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How Allstate Used Sampling To Confirm BofA/Countrywide Lied About Virtually Everything When Selling Mortgages

Tyler Durden's picture


A few days ago, news broke that MBIA was allowed to use statistical sampling in its ongoing Bank of America fraud lawsuit. This happened despite the Countrywide acquiror's loud protests. And now, courtesy of today's brand new lawsuit against BofA (and Agent Orange himself) filed by Allstate, in which the insurer "seeks unspecified damages, alleges fraud,
negligent misrepresentation and violation of U.S. securities
laws" we know just why Bank of America was so very against allowing sampling to be used by plaintiffs. According to the full report (pdf attached below), Allstate has determined that Bank of America misrepresented virtually everything in its prospectuses: from the percentage of owner-occupied properties reped in prospectuses (about a 10% differential), to the LTV thresholds on represented loans (both at the 90% and 100% threshold), while inbetween finding willful and malicious intent to defraud and deceive. We are confident that none of this, however, will result in a prison sentence for Mozillo, as laws in America are meant to be broken by anyone who can demonstrate an LTV more than 100,000% or have more than $100MM in annual income (including that derived from golden parachutes).

From the just released prospectus, which opens a green light for everyone who believes that the banks or its predecessor was dishonest in representing any and all deal components, and wishes to do so using statistical sampling, which is now permitted:

Allstate's sample sizes of Mortgage Loans are more than sufficient to provide statistically-significant data to demonstrate the degree of misrepresentation of the Mortgage Loan characteristics. Analyzing data for each Mortgage Loan in each Offering would have been cost-prohibitive and unnecessary. Statistical sampling is an accepted method of establishing reliable conclusions about broader data sets, and is routinely used by courts, government agencies, and private business. As the sample size increases, the reliability of its estimations of the total population increase as well. Experts in RMBS cases have found that a sample size of just 400 loans can provide statistically significant data, regardless the size of the actual loan pool, because it is unlikely that so large a sample would yield results vastly different from results fro the entire population.

So having used this sapling method, here is what Allstate found:

...statistics show that despite Countrywide's representations, a much higher percentage of borrowers did not occupy the mortgaged properties:

...Overall, 18.3% of the loans sampled had recalculated LTV ratios of more than 10% higher than was claimed in the offering materials, and 6% of the loans sampled had recalculated LTV ratios of more than 25% higher than what was claimed in the offering circular. This overvaluation affected numerous statistics in the Offering Materials...For instance, the Offerings each made representations about the percent
of loans that had LTVs higher than 90% provide the lender little value
cushion to protect against borrower default and loss upon foreclosure.
However, the AVM indicates that a much higher percentage of the loans
had LTVs higher than 90%

The Offerings uniformly represented that none of the Mortgage Loans that collateralized the Certificates had LTV ratios greater than 100 percent, meaning that the size of the loan is greater than the value of the property. (aka: being "underwater") Loans with over 100% LTV afford the lender no equity cushion and leave the lender with inadequate collateral from the outset of a loan. Allstate's analysis has found that, despite Countrywide's representations, a substantial number of Mortgage Loans had LTVs greater than 100%, as follows:

Allstate has also analyzed the weighted average LTV of the Mortgage Loans in each pool and has found that the weighted average LTV was also overstated, because of the overstatement of individual Mortgage Loans within the pools.

All these lies, and much, much more, can be found detailed in the filing below. At the risk of cheeiness, this is just a sampling of the sampling. And it demonstrates as all those who purchased loans from CFC/BofA that were repped to be in order, will find, following sampling or loan by loan analysis, that Brian Moynihan's bank committed acts of fraud after fraud, putting not only itself, but its underwriter counsel at risk time again. In fact, if there was anything remotely close to a working legal system in the US, what happened to Lehman's Repo 105 auditor, E&Y, should promptly befall every single underwriter's counsel which is jointly liable in representing that the data set forth by the underwriter is correct. But just as importantly, it means that of the hundreds of hundreds billions in loans sold by BofA to hapless dimwits, arguably the bulk of it is now subject to putbacks, and is of far worse quality than previously expected. It also means that the GSEs: those infinite receptacles of mortgage biohazard, are lying consistently when representing the state of their own books, which are likely orders of magnitude worse than the monthly status reports will indicate. 

This is just starting to get interesting.

The full Allstate filing which is a must read for everyone is presented below.



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Tue, 12/28/2010 - 18:46 | 834570 Sudden Debt
Sudden Debt's picture

And yet, BAC will win also that suit and markets will keep going up.

People expect justice to happen, but that's all a big joke.

That news didn't even got it in the red today and if you look to the 50 mda, it will be at 14 by jan.

Tue, 12/28/2010 - 19:35 | 834665 eatthebanksters
eatthebanksters's picture

Too bad HFT isn't a stock...I'd buy it.

Wed, 12/29/2010 - 01:00 | 835126 Malcolm Tucker
Malcolm Tucker's picture

Meanwhile the Germans want to implement Israeli-style profiling in their airports:

Probably screening for young, arab, males...I wonder if they can screen for middle aged German bankers holding the Irish people hostage? 

Tue, 12/28/2010 - 19:59 | 834712 unwashedmass
unwashedmass's picture

you guys at Zero hedge are some nervy little peasants...suggesting that someone like Mozillo, or anyone at BAC should go to jail! gimme a fuckin' break....

take a nip of some reality juice, will ya? People like this don't go to jail. They take their money and walk away after "sharing" some with their local legislators.

i mean, get with the program already.

Tue, 12/28/2010 - 20:26 | 834747 traderjoe
traderjoe's picture

I junked you because that defeatist attitude is a self-fulfilling prophecy. 

There is too much fraud in the system. The loans will never get paid. The corporations will fight amongst themselves. Eventually the wizard behind the curtain will be shown to have no clothes. The government will have to close the banks, replace the currency. Will there be prosecutions? Maybe not. But the conclusion is drawing near...

Tue, 12/28/2010 - 20:48 | 834774 LeBalance
LeBalance's picture

Golly pardner!

I think you need to get a hold of your Mr. Justice badge.  Have a seat..!

Now you know that the Fed's agreement has basically legalized counterfeiting aka theft.  And you also realise that the Bank owns everything. So why are you getting all hot and lathered up over systemic fraud?

Isn't completely obvious that head-to-toe plunder and rape is standard operating procedure?

Oh....I get just opened your eyes and want to rant about how yucky it is?

Ok, fine, but get over it and get to work jerking the guy next to you.

It's a living.

Wed, 12/29/2010 - 05:25 | 835271 jeff montanye
jeff montanye's picture

over a thousand felony convictions in the aftermath of the (much smaller) savings and loan scandal in 1990....  today?  none.   also the former used reorganization much more than bailout, relative to today.  oh, but wait, that was w. bush's father, one of the "greatest generation".  apparently the current one is ?

Tue, 12/28/2010 - 21:07 | 834804 B9K9
B9K9's picture

I just wish Tyler & Co would cease & desist with the gleeful reactions. They are unbecoming, and frankly, somewhat unprofessional given the stature of the blog and nature of the readership. But the worst mistakes are that they are both unserious and demonstrate a certain lack of awareness of what's really going down.

Look, it has always been known by all parties, indirect & direct, private & public, that this entire  steaming dung heap was based upon layers upon layers of fraud. But that's not the point: no, the entire exercise for the last 2-3 years was to jump start another bubble sufficient for the sins of (c)ommission to be miraculously erased.

That effort has failed. Of course, the likelihood of success was infinitesimal, so preparations have been in process of being made all along in case failure was indeed the result. So back to my original comment above: are to we to believe that this is it, that the courts will mete out justice and that the power-elite just fold up their tent(s) and come clean?

Bitchez, please. Rather than get excited about the next stage beginning to unfold, we should be focusing on anticipating what methods the evil empire will begin to employ to retain control once the "happy" mask is finally torn off.

This ain't no game.They're in it for keeps, and so should we. It's not everyday one witnesses or experience an end of an empire, evil or otherwise.

Tue, 12/28/2010 - 21:12 | 834821 cosmictrainwreck
cosmictrainwreck's picture

"so back to my original comment above..." so you are also traderjoe?

Wed, 12/29/2010 - 00:53 | 835121 traderjoe
traderjoe's picture

No, I am but a mere disciple. 


Wed, 12/29/2010 - 05:32 | 835276 jeff montanye
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this ain't no party, this ain't no disco, this ain't no foolin' around.

Tue, 12/28/2010 - 21:27 | 834849 Dantzler
Dantzler's picture

I appreciate your comment, B9K9 - thanks

Tue, 12/28/2010 - 22:01 | 834902 Thomas
Thomas's picture

Simon Johnson somehow got it through to me: Progress in rousting the rascals and cleaning out the rot will be slow and incremental, but it will occur.

Wed, 12/29/2010 - 00:44 | 835111 merehuman
merehuman's picture

BkB9, thanks , i get it.

Tue, 12/28/2010 - 21:53 | 834891 illyia
illyia's picture

Yeah, I appreciate your comment too B9K9.

I suppose dark humor is a way of dealing with the flood of corruption and the distinct lack of justice. But, it's also a method of passing the buck, a la "what can we do" it's too bad oh well.

The urge to action is repeatedly squelched and the bombardment keeps on coming.

But, B9K9, you certainly are on to something: These elitist thugs have a back-up plan. It's called "cover your ass". The second rule is "if I scratch your back you scratch mine." The last rule is "the enemy of my enemy is my friend."

Everything else is Soylent Green.

Now. Whats your plan?


P.S. However cynical I may be, I do ask honestly: How do you obtain justice?

Tue, 12/28/2010 - 22:25 | 834935 Greenhead
Greenhead's picture

None the less, the rule of law is the only long-term hope for our future.  If we do not invoke the rule of law, then all bets are off and we will have a totally corrupt government.  At the end of the day, all citizens must be accountable, even the elite.

Tue, 12/28/2010 - 23:59 | 835052 chumbawamba
chumbawamba's picture

Yes, it will be crucial to invoke the Rule of Law...once we're done hanging all the bankers and politicians.

I am Chumbawamba.

Wed, 12/29/2010 - 02:28 | 835193 Bay of Pigs
Bay of Pigs's picture

Yes, this is the the point. Sadly, most are totally brainwashed into believing otherwise. Why exactly is that?

The Rule Of Law is Dead?

Wed, 12/29/2010 - 12:45 | 835806 Winston Smith 2009
Winston Smith 2009's picture

"None the less, the rule of law is the only long-term hope for our future."

True, but historically with only rare exceptions, the rule of law doesn't apply to most within the oligarchy. It's only when their somewhat obvious con games collapse, as with Enron, WorldCom, and Madoff, that they are even officially noticed by "regulators" let alone the DoJ. And in our current case with massive fraud at every level within the financial and real estate sectors having caused a Great Depression II, even when a collapse does occur, it cannot be recognized and justice done because the repercussions would be catastrophic for the oligarchy.

"If we do not invoke the rule of law, then all bets are off and we will have a totally corrupt government."

It already is in the sense that it represents moneyed special interests and not the proles who vote for either of the two major parties.

"At the end of the day, all citizens must be accountable, even the elite."

With oligarchy-captured governments, that will never happen short of a systemic collapse and at that point, if history is any guide, the proles will finally awaken and do something really stupid like follow some demigod with simple (and typically incorrect) "answers."

Tue, 12/28/2010 - 23:04 | 834980 B9K9
B9K9's picture

Justice? Well, first of all, you've already lost if you think there's going to be any "justice" in the traditional sense of the word. Reality, especially played at the level we're going to begin experiencing, is all about realpolitik. The only justice anyone is going to get is after the military is convinced that their long-term viability lies with the People, rather than with the current powers-in-charge.

As Travis knows full well, as do the power-elite and any others who care to contemplate our situation, we simply do not have sufficient energy resources in which to adequately grow the economy in order to sustain the global Ponzi. (Please note this isn't about peak oil; rather it addresses the lack of sufficient energy to achieve an annualized CAGR of around 5-7% for the next couple of generations.) Hence, the return to slavery is anticipated to provide the displaced net energy deficiency.

Right now, your average American is slated for his/her new role as a low-energy consuming, highly emotional fungible tool to be used & discarded once his/her useful life is completed. If one were to consider an historical bell curve, we are simply retracing traditional practices that were merely suspended during the last 200 years or so of the fossil fuel period.

So that's what's in store. All the pieces are being arranged to maximize the capture cooefficient. As it's being designed, the MIC still plays an important part. How we mock up an alternative deal is the question for the ages. If we can convince them that they can achieve greater power & exercise further international control with a different financial political economy, we may have a chance.

Tue, 12/28/2010 - 23:53 | 835046 Oh regional Indian
Oh regional Indian's picture

There is an alternative B9K9. Very cogent writing by the way. All the way down this comment-stream.

But there is an energy alternative.

I have it. We're slaves to energy and TBT have us by the short hair because they control the energy. it really is that simple. He who controls energy resources controls everything.

Why am I not the new Tesla? Because everyone here and everywhere else bleats for an alternative while sucking away at the teat of the current energy paradigm.

90% of the folks here will scoff, junk or otherwise dismiss what I'm saying and move on to rant some more. Watch soome CNBC, drink a bud/coors/whatever from their fridge, turn up the AC/heat (depending) and wait to get reamed again tomorrow.

What am I waiting for? Public involvement. Not Venture fund involvement (TPB hands), not large company involvement (TPB control again), but people involvement.

And there are many others like me too. But most folks would turn away in fear of losing this for a new paradigm that might take a little re-training, even if only of perspective.

I've repeatedly invited this forum, because I see such a collective of incisive minds, but everyone is judging books by their covers.

Energy in-dependence. it's possible. In six months and a couple of million bucks and a global movement that will not retreat in the face of Corporate pushback.

I'm looking at fly in the wall news, millions and million to MIC companies including one where I was Director of Technology, believe it or not). Hundreds of millions.

Such is the state of the world.


Wed, 12/29/2010 - 00:05 | 835055 chumbawamba
chumbawamba's picture

You write many words but you communicate nothing.

I am Chumbawamba.

Wed, 12/29/2010 - 02:31 | 835195 Oh regional Indian
Oh regional Indian's picture

Well well, that coming from primo resident ego maniac?

You piss in the wind brother, piss in the wind.

Look at your own choppy, angry, abusive rants before pointing fingers.

Got an original idea? Not some anarchy, did not pay my bills, look at me bull-shit. 

some thing real?

I do.

Now shut up.



Wed, 12/29/2010 - 03:13 | 835214 MsCreant
MsCreant's picture

You have not stated specifics. 

Wed, 12/29/2010 - 07:10 | 835308 Byte Me
Byte Me's picture

It would seem that Vivek never wants to get into specifics.

But perhaps he'll misdirect and obfuscate again. I hope he does put up something specific though.

Wed, 12/29/2010 - 10:06 | 835461 Oh regional Indian
Oh regional Indian's picture

MsC and Byteme below,

Do you think I'm going to put my design for the re-designed bicycle, which completely turns the concept of the bi-cycle on it's head and therefor all bi-wheel products too, up for perusal? Or that I'd publish the design for the hybrid power-train that can deliver 300 miles a gallon in a public place? Or the add on for private and commercial aircraft that can extend their range by 100% or more on a web-site? Or perhaps for the distributed power-generation module that would solve global energy problems here or even on my blog?

That is just not practical. Some things are best alluded to. On my design website, which I'd posted here a few times, I've laid out the obvious of what is wring with the current paradigm. It's an old eastern trick. Called neti. Not this. Not this.

therefore this (or that) suggests itself.


if i put my designs up for public consumption, they would be drained and lost in a heartbeat. too much negative sentiment. 

Of course I've met industrialists, large corporations, "capitalists', world over. And been offered large sums of money, but always with the caveat of being swallowed into soem heartless beheamoth or controlled by money without heart or vision. 

I play and say here because I've felt, from the beginning, an undercurrent of awesome minds here.

So far, mostly pushback.

After 7 years of holding and honing the vision, I'm detached from outcomes or what shape they might take.

All of what I've said above is available for review, in person of course.

Meanwhile, it's fun to play with bright minds.


ORI (VivekAnand)

Wed, 12/29/2010 - 11:12 | 835575 MachoMan
MachoMan's picture

Not only are you a terrible salesman, but you're also completely full of shit.  By waiting to introduce your technology, you've proven a few things: (1) its success is dependent upon the destruction of cheaper energy; (2) you're not worried about competitive products being developed in the meantime, which suggests a contemptuous view of prospective competitors and/or a massive ego; and (3) that you could not care less about being a "public benefactor" and are instead concerned with meeting your expectations of financial gain.

In short, blow it up someone else's ass.  Revolutions don't bide their time.

Wed, 12/29/2010 - 11:26 | 835594 Oh regional Indian
Oh regional Indian's picture

have a happy time sleepwalking your way to whatever you have coming machoman. I'm responding to your current and following comment.

Your handle is indicative of your persona.

I wish you well. 


Mon, 06/27/2011 - 14:36 | 1406122 madbomber
madbomber's picture

its not revolution it's evolution.  revolutions come right back to the start.









Wed, 12/29/2010 - 10:42 | 835522 chumbawamba
chumbawamba's picture

Ok, I re-read your comment.  And I must repeat:

You write many words but you communicate nothing.

If you want to get everyone aboard your magic energy train then you're going to have to sell some tickets.  So far, it seems you've fallen rather short, by your own admission.

Maybe it's not everyone else that's the problem, maybe it's your poor salesmanship?

Inventions are like children: the parent always thinks theirs is the best and brightest, but if you don't socialize them then they'll never be able to properly emerge from beneath your wings.

I am Chumbawamba.

Wed, 12/29/2010 - 11:03 | 835558 Oh regional Indian
Oh regional Indian's picture

All right chumba, I'll buy that. Unfortunately, being a magic energy train creator AND being it's salesman is a pressure unique to our current system of product/company creation. Thus the less than 10% "success" rate of start-ups, a system I don't subscribe to and a "success" I'd rather pass on.

Also, as you might imagine, sitting on a brood of innovations that can turn many, entire industries on their head is quite "heavy'. Makes me iconoclastic in my approach with people. Impatient. not good "sales" qualities.

I've presented my innovations to world class aviation designers, automotive heads, rally team owners, large sports houses and watched cognitive dissonance freak them out as they get it and then want me gone because I'm a change maker..

n addition, I'm a demand-sider. When the world is ready for me, I'll be ready for the world.

I'm inviting (and have before) bright minds/honest people to come on board. And some have. From right here too. Just not critical mass yet.

Are you a good salesman?


Wed, 12/29/2010 - 11:14 | 835578 MachoMan
MachoMan's picture

If you had divulged your plans to this many people, they would have been perfected and patented by others by now.  Please quit spouting bullshit.  Reading between the lines, you simply present rudimentary concepts as sales pitches...  when it comes time to pony up the actual technology, you're all filler and no killer.  In short, a cozy science fiction movie is not any more of a bridge to technology than elephants painting.

Wed, 12/29/2010 - 11:33 | 835614 chumbawamba
chumbawamba's picture

I've read through your website previously.  I believe what you say.  My comment above was more a reflection of my impatience with vague descriptions.  There are many people, myself included, who believe not only that alternatives are possible but that they're already here.  We're waiting for the breakthrough.

I'm not a salesman, I'm an evangelist.  Once I'm convinced, I become as Luke, spreading the gospel.

People who have been successful in changing paradigms in the past didn't wait for people to come to them, because they would have waited in vain, like all the others who didn't become household names.  If you build it, they will come.

I am Chumbawamba.

Wed, 12/29/2010 - 12:09 | 835720 MachoMan
MachoMan's picture

The alternatives have been here for decades...  oil companies are not just oil companies, it's more accurate to portray them as energy companies...  if the technology is not taken, literally taken, by our government, it is purchased by energy companies and shelved until infrastructure can be paid and a desired level of profits achieved.

If you have a viable competing technology, the time to implement it is immediately.  As previously stated, revolution does not bide its time.  Which again, leads to my assumption that delay is indicative of a failed technology or a technology that requires a vastly changed world landscape...  either of which are hogwash for now.  As admitted by the poster, we need specific social change for the technology to even possibly work...  this is otherwise known as a prayer.  And I'm not the religious type.

Wed, 12/29/2010 - 15:03 | 836157 Oh regional Indian
Oh regional Indian's picture

Chumba, if you feel impatience, imagine mine.

And if I had one thing, say the bicycle, it'd be there, in the "market" by now.

But what I have is a seed, original knowledge that changes everything. Literally, figratively.

Like birthing, cannot put a finger or a toe out alone. It has to unfold, organically, fully, safely.

Also, like birthing, the womb, which machoman describes as the social milieu, the players, the financiers, all need to be ready and involved without attachment to financial outcomes or success.

I've learned patience the hard way.

We are at a tipping point though and the time I feel is now or soon.

I see it as more time to hone the vision, gather the team/community and hone my-self.



PS; Gratitude to TD and co for this awesome, open forum.

Wed, 12/29/2010 - 12:49 | 835815 Winston Smith 2009
Winston Smith 2009's picture

"He who controls energy resources controls everything."

No, he who controls the creation of money controls everything including energy resources.

Wed, 12/29/2010 - 00:42 | 835103 Unlawful Justice
Unlawful Justice's picture

"How do you obtain justice"

When it benefit's the participants to do so. There are many kinds of justice.  Moral, legal, social, natural, and poetic. It comes down to what's in it for me. But more so it's about the triumph of logic, and the reward of virtue. 

Wed, 12/29/2010 - 00:48 | 835118 merehuman
merehuman's picture

Rope and bullets cause the courts are bought as is congress.

Bullets and rope  is good too.

Tue, 12/28/2010 - 22:09 | 834913 grunk
grunk's picture

Finacial IED's.


They'll happen, in spite of Big Sis.

Tue, 12/28/2010 - 23:22 | 835002 Fred Hayek
Fred Hayek's picture

I suspect that it's a choice to adopt this tone rather than go the Denninger route and repeatedly appear to be shouting at readers that if something isn't done about THIS new indignity, THIS new corruption, then we no longer have any country whatsoever.  The problem is that the indignities and corruptions abound.  And as much as many of them deserve a response of full-on outrage, you can only do full-on outrage so many times before the effect is minimal and you seem to have progressed to an implicit defeatist attitude.

Wed, 12/29/2010 - 02:01 | 835167 marc_hanes
marc_hanes's picture

I do remember reading (not as an official member) the early days of this website when posts were presented in a more dispassionate, "you decide" tone. Maybe the expectation was that the readership was smaller and more intelligent or informed. The past, gosh, at least nine months the more "biased" introductions to articles have appeared. I remember a debate whether or not Tyler, et. al. should switch from "just the facts, ma'am" to more of an advocatory position. Both sides had valid points. It seems that ZH has chosen a more hands on, editorial approach. Not for me to say why. But, as one voice, I did prefer the more objective "here is an article, here is a twenty word synopsis, now discuss" approach.

Wed, 12/29/2010 - 11:17 | 835581 MachoMan
MachoMan's picture

The same reason why all media adopts a "stance" on the issue, the perceived bottom line...  we're dealing with intelligent actors...

Tue, 12/28/2010 - 22:51 | 834964 Hugh_Jorgan
Hugh_Jorgan's picture

C'mon. I do believe the man had his <sarc> turned on, as well as his <cynic>. We all know that it is a double-standard crock for all but those with a large enough bank account or the right aquaintances. Let the man vent in peace already.

Tue, 12/28/2010 - 23:58 | 835050 Blano
Blano's picture

I think you and 16 others need to fire up the ol' sarcasm meters a bit.

Wed, 12/29/2010 - 00:15 | 835071 undereducated
undereducated's picture


Dog, dog, dog eat dog.

Wed, 12/29/2010 - 10:22 | 835491 SteveNYC
SteveNYC's picture

I picked up on the same thing you did: the REAL nut here is the predictable behaviour of the corporations themselves. Now that most people are pretty much financially raped and there is nothing more to steal from them, the corporations will start eating themselves.

This could start with a trickle, and turn into a massive flood. The theatre will be superb. Let them weaken each other, take each other down, and observe.

Nature has designed mechanisms, ones our simple minds can't even contemplate or fathom existence thereof, that will restore balance. Let the conditions continue to manifest....

Tue, 12/28/2010 - 23:40 | 835020 Rwbrown72
Rwbrown72's picture

You've been touching too many people's junk! They are going down this time... or maybe next time.... or at least the time after that I'm sure!

Wed, 12/29/2010 - 00:54 | 835122 Air_BernanQE
Air_BernanQE's picture

Justice does not seem to be an option for Americans anymore. Markets will continue to ride "Air Bernank" .

Wed, 12/29/2010 - 10:23 | 835496 SteveNYC
SteveNYC's picture

Great name "Air BernanQE"! Had me in stitches!


Tue, 12/28/2010 - 18:50 | 834574 umop episdn
umop episdn's picture

The full Allstate filing which is a must read for everyone is presented below. And it wouldn't show up for me because I forgot to turn off Adblock... just a FYI.

Tue, 12/28/2010 - 20:24 | 834730 Hansel
Hansel's picture

Create an exception rule for  I did a while ago.

Also, everyone spend a couple minutes clicking ads to support zerohedge!  Learn all about silver from the monex guy, why hyperinflation is just around the corner, order some doofus's free book, ogle the bmw 7 series, or a hyundai.  Click Cramer's dumbass face and send his action alerts to some fake email address.  Pretend your interested in some stupid t-shirts.  Click the brokerage ads from SOGO, etrade,, etc., etc.

Wed, 12/29/2010 - 00:18 | 835075 undereducated
undereducated's picture

click, click...

Tue, 12/28/2010 - 18:51 | 834580 BORT
BORT's picture

Anyone know how this applies to Countrywide Capital V 7% Trust Pfd. Secs. (CFCB).  I bought at 25, held through the lows and then sold for 23.5 after taking interest at 7% for five years.  Any ideas what will happen to this?

Tue, 12/28/2010 - 19:27 | 834650 JoeStocks
JoeStocks's picture

The CFC A and B are now guaranteed by BAC. This news should have no more affect than it would on any other BAC debt. However, the CF TRUPS do seem to sell at a slight discount to BAC TRUPS as I assume by association to CFC. I guess some weak hands may be scared into selling which IMO would be a buying opportunity.

Tue, 12/28/2010 - 19:00 | 834581 gwar5
gwar5's picture

Insurance companies are second to none with actuarials and statistics. But any Californian anecdotally could tell you what this study proved.

This validates what we all know. Now, where does this go from here? Who really owns these and is this a downgrade of American owned toxic assets or fake bank books?

The sampling is also good in Napa Valley, but don't drive yourself home


Tue, 12/28/2010 - 18:52 | 834582 the rookie cynic
the rookie cynic's picture

And BAC is up nearly 20% in December. Purely on strong fundamentals of course.

Tue, 12/28/2010 - 20:51 | 834776 LeBalance
LeBalance's picture


after removing some interfering letters I get:


I see what you mean.

Tue, 12/28/2010 - 21:18 | 834834 Cheesy Bastard
Cheesy Bastard's picture


Tue, 12/28/2010 - 22:01 | 834904 Cistercian
Cistercian's picture

They are more leveraged than that.

 I ended up with FU, which sums up their attitude and ethics perfectly!

Tue, 12/28/2010 - 22:13 | 834916 Cheesy Bastard
Cheesy Bastard's picture

Also brilliant.  You guys are one bunch of fun damn mentals!

Wed, 12/29/2010 - 02:14 | 835177 Arkadaba
Arkadaba's picture

also a dam in there or mad reversed 

Wed, 12/29/2010 - 01:07 | 835131 Air_BernanQE
Air_BernanQE's picture

FUNdaMENTALS? I believe we live on planet Earth!!!!  Remember how Jesse Livermore was hired to push piggly wiggly stock?,9171,765047-2,00.html

Tue, 12/28/2010 - 18:55 | 834592 onlooker
onlooker's picture

Where do you think I can watch this tonight? cnbc, abc, cbs, or nbc? I will make you a bet that FOX, the pretend protector of accurate news, does not have a peep about it.

Please post any news reports you see or hear.

Tue, 12/28/2010 - 19:54 | 834702 GreenSideUp
GreenSideUp's picture

Fat chance we'll hear this anywhere else. I'm sure we'll hear about Hef's new fiancee and other earth shattering news though.

The very thing that brought me to ZH was a search for hard news and information regarding the "robo-signers".  I may not be the brightest crayon in the box but I knew there was more to it than a couple of folks signing some docs without proper authority. Lo and behold...

BTW, thank you ZH and all who post here.  I greatly appreciate the info and education.    


Tue, 12/28/2010 - 23:49 | 835035 Fish Gone Bad
Fish Gone Bad's picture

The brightest crayon in the box I would have to guess is the child's hand?

Tue, 12/28/2010 - 21:59 | 834896 tgatliff
tgatliff's picture

cnbc reported on it... At least on the web.  I mean it was a brilliant piece of journalistic work.  The words just flow so well that you want to read it over and over again. 

Tue, 12/28/2010 - 23:02 | 834977 Doctor sahab
Doctor sahab's picture

wow that was ephemeral, link goes to a page not found!

Wed, 12/29/2010 - 02:16 | 835181 Arkadaba
Arkadaba's picture

hehe :)

Tue, 12/28/2010 - 18:58 | 834595 Misean
Misean's picture

Well, it's certainly good that the banksters dropped the balance of their loss provisions into their bonus checks then...that way we serfs can get "Tanks in the Streets II-Kleptocrat Boogalloo" or "Tarp 2.0" to save the system again....

Tue, 12/28/2010 - 19:05 | 834605 Mitchman
Mitchman's picture

Allstate's analysis has found that, despite Countrywide's representations, a substantial number of Mortgage Loans had LTVs greater than 100%, as follows:

If they aren't hung on that one alone, then we can shut off the lights and close the door.

Tue, 12/28/2010 - 19:35 | 834664 hardcleareye
hardcleareye's picture

They are not going to be hung, shutting off the lights and closing the door is a BAD idea with these boys!!!!

Tue, 12/28/2010 - 20:21 | 834740 Mitchman
Mitchman's picture


Tue, 12/28/2010 - 20:44 | 834766 Windemup
Windemup's picture

Release the hounds.

Tue, 12/28/2010 - 23:52 | 835041 Fish Gone Bad
Fish Gone Bad's picture

+1 if said with Montgomery Burn's voice.

Tue, 12/28/2010 - 22:22 | 834932 rosiescenario
rosiescenario's picture

....and the irony is those 'values' are now down by about really needs to go back through that table and apply today's values to get a true idea of how really bad these loans currently are.

Tue, 12/28/2010 - 19:07 | 834608 velobabe
velobabe's picture

thanks tyler, you da man.

loan to value. what value, the fraud appraisal. fraud comps, this just reeks of fraud over fraud over misrepresentation. i swear. if BofA did this creative sampling accounting, don't you think the big JPM did as well, and others. fraud as a business model.

this gets tricky in my daughter's case. she got a cuntrywide loan in 07, but it was for employee housing. significant lower value. hard to work this out in my head.

Wed, 12/29/2010 - 10:25 | 835502 SteveNYC
SteveNYC's picture

"cuntrywide loan"

Outstanding Velo! The laughs just keep coming today!

Tue, 12/28/2010 - 19:08 | 834609 docmac324
docmac324's picture

...and nobody will go to jail.

Tue, 12/28/2010 - 19:19 | 834633 DaveyJones
DaveyJones's picture

When the criminals don't go to jail, the jailers are criminals

Tue, 12/28/2010 - 23:55 | 835047 Fish Gone Bad
Fish Gone Bad's picture

With so many criminals finding Jesus while in jail, I have got to think that Jesus (the son of God), is also in prison.

Wed, 12/29/2010 - 02:13 | 835176 Miles Kendig
Miles Kendig's picture

Push those J&CO's for churn ...

Tue, 12/28/2010 - 19:09 | 834612 Milestones
Milestones's picture

The little snakes are now attacking the bigger snakes. Hatfields v the McCoys next at 8;00pm  Milestones

Tue, 12/28/2010 - 19:09 | 834616 Reese Bobby
Reese Bobby's picture

Each fraud lawsuit pressures fiduciaries everywhere to follow suit, pun intended.  And now it is trickier for Congress to legislate this away for the Banksters.  I’m not saying I expect justice.  I’m just saying this has more legs than I thought the “System” would allow…

Wed, 12/29/2010 - 00:38 | 835098 StychoKiller
StychoKiller's picture

Yet, Eric "Place" Holder continues to sleep (with dreams of prosecuting Az governors)...

Wed, 12/29/2010 - 00:40 | 835101 goodrich4bk
goodrich4bk's picture


I prefer your insight over the tired defeatists above.  This is big news precisely because it pits two large, well-financed corporations against each other.  Also, some here may not have appreciated what the suit is alleging.  It is not saying that the LTV or owner occupancies were wrong "in hindsight".  No, it is saying that even the STATED LTV and owner occupancies were fraudulently misrepresented.  This is a black and white issue.  It involves the fraud of the issuer, not the fraud of the homeowners (of which there was plenty)

Tue, 12/28/2010 - 19:13 | 834621 gangland
gangland's picture

this is control fraud pure and simple, classic case.

Wed, 12/29/2010 - 12:55 | 835827 Winston Smith 2009
Winston Smith 2009's picture

Long live William K. Black.

Tue, 12/28/2010 - 19:14 | 834626 Cdad
Cdad's picture

Who cares about bank fraud, really?  I mean what with all the wealth effect being beamed out of the Federal Reserve Bank and all, who cares if loans are fraudulent and Blight on America bank is full of toxic waste and may be sued into oblivion?  I mean it is not like this would effect the perpetually rising index, right?

And about "rule of law"...please.  Our own Federal Reserve Bank chairman has no regard for the rule of law, so why should anyone else?  I mean no one thinks we should bother with arresting folk at BoA, do they?  They are way too busy receiving and blowing Bernanke Bananas to be bothered with such stuff.

You know, the more I read ZH, the more I think you guys simply have not made the jump to the New America.  You really should get up to speed.  Law is overrated, and it does not apply to bankers.  That has been made very very clear over the last three years.  No sense fighting it.

Let's all just head on down to the Roach Motel [SPY] and get blotto on tax payer dollars, shall we?  It would just be a lot easier and more fun, too.  I'd really like to see one of those creation units machines in action.  You?

Tue, 12/28/2010 - 22:23 | 834931 iDealMeat
iDealMeat's picture

Cut all your consumption in half..  and miss a mortgage payment or 2. then make it up.

keep the worker bees employed and starve the system..

Tue, 12/28/2010 - 19:39 | 834668 greenewave
greenewave's picture

We are NOW in a Houseless, Jobless RECOVERY according to the CROOKS on WALL STREET!! It’s such a FRIGGIN TERRIFIC RECOVERY watch the YouTube video “Jobless..Houseless..Recovery. Let’s Celebrate!” at (


This guy? is kinda! like a love child from Peter Schiff & Max Keiser!

Tue, 12/28/2010 - 20:04 | 834723 hardcleareye
hardcleareye's picture

Nice Rant...  husband wanted to know why I was listening to Glenn Beck.....

Wed, 12/29/2010 - 00:55 | 835123 Fish Gone Bad
Fish Gone Bad's picture

The rant was absolutely enjoyable!  I had a friend in school who would go on tears like that from time to time. 

Tue, 12/28/2010 - 20:51 | 834777 merehuman
merehuman's picture

You spoke for a lot of us. Many of us are down to a sleeping bag and 1meal per day. Not so nice in the rain. Misery index goes way up for homeless people, many unseen.

Too embarrassed , down on our luck and no where to hide, yet we do hide. Many cities dont allow you to sleep in your car on city streets. The world is an awful hard place when you are down and out.

In conclusion to all those who , like i, sit in a warm home: Be thankful for all you have and are. Its all temporary so dont get attached to it. Lastly i can say with complete certainty that you all will survive this human experience .

Tue, 12/28/2010 - 21:27 | 834850 Cheesy Bastard
Cheesy Bastard's picture

Lastly i can say with complete certainty that you all will survive this human experience .

On a long enough timeline the survival rate for everyone drops to zero.

Tue, 12/28/2010 - 22:15 | 834920 rosiescenario
rosiescenario's picture

...during this lifetime.......

Tue, 12/28/2010 - 22:33 | 834946 Cheesy Bastard
Cheesy Bastard's picture

I stand corrected.

Wed, 12/29/2010 - 02:22 | 835186 Arkadaba
Arkadaba's picture

If I recall ... you said you had willingly dropped out and sold everything - just a question - may be my memory might be faulty?

Tue, 12/28/2010 - 19:44 | 834677 Cognitive Dissonance
Cognitive Dissonance's picture

Simply amazing how extensive the couldn't-hit-the-broad-side-of-a-barn miss from specifications this was.

It seems they created the sales brochure (aka the prospectus) and then pimped it to various hungry-for-yield buyers. After the solicitation of interest determined they could sell enough units to make bonuses all the way up the food chain, they filled the junker with whatever damaged goods were hanging around the loading dock waiting to be shipped out the waiting suckers. Pump and dump baby.

Mission Accomplished

Tue, 12/28/2010 - 19:47 | 834681 Cdad
Cdad's picture

You make all that sound like a bad thing.

Wed, 12/29/2010 - 00:58 | 835124 Fish Gone Bad
Fish Gone Bad's picture


Tue, 12/28/2010 - 19:54 | 834699 Misean
Misean's picture

Is there some other way to do things?

Tue, 12/28/2010 - 19:46 | 834679 macholatte
macholatte's picture

Insurance Company vs Bank

Mothra VS Godzilla


where is Bonzai when we need him?

Tue, 12/28/2010 - 20:24 | 834746 Cognitive Dissonance
Cognitive Dissonance's picture

where is Bonzai when we need him?

Sleeping. The guy lives in Hong Kong after all and deserves his 5-6 hours a day of sleep (along with a few cat naps) regardless of how desperate we are for inspiration and laughs. He usually extends his evening to 3 or 4 AM HK time (sometimes even later) just so he can hang around here for the majority of the market day New York Time. :>)

Tue, 12/28/2010 - 23:50 | 835038 keepmydollar
keepmydollar's picture

Mothra VS Godzilla 


That's exactly what I was thinking.  Who has the more powerful lobby?  Insurance or banking?  This should be one hell of a steel cage death match.


Wed, 12/29/2010 - 02:38 | 835198 Arkadaba
Arkadaba's picture

Great question - they may both be bailed out once again but eventually I think there will be a battle. Right now - no bets. 

Tue, 12/28/2010 - 19:46 | 834683 dognamedabu
dognamedabu's picture

Zero Hedge..You rock. You should make a TV channel and give CNBS some smackdown.

I don't post here often but I read ZH daily and some of the comments..You guys are so funny.



Tue, 12/28/2010 - 21:37 | 834868 Missiondweller
Missiondweller's picture

I'll second that.

Tue, 12/28/2010 - 19:48 | 834684 buzzsaw99
buzzsaw99's picture

Allstate = my heros. Why should the rate payers have to pay for fraudulent securities?

Tue, 12/28/2010 - 19:50 | 834690 hardcleareye
hardcleareye's picture

Thanks for the info.  Love this site!

Tue, 12/28/2010 - 19:51 | 834694 gangland
gangland's picture

you're in good hands....

Tue, 12/28/2010 - 20:36 | 834756 Dr. Sandi
Dr. Sandi's picture

...with TSA

Tue, 12/28/2010 - 20:53 | 834785 merehuman
merehuman's picture your pants

Tue, 12/28/2010 - 21:15 | 834827 cosmictrainwreck
cosmictrainwreck's picture

that Craig Feruson is the shits, ain't he? a patriot, too

Wed, 12/29/2010 - 02:29 | 835191 Arkadaba
Arkadaba's picture

Old (weeks) but I love this as blogsphere kick back:

Tue, 12/28/2010 - 19:52 | 834696 Kina
Kina's picture

There will be no personal price to pay by any authorising criminal behaviour within banks. They own Senators, regulators, watchdogs parts of the judiciary are bankster/political appointments.


Only those not high enough up the elitist ladder, or sufficiently in the know to be a risk will be sacrificed.

One of the reason the sheeple will remain sheeple is that they will see how stacked the deck is against them and not bother to fight it.


Tue, 12/28/2010 - 19:58 | 834710 Misean
Misean's picture

I've said it before.  The elite, thanks to central control of reigning edumication and bureaRATic control are in the thrall of group think.  Their advisors are all Keynsian Ebbublegnomists.  The head gnomes said in '08 "We'll print our way out of this!" and all the other gnomes pulled there little beards and said "Yep! Yep!"

Now it comes to it, and the shit ain't workin'.  Now the elite's decamp and form up against each other to make sure they don't get flushed...

This is where it gets interesting...

Tue, 12/28/2010 - 20:52 | 834780 Cdad
Cdad's picture this is where criminal syndicate Wall Street bankers either bend to meet consequences of the rule of law...or they take the US one giant leap forward towards Marxism/fascism. 

Not seeing much in the way of concern for the rule of I'm guessing...

Tue, 12/28/2010 - 20:54 | 834787 merehuman
merehuman's picture

Great leap the cliff. Hello wiley coyoty!

Tue, 12/28/2010 - 22:29 | 834942 GreenSideUp
GreenSideUp's picture

I dunno about the sheeple not fighting anything once they finally understand what's going on. 

Unemployed people have a lot of time on their hands.  Throw in a little desperation get the picture.

Wed, 12/29/2010 - 11:24 | 835593 Bitch Tits
Bitch Tits's picture

"One of the reason the sheeple will remain sheeple is that they will see how stacked the deck is against them and not bother to fight it."

I wouldn't bet on that. All it takes is one breath to blow out a candle - or tear down a house of cards.

Tue, 12/28/2010 - 19:53 | 834698 chumbawamba
chumbawamba's picture

Start greasing up those backends, boys!  Looks like we'll be taking the banksters on a ride up the old Hershey Highway.


Memo to Pandit: Get ready, bitch.  Chumbawamba is coming.

I am Chumbawamba.

Tue, 12/28/2010 - 20:06 | 834720 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I hope so.  Do you think it will be more than a slap on the wrist $5 billion fine?

Tue, 12/28/2010 - 20:57 | 834793 Miss Expectations
Miss Expectations's picture

Mazola the Mozilo!

Tue, 12/28/2010 - 21:36 | 834865 Widowmaker
Widowmaker's picture

Was this post meant for eHarmony?

Tue, 12/28/2010 - 23:45 | 835026 chumbawamba
chumbawamba's picture

What?  No!


I am Chumbawamba.

Tue, 12/28/2010 - 20:21 | 834741 tony bonn
tony bonn's picture

skank of america is just as sleazy, arrogant, and malicious as jpm, golman sachs, and bp....they are companies for whom capital punishment would be too kind...

the most arrogant asshole "customer service" agents in america are at that arrogant fucking asshole boa....fuck them all to hell....

Tue, 12/28/2010 - 20:44 | 834752 plocequ1
plocequ1's picture

I have Allstate for my Car Insurance. Never had an Issue. They covered my $5,000 door repair. What they do as a hobby is not my concern. Rally on. ( My comments are based on the philosophy of who gives a fuck anymore)

Tue, 12/28/2010 - 20:39 | 834760 GoldmanSux
GoldmanSux's picture

Agent orange indeed. The evidence you show is sufficient for me to vote for a conviction of FRAUD. I am sympathic to the death penalty in this case.

Tue, 12/28/2010 - 20:47 | 834769 buzzsaw99
buzzsaw99's picture

The banking behemoths may own the system but the insurance cartel has lawyers and politicians on the payroll too. Clash of the titans.

Tue, 12/28/2010 - 20:50 | 834779 RobotTrader
RobotTrader's picture

Pretty much old news.

BAC has rocketed up off the lows.

I doubt anything bad going to happen out of all this hysteria.

Looks like it is ready to break out tomorrow if the year end happy print continues.


Tue, 12/28/2010 - 21:05 | 834810 buzzsaw99
buzzsaw99's picture

disagree. bac will be back in the (downward) channel before long. loan servicing and legal overhead will eat their lunch.

Tue, 12/28/2010 - 21:16 | 834832 cosmictrainwreck
cosmictrainwreck's picture

Robo, your mom's been looking for you....

Tue, 12/28/2010 - 22:30 | 834941 Robot Traders Mom
Robot Traders Mom's picture

Don't worry I found him Cosmic. He was out riding his bike with some of the neighborhood kids. He will be back trolling in no time!

Tue, 12/28/2010 - 22:38 | 834953 cosmictrainwreck
cosmictrainwreck's picture

thanks, Mom ! (can I call you "Mom"?)

Wed, 12/29/2010 - 02:47 | 835202 Arkadaba
Arkadaba's picture

Don't know who you are but making me laugh out loud for real :)

Wed, 12/29/2010 - 09:18 | 835390 Contura
Contura's picture

Priceless. Waiting for GrandMa..

Tue, 12/28/2010 - 22:55 | 834970 Careless Whisper
Careless Whisper's picture

maybe you didn't notice, robo, but it needs to be said; silver closed above $30/ounce again.

now getting back to BAC. what would you rather have, 110 shares of BAC or 1 ounce of gold? yes, i take the gold, it's a no brainer.



Tue, 12/28/2010 - 20:56 | 834792 merehuman
merehuman's picture

We are broke , so now they eat each other. Hurrah!

Tue, 12/28/2010 - 21:12 | 834820 Miss Expectations
Miss Expectations's picture

No one can do what Countrywide can:

Tue, 12/28/2010 - 21:16 | 834828 no cnbc cretin
no cnbc cretin's picture

ZH, for my money, overall rocks. ZH - ignore those morons who say different. They'll be the first to go, when the collaspe comes.

Tue, 12/28/2010 - 21:25 | 834840 cranky-old-geezer
cranky-old-geezer's picture

I wonder how many people whining about this and similar bankster frauds did the Xmas fraud this year ...complete with going in debt  buying gifts.

Tue, 12/28/2010 - 23:08 | 834986 chumbawamba
chumbawamba's picture

It's not your debt if they can't prove you own it.

I am Chumbawamba.

Wed, 12/29/2010 - 00:09 | 835064 Fred Hayek
Fred Hayek's picture

I thought the equivalent George Costanza line would be more like, "Remember Jerry, you're not underwater if you BELIEVE that you're solvent."

Wed, 12/29/2010 - 11:28 | 835604 Bitch Tits
Bitch Tits's picture

No one in our family did. For the first time ever. We didn't even get a tree. Guess what? Still had a great holiday, sans gifts.

Yet retail sales were booming. Right?

Tue, 12/28/2010 - 21:25 | 834843 Spigot
Spigot's picture

Well, when these turds get pushed back onto the orginators' and/or securitizers' they will have to come up with cash fast + penalties to boot. Out of the TRILLIONS of $$$ that transacted in these instruments let's guestimate a 40% put back and $4 trillion in questioned bonds. That would force these orgs to borrow $1.25-1.75 Trillion to settle. Looks like the Fed will be busy at the presses and will have to eat these turds as well.

Glad to see someone (insurance company sector) putting the gloves on. This is going to be a good fight. They have the money to prosecute it, too. And once one ins co steps to the plate, then it will indeed be all the others...and the retarded pension funds will finally get into the act too. Yummy!!!

Tue, 12/28/2010 - 21:28 | 834851 gangland
gangland's picture

off topic: read it and weep or get pissed or apply to the union, move chairs around at Lincoln Center and get paid an average of 290,000 doelars.


Tue, 12/28/2010 - 22:35 | 834948 palmereldritch
palmereldritch's picture

Plutocracy's Mini-me

Tue, 12/28/2010 - 23:26 | 835006 Pemaquid
Pemaquid's picture

As if there isn't enough to be pissed about ...

Wed, 12/29/2010 - 00:20 | 835078 gangland
gangland's picture

yeah man, at this point I would not know what to say, participate and say fuck it, or condemn it....I say bring on the fire...kill the disease by killing the host? what about the kids? lol...fucked up aint? i keep looking back, to see, if there's anyway of backing out of this least there'still regular runing water and nfl on nbc.

Do NOT follow this link or you will be banned from the site!