This page has been archived and commenting is disabled.

Mortgage Gate Just Got Weirder: Counterfeit Court Summons

Tyler Durden's picture


With each passing day, the revalations in mortgage-gate, which has for now implicated GMAC and JPMorgan in foreclosing on mortgages without titles, and will likely soon proceed through the entire mortgage origination industry like wildfire as more and more of those foreclosed upon begin to challenge the process (we wonder just what the statute on limitations for retroactive challenges is), are getting increasingly more bizarre. Today, courtesy of Alan Grayson's office we discover that not only are servicers foreclosing on mortgages to which nobody apparently owns the title, but that servicers, representing such reputable firms as Deutsche Bank National Trust Company, are willing to counterfeit court summons in their pursuit of a clean and efficient foreclosure mill. As Grayson's office points out: "Apparently what’s happening is that private process servicer companies may not be serving people with summons, and are simply counterfeiting the documents so they can keep the fees without doing the work.  That means that you could theoretically be foreclosed on without ever knowing there was even a foreclosure case against you." What it also means, is that banks may have been participants in this outright criminal judicial fraud, which we are confident will be uncovered in many more cases, as this is highly unlikely to be an isolated case. And the ultimate outcome, as the Florida Bar News states, is that soon, the entire foreclosure process will halt, thereby creating a huge bottleneck to cleaning out excess inventory as more and more squatters are allowed to reside in properties that no longer pay their mortgages to anyone, now that it is obvious that nobody (ahem Freddie, but how else can you keep bailing out the banks, pardon, the GSEs, via fraudulent fund flows) owns the actual deed. “If we had everyone defending their foreclosure, we’d never get through this.”



- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Wed, 09/29/2010 - 15:03 | 613203 DoChenRollingBearing
DoChenRollingBearing's picture

Realtor friend of mine told me an interesting tale.  Seems a homeowner got a foreclosure notice.  Problem was, the owner had paid cash and owed nothing!  Someone had forged documents trying to steal they guy's house.

If that is true, expect lots more fireworks!

Wed, 09/29/2010 - 15:06 | 613213 PicassoInActions
PicassoInActions's picture

"If that is true, expect lots more fireworks!" Fireworks of mass distructions.

Isn't what we were looking for in Iraq?

Wed, 09/29/2010 - 18:24 | 613849 scaleindependent
scaleindependent's picture


The REAL WMD were here.

Mission Accomplished biatchez!

Wed, 09/29/2010 - 15:07 | 613215 chrisd
Wed, 09/29/2010 - 15:35 | 613304 jmc8888
jmc8888's picture

Could you imagine if this happened to someone in a militia?

Wed, 09/29/2010 - 18:35 | 613889 dkny
dkny's picture

Hold on a second, but isn't this a case where the title insurance company screwed up?

I'll be the first to admit I'm not an expert on this stuff, but isn't it possible that the sale went through, but the mortgage lien remained, hence a foreclosure still possible?

Wed, 09/29/2010 - 18:45 | 613929 kathy.chamberli...'s picture

title fraud, happened to my friend.

Wed, 09/29/2010 - 15:25 | 613277 Slash
Slash's picture

I think someone had something to say about this....oh yes!


"I believe that banking institutions are more dangerous to our liberties than standing armies . . . If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] . . . will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered . . . The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." -- Thomas Jefferson -- The Debate Over The Recharter Of The Bank Bill, (1809)



looks like we're full steam ahead into the property deprivation part.

Wed, 09/29/2010 - 16:35 | 613519 ZackLo
ZackLo's picture

Yup, we are to the point that the banks own everything (almost) and every corporation depends on the near zero interest rate on margin just to run..It's crazy that over the last 300 years all the hardcore issues have been the same and people say "oh how can the constitution solve all the complex problems of today" There seems to be one problem to solve all problems....the central different 300 years ago then now..

Wed, 09/29/2010 - 17:18 | 613661 Slash
Slash's picture

exactly. dumbshit's say "oh but the constitution is so old, the world is so different today and the problems are new and unpredictable". Bullshit. Jefferson, among others, predicted the problems to almost exact certainty. Central banking is the same now as it was back then, we just have fancier names and glittery "innovative" financial poducts and arragenments. Just a few extra layers of bullshit piled on top of the base layer of fraud.


reminds me of a song....


Big man, pig man, ha ha charade you are.
You well heeled big wheel, ha ha charade you are.
And when your hand is on your heart,
You're nearly a good laugh,
Almost a joker,
With your head down in the pig bin,
Saying "Keep on digging."
Pig stain on your fat chin.
What do you hope to find.
When you're down in the pig mine.
You're nearly a laugh,
You're nearly a laugh
But you're really a cry.

Wed, 09/29/2010 - 23:36 | 614521 RichardP
RichardP's picture

The constitution was drafted to address human nature.  Human nature never changes.  Since we have agreed to live together, how then shall we live?

Wed, 09/29/2010 - 15:26 | 613280 Tarheel
Tarheel's picture

how is it possible for a firm to not be able to locate a deed they should have? Come on, a deed is one of the most expensive pieces of paper around (i.e. several hundred thousand in my neighborhood). They should be safeguarding those deeds more than anything in the firm!

Wed, 09/29/2010 - 16:30 | 613502 reading
reading's picture

Just imagine what they're doing with your personal info if they can't even keep track of their only record of ownership on their collateral.

Wed, 09/29/2010 - 20:14 | 614137 Kali
Kali's picture

"personal info" is now an oxymoron.  Hey, isn't this supposed to be the age of information?  No shit.  "can't even keep track of their only record of ownership".

Wed, 09/29/2010 - 18:46 | 613935 kathy.chamberli...'s picture

deed fraud, happened to someone i know.

Wed, 09/29/2010 - 16:20 | 613469 Alexandre Stavisky
Alexandre Stavisky's picture

"Little pig, little pig let me come in!"

Not by the restraining order yesterday served, neither unless your proper legal service can be established.  Nor still unless your documentation is in perfect order, title is without defect, all notices of default and foreclosure were conducted without error, and you can prove that predatory lending practices or fraudulent inducement were absent in all steps of application, acceptance, distribution, securitization and tranching.  No MERS, photocopying, substitutions are allowed.  Also get in line, the courts are backlogged 24 months on light volume. 

By the way, I also peed on your shoe through the mail slot.

Have a nice day, I'm back to bed.

Breakdown in the mortgage mill, can't grind with only one millstone--having the other about your neck as an ornament to your recklessness makes poor porridge.

Wed, 09/29/2010 - 18:47 | 613940 kathy.chamberli...'s picture

your good, i got a court date.

Wed, 09/29/2010 - 16:42 | 613535 Pegasus Muse
Pegasus Muse's picture

Public hangings.  When do they start?  My sensing of the prevailing mood is J6P is about ready to administer the kind of swift justice a complicit corrupt judicial system will not.

Wed, 09/29/2010 - 18:27 | 613865 scaleindependent
scaleindependent's picture

What other congressman is doing this, be it Democrat, Republican, Tea Partier, or Libertarian and yet how much hell does Grayson get around here?



Wed, 09/29/2010 - 15:04 | 613204 greased up deaf guy
greased up deaf guy's picture

give 'em hell, taz!

Wed, 09/29/2010 - 15:04 | 613205 themosmitsos
themosmitsos's picture

Tyler, I'll you this. I know they do this shit. But proving it is another matter. If proven however, judges will react VERY BADLY to this precedent existing, and may refuse to allow litigation to continue on any mortgage nationwide. The reason is, this is a direct offense against the Courts' credibility and authority, and thus their very jurisdiction.


Wed, 09/29/2010 - 15:11 | 613232 Cognitive Dissonance
Cognitive Dissonance's picture

While I appreciate your point, I'm fairly certain that some whore judges won't mind becoming bigger whores. It's just a matter of price. Or desperation.

Wed, 09/29/2010 - 15:18 | 613250 hedgeless_horseman
hedgeless_horseman's picture

Whore judges?  Are there any other kind?

No system is more corrupt than the legal system.

Judges are lawyers.  It is a conflict of interest.

Wed, 09/29/2010 - 15:23 | 613268 LeBalance
LeBalance's picture

Judges are attorneys.  It is an important distinction.

Attorneys are officers of the Court and have a dual allegence (1) to the Court and (2) to their client.  In all cases if there is a conflict of interest (1) wins.

Who owns the Courts?

The banks, of course.

Wed, 09/29/2010 - 15:30 | 613282 Cognitive Dissonance
Cognitive Dissonance's picture

Attorneys are officers of the Court and have a dual allegence....

Serving two masters never works out. So there's plenty of wiggle room in the middle to line the pockets and take care of well paying friends and family. 

I was thinking today that government corruption on this scale is a relatively new concept for the American people to absorb into their very bones. I'm not talking about politicians taking some bribes, I'm talking about wholesale and systemic fraud and corruption in the economic and social systems.

Most Americans still haven't come to grips with the fact that they live within The United Banana Republic States of America.

Wed, 09/29/2010 - 16:25 | 613485 MsCreant
MsCreant's picture

We keep waiting for the one that will be it, don't we? I know I do. But this is an interesting point you are making. Counterfeit court documents WILL blow some folk's minds. If those docs are counterfeit, WHAT ELSE IS COUNTERFEIT? Is there any legitimate law or authority? I do hope this is our black swan coming home to roost.

Wed, 09/29/2010 - 17:07 | 613632 Miss Expectations
Miss Expectations's picture

There are enough black swans to darken the sky.  I, too hope this one brings us to the tipping point in terms of public awareness and outrage.

I have a neighbor who actually breeds swans.  Last summer a very interested wild swan came around and wanted get into fenced area with the other swans.  He waited and waited....hung out for months and months.  I used to see him swimming in the creek.  He finally gave up and flew off alone. 




Wed, 09/29/2010 - 20:16 | 614145 Kali
Kali's picture

That is so sad.  The true swan is alone.  The captives have company.  That is so,so sad.

Wed, 09/29/2010 - 18:52 | 613956 kathy.chamberli...'s picture

i got a court date in a county that ain't too happy about hundreds and hundreds of foreclsoures. plus, the gas and oil companies pulling out really impacted this county. judge ain't happy, nope not one bit.

Wed, 09/29/2010 - 16:28 | 613497 Rotwang
Rotwang's picture

The United Obanana Republic States of Amerika

Wed, 09/29/2010 - 17:22 | 613686 Big Red
Big Red's picture

I'm sure you were posting "The United Bushleague Republic States of Amerika", also, right?


Screw off, you're still half the problem

Wed, 09/29/2010 - 17:12 | 613647 Uncle Remus
Uncle Remus's picture

When life gives you a Banana Republic, you make banana bread.

Wed, 09/29/2010 - 17:17 | 613669 MsCreant
MsCreant's picture

And an Obama Republic, Obama Bread? That is instead of Bernanke Bucks.

Wed, 09/29/2010 - 18:36 | 613888 Uncle Remus
Uncle Remus's picture

Deleted by commenter.


Wed, 09/29/2010 - 20:26 | 614174 WaterWings
WaterWings's picture

Obama Bread(TM) will soon be hitting shelves everywhere.

SNAP approved.

Charlton Heston yelling something about people.

Wed, 09/29/2010 - 23:44 | 614535 RichardP
RichardP's picture

Obama Bread = Fiat money??

Wed, 09/29/2010 - 17:11 | 613642 anonnn
anonnn's picture

Unclear. Attorneys are anyone appointed to legally represent [recall: power of attorney designations]. They may or may not also be lawyers [licensed to practice law; or even have lawyer training].

The matter of appointed  v. elected judges being lawyers is another matter.

Wed, 09/29/2010 - 15:25 | 613275 hack3434
hack3434's picture

Exactly! The legal system is a complete joke and any scumbag lawyer with skills knows how to exploit it. 

Wed, 09/29/2010 - 15:50 | 613342 JLee2027
JLee2027's picture

Having been subject to the whims and whammies of the civil legal system for years I both agree and disagree. I do think the legal system will be credible on mortgage cases...because they will fear the result and the wrath if they aren't. 

Wed, 09/29/2010 - 16:01 | 613391 Calculated_Risk
Calculated_Risk's picture

Exactly. Check out how the probate judges and attorneys are stealing from

the young and old in Arizona...


Wed, 09/29/2010 - 19:38 | 614061 Misstrial
Misstrial's picture

Wow...lots of interesting articles linked. Thanks!


Wed, 09/29/2010 - 15:25 | 613273 MachoMan
MachoMan's picture

CD, most of the judges that would be handling these cases are state judges in courts of general jurisdiction...  needless to say, these are not the guys that are conceivably in the back pockets of the PTB.  Further, there is probably an inherent bias against the large banks in most jurisdictions... you can send these bitches to a jury trial...

The more publicity these cases get, the more enterprising lawyers will be drawn to the pot of gold, and the more homeowners will be helped...

Wed, 09/29/2010 - 15:30 | 613290 Cognitive Dissonance
Cognitive Dissonance's picture

I didn't say all, just some. And not necessarily at this level. You know any judgement will get kicked upstairs. That's where the high class whores live, in the Red Light District of Columbia.

Wed, 09/29/2010 - 16:24 | 613484 DaveyJones
DaveyJones's picture

Red Light District of Columbia, I love it. And your right, titlegate is too big to be solved "legally." tweaking hugh henry, it title is a legal process, hypertitle is a political process... 

Wed, 09/29/2010 - 15:47 | 613332 Pool Shark
Pool Shark's picture



I'm in court everyday, and I can tell you that most of the state court judges I practice before are just as mad at the banks as many of you.

However, the court may not know there's fraud in a given case unless a party calls it to the court's attention.  Also, the court will not assist a party who does not defend its rights. Unfortunately, banks can afford 'good' attorneys while a defendant/homeowner in a foreclosure action is usually on their own, or at best, able to afford an over-worked or under-skilled counsel.


On the other hand, when this kind of fraud is discovered and proved, the consequnces for the offending party are sever -- In California, it's a felony punishable by up to three years in state prison, and cannot be reduced to a misdemeanor (see California Penal Code section 132).  

Wed, 09/29/2010 - 16:36 | 613513 DaveyJones
DaveyJones's picture

I've been in court everyday for twenty years now too and you're right, the local judges, like the rest of us are pissed. But CD has a point about the red light district. Not long ago, it was revealed that AT&T systematically assisted in violating the fourth amendment rights of just about everyone who sent an electronic communication. Many of us were outraged and started to sue but they were ultimately given immunity. Why, they were working in collusion with the federal government to push an agenda, an agenda that was for the most part hidden. Isn't this exactly what the big banks and government are doing now? This will be solved politically, not legally, not constitutionally. Ps. I hope your right, I hope I'm wrong

Wed, 09/29/2010 - 17:12 | 613650 Greenweather
Greenweather's picture

Amen.  We just had our Court of Appeals slap down a non-judicial deed of trust foreclosure for what amounted to a comedy of errors.  But you could really feel their anger with the process because the lone bidder got a piece of property for roughly a 75% discount from FMV.  Of course, the suit would have never seen the light of day if the dispute had been just between the lender, the trustee and borrower because it was rife with mandatory arbitration clauses.  The only way they got it into court was through a quiet title action between the borrower and the lone bidder.


Wed, 09/29/2010 - 15:43 | 613322 JohnKing
JohnKing's picture

The Florida Supreme Court just green-lighted fraud and misconduct.

Plunder the people!

The court's response, issued Tuesday, said the Florida Constitution and court rules did not give the chief justice authority to intercede in pending cases involving attorney misconduct, or to investigate allegations of fraud or misconduct in foreclosure cases. The fraud cases must first be adjudicated in trial courts, according to the response.

Wed, 09/29/2010 - 15:50 | 613343 Pool Shark
Pool Shark's picture

Separation of powers...

Courts don't investigate and prosecute crimes; that's for the executive branch (police and district attorneys).

Don't worry though; the wave of prosecutions is about to begin...

Wed, 09/29/2010 - 15:50 | 613346 Commander Cody
Commander Cody's picture

Our laws have evolved only to protect corporate fraud.  Fascism anyone?

Wed, 09/29/2010 - 15:30 | 613291 old_turk
old_turk's picture

"and may refuse to allow litigation to continue on any mortgage nationwide."



Each state has it's own foreclosure laws and processes, therefore, 'nationwide' is off the table.

Non-judicial foreclosure states (Texas being one) will require a notice of lien and much, much more in the deed of trust, on file at the county courthouse.  Everytime the lien holder changes, it goes on record and the lien-holder can 'assign' foreclosure rights ... so the servicers can foreclose.

Short and sweet: game over ... however, Florida with it's glorious history of land booms and busts is a 'judicial' foreclosure state and is very strict.  However, before anybody gets too excited about your free house ... condo ... lean-to, remember that your title will not be clear so selling that puppy will be problematic.

As always, consult competent legal advisors in your state.  They get paid to know your state's laws and processes.

Wed, 09/29/2010 - 16:09 | 613426 Dirt Rat
Dirt Rat's picture

remember that your title will not be clear so selling that puppy will be problematic.


Yes, you will no longer enjoy the right to transfer the property. You will, in effect, enjoy a de facto life estate in the property. If you live in it long enough--15 or 20 years, generally, depending on your state--you'll be able to eventually go down to the courthouse to file a deed of adverse possession on your fine, free shelter and then you can enjoy a full fee simple estate.

Wed, 09/29/2010 - 17:04 | 613614 Fearless Rick
Fearless Rick's picture

Yep, only 8 years and 10 months before I can go down to the courthouse and file for adverse possession (NY).

Long story short, I fell into this. Dad died in July, 2009. Sister wanted nothing to do with the property (3BR suburban colonial) and to do a deed in lieu. Brother also didn't want any part of $ mortgage and $4000/year prop taxes. I said, hell, no, and moved in, rented out my house with a rent to own contract (5 years).

BofA started foreclosure, stopped. No action after my answer 5 months ago. It will be a minimum of 4 more months before a judge is assigned, if and when the bank decides it's worth it to move forward (for them, it's probably not.) Another 4 months before first mandatory lender-borrower hearing (state law passed in 2008). Bank has to produce note, title, profuse number of documents. Then another 6 to 8 months, I figure, for them to produce the proper papers. Bank lawyers have been notorious in NY for failing to appear at mandatory conferences, and case cannot proceed until that time.

By then, I can decide with of the six or seven defenses I have would be worth using, or maybe taking them to Federal court on TILA violations.

Best part of this is that it's in probate, so any deal would have to be approved there also, causing more delay. I may not ever own the house, but the rent is right by me.

Wed, 09/29/2010 - 15:05 | 613211 traderjoe
traderjoe's picture

Massive Fail - M'Fer's.

But bullish for AAPL, iGadgets?

Wed, 09/29/2010 - 15:07 | 613214 packman
packman's picture

So - how else to keep housing prices from falling to their natural equilibrium levels?

 - QE MBS purcahses: check

 - QE treasury purchases: check

 - FASB mark-to-fantasy: check

 - FHA backing for everyone that has at least 7 fingers: check

 - Tax credits: check


 - Muck up the foreclosure process!!!!: check


Wed, 09/29/2010 - 15:07 | 613217 the not so migh...
the not so mighty maximiza's picture

It makes sense.  Repo a house that is fully paid off and fully maintaned, not a house in the getto with all copper plumbing removed.

Wed, 09/29/2010 - 15:11 | 613231 Uncle Remus
Uncle Remus's picture

Ghetto - coming to a street near you.

Wed, 09/29/2010 - 16:40 | 613536 DaveyJones
DaveyJones's picture

you mean the theatre is coming to a street near you

Wed, 09/29/2010 - 15:08 | 613220 The Alarmist
The Alarmist's picture

It's known as "sewer service," mostly because that is where the summons, notices, etc, end up being served by scummy types looking to move to summary judgment.  Nothing new here, nothing to see, so move on.

Wed, 09/29/2010 - 15:54 | 613363 Bob
Bob's picture

True, true, true, as the poor have always known.  When you're forced to go Pro Se, i.e., self-represented in court proceedings, you will get sodomized most of the time. 

Here we have something new: Homeowners getting the shaft.  Now it's a problem. 

And it's about time it was recognized. 

Wed, 09/29/2010 - 19:14 | 614004 kathy.chamberli...'s picture

just us - justice


Thu, 09/30/2010 - 00:49 | 614647 MsCreant
MsCreant's picture

Nice! You are on to something with that.

Wed, 09/29/2010 - 15:08 | 613221 mynhair
mynhair's picture

No Jail time for anyone, yet?

Wed, 09/29/2010 - 15:18 | 613254 economessed
economessed's picture

Did we stop manufacturing hand-cuffs in this country?  If so, can we use some of those zip ties they sell at Home Depot (manufactured in China)?


Wed, 09/29/2010 - 19:30 | 614046 The Alarmist
The Alarmist's picture

Who needs hand-cuffs when you can buy cable-ties and use them for mere pennies.  No need to worry about keys, and so little up-front investment in the hardware to boot. You can do roughly 300 million cable ties for the price of a few million hand-cuffs and invest the difference in Tazers, which are much more fun than hand cuffs.  Easy to see where this might go.

Wed, 09/29/2010 - 15:08 | 613223 Ripped Chunk
Ripped Chunk's picture

The game is just beginning.

Wed, 09/29/2010 - 15:14 | 613224 Cognitive Dissonance
Cognitive Dissonance's picture

...thereby creating a huge bottleneck to cleaning out excess inventory....

Time to bring out the industrial strength Ex-Lax. In fact, isn't that what the Fed's trying to do with its "liquidity" program, to get


Wed, 09/29/2010 - 15:18 | 613255 Nihilarian
Wed, 09/29/2010 - 15:23 | 613269 Cognitive Dissonance
Cognitive Dissonance's picture

This video brings new meaning to the term "In one end and out the other".

Of course, we've always assumed both ends belonged to the same entity. You learn something new every day.

Wed, 09/29/2010 - 15:29 | 613286 Nihilarian
Nihilarian's picture

This is the animal kingdom version of a mortgage backed security.

Wed, 09/29/2010 - 15:47 | 613331 the not so migh...
the not so mighty maximiza's picture

That chick is kinda hot holding the pale

Wed, 09/29/2010 - 15:56 | 613369 Cognitive Dissonance
Cognitive Dissonance's picture

I love that the garbage pail is lined with a "hefty" bag. I wonder what they do to get the elephant to stop once the pail is full? Or do they have a second pail on standby?

The mind is filled with questions. :>)

Wed, 09/29/2010 - 18:26 | 613861 Ned Zeppelin
Ned Zeppelin's picture

Yeah, like how heavy is the elephant dung? I figure half a garbage can full and she's dropping it to the pavement while the elephant is thinking  ". . . mmmm lotsa fiber yesterday, this is gonna take a while. . . "

Wed, 09/29/2010 - 20:29 | 614181 WaterWings
WaterWings's picture

No safety goggles! I demand a committee and an investigation.

Wed, 09/29/2010 - 15:08 | 613226 Uncle Remus
Uncle Remus's picture

Seems like some banker thought processes need a little, how you say, airing out...

Wed, 09/29/2010 - 15:11 | 613233 bank guy in Brussels
bank guy in Brussels's picture

Even most smart investors don't realise, that the key element in the US legal system is, to quote Tyler's phrase:

« outright criminal judicial fraud »

which happens all the time in America. USA has 2.4 million prisoners, hundreds of thousands innocent or railroaded on extortion 'plea bargains' etc - people getting their property stolen in divorces - the little guy almost always losing to the big guy in court.

This is another criminal scheme run by the American judges, with a wink and nod from the US oligarchs who bribe them, to stall the foreclosures a while to try and reflate the economy by keeping the houses at value on the banks' collective books.

The US judges don't care about 'justice' or proper procedure, they execute and murder people and jail them for life without 'proper procedure'.

This is another American scam running via the judges.

Wed, 09/29/2010 - 15:29 | 613288 subversive
subversive's picture

Yeah, I may be way off base here, but could this possibly be part of the recovery scheme?  No recovery until housing recovers, no housing recovery until foreclosures are gone.  If massive amounts of foreclosures were haulted it would have the effect of propping up home values AND give a whole lot of squatters free rent and therefore lots of excess cash to spend on stuff.  The banks suffer, but then we pass another MASSIVE bailout for the govt to buy out the bad mortgages that can't be forclosed on.  Housing price problem "solved", banks toxic assests "solved", low consumer spending problem "solved"!  WIN WIN WIN!  That is until the debts has to be paid... but we'll just sell that to China so no problem.  (brushing off hands in self approval)

Wed, 09/29/2010 - 15:39 | 613312 subversive
subversive's picture

I forgot to add that there will be ONE obligatory felon in the process.  Just like Madoff was.  The guy deserves what he got, but the only reason he was even investigated and charged was because, at the time, we needed a scapegoat.  Someone had to become the target of Americans anger that developed because of the bank bailout.  They gave us Madoff.  Madoff was the obligatory charged felon. And all of a sudden he became the symbol of greed and corruption.  He became the news headline.  And our anger was divided, distracted, and then conqured.  They will come up with another target because of this new foreclosure mess and someONE will pay a price, and the rest will not only get away with it... they will become more powerful in the process.

Wed, 09/29/2010 - 19:16 | 614008 kathy.chamberli...'s picture

don't forget michael jackson dying.

Thu, 09/30/2010 - 01:42 | 614728 StychoKiller
StychoKiller's picture

Just like in "Farhenheit 451":  "They will find the perpretrator, any moment now -- watch."

Wed, 09/29/2010 - 15:11 | 613234 OnTheWaterfront
OnTheWaterfront's picture

Crime Pays, on wall street.

Wed, 09/29/2010 - 15:11 | 613235 economessed
economessed's picture

Who needs laws?  They just complicate our ability to earn profits.  Want to jump start the economy?  Embrace anarchy.  (This applies to non-violent crimes, of course.)

Wed, 09/29/2010 - 15:32 | 613295 Panafrican Funk...
Panafrican Funktron Robot's picture

Violence, or a clear and present threat of it, by the common man towards the masters is actually the only way to affect change.  Which is, of course, why we're conditioned via the movies to accept and cheer hyperviolent policemen, and view the common man's violence as creepy and irrational (see:  the explosion of horror films invariably showing an "unhinged" regular guy).

We need focused, rational violence towards our masters if we have any hope of getting them to pay attention.  I realize this is a very uncomfortable idea for most of us, but try and think through why the discomfort is there.  It is not in our nature to accept this shit.


Wed, 09/29/2010 - 16:03 | 613396 Bob
Bob's picture

While I'll concede that there are a relative few movies of the type you describe, I would argue that the vast majority of guy's movies have for years pushed forward the image of the hero violently fighting the system . . . an entire generation has been raised on this. 

Of course, one wonders if it really sunk in. 

Wed, 09/29/2010 - 16:44 | 613550 DaveyJones
DaveyJones's picture

most heroes of history do the same

Wed, 09/29/2010 - 19:17 | 614011 kathy.chamberli...'s picture

i got a court date with a jury trial.

Thu, 09/30/2010 - 00:51 | 614655 MsCreant
MsCreant's picture

Will you be okay?

Wed, 09/29/2010 - 20:36 | 614196 WaterWings
WaterWings's picture

Catharsis. Denzel FTW.

Thu, 09/30/2010 - 00:53 | 614657 MsCreant
MsCreant's picture

Wonder if those flix let off steam that would otherwise get directed at, well, someone?

If they made a movie that told the truth (not documentary style, full hollywood) it would sell like hotcakes. This is something you feel, as well as the analysis.

Thu, 09/30/2010 - 01:43 | 614731 StychoKiller
StychoKiller's picture

"Inside Job", coming to a theater near you!

Wed, 09/29/2010 - 19:35 | 614055 The Alarmist
The Alarmist's picture

Profit-seekers are not really the problem ... it is the "wealth-transfer" types who seek to create an environment of "social-justice" who are the problem.  They are the ones they have been waiting for ... the rest of us hope to change the fact that they are in power.  The Chicago Wealth Transfer Project ... Criminals with the Power."

Thu, 09/30/2010 - 06:50 | 615007 pan-the-ist
pan-the-ist's picture

Like those who want to transfer their wealth to their children without paying taxes.  Criminals all of them.

Wed, 09/29/2010 - 15:12 | 613236 Commander Cody
Commander Cody's picture

More aspects of the giant wealth transfer process revealed.  Stay tuned tomorrow for more fun and games, but no surprises.

Wed, 09/29/2010 - 15:46 | 613238 williambanzai7
williambanzai7's picture


No one did anything about prosecuting origination fraud. What shall be expect on the back end?


Wed, 09/29/2010 - 15:15 | 613245 Milestones
Milestones's picture

Well, lets see now, can't trust theBanking Industry, The Military Industrial Complex, The Universities (credit cards),Stock Market, Gold and Silver folks; now we can add the Legal (ha-judicial) system!!

Mom, Dad I realize this is kinda sensetive thing to bring up but can I see your birth certificates?   Milestones

Wed, 09/29/2010 - 15:15 | 613246 Silverhog
Silverhog's picture

JP Morgan would never be tied to something as devious as this. This is a separate office from their trusted SLV dept.

Wed, 09/29/2010 - 15:17 | 613252 Internet Tough Guy
Internet Tough Guy's picture

Let's lynch the landlord:

Wed, 09/29/2010 - 15:29 | 613284 impending doom
impending doom's picture

I always liked this version. What's more punk than a fucking accordian, dog? Nothing, that's what.

Wed, 09/29/2010 - 19:37 | 614059 The Alarmist
The Alarmist's picture

.... You're going to help me fight city hall!"

Jello had quite a few good turns of phrase.

Wed, 09/29/2010 - 15:18 | 613257 csmith
csmith's picture

Classic case of "damn the torpedos - full speed ahead" thinking in the creation of securitized mortgages. Nobody bothered to create a mechanism for reverse-engineering securitizations if and when the underlying asset defaulted, so we don't have one. Too much money was being made in the securitization process for anybody to bother. One key speed bump in the securitization process was the all-important (especially in retrospect) step of RECORDING all mortgages in the jurisdiction in which they are created, so in many cases it was ELIMINATED. As a result there are literally hundreds of thousands of unrecorded mortgages in existence. As we're all learning, from the point of view of the courts, unrecorded mortgages DON'T EXIST. If I owned a title insurance company, I would be scared out of my mind right now. Bad things are coming down the pike for the likes of FNF.

Wed, 09/29/2010 - 15:59 | 613384 Dirt Rat
Dirt Rat's picture

A great many title insurance companies have already gone out of business. Commonwealth Land Title, which was one of the oldest, largest title companies in the US and which was later acquired by the Land America Group, declared bankruptcy a couple years ago. And don't even get me started on First American Title, who is being sued by BoA for sloppy title work, among First American's other problems. First American Title's parent company First American was investigated by Eliot Spitzer for providing WaMu with inflated appraisals before Spitzer got canned.

Wed, 09/29/2010 - 19:20 | 614021 kathy.chamberli...'s picture

title fraud alive and doing quite well, thank you.

"hey, bring the HUD back in and I will correct it" said  title escrow agent.

Wed, 09/29/2010 - 17:03 | 613601 scatterbrains
scatterbrains's picture

what would the underground market price be to buy one of these squatters out of one of these homes?  I want to live mortgage free.. keep the taxes up but never have equity.. what's the fair market value of such a home on a cash deal basis ?

Any of you squatters out there want to post one of these homes up on ebay for me ? I'll enter the bidding... I think lol

Wed, 09/29/2010 - 17:14 | 613648 Fearless Rick
Fearless Rick's picture

$30,000, it's yours. You can find me at I own the site, not the house. Rochester, NY.

Payment must be at least 50% in gold. Coins are fine, current price OK.

Wed, 09/29/2010 - 15:19 | 613261 Something Wicke...
Something Wicked This Way Comes's picture

I love this story. Could mortgage bankers have screwed this pooch anymore? I doubt it- the problem is the crony capitalists who are more than willing to bail these pieces of shit out at our expense.

Frank and Dodd should be behind bars. Followed by Mozilo and that billionaire couple that dumped their exotic mortgage portfolio on Wachovia. I am in absolute amazement that none of these bags of shit were charged with fraud. Including Dodd and his amazing financing arrangment on his "irish cottage." Fuck TBTF and fuck the FED.


Wed, 09/29/2010 - 15:33 | 613298 Cvillian
Cvillian's picture

Golden West was sold by Herbert and Marion Sandler to Wachovia for $24.3B in summer of 2006. Only Sam Zell did a better job top ticking it.

Wed, 09/29/2010 - 15:35 | 613303 nevadan
nevadan's picture

Here's a catchy tune for ya.......

Wed, 09/29/2010 - 15:26 | 613279 Everyman
Everyman's picture

I M thinking machine guns with a whole lotta rounds. 

Barrels too, the tend to heat up.

Wed, 09/29/2010 - 15:27 | 613281 deadparrot
deadparrot's picture

If this story gets bigger and goes mainstream, sales of homes will grind to a halt. Why would someone buy a house and take the risk of it being stolen back? The only way homes would be sold is if there is no down payment, and the mortgage payment is lower than the equivalent rent. Otherwise, who would take the risk?

Wed, 09/29/2010 - 15:29 | 613287 Captain Queeg
Captain Queeg's picture


Wed, 09/29/2010 - 15:31 | 613294 edwardo1
edwardo1's picture

This is why our capital markets, at the very least, will in time be shunned internationally.

Wed, 09/29/2010 - 15:35 | 613305 carbonmutant
carbonmutant's picture

Why do banks want the foreclosed properties?

It's just more inventory...


Wed, 09/29/2010 - 15:42 | 613319 the not so migh...
the not so mighty maximiza's picture

Under mark to model the banks can claim these are diamond fields?

Wed, 09/29/2010 - 17:39 | 613737 Commander Cody
Commander Cody's picture

Real estate, as the name implies, is a real asset, as opposed to the surreal assets banks have devised.  So, having properties in inventory is actually a return to more traditional banking practices, as opposed to those deviant practices of the most recent past.  The banks are organically and spiritually healing.  The wonder!  Also, they are extracting more wealth from us serfs, but that is their way.

Thu, 09/30/2010 - 01:48 | 614735 StychoKiller
StychoKiller's picture

Actually, "Real" in real estate is Spanish for "King", meaning that the sovereign owns the land.  Think not?  Don't pay your property taxes then.

Wed, 09/29/2010 - 15:38 | 613311 shushup
shushup's picture

I asked from proof of ouwner ship on my properties last yr and WaMU, JPM and National City all were able to provide them.

Wed, 09/29/2010 - 15:58 | 613382 MachoMan
MachoMan's picture

this is why you wait and let them file first and when they fail to jump through all the hoops, you close the door on them...  if you attempt to be on the offensive, you just give them a reason to single you out and get all your papers in order...  however, if you wait, they may not follow the proper formalities or, worse, commit fraud on the court... 

the issue isn't whether someone out there owns it...  it's that the someone either screws up the proceedings or the wrong someone is the party foreclosing...

Wed, 09/29/2010 - 15:40 | 613317 davidsmith
davidsmith's picture

we wonder just what the statute on limitations for retroactive challenges is),



Basically, none if fraud is involved.  It starts to run when you discover the fraud.


You're talking about setting aside sales.  And yes, those sales will be set aside.  And yes, those poor purchasers of foreclosed properties will sue the United States.  And yes, they will win.


As I have said before, game over for housing.  It's not a part of economics anymore.  Stop thinking of it in terms of economics.  Wrong wrong wrong.

Wed, 09/29/2010 - 15:55 | 613366 hack3434
hack3434's picture

It's not a part of economics anymore.  Stop thinking of it in terms of economics.  Wrong wrong wrong.


Have ever hear of Mortgage backed securities? Do you know who owns them? This has everything to do with economics. 

Wed, 09/29/2010 - 15:43 | 613321 Anarchist
Anarchist's picture

Fannie and Freddie will be landlords for everything on their books until they have time to package them in "lots" for investors. The blocks of homes will be sold for pennies on the dollar to "select" investors. Pions will be able to buy the less desirable leftovers from Fannie and Freddie in auctions. The homes will ultimately be sold back to the public at a huge profit since no investor will want to own them long term. This has already happened. The question is how much "protection" Fannie and Freddie are allowed to give the investors so they are guaranteed a profit. This will dwarf the S&L crisis. The taxpayer will lose trillions.

Wed, 09/29/2010 - 15:54 | 613364 MachoMan
MachoMan's picture

bingo.  you've just described the culimation of decades of theft and impropriety.  head of the class.

Wed, 09/29/2010 - 15:59 | 613383 giddy
giddy's picture

Ummm... FRE&FNM... Gov't Property Managers...

Wed, 09/29/2010 - 15:46 | 613326 davidsmith
davidsmith's picture

Tyler, can't you ever get out of your petit bourgeois mindset?


"And the ultimate outcome, as the Florida Bar News states, is that soon, the entire foreclosure process will halt, thereby creating a huge bottleneck to cleaning out excess inventory as more and more squatters are allowed to reside in properties that no longer pay their mortgages to anyone, now that it is obvious that nobody (ahem Freddie, but how else can you keep bailing out the banks, pardon, the GSEs, via fraudulent fund flows) owns the actual deed."


There isn't going to be any "bottleneck" because there aren't going to be any more foreclosures, EVER.  Obama is planning, right now, to ban them permanently.


They won't be "squatters" because they will still have title.  In fact, the United States has already forgiven home mortgage debt, and so they will be in home free and clear of any debt.


The meaning of "nobody owns the deed" is that there is 0 incentive on the part of the U.S. to foreclose.  Meaning?  Meaning that the U.S. has forgiven home mortgage debt.


Expect an announcement soon.  You think you are ahead of the Government, but they are WAY ahead of you on this.  They realized some time ago that there is no economic incentive for them to foreclose.


Some time ago, the United States forgave all home mortgage indebtedness.  Think it over.

Wed, 09/29/2010 - 16:01 | 613389 JLee2027
JLee2027's picture
Link please?  BTW, I don't think Obama can speak for all the banks and shareholders or other owners of said banks. This isn't the Soviet Union.
Wed, 09/29/2010 - 16:34 | 613512 davidsmith
davidsmith's picture

"Speak for."  Puleeze.  He can certainly do it pursuant to his power to declare an economic emergency.  There is no legal question AT ALL that he can halt home foreclosures if he orders it.


I suspect he will turn over home mortgage issues to a joint Justice, HUD and Treasury with one mandate: keep people in their housing.


Wake up.  It's over.

Wed, 09/29/2010 - 17:10 | 613638 JLee2027
JLee2027's picture

Never heard of "economic emergency powers". What is that some Venezuelan thing? And where's the link I asked for?

Wed, 09/29/2010 - 16:18 | 613464 giddy
giddy's picture

ummm... lots of ways gov't  forgives mortgage debt...  state HFA's are pushing-out billions to subsidize mortgage payments for unemployed and underemployed based on about 6 eligibity datapoints which include: Do you intend to vote for Obama in 2012?  (ok..maybe that's an "implied" eligibility criteria...)  3 soon to be 4 tranches of funding... more to come... treasury guidance is ziltch... quarterly "reporting"... want states to push $$$ out very quickly... 

Wed, 09/29/2010 - 18:28 | 613868 moneymutt
moneymutt's picture

what world do you live in? its clearly not this universe, you ideology blinds you

Wed, 09/29/2010 - 18:28 | 613870 moneymutt
moneymutt's picture

what world do you live in? its clearly not this universe, you ideology blinds you

Wed, 09/29/2010 - 15:51 | 613348 Eureka Springs
Eureka Springs's picture

I keep telling folks... Ian Welsh has the best answer for this i have read to date.

Wed, 09/29/2010 - 15:51 | 613349 sweaty7
sweaty7's picture

and yet the government is determined to drive the community banker out of business. you know, someone that actually sits across a desk from you and has a vested interest in your future. not to say there hasn't been abuse at all levels, but when the new regs successfully burden the small banks out of business, watch out!

Wed, 09/29/2010 - 15:53 | 613356 MachoMan
MachoMan's picture


The statute of limitations for retroactive challenges will depend on the venue and will vary by jurisdiction.  Generally, the time period to set aside a judgment is fairly short (90 days here).  However, the time period to set aside a judgment for fraud on the court could literally be indefinitely.  The doctrine of fraudulent concealment could effectively stay the tolling of the statute of limitations indefinitely...  plus, practically speaking, if you commit fraud on a court, it will do whatever it has at its disposal, legal or not (that's for the appellate court to sort out), to punish those who commit the fraud...  generally speaking of course.

I talked about this in another thread, but an ancillary consideration is the requirement of a meritorious defense.  In general, a person attempting to set aside a judgment is going to have to show that he has a valid defense to the successful party's claims and, if true, would grant him judgment over the previously successful party.  However, at least in this jurisdiction (and we parrot most), a default judgment obtained without valid service is void ab initio.  Likewise, a fraud upon the court would likely render a judgment void ab initio.  As a result, the contesting party does not even need to show a meritorious defense to at least get a day in court.

I believe I may be defending an appeal soon on this issue, but where a judgment is void ab initio, the purchaser at foreclosure sale, even though a bfp, may still be divested of title by the contesting homeowner.  Obviously someone other than the bfp will need to pick up the tab for any improvements made, but still, that's pretty significant.  I don't think the bfp should be divested, but there's obviously an argument to be made otherwise.

In the end, I think the most major impact of this will be to simply delay the inevitable, a judgment for the noteholder and then a foreclosure to collect.  I just don't see a lot of aggrieved homeowners getting windfalls for hundreds of thousands of dollars.  After all, the homeowner was likely in default in the first place... 

Wed, 09/29/2010 - 15:58 | 613381 three chord sloth
three chord sloth's picture

This stuff has been going on in the rental industry for years... I know 'cause it happened to me!

I used to live in San Francisco back in the 90's when the rent on apartments was exploding. My landlord wanted to cash in, but couldn't 'cause of rent control laws. So they claimed I wasn't paying the rent (I was) and took me to court and got a summary judgement 'cause I was a no-show. I of course had no idea this was going on... I got no summons and my signature must've been faked. The first time I had any idea was the day the sheriff showed up!

Wed, 09/29/2010 - 18:12 | 613823 moneymutt
moneymutt's picture

wow, that's major fraud, with enough time and money to litigate, you could have really cost them, but most of it would have gone to your lawyer

Wed, 09/29/2010 - 16:01 | 613390 the not so migh...
the not so mighty maximiza's picture

All contracts ever signed are void, what a world.

Wed, 09/29/2010 - 16:57 | 613409 jmc8888
jmc8888's picture

Hey Mary, and all other useless stewards, this one is for you!.

(can't get a pic in, wtf am I doing wrong lol)

Wed, 09/29/2010 - 16:24 | 613477 ThisIsBob
ThisIsBob's picture

For all the dissing of lawyers and judges, bear in mind that nobody in either the executive or legislative branches has yet had the guts to shove that toxic waste right up where it belongs.

Wed, 09/29/2010 - 16:37 | 613522 Rotwang
Rotwang's picture

If you are interested in "contracts", learn how to manufacture a modern equivalent of an indenture on an 11"x17" with a tear margin. Clearly not too much work.

Wed, 09/29/2010 - 17:13 | 613654 doggis
doggis's picture

i say "SLAP" those ever damned incubus of fraudulent plague - otherwise known as the TBTF banks - with a massive fine! We all accept that the individuals bankers involved will NEVER see the face of justice, so the least we can do is to make it hurt!! does anyone have a fine amount that would act as a deterrant?? anyone??

Wed, 09/29/2010 - 17:18 | 613670 non-anon
non-anon's picture

thanks ZH for these important posts.

I just don't see this going well and will

be blood running in the streets.

Time to refresh that tree of Liberty.

Wed, 09/29/2010 - 17:21 | 613683 bugs_
bugs_'s picture

When the going gets weird, the weird turn pro.

Wed, 09/29/2010 - 17:27 | 613701 Fearless Rick
Fearless Rick's picture

I start the bidding at $200 billion.

Wed, 09/29/2010 - 18:04 | 613802 bugs_
bugs_'s picture

How do you serve papers to an illegal that has skipped?

How do you foreclose in such a situation?


The marginal risk on a per-property basis is not that great since its likely that ALL the paperwork won't stand up to scrutiny.

The systemic risk is that there are way too many of these.

Wed, 09/29/2010 - 18:31 | 613877 Ned Zeppelin
Ned Zeppelin's picture

There is always a way to get service - you can tdo  it by publication in a newspaper by court order if all else fails.

This is all about cutting corners, big time, and hoping the borrowers just accept their fate without protest. The foreclosure mills have  NEVER experienced the kind of opposition that seems to be brewing, and believe it or not, on a good day it is hard for an attorney representing a bank to dot all the i's and cross all the t's in a foreclosure. 

Still the law hates a forfeiture, so don't look for legit mortgages to be tossd out - however, where they have been sliced and diced, and incapable of being put back together again, it may take national legislation to fix all this.

Look for a "National Foreclosure Standards Act" coming to CONgress near you if this keeps going. There is no way the banks will walk away from all that money for reason of "technical defects" in the documents.  


Wed, 09/29/2010 - 19:27 | 614038 kathy.chamberli...'s picture

you can go through your judge on your case and show him the diligence you tried many different addresses your defendent has, even unlisted. he signed off on mine, for a millionaire crook on the run.

Wed, 09/29/2010 - 19:29 | 614041 MachoMan
MachoMan's picture

A warning order is pretty painless and cheap to obtain...  in a nutshell, it's "i tried to find them, i was diligent and reasonable in my efforts, i can't find them".

What doesn't make any sense is that you jeopardize hundreds of thousands of dollars for a few hundred dollars in taxes and fees and court costs?  This is where you make the argument that: (a) it was designed to fall like this; or (b) whether it is public or private, bureaucracy and complexity leads to significant inefficiencies which eventually impact effectiveness of an organization.

So, if you're running the GSEs, do you turn on the banks and request your money back for fraud?

Wed, 09/29/2010 - 18:09 | 613817 moneymutt
moneymutt's picture

We have a zombie economy....go long anything Zombie...


We are now Third World, where development of land usually is thwarted because of muddy ownership/title issues...we used to have fair, transparent, due process where there was little title disputes, making us a safe land to invesment, minimize the drage of unknowns and political risks, but now we are Haiti, 20 people say they own a piece of land so no one can do anything with it.....we soiled our own bed, forgot what made us work, let down our guard, and now we are third world...

Wed, 09/29/2010 - 18:55 | 613961 trav7777
trav7777's picture

It sounds very strongly like I should lever to the moon and make no payments.  I just wish I had the credit to borrow enough to never have to work.

The "forgive all debts" seems to run in line with the "screw the prudent" and "screw the savers" memes.

Once debts get wiped, nobody will ever lend again.  I still think FNM, FRE become landlords and this becomes a gigantic Sec 8 housing system where you pay taxes on housing.  At some point, squatting becomes ownership.  I mean, who really the fuck knows which hood rat lives in which project unit?

Wed, 09/29/2010 - 20:41 | 614206 WaterWings
WaterWings's picture

Speaking of the moon you see that water going out. Much more rapid than the tide. It's coming back in a big way. Head for H I G H  G R O U N D.

Like Aspen.

Wed, 09/29/2010 - 19:44 | 614076 The Alarmist
The Alarmist's picture

Just curious Tyler... what did Rush Limbaugh's mention of the web-address do for your stats?


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