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Investors Holding Voting Rights In More than 2,600 MBS Deals Prepare To Fight Back Against Servicers
It just went from bad to worse for mortgage servicers: Bloomberg reports that investors who collectively hold over $500 billion in MBS, are huddling and preparing to fire back at the servicers. Mortgage-bond investors represented by Dallas lawyer Talcott Franklin will send letters to securities trustees complaining that they shouldn’t bear the costs of loan servicers’ so-called robo-signing. The reason for the ire? It is the noteholders who ended up having to pay legal fees associated with discoveries of rampant fraud: "The investors, who Franklin has said own more than $500 billion of the securities, are “pretty disturbed” that mortgage-bond trusts are being forced to pay penalties. Judges are forcing the trusts to cover homeowners’ attorney fees when servicer misdeeds are discovered. “Look who got sanctioned,” Franklin said today at a conference in New York organized by law firm Grais & Ellsworth LLP. “It wasn’t the servicer, it was the holder of the note." One wonders just how large this number is when summed across the hundreds of assorted holders, and what happens when say a Bank of America is stuck with the invoice.
And hundreds it was:
New York-based lawyer David Grais hosted the conference, which about 100 people attended and about 150 were expected to listen to via a webcast. He represented securities firm Greenwich Financial Services LLC in a lawsuit that stemmed from Bank of America’s 2008 agreement with a group of attorneys general to rework debt to settle charges of fraudulent lending by Countrywide Financial, which the bank bought that year.
While Grais lost the case this month as the court ruled Greenwich Financial didn’t own enough of the bonds to pursue it, investors may have more luck heading off a new settlement by mortgage companies that harms them, he said today.
Just so it is clear, those 100-150 people who are about to launch lawsuits.
And here is the even worse part:
Mortgage servicers have been reworking investor-owned loans while not seeking amendments on debts they hold themselves, a misstep investors can use to bypass trustees or force them to act, Bill Frey, the head of Greenwich Financial, said at the conference. The four largest U.S. banks, which service a majority of U.S. mortgages, own more than $400 billion of home-equity debt, Goodman said.
“We found servicer defaults in 100 percent of the trusts,” Frey said.
Franklin said the group of investors coordinating through his firm’s RMBS Investor Clearing House owns more than 25 percent of so-called voting rights for about 2,600 mortgage securitizations, and more than 50 percent for about 1,150 deals.
That's a lot of deals that are about to be put back. Does JPM wish to reconsider its putback charge estimate?
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Robo-signers are chump change. Wait till the big atty firms get on board with the realization that almost none of the old crappy loans were properly assigned to the Trusts. The investors will sue to get the crappy loans out of the pool, demand that they be properly replaced with good loans, and the whole thing comes crashing down.
What are these "good loans" of which you speak, sir?
the other side of Pluto (and I don't mean dog poop)
Good loans would be any loan available for purchase on the market, which is current and fits the parameters of the specific trust.
"Good" in this case would mean "not in default" at the very least.
--Amelia Granger
Investors should take a stance against fraudulent servicing procedures such as robo-signing, lawyers speaking at a conference in New York said today. Speakers urged investors to connect by joining a clearinghouse assembled by Dallas, Texas-based lawyer Talcott Franklin. Franklin said the first step he would take as the legal counsel of the clearinghouse would be to send a letter to trustees on soured deals making it clear no investor had wanted any representative of trusts to engage in “illegal or fraudulent” servicing procedures, such as robo-signing.
“We can do something here,” Franklin said. He said the clearinghouse already had enough investor members to represent the necessary 25% stake .
http://www.totalsecuritization.com/Article/2700573/Investors_Band_Togeth...
Does not any change in the holdings of the trust invalidate the tax status of the REMIC?
It looks like Bernanke's 100s of Billions on QE2 will be spent on one investor group at a time bailing the banks out of that thicket as congress comes up with new bill legalizing robo-signing and document creation. Bank stocks should have been cut in half by now.
I guess the question we have to ask is when did congress or the executive branch do anything that was detrimental to the bank's interests? The answer should tell us what's coming right after the elections.
Heh. The firestorm has begun. Burn baby burn.
Game Over
It *should* be game over, but take one look at bank stocks and it's pretty clear the market expects the banks to get bailed out again.
What was that sound? Was that tens of thousands of lawyers trying to intern at firms specializing in foreclosures?
and they thought collections and bankruptcy were the only games left in town
Well its not like the government regulators are interested in seeing how deep the fraud runs. So we'll have to do it the most expensive and wasteful way - by having the lawyers find out the truth.
Well said.
There are costs to abdication of responsibility.
Good thing we are only paying Mary Shapiro $8 million/yr to be blind, deaf and stupid.
And the "call on the Street" tonight...is "buy financials."
"Tremendous opportunity."
"JP Morgan Sued for Manipulation of Comex Silver Market"
"Financials will lead the market higher"
Am I losing my mind? Anyone, Bueller....Bueller....
No, you're not losing your mind. I remember back in summer 2008 when it was widely known at the banks that Lehman was toast. JP Morgan rallied from around $32 in July to touch $50 at the end of September, but the risk in the derivative portfolio and off balance sheet vehicles was not known. Honestly, BAC being up 2% today and highest riser in the Dow is simply the banks saying a big fuck you to the market, the banks think they will decide when this is over and want to show the world that they are still in charge.
In reality, the calls Dimon is taking in his office will be with chief risk officer, head of legal, Treasury officials, trying to limit the damage and agreeing on the timing for letting this go.
I have said this before, but this is the biggest banking screw up since the 1920s, it dwarfs Lehman or the S&L crisis. Of course they will be helped, but without some help, the whol ething goes, however, it is going to cost the banks a huge amount and they know it.
To my mind, it is one of the key reasons the Fed is scaling back on QE2 - they need to save their powder as we don't know what sort of rescue package will be needed to cover this yet.
They're also holding back because until the elections are over everyone is under orders to pretend everything is honky dory. As usual, as SOON as the elections are over, all kinds of sh*t will be revealed, esp. how we the taxpayers don't want to, but HAVE to, bail out the banks. Pretty please? We promise its the last time.
Any way, check out PsychoNews, we just did Feature #4 on Nominate-A-Psycho, featuring none other than Zimbabwe Ben Bernanke.
http://psychonews.site90.net
PsychoNews, exposing the Oligarchy one psycho at a time.
Better speed up those bank bonus payments so as to avoid the bailout rush.
There will be hell to pay if billions in bonuses are paid out AFTER a bailout.
No, wait. That won't happen without some buildings burning in NYC.
My prediction is massive state layoffs after the elections...budgets are beyond broken.
And this just in...Wells Fargo now confesses to errors found in documents. The supposed squeaky clean Wells.
If Ben Bails them out again, there will be blood in the streets of the US. Too many folk on this, following, reading, researching the Fed. The Fed will perish with them if that is what QE2 turns out to be all about [oh, and I have no doubt you are correct].
Just pissed...and spinning....
we like banks that say "the big phuck you" to Mr. Market. JP as I understand it "had a deal" since they were in effect being forced to take over these banks by the government in order to "keep up appearances." Good luck on that score. BofA and Wells are a whole different enchilada...but the bottom line is state AG's are really, really, REALLY looking for a deal and that means keeping "it" out of the courts. My belief is that the only way this issue in a legal sense is via Justice Dept and "Housing Discrimination." "All roads lead to DC" on this issue. Period.
Who said that? Goldman Sachs?
No...numerous talking heads in the MSM.
This feels like we're wishing and hoping this calamity "takes hold" and redemption ensues, whereas, in reality, we also know the Banksters and their Pimps (Congress) will pull an outrageous "ole" and the exhaustive fight continues. This is sad.
I thought the bankers were the pimps and the congress was the whore? I guess I should see how they're dressed
congress wears a feather boa, aquarium platform shoes, gold cane, and has a feather in its top hat.
the banks wear their underpants, cheap lipstick and perfume, and haven't a tooth left in their heads... and worst of all, try and convince us they're not prostitutes.
no, no, no. they're trying to convince us they're GOOD prostitutes. (They may very well be...)
I heard Barney goes both ways.
I hope it happens because lawsuits appear to be the only way that the epidemic of fraud will ever be revealed. The regulators and politicians sure aren't interested in letting the truth see the light of day.
This is easily good for +30 e/s points.
“We found servicer defaults in 100 percent of the trusts,” Frey said.
I think the quote got misunderstood. It probably was "We trust 100 percent of the servicers will default."
Score one for Homer.
This too will be legislated away. Massive post-election nationalization fix for the TBTF banks, Fannie, Freddie, et al. Blanket amnesty granted for the guilty, and punishment meeted out for Joe Blow via a new national sales tax, because "it's time to act like adults now".
Yes, there is massive belt tightening in Joe Sixpack's future.
Black market.
Tyler,
Some day in the future, distant or otherwise, after all of what we have been speaking of here for the last couple of years comes to pass, how 'bout a big ole party where we all get together and meet everybody who has participated in this forum?
What say ye?
I think we will be in our basements guarding whats left of our freeze dried yams.
That's just it, don't you see the brilliance of his suggestion? You have freeze dried yams, I've got freeze dried peas and some turkey jerky, some others will have some instant potatoes and gravy mix. I think you see where this is going...
Happy Post Apocalyptic Thanksgiving Everyone!
It's already been arranged to happen when gold reaches $10K.
Ok, but next year I'll have do it with Cheesy Bitch's side of the family. It's only fair.
Bellysnort !!!
I'm thinking at this point there is little if anything that will prevent a economic hurricane landing here sometime in spring 2011. The few green shoots this Fall are about to get scorched.
"Canary in the coal mine" ....????
The debate over whether — and if so, how — mortgage issues in the States will affect the secondary market for private-label residential MBS has raged for some time now. These issues include (for those who can’t keep up) foreclosure moratoriums and mortgage repurchases, or putbacks, on misrepresented or faulty loans.
From Total Securitization:
So that’s frozen in the RMBS market — though no one really seems to know why. Is it the putbacks? Foreclosure issues? General confusion? Or, God forbid — concern?
Ron D’Vari, CEO and co-founder of asset management firm New Oak Capital in the States, had a rather pungent take. As he told FT Alphaville:
Ah — perhaps all the MBS traders are out with food poisoning.
http://ftalphaville.ft.com/blog/2010/10/27/385056/mbs-trading-takes-a-ti...
i'd like to see jail terms to go along with those lawsuits.
Rule of Law protects everybody--until it no longer rules.
Americans are still deeply in debt; so is our government. So, they have to inflate. They have no choice. Retirees will be hurt, but they are living off the workers in a sense through social security, and which is unfair burden on younger generations. That transfer of wealth needs to happen, one way or another.
The transfer of wealth is largely over. It's called the wealth gap. You think the game is to be played in the future? We're down 64-3 in the fourth quarter with about 3 minutes left on the clock and no timeouts.
Needless to say, it doesn't matter whether deflation or inflation hits at this juncture.
Yup. Bernanke 100% wrong on everything so far I say he couldn't inflate a tire, although he's trying like an caged gorilla bending his bars.
I say we escape both inflation and deflation with a massive reset.
A reset of the magnitude necessary to escape inflation, deflation, and put us back on some type of level playing field is patently impossible to control. The primary question would be how do we claw back the ill-gotten gains of the principal actors and their proxies? What about the retirement gains from union members who knew or should have known that their actions would necessarily bankrupt municipalities and states? What do we do with the property obtained by citizens in contravention of their agreements to pay for the property?
I look at it this way... in the event everything falls apart, then the principal actors get away scott free (what happened in the past will be the least of our worries). However, if we keep enough of the system intact to focus on our common enemy, then there will be many people likely unsatisfied with the results, given a substantial portion of the wealth gap will be transmitted to subsequent generations and/or allowed to be utilized by persons of questionable character. If we keep too much of the system in tact, then obviously we won't have fixed much of anything. I'm not sure how we walk this tightrope, but it's going to be interesting to say the least.
Just like the decision whether or not to lever places the impetus upon us to make the correct decision and have a significant degree of discipline, so too will the decision as to how far to claw back gains and how much of the system to change... the risk being total systemic failure and, therefore, anarchy/mob rule. Again, we've been posed with a situation where the impetus is upon us to walk the tightrope, not the principal actors... at some point, I hope we quit trying to play checkers with the chess pieces given our adversaries are incredibly adept at thinking many moves in advance far in excess of our capabilities.
Yep. Game over. Need to start a new game called "Barter Bitches"
Yep. Game over. Need to start a new game called "Barter Bitches"
I don't know if I WOULD call it unfair since many of the old timers you speak of have been contributing to Social Security for 40 years that they are a "burden" for the younger generation?
Grab a cup of get real and call me in the morning...
I am sure most of them will not collect near what they contributed...I am certain my 80 yr old father and 76 yr old mother are getting screwed simply because multiple congresses couldn't keep the fucking hands out of the cookie jar...
The sad part is that at their age it indicates they "contributed" (or else) real dollars and now they are receiving FRNs. Too bad they were not allowed to use the same dollars to purchase AU, but then, that wasn't legal till 1974. Welcome to Amerika.
All of those old timers who are about to get pounded by hyperinflation are the same people that elected decades of political whores, who created this mess with their pimps the bankers. I feel sorry for them, but I am more concerned for my children. When the time comes, I'll move Mom, Dad, and my old Uncle into my garage or something. Good thing I have a nice bonus room in my McMansion. I will, however, remind them over the dinner I will pay for each night how they sold the country out from under all of us. Hope it helps their digestion.
I kind of like where you're going with this. Like say "enough foreplay already! give me those higher prices you woderfully incompetent fiscal hookers!"
Robo Put Back Baby!
I'l be back!
cannibalism has begun.
This baby's got legs. Anybody who thinks this is a headline today, gone tomorrow should just shutup and go all-in and buy out of the money calls on AAPL.
Well...JP Morgan has not budged...not even with the announcement of the lawsuit put to them on the COMEX issue.
I hope your right...for the sake of the nation...which I do not think will survive without getting rid of the JP Morgans of the world. But the market...it is so f'n rigged and stupid....
I think this is what QE2 is gonna be - from an extra to a status quo. But yeah, for now, its still like the issue doesn't exist to most. But you sure gotta think the suits have circled the wagons, lawyered up, and begun mapping out who they'll rat out for the plea deal.
You would think...and yet the price action is still not there. We are ultimately talking about insolvency, perp walks, and the systemic defunding of these crooked banks by Average Joe's everywhere who simply demand clean title.
And yet JP Morgan...strong today.
...am i the only one that knows this?
Provide a link, then go, "Hey TD check this out."
...thanks ragnarok.
"hey td check this out"
http://www.reuters.com/article/idAFN2725907120101027?rpc=44
All 2,600 MBS should be put-back to the banks as they are empty. No mortgage notes were properly transferred to the MBS trusts - because MERS has kept the lien for itself. This is illegal.
It's time for the public, in mass, to start investigating who holds their note, and if no actual note exists, sue. The lender has harmed the borrower by clouding the title to the property, and if the lender cannot correct the title - at their expense - the court must quiet the title and void the debt.
Additionally, the borrowing public needs to sue for the lender/servicer to pay the recording fees that have not been paid, since the county to attatch a lien to the property at a future date to recover these fees that are owed.
I would like to see this happen on an individual basis, not a class action one. A thousand pricks of a needle instead of one big knife, so to speak.
Advice please
I have an old CountryWide Loan from 2008 that is now with B of A @ 6.75% It is in the MERS system. It says BofA Servicer and Fannie is the investor. B OF A wants me to do a quick refi, no appraisal just sign here and your rate magically drops to 4%. Seem kinda odd????
They are trying to get the paper legit. Tell them you want 2% fixed or you want to see the note, capeesh ...
Yep...fresh signature, fresh loan doc, fresh clean title...and that loan does not get away from them. It is happening all over the place as the very best evidence that this bankster crime wave is REAL!
But hey, Najarian thinks the banks will bring the market home tomorrow....so what do I know?
just talked to B OF A they said they are mailing out a copy of my note and deed of trust. I asked who had the wet ink signature and she said she is sending everything that they have?? WTF does that mean?
Stay on the board. RockyRacoon or someone will help I would want to see all the original documents.
Its got to scare the shit out of them that you are asking all this ...I would be asking all types of questions...
You'd have to go to some office to view the original wet documents (note) since they aren't going to send them to you for any reason -- until marked "satisfied" and stamped with the filing clerk's dated seal.
Ask for the friggin' moon... as well as proof that they hold good paper.
Be sure your new note is a non-recourse note!
Just a suggestion -
Have your friendly escrow (escrow states) office submit a demand for payoff. Once your lender receives a demand they know that they have to get you what you want, or what they have, in a timely fashion.
Make them lower the frickin' principle! Jeesh.
Be wary.
This ZH article and following comments would be a good place to start.
http://www.zerohedge.com/article/gonzalo-lira-mulligan-mortgages%E2%80%9...
So what does it mean if it shows up in the MERS system? The details on mine are the same as yours, bac services with fannie investor. Do all loans show in MERS or just ones that are possibly screwed up?
Skip a couple of payments and have a friend offer to do a "short sale". I have heard of a big bank settling for $85000 on a $260000 note. I don't know how far you can push this. Let your conscience be your guide. (sarkylert)
If the bank has title issues, you owe them nothing...so 85K is a terrible deal.
I'd be thinking of jumping before I were publicly humilated and tried for criminal offenses if I were them:
http://www.youtube.com/watch?v=yge311sFhC8
There is no honor among theives ... which one is the good, the bad and the ugly? Is this a crazy spectacle or what!?!?
It is just that...a crazy spectacle. And I posted before about price action...but that is incorrect. Price action in this market makes no sense.
What is crazy is how certain elements of the market are not even acknowledging this whole mess. Amazing. We are clearly witnessing the death of NBC. And that is amazing as Comcast just cannot get that deal closed fast enough. There will be nothing left to close at this rate...and as they show that they are not a news reporting agency.
The ripples..they travel out so far!
It is amazing. I passed over Cramer during a bout of channel surfing and, stopping for a few minutes, could hardly believe the way he was completely disregarding the growing throes of the banks.
It was like watching crazyvision.
If you were watching Cramer, its more like "dumbassvision".
Actually, he was giving a hard sell on an ES pullback entirely on the grounds of the coming election and implications for business, spinning it as a "good thing . . . you can't have endless up days forever without a pullback now and then." It gave me the creeps, I could only take a couple minutes.
Food fight! Call the Cafeteria Monitor. Alert the Rector of Discipline.
I Saw What You Did...And I Know Who You Are
Here's the movie clip to go along with this shit show:
http://www.youtube.com/watch?v=yOy3Qd3tfws&feature=related
Checked my paperwork at the county today. Original Lender is posted and they filed bankruptcy in 2009 and no longer in business. Now I send our payment to CitiMortgage but they aren't listed on the deed. Thoughts?
for those of you who may think BofA will be thrown under a bus:
http://pajamasmedia.com/blog/did-the-dnc-get-an-illegal-campaign-loan-fr...
"Shortly after Labor Day, as polls continued to sink, the Democratic National Committee (DNC) realized it needed a cash infusion for the upcoming midterm elections. Its chairman, former Virginia Governor Tim Kaine, turned to the Bank of America to secure a $15 million revolving credit line. Then, in the middle of this month, the Democratic Congressional Campaign Committee (DCCC) got another loan from BofA for an additional $17 million.
What was their collateral? It turns out, not much. The DNC claims their collateral was an intangible piece of property — its donor mailing list."
And . . these are the guys who were bankrolled by the tbtf banks in 2008 and who are making (intentionally)vague dumb claims about the repubs' financing. I can't imagine what a soul destroying endeavor it must be to be working in politics.
I can't believe the story of the day Bill Gross of Pimco calling out the Federal Reserve and Treasury as a "Ponzie Scheme" hasn't just sent the market into a selling frenzie. Does fraud matter anymore?
That seem to be the predominant question within this thread. And the predominant answer seems to be that it is amazing how fraud does not matter anymore if you are a bankster or the Chairman of the Federal Reserve Bank.
Good luck out there...
Most people are out of the market already. Only Big Ben is buying to keep prices up.
The Franklin group thinks this is bad. Wait until they realize the mortgages the MBS pools hold without a clear claim to the underlying note become non-qualified investments for tax purposes - that is earnings from these types of uncollaterized mortgages is subject to additional tax.
So if you think investors are unhappy now, wait they see their investment eaten up by extra taxes.
There should be no mock or tongue in cheek celebration. That would be like Bugs Bunny sitting in the pot asking "Hey, Doc! Something smells really good! What's (chomp chomp chomp on the everpresent carrot) for dinner?"
A rhetorical question I am sure.
What I don't understand is what has taken these guys so long. What kind of lazy-ass vulture investor buys a distressed asset, the value of which is largely dependent on enforcing contracts (ie by sacking the servicer banks that obviously rigged the terms of the deals in their own favor, as they wrote them), and then doesn't get organized enough to meet the 25% threshhold to start the sacking process until more than two years after the crisis?
I share the often-repeated frustration about widespread fraud seeming not to matter. And it's true: It doesn’t matter…until it does....and it will, soon. Like the rain, it takes a while for the ground to saturate. Once it does, then that small drip of a leak in your basement is quickly joined by several other stronger leaks seemingly all at once as the hydrostatic pressure overwhelms the wall and finds lots of release points. Can you/need you predict the quantity of water necessary or the timing when the wall will be breached? No, you only need know THAT it will happen, and soon the more rain that falls into the soil. In my view, we are at most a few weeks away from the whole thing letting go….finding those weak release points in Mr Ponzi's wall.
To mix in another simile, like the roller coaster as clicks up the chain jog to the top of the first hill, you know what’s coming and yet the drop when it actually occurs is still _______ (a thrill, nauseating, stomach churning, pick your own sensation). I was short the market in the fall of 2008 and yet I still remember the feeling in the pit of my stomach when the market went over the cliff after Congress didn’t pass TARP the first time through: OMFG, here we go.
So, even when you're prepared and you know what's coming, it's still going to be a scary ride when it happens....soon.
In my view, we are at most a few weeks away from the whole thing letting go…
That's what I'm feeling to. It will be a November to remember.
Hey, Wells: Fuck You.
Wells Fargo & Co., conceding that some foreclosure affidavits “did not strictly adhere to the required procedures,” said it will file supplemental statements to courts in about 55,000 proceedings.
The bank, which has proceeded with home seizures while rivals including Bank of America Corp. and JPMorgan Chase & Co. delayed theirs, said today in a statement that it found some lapses during a review of its processes. The bank will begin filings in 23 states immediately and aims to complete them by mid-November, subject to local laws, according to the statement.
http://www.bloomberg.com/news/2010-10-27/wells-fargo-finds-foreclosure-l...
So they made a few, er hundreds, er a lot, um, thousands of mistakes?
Who is going to notice 55,000 mistakes, probably on every single open foreclosure? :)
One would think 55,000 corrections would not be Robo-corrections and would take years to complete, not weeks.
I keep hearing November when all if this will be "fixed" by various banks. "Just a few hundred thousand errors , it will all be ok by November ( wonder how many times Buffett has called DC) . That's when the bill comes out "Anything the banks, it's employees, surrogate, contractors , suppliers, attorneys and their dogs do is legal. Yes ANYTHING"
Bill filed under: FU-USA-D-50,000-BTCZ
Any jackasses that went to the MBS well that many times get ZERO sympathy from me; file under "chump". Sure, I think the servicing houses and banks should take the hit for their own mistakes, but these whiny twits aren't anything but enablers for thieves who happened to get "too greedy".
Boo fuckin' hoo, bitchez.
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