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The Sophisticated and the Scammed – MBS Trusts Keeping Assets on the Books Long After they are Liquidated
The Sophisticated and the Scammed
Each time an investor group or shareholder sues a financial institution for MBS damages, the financial institution files a response stating the investors "were sophisticated investors who knew or should have known better."
We are beginning to uncover and expose continuing scams, fraud, and theft (hint: monthly renewing statute of limitations).
The MBS trusts' accounting is as suspect, invalid, inconsistent, and outright fraudulent as are the real estate documents fabricated by document mills.
All eyes are on the Pino v BoNYM as trustee of CWALT 2008-oc8 (BoA servicer) fraudclosure case. The FHFA, regulator of Freddie Mac which owns class/tranche 1A1, claims all manner of origination, underwriting, appraisal, loan-to-value, and ratings fraud in their suit against Countrywide (here), and also tranche 2A2B was such a "toxic asset" that it was purchased by the Fed at 100 cents on the dollar and dumped into Maiden Lane II.
After Roman Pino's fraudclosure defense lawyer at Ice Legal uncovered and exposed massive fraud in the lower trial court, Palm Beach County's 15th Judicial Circuit, Bank of New York Mellon as Trustee and their fraudclosure mill attempted to slink away by voluntarily dismiss the case while they filed a new case with newly fabricated fraudulent documents.
Ice Legal said, "Not so fast! We insist on a hearing to review the evidence so the judge can dismiss this case to avoid the new fraudclosure case from going forward." But the lower court judge ruled that it is perfectly acceptable for fraud to be perpetrated on the court as long as the fraudster voluntarily dismisses the case once the fraud is exposed. Ice Legal brought this issue up on appeal. The bank friendly puppets in Florida's 4th district court of appeal didn't want to touch this case with a ten foot pole. The appellate judges allowed the lower court decision to stand but turfed up the the case to the Florida Supreme Court stating that fraud was rampant and an issue of great public importance.
BoNYM (BoA servicer) freaked out because, unlike Florida's lower and appellate courts, Florida Supreme Court is not a sure bank puppet operative. So, the case was "settled" with a confidential agreement. Both the fraudclosure mill and Mr. Pino's lawyer notified the Florida Supreme Court that the case had been settled and both parties were requesting the case to be dismissed.
The Florida Supreme Court Justices, acknowledging the public importance of foreclosure fraud, decided to keep the case alive. (Can you hear BoNYM & BoA howling in protest?)
While the settlement with Mr. Pino is confidential, we do know that a satisfaction of his mortgage was recorded in the public records in July 2011 (below).
Despite the fact that this mortgage "asset" no longer exists, the trust is still claiming this mortgage as an asset as of the Jan 2012 investor report, charging all sorts of fees, including monthly servicing fees, etc.
Our research has uncovered other non-existent "assets" on the books of this trust. To put this in perspective, at the origination of this trust there were 6,734 loans of which 61 were originated in Palm Beach County. As of the Jan 2012 investor report, 29 of the original 61 Palm Beach County loans remain on the trusts' books. Only ONE is performing as originally contracted at closing. Three others have been modified; one has a $39k forbearance, one has a $8k added to principal, one has $16k added to principal. The other 25 loans are non-performing. (As of Jan 2012 report, total left in the trust 2,921; of the 2,921 left 1,187 are non-performing (delinquent = 237, bankruptcy 188, foreclosure = 512, REO = 250) but we know this data isn't correct, so....)
Some "non-existent" loan examples from the trust
Roman Pino loan #130133456 - $162,400 - (July 2011 satisfaction - still on the books in Jan 2012 trust report in "foreclosure" status) [3764 Mil Run Court, Greenacres, FL 33463] - BoA monthly servicing fee for non-existent mortgage $50.73
Samantha Woodruff loan #130521936 - $171,940 - (Sept 2011 deed from trust REO to new buyer - still on the books in Jan 2012 trust report in "REO" status) [1497 Lake Crystal Drive D, West Palm Beach, FL 33411] BoA monthly servicing fee for non-existent mortgage $33.70
Robert Rodriguez loan #130450231 - $176,542 - (Sept 2011 short sale deed & Nov 2011 satisfaction - still on the books in Jan 2012 trust report in "REO" status) [1139 Lake Terry Drive 60L, West Palm Beach, FL 33411] WOW - BoA monthly servicing fee for non-existent mortgage $181.69
Elsa Castillo Rivas loan #130445815 - $375,000 - (July 2011 short sale deed) - remained on books through Dec 2011 in "REO" status), finally reported as "liquidated" in Jan 2012 report [13918 Preacher Chapman Place, Centreville, VA]. WOW - BoA monthly servicing fee for non-existent mortgage $328.04
This is just a small example of what we are uncovering. If we learned anything from the robosigning scandal, if there are more than two "irregularities," there are thousands.
More examples from other trusts to come.
www.4closureFraud.org
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Samantha Woodruff loan #130521936 - $171,940 - (Sept 2011 deed from trust REO to new buyer - still on the books in Jan 2012 trust report)
BoA monthly servicing fee for non-existent mortgage $33.70
| Date | 07/29/2011 |
| Amount | $230,000 |
| Seller | CASTILLO RIVAS ELSA M |
| Buyer | GRANO PAUL |
| Notes | Valid and verified sale |
| Deed Book and Page | 21776-2185 |
»
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My hat-tip to the LYric King and WB7 /
This side of paradise is where I want to be
This side of paradise, for you and me!
This side of paradise, what you get is what you see
And I never thought I'd see a place as nice, this side of paradise
Pokemon - This Side Of Paradise Lyrics
About the novel of same name by FSF: "I cannot bear to think that our young men are merely living four years in a country club and spending their lives wholly in a spirit of calculation and snobbishness."[10]
The President of Princeton U had this to say when his prize pupil published his first book!
Rings familiar doesn't it!! But in the field of finance.
Novel, innovative, this is why we can never let the big banks fail. My guess is Holder and Obama may want to hire some of these out of the box innovators.
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Its all just meaningless pieces of paper, man!
You talking about this robo stuff or the US dollar? (Hehehe.)
Despite the fact that this mortgage "asset" no longer exists, the trust is still claiming this mortgage as an asset as of the Jan 2012 investor report, charging all sorts of fees, including monthly servicing fees, etc.
Fucking assholes!
These transgressions won't stand.
Man!
Wont they?
dude
If only we knew the true scope of shananigans our US banks have been up to. As bad as we trash them out on ZH it wouldn't surprise me one bit if the situation is even worse. Somehow I get the feeling that a good defense attorney might not be enough for some of these assholes in the end.
Here is a good one. I believe CWALT deal was backed by alt a collateral. FNMA bought tons of these private label deals -along with many AAA portions of subprime deals - for their portfolio. So I find it interesting that on behalf of FN FHFA is suing for damages for purchases of assets -subprime and alt a - that former CEO's tesified UNDER OATH that they did not take subprime risk. Guess the portfolio does not count.
Guess Expanded Approval didn't count either.
the financial institution files a response stating the investors "were sophisticated investors who knew or should have known better."
Bullshit
One of the biggest lies ever told is "crime prevention" You cannot stop (spot) a crime before it occurs except in very rare exceptions (almost always tip-offs from insiders)
You cannot spot/stop a Ponzi/Madoff scheme or tell the difference between a normal Hedge or Investment Fund taking in customer funds. Fact.
You could argue "sophisticated investors" should have known better to invest in a developing property bubble or picked up some inkling money was being thrown at high risk sub-par, sub-prime, lenders or a 'tad naive' to think CRA's paid by the piper weren't conflicted in their grading of ratings
But who was to know mortgagers were encouraged to cook their earnings. It also does not excuse in any way MERS, usurping State property registry rights and showing complete contempt for the Constitutional protections, the fraudulent and incompetent paper trail, nor paying CRA's to sugar coat the turds as fraudulent AAA ratings
Only insiders knew the full extent of the endless production line of criminal fraud, lies and contempt for Law. No "sophisticated investor" could uncover the full extent of this Washington-Wall Street crime scene
Your exactly right, there is now way for anybody to know. Especially if said institution was purposely lying and committing fraud. You have to trust somebody or something, and just saying that you should have known is BS.
the MBS/sub-prime scandal that's laid waste to US property has all the hallmarks of 'Pump & Dump'
this is big dinosaur institutions flogging an 'asset' for all they're worth, primed by Washngton-Fed cheap money and peanut brained socialism
The quality of the MBS production line is 3rd rate garbage from start (loan generation) to finish (AAA sugar coatings to cover over the turds).. it's all about flogging big volumes fast as they could far and wide
It was the lazy greedy big bankers producing their usual big volume trash products (like 401k's, like derivatives).. the endless fraud, cheating and lies was integral to keeping this sub-standard business pumping
Wall Street sells garbage
For their lawyers to blame the buyers is to ignore Wall Streets implicit responsibility for selling/flogging sub-standard financial products.. only Microsoft is on a par with these cowboys
"One of the biggest lies ever told is "crime prevention" You cannot stop (spot) a crime before it occurs except in very rare exceptions"
Huh?
Haven't you seen the movie 'Minority Report' or the current TV show 'Person of Interest'?
LOL
But, the movie is the message.
May he rest in peace. Philip K. Dick saw our future (and present) decades ago.
Yep. Thus the irrational War On Drugs and the bumping of psykotropic drugs to "Class A" thus lumping them together with truly addictive stuff like Heroin: No "Red Pill" for You lot (and no more Philip K. Dicks :)
C'mon, Holder! Sick em!
Holder?
Hmmm.
LQL!
SFAS 140 permits this? Where's the mark to market law?
IS this disclosed in any audits?
This happened ages ago, which explains the counterfeit $600 trillion subprime market. But say... they never did anything about it. So this isn't any big surprise.
Maybe I can apply for one of those hefty subprime mortgages with an equity line by claiming assets that I sold and money that I spent years ago. When I can't pay them back, I'll get a bailout by claiming thyself as a "TBTF bank holding company".
Even still, I'll come up more solvent and liquid than the banks.
When you do that I will print myself record bonuses, and then kick my neighbors out of their homes claiming national security for oil stains on their driveway.
Save a cigarette - light an "investment" banker.
...if there are more than two "irregularities," there are thousands.
Once is happenstance. Twice is coincidence. The third time it's enemy action.
Criminals that commit willful fraud upon the courts are the enemy of a functioning judicial system. Every lawyer should be speaking out and asking that plaintiffs who routinely fabricate sworn documents are held accountable.
Thanks to the author for an excellent posting.
"...if there are more than two "irregularities," there are thousands."
Ah yes, validation of the cockroach theory- If you see one, ...
Unfortunately I have personal experience with this fraud and I can tell you these Banksters have wiped out at least 200 years of "Black Letter Law" in real estate. Truth is, with all the securitization, government bailouts and payments, etc., the Banksters may have been paid off 2, 3, maybe as many as 10 times on a single property, and then they'll cry that homeowner/borrowers should get no relief because it might end up in a "free house".
You can stick a fork in the rule of law in America....it's done.
fraud equals economic growth
damn you just said it all!
brilliant reporting and exposure of the scum and shit who make up the mortgage and bankster industries....
the investors "were sophisticated investors who knew or should have known better."
of course they should have known that the purveyor was dishonest and more crooked bernie madoff...
Spectacular work gents. This is a really, really big ancillary issue. The issue all along is the securities side... and all of these things have been set up as a life support system for the banks... that no regulator is supposed to touch. Good thing we got the private, civil side left.
What you're going to find moving foward are less and less performing loans... not only that, but objectively DONE loans, e.g. bk/tax sale/etc. The amount of non-existent loans that are still generating service fees for the banks are going to increase... all of the loans are going to get sorted out through natural safeguards in the law and recording system...
Also, by uncovering these issues, you give us additional insight into just how far the rabit hole goes with governmental oversight (or lack thereof)...
It seems to me that, in the end, the big issue is how can the government agencies/gse/FED (yeah, I said FED too) rightfully own, as stewards of the public trust and money, any of these toxic assets they know to have been created under false conditions? Are they simply hoping to get a court ruling absolving them of fiduciary responsibility? I can't really see that happening... In the end, all of these toxic assets come home to roost... [which will be bought up for pennies on the dollar by the folks who created the mess in the first place, but I digress]
Too bad socialized crime Inc. is 100% above the vomit-justice you call "law."
The hope between the lines of your post will be crushed, along with every professional steward or believer in said vomit.
Show me a single responsible act by government Inc. towards vomit-cleanup. There is none. Not one fucking example in 4 years. Not one.
The system is 100% fraud, and it's bigger than the US legal belief system.
Not really... the difference between criminal sanctions from the government and civil sanctions from private suits will be negligible... putbacks are putbacks and the system is too fragile to have any hiccups.
Needless to say, there are too many judges to buy off... and many of these cases are simply too easy for the adverse parties to prove...
In the end, even the FED drowns with nonpeforming assets...
Macho...I'm going to hit you up on email about something that is brewing but I wanted to show you this.
MERS Has A Bad Day (Cheryl Marchant Lies?) and Bonus MERS Motion for Protective Order Denied.
The discovery work in the 4closurefraud OP is stunning. Funny that one person with a laptop can figure this out but not a single state or federal agency/regulatory body has a fucking clue.
Or Senator...
Or Bloomberg news....
Or Diana Olick at cnbc...
Click 3X and hope it goes away!
Is ZH a bona fide "news" outlet? Perhaps FOIA is in ZH's future!
fire away.
That hearing transcript was pretty funny... the judge wasn't having any of that shit.
Yup. And that was quite a reversal for him.
I don't think he realized the implications of what he did.
Ha ha ha, "judges." Mission accomplished.
Good luck with civil/criminal/court anything. It should be patently obvious all aspects are 100% meaningless given the performance of the "system" the last 4 years. So far we have:
Too big to fail
MERS/Robosigning
Failure rewarded at the expense of the strong
Citizen's United
Unlimited bailouts from unconstitutional entities
(to name a few)
You call that headed in the right direction?
Perhaps you meant MAGIC judges to deal with the legally untouchable, incorporated.
Face it, the US is no longer a nation of laws and individual governance. You are dreaming to think otherwise (and you are 20 years late to the untouchable party that put it in place).
.... and you are 20 years late to the untouchable party that put it in place).
About 200 years too late. George Washington himself got the party going, others wanted in on the gig and a pattern was formed.
Us common folks have to wait for them to make a mistake, like f.ex. Prohibition, to be able to join the ranks of inherited untouchability.
PS:
This ascension opportunity did not work out so well for the Kennedy family, maybe one should know ones real place in life and just stick to being rich and manufacture bum-wine ;-)
You left out MF Global. $1.6 billion in client funds looted to JP Morgan with little real chance of client recovery. And the "Honorable John Corzine" just didn't know what happened to all that money he "vaporized".
I think it's a fair characterization that many aspects of our society are lawless for the cream of the crop... however, not all are immune and not all issues are out of the realm of redress within the system... this just happens to be one of the exceptions... although, I understand your frustration with the time it is taking for this to go through (you have to remember discovery is MASSIVE on this issue).
What you're going to find soon is going to be a death struggle between those holding shadow inventory and state land commissioners wanting to tax that ass. For states without an income tax, this is going to be for all the chips.
Great insight, Macho, however how many states without income tax have mineral severance, balanced budgets, and are debt free rated AAA (bullshit). I can't think of one example where a state (without income tax) doesn't have minerals, but my research is unsubstantial to make a qualified claim.
Nope, this is the grand heist for all, and you can bet the little guy (local governments) have no chance now that "bigger "government" based on payolaw is completely marginalized through personified incorporation beholden to money authoring the laws (see all finreg's the last two decades, and election 2012).
Your an attorney (judge?) see for yourself - being big and incorporated is a free pass to do whatever the fuck you want and blame it all on the corp. Justice is perverted from the top all the way to the street cameras sending citizens $75 citations for crossing the line at a crosswalk. That isn't justice, that is profit Inc. sponsored by your unchecked fascist government.
What about states that have interlock devices mandated on alleged DUI offenders by the DOT -- this is unadjudicated sentencing by the executive branch, and abortion of due process. Yet it's catching on in this nation of corporate untouchables.
Your own personal racket: buy the politicians, get the legislation and fuck the citizens for profit -- rinse/repeat. This worked for that zionist faggot of dirt security, Michael Chertoff, and literally EVERYONE in banking... (Corzine authored it in his exit strategy for fucks sake!) why not everybody else.
Until there is culpability at the INDIVIDUAL LEVEL there will be no healing, no justice, no nothing but decline and as many predict, civil unrest. History is ripe with examples of what happens during the latter. The only culpability in the entire crisis is Madoff -- all else is TBTF.
Until personal lives and families are destroyed (where even the rich loath money) it's baked in the cake. Fuck them.
I guess you could say peak-money. Confidence is receeding very fast, I'm hearing the sheeple talk like they are starting to listen... Too bad they don't have the cash to play.
whoa silver... that covered a lot of territory...
I have personal experience with the DUI racket... I refuse to represent people unless they're really, really serious about fighting it... I can't do anything for them... immediate adjudication of guilt with no practical way to get out of it...
know of a person who got pulled over for DWI drugs... then went and refused to blow at the police station... at any rate, what happened was a double whammy. If you get charged with DWI- drugs, then you can't get an interlock device... if you refuse the test, then you can't get a restricted license... no way to get to work... doh. plead guilty and go on...
In the systems' defense, this person was completely intoxicated...
I refer to this as the "municipal court treadmill" and I see it a lot... people basically get in there for nick nack (not DWI) charges... can't pay the fine... then get more and more fees, fines, costs, community service, etc. tacked on each time because they couldn't complete the last sentence. Total bullshit. The cost to our county is fucking insane... and the collectability of these debts is nil... the wrath of god needs to be tempered with a pinch of practicality...
But, I reiterate... despite my misgivings about where we're headed and where we are... these real estate issues are going to play out in state court.... and I say that knowing the big issues are with securities, but I think that the real property/foreclosure cases are going to tie the hands and fact patterns of the securities cases... in that, they'll prove the loans are non-performing... as well as transfer title away from the donkeys who bought that shit... free and clear of any liens... just watch.
Great perspective.
Great wrestler.
Linda Green's signature must have appeared on an earlier foreclosure then?
Like a broken record, I've being yelling from the rooftops for over a year on ZH that THE ENTIRE FUCKING SYSTEM IS FRAUD FROM TOP TO BOTTOM!
There is NOTHING BUT FRAUD -- ALL OF IT!
Every ounce of truth is shreaded by marginalization via fraud.
It's THE systemic risk. NOTHING IS TRUTH, NOTHING!
There is a total crisis in enforcement, who would think to see that coming?! Dick Holder gonna come for you? Nope, only the dope.
After the robo signing fiasco I looked into the status of title of a lot of relatives real estate wherein they had payed off the mortgage or note. In a suprising number of cases various financial entities couldn't even manage to get the satisfactin of mortgage aka reconveyance etc back to the homeowner. Even though in many states the servicer is required to get this original paperwork to the homeowner. Thankfully in checking all the satisfactions were recorded and we were able to obtain certified copies of them. So if these servicers can't manage to put the homeowners name and address of the satisfaction being recorded so that it can be returned to the homeowner after recordation how are they going to be able to accurately keep tract of what mortgages they are still servicing.
Its fraudulent though not necessarily intentional. Its more like gross negligence. Troubling. I wonder how many people out there paid off their mortgages and don't have a clean title because the homeonwers don't necessarily understand how title works and apparently the banks don't really care either.
Do the TPTB not see that without rule of law capitalism our economy, any markets etc simply can't function well? The SYSTEMIC RISK TO THE SYSTEM BY THESE BANKSTERS is huge.
Practically speaking, you're not going to have to pay off your house twice... nor is a BFP going to be saddled with a lien that hasn't been recorded... this is all stuff that gets decided in YOUR backyard, wherever you may be, against a transnational banking institution/bottom feeder credit collector. Do you really think a jury of your peers is going to make you pay twice or is it more likely to break one off in the bank's ass? They know this and this is why they aren't even attempting to come after people for a second round... (the person/entity you paid off with the loan proceeds would have to cough them up to whoever is the "rightful" owner of the note/mortgage).
Further, as soon as you stop paying, the clock starts ticking on the statute of limitations... and this isn't even taking into consideration equitable defenses...
Also, if your closing agent (title company) pays off the wrong party with the loan proceeds, you probably have a very decent chance at recovering against the agent...
No one is worried about paying off the loan twice. Its more in wanting to have record title unencumbered for the purposes of sale or lending. Real estate is already illiquid. No need to have it all the more illiquid requiring a bond in escrow for closing or delaying your ability to borrow against it. If its not taken care of you could have an expensive and needlessly delaying time quieting title if the financial entity ceases to exist and you go to borrow or sell in several years.
At closing you convey UNCLOUDED TITLE. If someone has an equitable lien (unrecorded) on your property and you sell it to a BFP before recording, the lienholder is SOL. Same thing happens at refi, hence why they're so desperately trying to get you to do so... you clear up all the bad mess and they get another shot at the kitty.
When people start filing lawsuits because they're subject to multiple suits over the same debt, then I'll take this issue seriously... [if this does happen, then it's basically a get your house free card because the arguing creditors haven't the foggiest idea who is the real holder and they're too fucking stupid to decide this amongst themselves before initiating suit and/or attempting to collect].
@MachoMan - agree with your analysis. Was talking about a situation where a mortgage was recorded but the finance company although perhaps sending a payoff letter fails to process the reconveyance. If they can fail to get the original reconveyance repeatedly ( I have seen it happen multiple times now esp J.P. Morgan) to the homeowners, whose to say they don't occasionally fail to get a reconveyance recorded in the proper county. Its not huge or revolutionary and again not worried about equitable unrecorded interests. I am just saying that a lot of people take it for granted that the banks will do what they promise to do and assume everything is kosher. Then 99.999% of people wouldn't discover what amounts to a clerical error until years later next time they attempt to borrow or sell the property.
Like in the below situation where creditor's counsel and even debtor's counsel are just assuming a fraudulent deed is real and wasting resources dealing with motions for relief from the automatic stay. http://www.nakedcapitalism.com/2012/02/more-foreclosure-mischief-bankrup...
The title system in this country withs its BFP 4V system has worked so well for so long that people assume everything is legit.
I think what the real repercussion is just that actual "due diligence" is again at play in Real Estate where it could have been taken for granted in the past.
My main point in all of my commentary was just that I think in this climate you shouldn't assume that Banks will do what they are supposed to do. They have proven themselves unable to function properly and legally within the excellent frame work of the recording laws.The banks management didn't want to pay for the costs of (1) recording and (2) having a robust system in place to handle the paperwork and (3) having competent staffing to do the inevitable assignment and foreclosure work. They didn't care they made their money and took their huge bonuses.
In all likelihood only a tiny percentage of homeowner's challenging foreclosure aren't delinquent in their loans to the point where whoever does own the loan would have the right to foreclose if they could get their paperwork together. Anyway its just one more reason why you can't trust these multi-national banks and should instead try and keep your financial life local.
If they don't cough up a satisfaction, then you send them a polite letter, requesting it... and then you sue their ass... win easily when you can prove you paid them...
if they claim they aren't entitled to issue a satisfaction because they're not the real holder, then they can cough up the money and tell you who should get it...
A portion of this due diligence is also up to the closing agent... that's what they get paid to do... the title policy for the bfp depends on it... (generally underwritten by a parent or associate of the closing company)... closing company screws the pooch, and the title policy never issues...