloo, a scion of the Rothschilds is said to have declared: The time to buy is when blood is running in the streets.

Now as red ink runs on Wall Street, the figurative heirs of the Rothschilds — bankers, traders, hedge fund gurus and takeover artists — are plotting to profit from today’s financial upheaval. These market opportunists — vulture investors in the Wall Street term — have begun to swoop. They are buying up mortgages of hard-pressed homeowners, the bank loans of cash-short businesses, and companies that seem to be hurtling to bankruptcy. And they are trying to buy them all on the cheap. . . .

“The only time you really know you’ve reached the bottom is when you’re back on the other side and things are going back up,” said Wilbur L. Ross, Jr., a dean of vulture investors, who made a fortune buying steel companies when no one else seemed to want them.

Such caution aside, his firm, W. L. Ross & Company, recently spent $2.6 billion for two mortgage servicers [AHMSI and Option One] and a bond insurance company. He said he planned to buy more as hedge funds and other investor sell at bargain prices.

Moreover, ACRIS revealed that defendant MAITLAND sold the premises to 732 HENDRIX STREET, LLC for $155,000.00, with the deed executed on April 5, 2010 and recorded on April 14, 2010, at the Office of the City Register of the City of New York, at CRFN XXXXXXXXXXXXX.

Plaintiff’s counsel never had the courtesy or professionalism to notify the Court that the instant mortgage was satisfied and file a motion to discontinue the instant action. The Court is gravely concerned that it: expended scarce resources on an action that should have been discontinued; and, would have signed an order that could have possibly damaged the credit rating of defendant MAITLAND and put an unfair cloud on the title to the subject premises now owned by 732 HENDRIX STREET, LLC, causing both defendant MAITLAND and 732 HENDRIX STREET, LLC much time and effort to correct an error caused by the failure of successor plaintiff AHMSI and plaintiff’s counsel to exercise due diligence. If successor plaintiff AHMSI is a responsible lender, not a vulture investor looking to profit “when blood is running in the streets,” it should have notified the Court that the subject mortgage had been satisfied.

Discussion

It is clear that successor plaintiff AHMSI lacked standing to proceed in the instant action since some time prior to April 26, 2010, when the satisfaction for defendant MAITLAND’s mortgage was executed. The exact date is probably April 5, 2010, when defendant MAITLAND likely paid off the subject mortgage loan as part of her closing with 732 HENDRIX STREET, LLC, for the sale of the subject mortgaged premises. “To establish a prima facie case in an action to foreclose a mortgage, the plaintiff must establish the existence of the mortgage and the mortgage note, ownership of the mortgage, and the defendant’s default in payment.” (Campaign v Barba (23 AD3d 327 [2d Dept. 2005]). The instant mortgage was satisfied months before the instant motion for an order of reference was forwarded to me by the Foreclosure Department. The satisfaction, dated April 26, 2010, states that “AMERICAN HOME MORTGAGE INC. AS SUCCESSOR TO CITI RESIDENTIAL LENDING, INC. AS SUCCESSOR TO ARGENT MORTGAGE COMPANY, LLC . . . does hereby certify that a certain indenture of mortgage . . . to secure payment of the principal sum of $392,000.00, and interest, and duly recorded . . . document no. 2006000477619 on the 23rd day of August 2006, is PAID, and does hereby consent that the same be discharged of record.” (See Household Finance Realty Corp. of New York v Wynn, 19 AD3d 545 [2d Dept. 2005]; Sears Mortgage Corp. v Yahhobi, 19 AD3d 402 [2d Dept. 2005]; Ocwen Federal Bank FSB v Miller, 18 AD3d 527 [2d Dept. 2005]; U.S. Bank Trust Nat. Ass’n Trustee v Butti, 16 AD3d 408 [2d Dept 2005]; First Union Mortgage Corp. v Fern, 298 AD2d 490 [2d Dept 2002]; Village Bank v Wild Oaks, Holding, Inc., 196 AD2d 812 [2d Dept 1993]).

The Court of Appeals (Saratoga County Chamber of Commerce, Inc. v Pataki, 100 NY2d 801, 812 [2003], cert denied 540 US 1017 [2003]) declared that “[s]tanding to sue is critical to the proper functioning of the judicial system. It is a threshold issue. If standing is denied, the pathway to the courthouse is blocked. The plaintiff who has standing, however, may cross the threshold and seek judicial redress.”

In Caprer v Nussbaum (36 AD3d 176, 181 [2d Dept 2006]) the Court held that “[s]tanding to sue requires an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant’s request.” If a plaintiff lacks standing to sue, the plaintiff may not proceed in the action. (Stark v Goldberg, 297 AD2d 203 [1st Dept 2002]).

Since AHMSI executed the satisfaction for the instant mortgage, the Court must not only deny the instant motion, but also dismiss the complaint and cancel the notice of pendency filed by ARGENT with the Kings County Clerk on November 8, 2007. CPLR § 6501 provides that the filing of a notice of pendency against a property is to give constructive notice to any purchaser of real property or encumbrancer against real property of an action that “would affect the title to, or the possession, use or enjoyment of real property, except in a summary proceeding brought to recover the possession of real property.” Professor David Siegel, in NY Prac, § 334, at 535 [4th ed] observes about a notice of pendency that:

The plaintiff files it with the county clerk of the real property county, putting the world on notice of the plaintiff’s potential rights in the action and thereby warning all comers that if they then buy the property or lend on the strength of it or otherwise rely on the defendant’s right, they do so subject to whatever the action may establish as the plaintiff’s right.

The Court of Appeals, in 5303 Realty Corp. v O & Y Equity Corp. (64 NY2d 313, 315 [1984]), commented that “[a] notice of pendency, commonly known as a lis pendens,‘ can be a potent shield to litigants claiming an interest in real property.” The Court, at 318-320, outlined the history of the doctrine of lis pendens back to 17th century England. It was formally recognized in New York courts in 1815 and first codified in the Code of Procedure [Field Code] enacted in 1848. At 319, the Court stated that “[t]he purpose of the doctrine was to assure that a court retained its ability to effect justice by preserving its power over the property, regardless of whether a purchaser had any notice of the pending suit,” and, at 320, “the statutory scheme permits a party to effectively retard the alienability of real property without any prior judicial review.”

In Israelson v Bradley (308 NY 511, 516 [1955]) the Court observed that with a notice of pendency a plaintiff who has an interest in real property has received from the State:

an extraordinary privilege which . . . upon the mere filing of the notice of a pendency of action, a summons and a complaint and strict compliance with the requirements of section 120 [of the Civil Practice Act; now codified in CPLR § § 6501, 6511 and 6512] is required. Proper administration of the law by the courts requires promptness on the part of a litigant so favored and that he accept the shield which has been given him upon the terms imposed and that he not be permitted to so use the privilege granted that itbecomes a sword usable against the owner or possessor of realty. If the terms imposed are not met, the privilege is at an end. [Emphasis added]

Article 65 of the CPLR outlines notice of pendency procedures. The Court, in Da Silva v Musso (76 NY2d 436, 442 [1990]), held that “the specific statutorily prescribed mechanisms for implementing this provisional remedy . . . were designed with a view toward balancing the interests of the claimant in the preservation of the status quo against the equally legitimate interests of the property owner in the marketability of his title.” The Court of Appeals, quoted Professor Siegel, in holding that “[t]he ability to file a notice of pendency is a privilege that can be lost if abused’ (Siegel, New York Practice § 336, at 512).” (In Re Sakow, 97 NY2d 436, 441 [2002]).

The instant case, with successor plaintiff AHMSI lacking standing to bring this action and the complaint dismissed, meets the criteria for losing “a privilege that can be lost if abused.” CPLR § 6514 (a) provides for the mandatory cancellation of a notice of pendency by:

[t]he court, upon motion of any person aggrieved and upon such notice as it may require, shall direct any county clerk to cancel a notice of pendency, if service of a summons has not been completed within the time limited by section 6512; or if the action has been settled, discontinued or abated; or if the time to appeal from a final judgment against the plaintiff has expired; or if enforcement of a final judgment against the plaintiff has not been stayed pursuant to section 5519. [Emphasis added]

The plain meaning of the word “abated,” as used in CPLR § 6514 (a) is the ending of an action. Abatement is defined (Black’s Law Dictionary 3 [7th ed 1999]) as “the act of eliminating or nullifying.” “An action which has been abated is dead, and any further enforcement of the cause of action requires the bringing of a new action, provided that a cause of action remains’ (2A Carmody-Wait 2d § 11.1).” (Nastasi v Nastasi, 26 AD3d 32, 40 [2d Dept 2005]). Further, Nastasi at 36, held that “[c]ancellation of a notice of pendency can be granted in the exercise of the inherent power of the court where its filing fails to comply with CPLR 6501 (see 5303 Realty Corp. v O & Y Equity Corp. at 320-321; Rose v Montt Assets, 250 AD2d 451, 451-452 [1st Dept 1998]; Siegel, NY Prac § 336 [4th ed]).” AHMSI, as successor plaintiff, lacks standing to sue. Therefore, dismissal of the instant complaint must result in mandatory cancellation of the November 8, 2007 notice of pendency against the property “in the exercise of the inherent power of the Court.”

The failure of successor plaintiff AHMSI, by its President David M. Friedman or its Executive Vice President, Chief Legal Officer and Secretary Jordan D. Dorchuck, Esq., and its counsel, Melissa A. Sposato, Esq. and her firm, Jordan S. Katz, P.C., to discontinue the instant action since the April 2010 payoff of the MAITLAND mortgage appears to be “frivolous.” 22 NYCRR § 130-1.1 (a) states that “the Court, in its discretion may impose financial sanctions upon any party or attorney in a civil action or proceeding who engages in frivolous conduct as defined in this Part, which shall be payable as provided in section 130-1.3 of this Subpart.” Further, it states in 22 NYCRR § 130-1.1 (b), that “sanctions may be imposed upon any attorney appearing in the action or upon a partnership, firm or corporation with which the attorney is associated.”

22 NYCRR § 130-1.1 (c) states that:

For purposes of this part, conduct is frivolous if:

(1) it is completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law;

(2) it is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another; or

(3) it asserts material factual statements that are false.

It is clear that since at least April 26, 2010 the instant motion for aan order of reference “is completely without merit in law” and “asserts material factual statements that are false.”

Several years before the drafting and implementation of the Part 130 Rules for costs and sanctions, the Court of Appeals (A.G. Ship Maintenance Corp. v Lezak, 69 NY2d 1, 6 [1986]) observed that “frivolous litigation is so serious a problem affecting the proper administration of justice, the courts may proscribe such conduct and impose sanctions in this exercise of their rule-making powers, in the absence of legislation to the contrary (see NY Const, art VI, § 30, Judiciary Law § 211 [1] [b] ).”

Part 130 Rules were subsequently created, effective January 1, 1989, to give the courts an additional remedy to deal with frivolous conduct. These stand beside Appellate Division disciplinary case law against attorneys for abuse of process or malicious prosecution. The Court, in Gordon v Marrone (202 AD2d 104, 110 [2d Dept 1994], lv denied 84 NY2d 813 [1995]), instructed that:

Conduct is frivolous and can be sanctioned under the court rule if “it is completely without merit . . . and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law; or . . .

it is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another” (22 NYCRR 130-1.1[c] [1], [2] . . . ).

In Levy v Carol Management Corporation (260 AD2d 27, 33 [1st Dept 1999]) the Court stated that in determining if sanctions are appropriate the Court must look at the broad pattern of conduct by the offending attorneys or parties. Further, “22 NYCRR 130-1.1 allows us to exercise our discretion to impose costs and sanctions on an errant party . . .” Levy at 34, held that “[s]anctions are retributive, in that they punish past conduct. They also are goal oriented, in that they are useful in deterring future frivolous conduct not only by the particular parties, but also by the Bar at large.”

The Court, in Kernisan, M.D. v Taylor (171 AD2d 869 [2d Dept 1991]), noted that the intent of the Part 130 Rules “is to prevent the waste of judicial resources and to deter vexatious litigation and dilatory or malicious litigation tactics (cf. Minister, Elders & Deacons of Refm. Prot. Church of City of New York v 198 Broadway, 76 NY2d 411; see Steiner v Bonhamer, 146 Misc 2d 10) [Emphasis added].” Since at least April 26, 2010, and probably since April 5, 2010, the instant action is “a waste of judicial resources.” This conduct, as noted in Levy, must be deterred. In Weinstock v Weinstock (253 AD2d 873 [2d Dept 1998]) the Court ordered the maximum sanction of $10,000.00 for an attorney who pursued an appeal “completely without merit,” and holding, at 874, that “[w]e therefore award the maximum authorized amount as a sanction for this conduct (see, 22 NYCRR 130-1.1) calling to mind that frivolous litigation causes a substantial waste of judicial resources to the detriment of those litigants who come to the Court with real grievances [Emphasis added].” Citing Weinstock, the Appellate Division, Second Department, in Bernadette Panzella, P.C. v De Santis (36 AD3d 734 [2d Dept 2007]) affirmed a Supreme Court, Richmond County $2,500.00 sanction, at 736, as “appropriate in view of the plaintiff’s waste of judicial resources [Emphasis added].”

In Navin v Mosquera (30 AD3d 883 [3d Dept 2006]) the Court instructed that when considering if specific conduct is sanctionable as frivolous, “courts are required to examine whether or not the conduct was continued when its lack of legal or factual basis was apparent [or] should have been apparent’ (22 NYCRR 130-1.1 [c]).” The Court, in Sakow ex rel. Columbia Bagel, Inc. v Columbia Bagel, Inc. (6 Misc 3d 939, 943 [Sup Ct,

New York County 2004]), held that “[i]n assessing whether to award sanctions, the Court must consider whether the attorney adhered to the standards of a reasonable attorney (Principe v Assay Partners, 154 Misc 2d 702 [Sup Ct, NY County 1992]).” In the instant action, plaintiff’s Chief Legal Officer or its outside counsel is responsible for keeping track of whether the mortgage was satisfied. In Sakow at 943, the Court observed that “[a]n attorney cannot safely delegate all duties to others.”

This Court will examine the conduct of successor plaintiff AHMSI and plaintiff’s counsel, in a hearing, pursuant to 22 NYCRR § 130-1.1, to determine if plaintiff AHMSI, by its President, David M. Friedman, or its Executive Vice President, Chief Legal Officer and Secretary, Jordan D. Dorchuck, Esq., and plaintiff’s counsel Melissa A. Sposato, Esq. and her firm Jordan S. Katz, P.C. engaged in frivolous conduct, and to allow successor plaintiff AHMSI, by its President David M. Friedman or Executive Vice President, Chief Legal Officer and Secretary Jordan D. Dorchuck, Esq., and plaintiff’s counsel Melissa A. Sposato, Esq. and her firm Jordan S. Katz, P.C. a reasonable opportunity to be heard. The Court is aware that AHMSI’s Chief Legal Officer, Mr. Dorchuck, is a member of the New York State Bar. (See Mascia v Maresco, 39 AD3d 504 [2d Dept 2007]; Yan v Klein, 35 AD3d 729 [2d Dept 2006]; Greene v Doral Conference Center Associates, 18 AD3d 429 [2d Dept 2005]; Kucker v Kaminsky & Rich, 7 AD3d 39 [2d Dept 2004]).

Conclusion

Accordingly, it is

ORDERED, that the motion of successor plaintiff, AMERICAN HOME MORTGAGE SERVICING, INC., for an order of reference for the premises located at 732 Hendrix Street, Brooklyn, New York (Block 4305, Lot 22, County of Kings), is denied with prejudice; and it is further

ORDERED, that because successor plaintiff, AMERICAN HOME MORTGAGE SERVICING, INC., lacks standing and no longer is the mortgagee in this foreclosure action, the instant complaint, Index No. 41383/07 is dismissed with prejudice; and it is further

ORDERED, that the Notice of Pendency filed with the Kings County Clerk on November 8, 2007, by original plaintiff, ARGENT MORTGAGE COMPANY, LLC, in an action to foreclose a mortgage for real property located at 732 Hendrix Street, Brooklyn, New York (Block 4305, Lot 22, County of Kings), is cancelled; and it is further

ORDERED, that it appearing that successor plaintiff AMERICAN HOME MORTGAGE SERVICING, INC., Melissa A. Sposato, Esq. and Jordan S. Katz, P.C. engaged in “frivolous conduct,” as defined in the Rules of the Chief Administrator, 22 NYCRR § 130-1 (c), and that pursuant to the Rules of the Chief Administrator, 22 NYCRR § 130.1.1 (d), “[a]n award of costs or the imposition of sanctions may be made. . . upon the court’s own initiative, after a reasonable opportunity to be heard,” this Court will conduct a hearing affording: successor plaintiff AMERICAN HOME MORTGAGE SERVICING, INC., by its President David M. Friedman or Executive Vice President, Chief Legal Officer and Secretary, Jordan D. Dorchuck, Esq.; Melissa A. Sposato, Esq.; and, Jordan S. Katz, P.C.; “a reasonable opportunity to be heard” before me in Part 27, on Monday, September 13, 2010, at 2:30 P.M., in Room 479, 360 Adams Street, Brooklyn, NY 11201; and it is further

ORDERED, that because the headquarters of successor plaintiff AMERICAN HOME MORTGAGE SERVICING, INC. is in Irving, Texas, Mr. Friedman or Mr. Dorchuck may appear either in person or by telephone; and it is further

ORDERED, that Ronald David Bratt, Esq., my Principal Law Clerk, is directed to serve this order by first-class mail, upon: David M. Friedman, President of successor plaintiff AMERICAN HOME MORTGAGE SERVICING, INC., 4600 Regent Boulevard, Suite 200, Irving, Texas 75063; Jordan D. Dorchuck, Esq., Executive Vice President, Chief Legal Officer and Secretary of successor plaintiff AMERICAN HOME MORTGAGE SERVICING, INC., 4600 Regent Boulevard, Suite 200, Irving, Texas 75063; Melissa A. Sposato, Esq., Law Offices of Jordan S. Katz, P.C., 395 North Service Road, Suite 401, Melville, New York XXXXX-XXXX; and Jordan S. Katz, P.C., 395 North Service Road, Suite 401, Melville, New York XXXXX-XXXX.

This constitutes the Decision and Order of the Court.

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Posted in bogus, chain in title, citi, concealment, conflict of interest, conspiracy, CONTROL FRAUD, corruption, discovery, dismissed, foreclosure, foreclosure fraud, foreclosure mills, foreclosures, inc., investigation, judge arthur schack, lawsuit, mortgage, Mortgage Foreclosure Fraud, non disclosure, note, quiet title, Real Estate, scam, Violations2 Comments

Banking Execs Say Gov’t Needs To Back Mortgages

Banking Execs Say Gov’t Needs To Back Mortgages

Banking Executives Tell Obama Officials Government Needs To Play Large Role In Mortgage Market

(AP) WASHINGTON (AP) – The Obama administration invited banking executives Tuesday to offer advice on changing the government’s role in the mortgage market. Their response: stay big.

While the executives disagreed on the exact level of support needed, the group overwhelmingly advocated the government should maintain a large role propping up the nearly $11 trillion market.

Bill Gross, managing director of bond giant Pimco, said the economic recovery required more government stimulus, particularly in the housing market. He suggested the administration push for the automatic refinancing of millions homes backed by mortgage giants Fannie Mae and Fannie Mac.

Refinancing those homes at the lowest mortgage rates in decades would give Americans more money each month. That would boost consumer spending by $50 billion to $60 billion and lift housing prices by as much as 10 percent, he said.

Without such stimulus in the next six months, Gross said, the economy will move at a “snails pace.”

Treasury officials have said they have no plans to enact such a plan, which has been the subject of intense rumors on Wall Street in recent weeks.

Tuesday’s conference at the Treasury Department is the administration’s first of many steps toward restructuring the troubled industry. So far, rescuing Fannie and Freddie has cost the government more than $148 billion. That number is expected to grow.

Treasury Secretary Timothy Geithner pledged “fundamental change” to the structure of Fannie and Freddie. The mortgage giants profited tremendously during good times but burdened taxpayers with losses when the housing market went bust. He said the two companies weren’t the only cause of the financial crisis, but made it worse.

Fannie and Freddie buy mortgages and package them into securities with a guarantee against default. They have ensured that millions of Americans can get home loans – even after the housing market collapsed.

The two companies, the Federal Housing Administration and the Veterans Administration together backed about 90 percent of loans made in the first half of the year, according to trade publication Inside Mortgage Finance.

Geithner did not offer a specific exit strategy for Fannie and Freddie. He agreed that the government could remain involved in the mortgage system by guaranteeing investors in mortgage-backed securities get paid, even when borrowers default.

There is a “strong case to be made” for such an arrangement, Geithner said.’

But Geithner suggested that Fannie and Freddie’s replacements could pay the government to insure the loans. That money could be tapped if the housing market collapses and would ensure taxpayers do not get hit with losses in the future.

“It is our responsibility to make sure that we create a system that is not vulnerable to these same failures happening again,” Geithner said.

Republicans are expected to pick up seats in Congress in November and the Obama administration will need support from both parties to enact changes next year.

The Obama administration’s management of Fannie and Freddie has been under fire for months from Republicans on Capitol Hill. In December, the Treasury Department eliminated a $400 billion cap on how much money it would give the mortgage giants to keep them from failing.

Rep. Spencer Bachus, the top Republican on the House Financial Services Committee, accused the Obama administration of excluding critics of the government’s role in the mortgage system from Tuesday’s conference.

In a letter to Geithner, Bachus said Treasury appears to be “laying the groundwork for a predetermined policy outcome that looks uncomfortably similar to the failed status quo.”

But the industry executives and experts at the conference seemed to agree that the government should maintain a role in the mortgage market, even if Fannie and Freddie disappear someday. Where they disagreed was on the level of government involvement and whether it should be reduced gradually.

Gross advocated the biggest government role. He said Fannie and Freddie’s function should be consolidated into one government agency that would issue mortgage-backed securities. Without such a solid guarantee, mortgage rates would soar, he warned.

Gross said he is skeptical of having those securities issued by the private sector, saying that doing so would favor “Wall Street as opposed to Main Street.”

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Posted in CONTROL FRAUD, corruption, fannie mae, foreclosure, foreclosure fraud, foreclosures, Freddie Mac, geithner, mbs, mortgage, non disclosure, Real Estate, rmbs, scam, sub-prime, trade secrets1 Comment

Judge rejects Citigroup’s $75 million settlement with SEC

Judge rejects Citigroup’s $75 million settlement with SEC

Washington Post Staff Writer
Monday, August 16, 2010; 7:32 PM

A federal judge on Monday refused to accept a $75 million settlement between the Securities and Exchange Commission and Citigroup, the second time in a year that the agency’s attempt to sanction a major bank was foiled by a judge with questions about the appropriateness of the agreement.

Judge Ellen S. Huvelle of the U.S. District Court of the District of Columbia raised questions during a hearing Monday about why the SEC chose to penalize Citigroup financially when it’s the company’s shareholders who will ultimately bear the price of the sanction, according to lawyers who were present. She also asked why the agency decided to charge only two executives with wrongdoing when other more senior executives were involved with Citigroup’s actions, the lawyers said.

Huvelle demanded more information from SEC and Citigroup and scheduled another hearing for Sept. 24.

Continue Reading…Washington Post

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Posted in CitiGroup, conspiracy, CONTROL FRAUD, corruption, mbs, reversed court decision, scam, securitization, settlement1 Comment

Florida Attorney General Launches Investigation into Foreclosure Mills Fraud

Florida Attorney General Launches Investigation into Foreclosure Mills Fraud

On Tuesday the Florida Attorney General Bill McCollum’s office announced an investigation of Three South Florida law firms.

The firms are identified as The Law Offices of Marshall C. Watson in Fort Lauderdale; Shapiro & Fishman, which has offices in Boca Raton and Tampa; and the Law Offices of David J. Stern, P.A. in Plantation.

It is alleged that the firms, which were hired by loan servicers to begin foreclosure proceedings when homeowners were behind on their mortgages, may have fabricated mortgage assignments in order to speed up the foreclosure process.

“Thousands of final judgments of foreclosure against Florida homeowners may have been the result of the allegedly improper actions of the law firms under investigation,” said McCollum, who is running for governor.

McCollum said his office also is looking into whether the firms created affiliated companies outside of the U.S., where the allegedly false documents are prepared.

“We are seeing a paperwork trail where law firms, through a mill, prepared paperwork with signatures from lenders who had assigned the mortgage,” he said.

All they have to do is look into several blogs and attorney sites to see the evidence of fraud including this one.
________________________________________

Here is Stern’s subpoena below…

Excerpts:

YOU ARE HEREBY COMMANDED to produce at said time and place all documents, as defined above, relating to the following subjects:
1. A list of all employees, independent contractors and/or subcontractors of the Law Offices of David J. Stern (DJS) for the past 5 years (former and current employees, independent contractors and/or subcontractors) including their job title(s), their duties and responsibilities and the length of their employment with DJS, including any contracts DJS has or had with them.
2. For the past five years, the names and addresses of any and all lawyers and/or law firms that DJS hires/uses throughout the State to represent their clients in foreclosure cases and in what capacity said lawyers/law firms serve DJS, including any contracts between DJS and the lawyer(s) and/or law firm(s).
3. The names and addresses of the lending institutions that DJS has represented in foreclosure cases over the past 5 years, including any contracts between DJS and said institutions.
4. The names and addresses of any and all companies used by DJS to draft and/or execute Assignments of Mortgage or Affidavits for the past 5 years, including any contracts between the lending institutions and DJS allowing for the use of the companies to draft and/or execute said Assignments of Mortgage.
5. The names and addresses of any and all persons and/or companies hired and/or used by DJS to perfect service of process on foreclosure defendants for the past 5 years, including their relationship to DJS and/or David J. Stern, individually including any and all contracts between the person or persons and/or company and DJS.
6. The names and addresses of any and all servicing companies DJS represents or represented for the past 5 years.
7. For the past 5 years, the names and addresses of any corporations, companies, partnerships or associations that David J. Stern and/or DJS has any interest in, including any foreign corporations, and detail what the business does and what type of interest is held by Stern and/or DJS.
9. List all notaries for the past 5 years that worked or works for DJS who notarized Affidavits as to fee and Assignments of Mortgage, include their names and addresses.
10. Copies of all non-disclosure agreements that DJS has or had over the past 5 years with any and all of its employees, subcontractor or independent contractors.
11. Copies of all checks and/or evidence of any other form of payment(s) from the plaintiffs that DJS represents in court in foreclosure cases to DJS and/or any of DJS’s affiliates and/or subsidiaries for services rendered in foreclosure cases.
12. Documents, including emails, that evidence what the pay scales, pay grades and/or bonuses paid by DJS to employees, subcontractors or independent contractors for completion of foreclosure cases within a certain time period.
13. Documents, including emails, that evidence what the pay scales, pay grades and/or bonuses paid by lenders to DJS or its employees, subcontractors or independent contractors for completion of foreclosure cases within a certain time period
[ipaper docId=35680209 access_key=key-16l1kpbcmkkh7zujuh5k height=600 width=600 /]

FISHMAN and SHAPIRO’s

http://www.scribd.com/full/35689746?access_key=key-mf28ympkahmdfyf3oaa

MARSHALL C. WATSON’s

http://www.scribd.com/full/35690128?access_key=key-162xk4l4gnfk4q3zx4y1

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Posted in chain in title, conspiracy, CONTROL FRAUD, corruption, djsp enterprises, fannie mae, foreclosure, foreclosure fraud, foreclosure mills, foreclosures, investigation, Law Offices Of David J. Stern P.A., law offices of Marshall C. Watson pa, MERS, MERSCORP, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., Mortgage Foreclosure Fraud, notary fraud, robo signer, robo signers, scam, securitization, shapiro & fishman pa, trade secrets3 Comments

WALL STREET FINES: “LARGE PONZI SCHEME”

WALL STREET FINES: “LARGE PONZI SCHEME”

CONGRESS IS COVERING UP! SHAM…SCANDAL!

Janet Tavakoli of Tavakoli Structured Finance tells what she thinks of recent fines the SEC has imposed on Wall Street giants and where she would like future investigations take place.

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Posted in bogus, CitiGroup, concealment, conspiracy, CONTROL FRAUD, corruption, foreclosure, foreclosure fraud, foreclosures, goldman sachs, mbs, originator, Real Estate, S.E.C., scam, securitization, servicers, settlement, sub-prime1 Comment

Whistleblower| Fannie Mae Bungled HAMP Anti-Foreclosure Program

Whistleblower| Fannie Mae Bungled HAMP Anti-Foreclosure Program

By Michael Hudson | August 06, 2010

Fannie Mae executives bungled their stewardship of the federal government’s massive foreclosure-prevention campaign, creating a bureaucratic muddle characterized by “mismanagement and gross waste of public funds,” according to a whistleblower lawsuit by a former Fannie Mae executive and consultant.

Caroline Herron, a former Fannie vice president who returned to the mortgage giant in 2009 as a high-level consultant, claims that the homeowner-relief effort was marred by delays, missteps and executives preoccupied with their institution’s short-term financial interests.

“It appeared that Fannie Mae officers were focused on maximizing incentive payments available to Fannie Mae under various federal programs – even if this meant wasting taxpayer money and delaying the implementation of high-priority Treasury programs,” she claims in the lawsuit.

Herron alleges that Fannie Mae officials terminated her $200-an-hour consulting work in January because she raised questions about how it was administering the federal government’s push to help homeowners avoid foreclosure, known as the Home Affordable Modification Program, or HAMP.

Continue Reading…PublicIntegrity.org

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Posted in concealment, conspiracy, fannie mae, foreclosure, hamp, investigation, mortgage modification, scam1 Comment

Mortgage Servicers Playing the Blame Game

Mortgage Servicers Playing the Blame Game

When Denying Loan Mods, Loan Servicers Often Wrongly Blame Investors

by Karen Weise
ProPublica, Yesterday, 7:50 a.m.

Arthur and Alberta Bailey are about to lose their home near New Orleans, and their mortgage company says one thing stands in the way of relief: The investors who own their mortgage won’t allow any modifications.

It’s a story heard again and again across the country as desperate homeowners try to participate in a federal program created to foster loan modifications and prevent foreclosures. Loan servicers say their hands are tied by Wall Street.

Federal officials, bank officers, housing counselors and investors themselves say that excuse is cited far more often than is justified. In fact, they say, few mortgage deals include such restrictions.

Consider the case of the Baileys. Litton, a subsidiary of Goldman Sachs, services their loan, and Litton’s contract with investors has no clear language banning modifications. In fact, documents show that over 115 other mortgages [1] from the same investment pool have already been modified.

Even the representative of investors in the Baileys’ mortgage says only the servicer can decide when to modify loans. While he couldn’t comment on an individual case, Bank of New York Mellon spokesman Kevin Heine says it’s “misinformation” to say that investors make these decisions.

Servicers can pass the buck because one mortgage often involves many different companies. During the housing bubble, banks often sold mortgages to investors on Wall Street so they wouldn’t have to keep the loans on their own books, freeing them to make even more loans and protecting them from those that went bad. They then hired servicers to handle the day-to-day work of collecting payments from homeowners ­– and to decide when to modify loans. Now loan servicers have been inundated with requests from homeowners trying to avoid foreclosure through the government’s $75 billion mortgage modification program. The Treasury Department estimates that 1.7 million homeowners should qualify for help.

For homeowners, it can be difficult to understand who is responsible for what. This confusion gives servicers a ready excuse for refusing modifications.

Indeed, nobody knows the exact extent to which servicers are passing blame on to investors. Some housing counselors estimate that 10 percent of the denials they see are attributed to investors; others say they see as many as 40 percent. Either way, tens of thousands of homeowners may be affected, their attempts to modify their mortgage wrongly denied.

The prevalence of such false claims by servicers is a “legitimate concern,” said Laurie Maggiano, the Treasury Department’s director of policy for the modification program. “It’s been very frustrating for us.”

Investors are also dismayed, saying servicers are not acting in their best interests. “This is one of those rare alliances where investors and borrowers are on the same page,” according to Laurie Goodman, senior managing director at Amherst Securities, a brokerage firm that specializes in mortgage securities. She says investors have “zero vote” in determining individual loan modifications and, instead of foreclosures, prefer sustainable modifications that lower homeowners’ total debt.

Investor-owned mortgages represent more than a third of trial and permanent modifications in the government’s program [2]. Under the program, servicers must modify the loans of qualified [3] borrowers unless contracts with investors prohibit the modification, or if calculations [4] determine that the investors won’t benefit from a modification. Investors’ contracts rarely prohibit modifications, and at times, ProPublica found, they have been blamed for denials even though other mortgages owned by the same investors have been modified.Even when contracts with investors do have restrictions, servicers don’t appear to be following federal requirements that they ask investors for waivers to allow modifications.

Such requests “never happen,” says David Co, a director at Deutsche Bank’s department that oversees 1,600 residential securities, the complex bundles of mortgages sold to investors.

Treasury’s Maggiano says the government is investigating investor denials and considering greater consequences for servicers that wrongfully deny modifications. Servicers’ compliance and accountability have been a major problem for the government’s program. Treasury has threatened penalties before, but it hasn’t yet issued any [5].

Whose decision is it?

“The very phrase ‘investor restriction,’ I think, is deliberately confusing,” says Joseph Sant, an attorney with Staten Island Legal Services, which represents homeowners in foreclosure. “What we’re talking about are not business entities or people, but inert documents.”

Typically, financial institutions set up mortgage-backed securities as a trust — legally their own entities — and then sell bonds from the trust to investors, which can range from mutual funds to pension funds. At the same time, they sign up trustees to manage the security and hire divisions of their own banks or other companies to act as servicers that work directly with homeowners.

While servicers often tell homeowners that investors decide whose loans can be adjusted, Heine, the spokesman for Bank of New York Mellon, one of the largest trustees that administer mortgage securities, says the responsibility to modify loans “falls squarely to the servicer.”

And the contracts that servicers often blame are usually not a roadblock. A report by John Hunt, a law professor at the University of California, Davis, looked at contracts [6] (PDF) that covered three-quarters of the subprime loans securitized in 2006 and found that only 8 percent prohibited modifications outright. Almost two-thirds of the contracts explicitly gave servicers the authority to make modifications, particularly for homeowners who had defaulted or would likely default soon. The rest of the contracts did not address modifications.

Jeffrey Gentes, an attorney at the Connecticut Fair Housing Center who works with hundreds of homeowners across the state, estimates that in 80 percent of the cases in which he has seen the servicing contracts, no language prevents modifications as the servicers have claimed.

Homeowners’ advocates say that when they successfully disprove a contractual restriction, the servicer just gives another reason for denying the modification. “The investor is cited first until the borrower can prove it otherwise,” says Kevin Stein, associate director of the California Reinvestment Coalition, which helps low-income people and minority groups get access to financial services.

Sant, the Staten Island attorney, says a servicer told one client that the contract with investors forbade extending the length of the mortgage, one key way monthly payments can be reduced through government’s program. But the government has addressed the objection, ruling that if a servicer can’t extend the length of a mortgage, it can still give a modification and just add a balloon payment to the end of the loan. Sant pushed back on the servicer’s attorney, who dropped that reason for denial and instead said the homeowner had failed the computer model [4] that determines eligibility. Sant currently is reviewing the case to determine how to proceed.

Continue reading ….ProPublica

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in bank of new york, foreclosure, foreclosure fraud, foreclosures, goldman sachs, Litton, mortgage modification, scam, servicers, STOP FORECLOSURE FRAUD, Wall Street1 Comment

Foreclosed without notice: How a court order could be violating homeowners’ due process

Foreclosed without notice: How a court order could be violating homeowners’ due process

(UPDATED)

user-pic

Angela Caputo on 07.23.10 at 10:41 AM |

(Originally published 7/22/10 at 5:20 p.m.) Chicagoan Rich Gregory figured it was only a matter of time before he’d hear from his bank after falling behind on his second mortgage. But when he was summonsed to foreclosure court in 2008, he realized his bank wasn’t interested in negotiating.

Gregory noticed something “goofy” about the summons. Attached to it was a copy of the server’s credentials, issued on the letterhead of former Cook County Circuit Court Clerk Morgan Finley, a man convicted of extortion and ousted from office more than two decades earlier. “I thought, ‘This guy’s not licensed. He’s not authorized to do it,” Gregory said.

Turns out that Cook County Judge Dorothy Kinnaird, who oversees the Chancery Division, issued a court order in June 2007, allowing lenders and servicers to sidestep the Cook County Sheriff’s office and hire private agencies to deliver foreclosure summons. The idea was to free up a flood of new foreclosure cases. Lawmakers had toyed with the idea decades earlier. Ultimately, they decided that having a neutral party – primarily the Sheriff’s office – delivering court documents would avert the sort of conflict that’s brewing in the Cook County court system. Homeowners are now challenging the legitimacy of their summonses, and some are saying that they were never called to court to plead their case.

We hear that a lawsuit is coming down to challenge the court’s use of special process servers.

As far as Marty Stack, legal council to the Sheriff’s office is concerned, these questionable summonses could threaten the legitimacy of potentially thousands of local foreclosure cases. “Basically, all of these people could come back to vacate their case,” Stack said. “The judge has no right to take away their due process.”

Continue reading…Chicagonow.com

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Posted in conspiracy, foreclosure, foreclosure fraud, foreclosures, scam, sewer service1 Comment

‘One Size Fits All Doesn’t Work’ MERS PRELIMINARY INJUNCTION Dalton V. CitiMortgage Reno, Nevada

‘One Size Fits All Doesn’t Work’ MERS PRELIMINARY INJUNCTION Dalton V. CitiMortgage Reno, Nevada

This is a case where Plaintiff’s counsel aggressively sought to have all foreclosures stopped due to no standing. He states Thats why the MERS system tried to be a nationwide system. “One Size Fits All Doesn’t Work”!

[ipaper docId=32239392 access_key=key-12qtvlfzvjvmbajyve1p height=600 width=600 /]

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Posted in concealment, conspiracy, CONTROL FRAUD, MERS, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., Mortgage Foreclosure Fraud, scam, securitization, trade secrets0 Comments

No Penalties for Mortgage Company with Worst Loan Mod Backlog

No Penalties for Mortgage Company with Worst Loan Mod Backlog

by Paul Kiel, ProPublica – May 28, 2010 1:53 pm EDT

Jeanenne Longacre said she received a letter from Saxon Mortgage saying she was approved for a loan mod, but the final terms never came. She says she lost her home because of Saxon's errors.
Jeanenne Longacre said she received a letter from Saxon Mortgage saying she was approved for a loan mod, but the final terms never came. She says she lost her home because of Saxon’s errors.

Last week, the government released data [1] showing that there’s a big problem at Saxon Mortgage, a subsidiary of Morgan Stanley. Of all the mortgage companies participating in the administration’s mortgage modification program, Saxon has the largest proportion of homeowners caught in modification limbo.

The program, which provides incentives for mortgage companies to modify loans to an affordable level, has been plagued by delays and disappointing results. About 1.2 million homeowners have begun a “trial” modification, which is supposed to last three months. But less than a quarter of them have emerged with a real, lasting modification. (Here’s our backgrounder on the program and problems with it [2].)

As of April, about 265,000 homeowners [3] were caught in trials that had lasted more than six months. Nowhere is that backlog worse than at Saxon, a mid-sized subprime servicer based in Texas that was acquired [4] by Morgan Stanley in 2006 and has had long-running customer service problems [5].

Few of Saxon’s trials have converted into lasting modifications. As of the end of April, Saxon had put 40,000 homeowners into trials, but only about 11,000, or 27 percent, had received a permanent modification. Far more had either been dropped from the program (16,000) or were still waiting for a final answer after being in the trial for longer than six months (10,000).

The Four Mortgage Servicers with The Biggest Trial Backlogs

Servicers Est. # “Aged” Trials % of Active Trials that are “Aged”
Saxon Mortgage Services 9,839 76%
JPMorgan Chase 85,678 72%
U.S. Bank 2,064 58%
CitiMortgage 26,375 48%
Total for Program 265,015 42%

A close look at Saxon provides a window into problems with the program itself, in particular a glaring lack of oversight from Washington. While the government set up the program, it relies on mortgage companies to actually perform modifications. So far Washington has shied away from penalizing those servicers that have failed to follow the program’s rules or underperformed. Indeed, despite widespread problems [3] among mortgage servicers and frequent tough talk [6] from Treasury officials, who have often threatened penalties, the government has yet to issue a single one.

A spokeswoman for Saxon said that the company has been regularly audited, as have other participants in the government’s program, and that the reviews had uncovered no “material issues.”

For homeowners, on the other hand, the consequences of servicer problems can be all-too-real. Some homeowners say they lost their home because of errors by Saxon.

The country’s largest mortgage servicers are attached to the biggest banks like Bank of America, JPMorgan Chase and Wells Fargo, but a number of mid-sized servicers like Saxon are stand-alone companies or subsidiaries of other banks. As of 2008, Saxon serviced over 340,000 loans.

According to the Better Business Bureau, Saxon Mortgage Services requests that consumers with a complaint contact Robin Chrostowski, Assistant Vice President of the Customer Solutions and Innovation Team, at 817-665-7862 or email CSIteam@saxonmsi.com to resolve the issues prior to filing a complaint with the Better Business Bureau.

 

The company already had problems before the administration launched its mortgage modification program in April 2009. As the Wall Street Journal reported last July [7], Saxon ranked last among 20 servicers in a Credit Suisse analysis of how many subprime loans each had modified. The Better Business Bureau had given the company an “F” [5] rating, based on a profusion of consumer complaints.

But the company was among the first to sign up for the government program when it launched in April, 2009. In the first few months, Saxon put tens of thousands of homeowners into trial modifications. In a November press release, Saxon CEO Anthony Meola boasted [8] that Saxon was leading all other servicers in the number of trials it had begun.

The Treasury Department had set the rules of the program [9] to encourage servicers to rapidly enroll homeowners. Servicers were allowed to accept homeowners on the basis of their “stated” income, what a Treasury official described [9] as “a wing and a prayer.” The financial information would be verified later, after the trial began. While well-intentioned, the policy resulted in an enormous backlog of trials—homeowners who had been given temporary modifications and were waiting months for a final answer — and Treasury changed the program rules this spring to require verified income information up front.

Consumer advocates say that homeowners who are denied modification after making several months of trial payments are often worse off than if they’d never started the trial at all [9], because the process damages their credit and they’re prevented from saving for the possibility of foreclosure.

At Saxon, many homeowners seem to be caught in that limbo because of mistakes and delays at the company. John Riggins, the CEO of the Fort Worth Better Business Bureau, said that the biggest complaints about Saxon are that the company has misapplied payments or lost documents sent as part of the modification process. Saxon employees often blame computer problems or a lack of staffing, according to the complaints, which number 208 in the past year.

Jennifer Sala, a spokeswoman for Saxon, said the backlog was not caused by a lack of capacity, but resulted from a “careful review process” that “can take a considerable amount of time.” She added, “We want to afford our customers every opportunity to avoid foreclosure.”

Saxon has hired about 330 new full-time employees in the past year, she said, increasing the staff by 50 percent. Riggins of the Better Business Bureau said that the complaint volume had improved since last year, but that major problems remained. Saxon has improved only from an “F” to a “D-.” rating [10].

There are other signs Saxon has been struggling to handle the volume. In April, it transferred the servicing rights [11] for about 38,000 loans to Ocwen, which specializes in servicing troubled loans. “Normally the reason for selling loans to Ocwen is you don’t want to hassle with them anymore and they’re delinquent,” said Guy Cecala, the publisher of Inside Mortgage Finance. Some of the loans transferred were in the middle of the modification process.

Sometimes the communications from Saxon can be bewildering. Barbara Niederstein of Fayetteville, Ga., said she has twice received letters saying she was being dropped from the program. Both letters cited missing documentation as a reason, but she says she was never told it was missing. Saxon has threatened to pursue foreclosure. Niederstein says that hours spent on the phone with a housing counselor and Saxon employees has at least postponed that for a month, even if the confusion has yet to be cleared up.

 Jeanenne Longacre and her husband Robert.

Jeanenne Longacre and her husband Robert.

Jeanenne Longacre says she lost her home because of Saxon’s errors. She says Saxon wrongly set the trial payments at a level Longacre and her husband could only muster for a few months, and then booted her from the program when she couldn’t keep up the payments. Her house was ultimately sold out from under her after she says she received an assurance the sale would be delayed.

For months, her husband had been struggling to find steady employment when Longacre lost her job with California Blue Cross in February 2009. They were behind on their mortgage payments and faced foreclosure.

The pair, in their 50s with grown children, had been in the house for 10 years, but had refinanced in 2006 into an adjustable-rate loan with New Century, the now-defunct subprime lender. The Longacres were underwater on their mortgage, with their Los Angeles home worth about half as much as they owed.

Longacre says Saxon’s first error with her modification came with the level of the couple’s payments. The modified mortgage payment was set at $3,400, about $1,400 lower than the couple’s payments had been, but at a level they could maintain only with the help of temporary severance she was receiving. That severance would run out in August, just two months after her trial began in June.

Sala, the spokeswoman for Saxon, said she could not discuss Longacre’s case because company policy prohibited discussing customer information.

Trials are supposed to test the homeowner’s ability to make the reduced payments for a prolonged period of time. But Longacre says she always knew they would be able to make the payments only for a few months. By the time August, September came around, we started struggling,” she said. “It’s ridiculous paying that kind of money when you don’t have it.”

Still, Longacre kept paying. After August, the third month of the trial, came and went with no news, Longacre began calling Saxon regularly to find out what was happening. For months, she says she couldn’t get an answer. She was occasionally asked to send in a new document, but then the wait would continue.

Finally, she spoke to a negotiator in January this year, the eighth month of her trial. He told her she’d be approved for a permanent modification and that the payment, based on her family’s verified income, would be much lower, just $1,300 a month.

“I was so excited,” Longacre said. “I thought a miracle had happened.”

But her excitement was short-lived. She received a letter from Saxon in early February [12] saying she’d been approved for the modification, but the final terms never came. When she called to ask about that, she says she was told she had to make the trial payments for January and February or she’d face foreclosure.

The couple had missed those payments because their money had finally run out, she says. But even though Saxon had set their permanent modification at a level far below her trial payments, she was dropped from the program for not making all of her trial payments.

In March, she received a notice that Saxon would auction her home on April 1. She hired a lawyer to negotiate on her behalf, and it seemed like foreclosure had been temporarily avoided when a Saxon employee said the sale would be postponed until May in order to provide more time to work out another solution.

Longacre thought the auction had been deferred until a man knocked on her door in early April, saying that he represented the new owners of her home and was offering her money to vacate. The home had sold for $302,000, less than half of what the Longacres owed on the mortgage.

“That home was the only thing we had. I put it everything that I own into that home.” She currently lives in an apartment with her husband.

As we reported earlier this month, mistaken foreclosures can result from a lack of communication within the servicer itself [13]. In Longacre’s case, she says she was not provided a denial letter or given an opportunity to otherwise avoid foreclosure, as the federal program’s guidelines require.

Consumers advocates say the program does not offer an effective recourse for homeowners to redress servicer wrongs. Treasury officials say [13] that homeowners in Longacre’s position should call the HOPE Hotline, which is staffed with housing counselors, for help. Advocates say that’s been ineffective, and have long complained [14] about the lack of a formal appeals process for homeowners.

Longacre’s case also reflects on a problem faced by the hundreds of thousands of homeowners who’ve been caught in prolonged trials: whether they must keep paying after the three-month period expires, and whether mortgage companies can deny modifications if homeowners miss payments while they’re in limbo.

The Treasury Department has given conflicting answers for that question.

The program’s guidelines say [15] that borrowers remain eligible for a permanent modification “regardless of whether the borrower failed to make trial period payments following the successful completion of the trial period.”

Despite that apparently clear meaning, a Treasury spokeswoman told ProPublica homeowners were required to continue the payments “even if the period was extended to allow additional processing.”

Cohen, of the National Consumer Law Center, said that’s not how consumer advocates have understood the program’s rules. “The program rules are clear: a homeowner is required to make trial payments only until the effective date of the permanent modification, which is three months after the beginning of the trial period.”

Four other Saxon customers told ProPublica that they’d been disqualified for missing the extended trial payments. Sala, Saxon’s spokeswoman, said the company follows the program’s guidelines. It’s unclear if there will be any consequences for Saxon for any errors or rule violations. The Treasury has hired [16] Freddie Mac [17] to audit the servicers participating in the program, and so far, as Saxon’s spokeswoman has said, auditors have not flagged any “material issues” at the company. The Treasury spokeswoman said some information from the compliance reviews will eventually be made public, but none was available now.

 Write to Paul Kiel at paul.kiel@propublica.org

Posted in forensic loan audit, forensic mortgage investigation audit, Mortgage Foreclosure Fraud, mortgage modification, saxon mortgage, scam0 Comments

SEC KNEW ABOUT SUBPRIME ACCOUNTING FRAUD A DECADE AGO

SEC KNEW ABOUT SUBPRIME ACCOUNTING FRAUD A DECADE AGO

by Elizabeth MacDonald FoxBusiness

The Securities and Exchange  Commission is missing a bigger fraud while it chases the banks. Even though it knew about this massive, plain old fashioned accounting fraud back in 1998.
Instead, the market cops are probing simpler disclosure cases that could charge bank and Wall Street with not telling investors about their conflicts of interest in selling securities they knew were damaged while making bets against those same securities behind the scenes, via credit default swaps.
Those probes have gotten headlines, but there aren’t too many signs that this will lead to anything close to massive settlements or fines.

For instance, the SEC doesn’t appear to be investigating how banks frontloaded their profits via channel stuffing — securitizing loans and shoving paper securitizations onto investors, while booking those revenues immediately, even though the mortgage payments underlying those paper daisy chains were coming in the door years, even decades, later. Those moves helped lead to $2.4 trillion in writedowns worldwide.
The agency said it  believed banks were committing subprime securitization accounting frauds back in 1998 and claimed to be ‘probing’ them.
I had written about these SEC probes into potential frauds while covering corporate accounting abuses at The Wall Street Journal. The rules essentially let banks frontload into their revenue the sale of subprime mortgages or other loans that they then packaged and sold off as securities, even though the payments on those underlying loans were coming in the door over the next seven, 10, 20, or 30 years.
Estimating those revenues based on the value of future mortgage payments involved plenty of guesswork.

Securitization: Free Market Became a Free For All
The total amount of overall mortgage-backed securities generated by Wall Street virtually tripled between 1996 and 2007, to $7.3 trillion. Subprime mortgage securitizations increased from 54% in 2001, to 75% in 2006. Back in 1998, the SEC had warned a dozen top accounting firms that they must do a  better job policing how subprime lenders book profits from loans that are repackaged as securities and sold on the secondary market. The SEC “is becoming increasingly concerned” over the way lenders use what are called “gain on sale” accounting rules when they securitize these loans, Jane B. Adams, the SEC’s deputy chief accountant, said in a letter sent to the Financial Accounting Standards Board, the nation’s chief accounting rule makers.
At that time, subprime lenders had come under fire from consumer groups and Congress, who said banks were using aggressive accounting to frontload profits from securitizing subprime loans. Subprime auto lender Mercury Finance collapsed after a spectacular accounting fraud and shareholder suits, New Century Financial was tanking as well for the same reason.

SEC Knew About Subprime Fraud More than a Decade Ago
The SEC more than a decade ago believed that subprime lenders were abusing the accounting rules.
When lenders repackage consumer loans as asset-backed securities, they must book the fair value of profits or losses from the deals. But regulators said lenders were overvaluing the loan assets they kept on their books in order to inflate current profits. Others delayed booking assets in order to increase future earnings. Lenders were also using poor default and prepayment rate assumptions to overestimate the fair value of their securitizations.
Counting future revenue was perfectly legal under too lax rules.
But without it many lenders that are in an objective sense doing quite well would look as if they were headed for bankruptcy.
At that time, the SEC’s eyebrows were raised when Dan Phillips, chief executive officer of FirstPlus Financial Group, a Dallas subprime home equity lenders, had said the poor accounting actually levitated profits at lenders.
“The reality is that companies like us wouldn’t be here without gain on sale,” he said, adding, “a lot of people abuse it.”
But this much larger accounting trick, one that has exacerbated the ties that blind between company and auditor, is more difficult to nail down because it involves wading through a lot of math, a calculus that Wall Street stretched it until it snapped.

Impenetrably Absurd Accounting
These were the most idiotic accounting rules known to man, rules manufactured by a quiescent Financial Accounting Standards Board [FASB] that let bank executives make up profits out of thin air.
It resulted in a folie à deux between Wall Street and complicit accounting firms that swallowed whole guesstimates pulled out of the atmosphere.
Their accounting gamesmanship set alight the most massive off-balance sheet bubble of all, a rule that helped tear the stock market off its moorings.
The rules helped five Wall Street firms – Bear Stearns, Lehman Bros., Morgan Stanley, Goldman Sachs and Merrill Lynch – earn an estimated $312 billion based on fictitious profits during the bubble years.

Who Used the Rule?
Banks and investment firms including Citigroup, Bank of America and Merrill all used this “legit” rule.
Countrywide Financial made widespread use of this accounting chicanery (see below). So did Washington Mutual. So did IndyMac Bancorp. So did FirstPlus Financial Group, and as noted Mercury Finance Co. and New Century Financial Corp.
Brought to the cliff’s edge, these banks were either bailed out, taken over or went through bankruptcies.
Many banks sold those securitized loans to Enron-style off-balance sheet trusts, otherwise called “structured investment vehicles” (SIVs), again booking profits immediately (Citigroup invented the SIV in 1988).
So, presto-change-o, banks got to dump loans off their books, making their leverage ratios look a whole lot nicer, so in turn they could borrow more.
At the same time, the banks got to record immediate profits, even though those no-income, no-doc loans supporting those paper securities and paper gains were bellyflopping right and left.
The writedowns were then buried in obscure line items called “impairment charges,” and were then masked by new profits from issuing new loans or by refinancings.

Rulemakers Fight Back
The FASB has been fighting to restrict this and other types of accounting games, but the banks have been battling back with an army of lobbyists.
The FASB, which sets the rules for publicly traded companies, is still trying to hang tough and is trying to force all sorts of off-balance sheet borrowings back onto bank balance sheets.
But these “gain on sale” rules, along with the “fair value” or what are called “marked to market” rules, have either been watered down or have enough loopholes in them, escape hatches that were written into the rules by the accountants themselves, so that auditors can make a clean get away.
As the market turned down, banks got the FASB to back down on mark-to-market accounting, which had forced them to more immediately value these assets and take quarterly profit hits if those assets soured – even though they were booking immediate profits from this “gain on sale” rule on the way up.
Also, the FASB has clung fast to the Puritanism of their rulemaking by arguing a sale is a sale is a sale, so companies can immediately book the entire value of a sale of a loan turned into a bond, even though the cash from the underlying mortgage has yet to come in the door.

Old-Fashioned ‘Channel Stuffing’
This sanctioned “gain on sale” accounting is really old-fashioned “channel stuffing.”
The move lets companies pad their revenue and profit numbers by stuffing lots of goods and inventory (mortgages and subprime securities) into the system without actually getting the money in the door, and booking those channel-stuffed goods as actual sales in order to cook ever higher their earnings.
Sort of like what Sunbeam did with its barbecue grills in the ’90s.

Intergalactic Bank Justice League
Cleaning up the accounting rules is an easier fix instead of a new, belabored, top-heavy “Systemic Risk Council” of the heads of federal financial regulatory agencies, as Sen. Chris Dodd (D-Conn) envisions in financial regulatory reform.
An intergalactic Marvel Justice League of bank regulators can do nothing in the face of chicanery allowed in the rules.

Planes on a Tarmac
What happened was, banks and investment firms like Citigroup and Merrill Lynch who couldn’t sell these subprime bonds, or “collateralized debt obligations,” as well as other loan assets into these SIVs got caught out when the markets turned, stuck with this junk on their balance sheets like planes on a tarmac in a blizzard.
Bank of America saw its fourth-quarter 2007 profits plunge 95% largely due to SIV investments. SunTrust Banks’ earnings were nearly wiped out, a 98% drop in the same quarter, because of its SIVs.
Great Britain’s Northern Rock ran into huge problems in 2007 stemming from SIVs, and was later nationalized by the British government in February 2008.
Even the mortgage lending arm of tax preparer H&R Block used the move. Block sold its loans to off-balance-sheet vehicles so it could book gains about a month earlier than it otherwise would. Weee!
The company had $75 million of these items on its books at the end of its fiscal 2003 year. All totally within the rules.

Leverage Culture
The rampant fakery helped fuel a leverage culture that got a lot of homes put in hock.
Banks, for instance, started advertising home equity loans as “equity access,” or ways to “Live Richly” or as Fleet Bank once touted, “The smartest place to borrow? Your place.”
In fact, Washington Mutual and IndyMac got so excited by the gain on sale rules, they went so far as to count in profits futuristic gains even if they had only an “interest rate” commitment from a borrower, and not a final mortgage loan.
Talk about counting chickens before they hatch.

Closer Look at Wamu
Look at Wamu’s profits in just one year during the runup to the bubble. Such gains more than tripled in 2001 at Wamu, to just shy of $1 billion, or 22% of its pretax earnings before extraordinary items, up from $262 million, or 9%, in 2000.
But in 2001, Washington Mutual took $1.7 billion in charges, $1.1 billion of it in the final, fourth quarter, to reflect bleaker prospects for the revenue stream of all those servicing rights.
It papered over the hit with a nearly identical $1.8 billion gain on securitizations and portfolio sales.

Closer Look at Countrywide
The accounting fakery let Countrywide Financial Corp., the mortgage issuer now owned by Bank of America, triple its profit in 2003 to $2.4 billion on $8.5 billion in revenue.
At the height of the bubble, Countrywide booked $6.1 billion in gains from the sale of loans and securities. But this wasn’t cold, hard cash. No, this was potential future profits from servicing mortgage portfolios, meaning collecting monthly payments and late penalties.

Posted in bank of america, cdo, concealment, conspiracy, corruption, countrywide, foreclosure, foreclosure fraud, S.E.C., scam, securitization, washington mutual0 Comments

Struggling housing markets to receive $1B in federal dollars: The HILL

Struggling housing markets to receive $1B in federal dollars: The HILL

Umm…look at where the funds are going…BACK TO THE BANKS!

Follow the money trail…

By Vicki Needham – 05/18/10 02:34 PM ET

Areas hardest hit by the nation’s housing crisis could get a share of up to $1 billion in reallocated federal funds.

Housing and Urban Development Secretary Shaun Donovan said during a breakfast with reporters Tuesday that his department intends to create a new formula for allocating dollars from an existing program launched by the George W. Bush administration.

Funding in the Neighborhood Stabilization Program will be shifted to communities hit hardest by foreclosures, vacancy rates, falling home values and unemployment during the recession, Donovan said.

The Bush administration spread funding more broadly, with each state government receiving a base allocation of $19.6 million, Donovan said.

The reallocation could offer big benefits to states such as Nevada, California and Arizona that are among the hardest hit by the housing crisis. Donovan said the reallocation could help Las Vegas more than any other single place.

The reallocated funding will be shifted from communities that haven’t committed to projects.

The idea behind the program is to avoid blight. Much of the funding will be used to demolish or revamp vacant properties. Those properties would then be sold to new buyers.

Funds would also be used to create “land banks” to assemble, temporarily manage and dispose of foreclosed homes, Donovan said.

Funds could also be used to help some homeowners avoid foreclosure, and to help prospective low- to middle-income homebuyers with a down payment or closing costs.

“We want this to produce a quality product that will create demand,” Donovan said.

Under the program, 17,000 homes so far have been renovated. HUD estimates that more than 63,000 homes will be demolished or fixed up.

The Neighborhood Stabilization Program has received $6 billion in funding — $4 billion to improve housing and $2 billion in targeted stimulus funding, which was awarded in December, Donovan said.

Donovan said he intends to work with Congress to procure more funding for the housing program and new foreclosure counseling efforts. The Housing and Economic Recovery Act of 2008 provided $150 million for counseling to provide options for struggling homeowners.

Posted in concealment, conspiracy, corruption, FED FRAUD, HUD, scam0 Comments

Florida AG investigating LPS subsidiary: Jacksonville Business Journal

Florida AG investigating LPS subsidiary: Jacksonville Business Journal

Monday, May 17, 2010, 1:50pm EDT  |  Modified: Monday, May 17, 2010, 1:51pm

Jacksonville Business Journal – by Christian Conte Staff Writer

The Florida Attorney General’s Office has launched a civil investigation similar to one launched by a Florida U.S. Attorney’s Office against Fidelity National Financial Inc. and Lender Processing Services Inc., along with an LPS subsidiary, relating to possible forged documents in foreclosure cases.

According to the Attorney General’s website, DOCX LLC, based in Alpharetta, Ga., “seems to be creating and manufacturing ‘bogus assignments’ of mortgage in order that foreclosures may go through more quickly and efficiently. These documents appear to be forged, incorrectly and illegally executed, false and misleading. These documents are used in court cases as ‘real’ documents of assignment and presented to the court as so, when it actually appears that they are fabricated in order to meet the documentation to foreclosure according to law.”

The Attorney General’s Economic Crimes Division in Fort Lauderdale is handling the case.

Fidelity National Financial (NYSE: FNF), based in Jacksonville, provides title insurance, specialty insurance, claims management services and information services. Lender Processing Services (NYSE: LPS), also based in Jacksonville, provides mortgage processing services, settlement services, mortgage performance analytics and default solutions.

Fidelity National acquired DOCX, which processes and files lien releases and mortgage assignments for lenders, in 2005.

The U.S. Attorney’s office launched its investigation of DOCX in February.

LPS stated in its 2009 annual report that there was a “business process that caused an error in the notarization” of mortgage documents, some in the foreclosure proceedings in “various jurisdictions around the country,” according to a filing with the U.S. Securities and Exchange Commission.

While the company said it fixed the problem, the annual report stated it spurred an inquiry by the Clerk of Superior Court in Fulton County, Ga., and most recently, LPS was notified by the U.S. Attorney’s Office for the Middle District of Florida, based in Tampa, that it is also investigating the “business processes” of DOCX.

cconte@bizjournals.com | 265-2227
Read more: Florida AG investigating LPS subsidiary – Jacksonville Business Journal:

RELATED STORY: MISSION: VOID LENDER PROCESSING SERVICES “ASSIGNMENTS”

Posted in concealment, conspiracy, corruption, foreclosure fraud, forensic loan audit, Former Fidelity National Information Services, fraud digest, investigation, Law Offices Of David J. Stern P.A., law offices of Marshall C. Watson pa, Lender Processing Services Inc., LPS, Lynn Szymoniak ESQ, mortgage electronic registration system, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., Mortgage Foreclosure Fraud, scam, stop foreclosure fraud0 Comments

Threat of Shadow Inventory Diminishing: Barclays

Threat of Shadow Inventory Diminishing: Barclays

Imagine what your value will be worth after all these “shadow inventory” is finally released. Again, I hold a real estate license and can tell you I have access to some of this shadow inventory and it is not pretty to look at. Barclays report below is only one source!

In Michigan they are demolishing homes like you cannot imagine…But I may know exactly why…”Greece” is a hint.

BY: CARRIE BAY DSNEWS.com

Analysts at Barclays Capital say the industry’s ominous shadow inventory is close to topping out.

New research published by the firm says the supply of homes nearing REO status, defined as 90 or more days delinquent or in the process of foreclosure, will peak this summer and then begin falling gradually as the market becomes stable enough to absorb 130,000 distressed properties a month.

“While we expect REO levels to remain elevated, the trickle of homes from foreclosure into REO implies moderate levels of inventory reaching market,” Barclays said in its report.

The company estimates the current REO supply to be 478,000 and expects it to rise to 536,000 by late 2011.

Barclays’ delinquency pipeline snapshot shows that as of February, there were 2.4 million mortgages at least 90 days past due and 2.1 million more already winding through the foreclosure process, which combined makes up a shadow inventory of 4.5 million.

It’s a daunting tally and could grow larger as foreclosure alternatives are exhausted, but Barclays’ model forecasts 4.7 million distressed sales over the next three years, with 1.6 million coming in 2010, 1.6 million in 2011, and 1.5 million in 2012.

The research firm notes, however, that an orderly liquidation of shadow inventory will require both “more robust household formation and job growth.”

Some market indicators, though, are looking favorable. This week, Fannie Mae reported only a minor increase in its March serious delinquency rate – 5.59 percent versus 5.51 percent in February. RealtyTrac also reported a 12 percent month-to-month decline in default notices for April.

Barclays says this data supports its forecast that the industry is only a few months away from reaching peak levels of shadow inventory.

Posted in fannie mae, foreclosure fraud, scam0 Comments

SENATE FINDS MASSIVE FRAUD WASHINGTON MUTUAL: SPECIAL DELIVERY FOR WAMU VICTIMS!

SENATE FINDS MASSIVE FRAUD WASHINGTON MUTUAL: SPECIAL DELIVERY FOR WAMU VICTIMS!

Senate finds Massive FRAUD in SHam-MU! WaMu has allegedly defrauded hundreds of thousands of homeowners with unfair, deceptive and perhaps illegal lending policies and practices. Many of these homeowners are now facing the possibility of or are in foreclosure.

666 Pages with “Private” emails you’d like to read. Please be patient to upload.

 

 

 

 

 

 

 

[scribd id=31356428 key=key-2ds6hgs6mi4aixhlw07z mode=list]

 

Posted in concealment, conspiracy, corruption, credit score, foreclosure, foreclosure fraud, forensic loan audit, forensic mortgage investigation audit, jpmorgan chase, scam, securitization, washington mutual0 Comments

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