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Kiss The Foreclosure Settlement Goodbye: Bank of America, Wells And JP Morgan Are Sued Over Use Of MERS

Tyler Durden's picture




 

A little over a year since the day that the world first learned about robosigning and the broader problem of fraudclosure, which is merely the functional equivalent of infinite rehypothecation of an underlying asset between a daisy-chain of lien holders, we get the first legal incursion into this farce. From Bloomberg we learn that:

  • BANK OF AMERICA, WELLS FARGO, JPMORGAN SUED BY NEW YORK OVER MERS
  • NY AG SUIT CITES FRAUDULENT FORECLOSURE FILINGS

In other words, kiss that foreclosure settlement goodbye. In the meantime, the  electronic momos keep taking BAC ever higher even as this news confirms that the bank is about to suffer a multi-billion impairment shortly.

From the AG office:

A.G. SCHNEIDERMAN ANNOUNCES MAJOR LAWSUIT AGAINST NATION’S LARGEST BANKS FOR DECEPTIVE & FRAUDULENT USE OF ELECTRONIC MORTGAGE REGISTRY

Complaint Charges Use Of MERS By Bank Of America, J.P. Morgan Chase, And Wells Fargo Resulted In Fraudulent Foreclosure Filings 
Servicers And MERS Filed Improper Foreclosure Actions Where Authority To Sue Was Questionable
 
Schneiderman: MERS And Servicers Engaged In Deceptive and Fraudulent Practices That Harmed Homeowners And Undermined Judicial Foreclosure Process

NEW YORK – Attorney General Eric T. Schneiderman today filed a lawsuit against several of the nation’s largest banks charging that the creation and use of a private national mortgage electronic registry system known as MERS has resulted in a wide range of deceptive and fraudulent foreclosure filings in New York state and federal courts, harming homeowners and undermining the integrity of the judicial foreclosure process. The lawsuit asserts that employees and agents of Bank of America, J.P. Morgan Chase, and Wells Fargo, acting as "MERS certifying officers," have repeatedly submitted court documents containing false and misleading information that made it appear that the foreclosing party had the authority to bring a case when in fact it may not have. The lawsuit names JPMorgan Chase Bank, N.A., Bank of America, N.A., Wells Fargo Bank, N.A., as well as Virginia-based MERSCORP, Inc. and its subsidiary, Mortgage Electronic Registration Systems, Inc.

The lawsuit further asserts that the MERS System has effectively eliminated homeowners' and the public's ability to track property transfers through the traditional public records system. Instead, this information is now stored only in a private database – which is plagued with inaccuracies and errors – over which MERS and its financial institution members exercise sole control. Additional defendants include BAC Home Loans Servicing, LP, Chase Home Finance LLC, EMC Mortgage Corporation, and Wells Fargo Home Mortgage, Inc.

“The banks created the MERS system as an end-run around the property recording system, to facilitate the rapid securitization and sale of mortgages. Once the mortgages went sour, these same banks brought foreclosure proceedings en masse based on deceptive and fraudulent court submissions, seeking to take homes away from people with little regard for basic legal requirements or the rule of law,” said Attorney General Schneiderman. “Our action demonstrates that there is one set of rules for all – no matter how big or powerful the institution may be – and that those rules will be enforced vigorously. Only through real accountability for the illegal and deceptive conduct in the foreclosure crisis will there be justice for New York’s homeowners.”

The financial industry created MERS in 1995 to allow financial institutions to evade local county recording fees, avoid the hassle and paperwork of publicly recording mortgage transfers, and facilitate the rapid sale and securitization of mortgages. MERS operates as a membership organization, and most large companies that participate in the mortgage industry – by originating loans, buying or investing in loans, or servicing loans – are members, including JPMorgan Chase, Bank of America, Wells Fargo, Fannie Mae, and Freddie Mac. Over 70 million loans nationally have been registered in MERS System, including about 30 million currently active loans.

Through their membership in MERS, these companies avoided publicly recording the purchase and sale of mortgages by designating MERS Inc. – a shell company with no economic interest in any mortgage loan – as the "nominal" mortgagee of the loan in the public records. Instead, MERS members were supposed to log mortgage transfers in the MERS private electronic registry. The basic theory behind MERS is that, because MERS Inc. serves as a "nominee" (or agent) for most major lenders, it remains the "mortgagee" in the public records regardless of how often the loan is sold or transferred among MERS members. Thus, although MERSCORP has only about 70 employees, MERS Inc. serves as the mortgagee of record for tens of millions of loans registered in the MERS System.

MERS has granted over 20,000 “certifying officers” the authority to act on its behalf, including the authority to assign mortgages, to execute paperwork necessary to foreclose, and to submit filings on behalf of MERS in bankruptcy proceedings. These certifying officers are not MERS employees, but instead are employed by MERS members, including JPMorgan Chase, Bank of America, and Wells Fargo.

MERS' conduct, as well as the servicers’ use of the MERS System, has resulted in the filing of improper New York foreclosure proceedings, undermined the integrity of the judicial process, created confusion and uncertainty concerning property ownership interests, and potentially clouded titles on properties throughout the State of New York. In fact, several New York judges have questioned the standing of the foreclosing party in cases involving MERS loans and the validity of mortgage assignments executed by MERS certifying officers.

The lawsuit specifically charges that the defendants have engaged in the following fraudulent and deceptive practices:

  • MERS has filed over 13,000 foreclosure actions against New York homeowners listing itself as the plaintiff, but in many instances, MERS lacked the legal authority to foreclose and did not own or hold the promissory note, despite saying otherwise in court submissions.
  • MERS certifying officers, including employees and agents of JPMorgan Chase, Bank of America, and Wells Fargo, have repeatedly executed and submitted in court legal documents purporting to assign the mortgage and/or note to the foreclosing party. These documents contain numerous defects, including affirmative misrepresentations of fact, which render them false, deceptive, and/or invalid. These assignments were often automatically generated and "robosigned" by individuals who did not review the underlying property ownership records, confirm the documents’ accuracy, or even read the documents. These false and defective assignments often masked gaps in the chain of title and the foreclosing party's inability to establish its authority to foreclose, and as a result have misled homeowners and the courts.
  • MERS' indiscriminate use of non-employee "certifying officers" to execute vital legal documents has confused, misled, and deceived homeowners and the courts and made it difficult to ascertain whether a party actually has the right to foreclose. MERS certifying officers have regularly executed and submitted in court mortgage assignments and other legal documents on behalf of MERS without disclosing that they are not MERS employees, but instead are employed by other entities, such as the mortgage servicer filing the case or its counsel. The signature line just indicates that the individual is an "Assistant Secretary," "Vice President," or other officer of MERS. Indeed, these documents often purport to assign the mortgage to the certifying officer's own employer. Moreover, as a result of the defendants' failure to track the designation of certifying officers and the scope of their authority to act, individuals have executed legal documents on behalf of MERS, such as mortgage assignments and loan modifications, when they were either not designated as a MERS certifying officer at the time or were not authorized to execute documents on behalf of MERS with respect to the subject loan.
  • MERS and its members have deceived and misled borrowers about the importance and ramifications of MERS' role with respect to their loan by providing inadequate disclosures.
  • The MERS System is riddled with inaccuracies which make it difficult to verify the chain of title for a loan or the current note-holder, and creates confusion among stakeholders who rely on the information. In addition, as a result of these inaccuracies, MERS has filed mortgage satisfactions against the wrong property.

The lawsuit seeks a declaration that the alleged practices violate the law, as well as injunctive relief, damages for harmed homeowners, and civil penalties. The lawsuit also seeks a court order requiring defendants to take all actions necessary to cure any title defects and clear any improper liens resulting from their fraudulent and deceptive acts and practices.

The matter is being handled by Deputy Bureau Chief of the Bureau of Consumer Frauds & Protection Jeffrey K. Powell, Assistant Attorney General Clare Norins, and Assistant Solicitor General Steven C. Wu, under the supervision of First Deputy Attorney General Harlan Levy.

 

 

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Fri, 02/03/2012 - 12:59 | 2123635 knight99
knight99's picture

GPAP AND THIS. Today shuold mark the top of all risk assets for awhile.

Fri, 02/03/2012 - 13:01 | 2123648 nope-1004
nope-1004's picture

Good-bye BAC!  LOL.

 

Fri, 02/03/2012 - 13:04 | 2123662 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

BAC's up 5%.  This is either the last act of desperate pigmen, or we are now flat footed in the final stage of the hyperinflation of the dollar.

Everyone knows the dollar has lost 98% of its purchasing power over the course of its life, the last 99 years.  The question you should ask yourself is, "If we are on an exponential curve, and we have 2% left to lose, how fast will it go?"

Aannd....it's gone!

Fri, 02/03/2012 - 13:57 | 2123925 Troll Magnet
Troll Magnet's picture

i guess obama is miffed at wall street now that they're pouring their $ to mitten's campaign?

Fri, 02/03/2012 - 14:13 | 2124010 Stax Edwards
Stax Edwards's picture

Good on Schneiderman, I think we all know Holder's justice department will never challenge the big banks.  He knows where his bread is buttered.

Fri, 02/03/2012 - 22:44 | 2125774 Problem Is
Problem Is's picture

Eric "Empty Suit" Holder???

Has that worthless cock sucker even shown up for work yet??

Fri, 02/03/2012 - 22:11 | 2125718 holdbuysell
holdbuysell's picture

An article in the MSM on gold and silver and a dollar collapse that approaches alarmist. That's ZH talk for the people that get it.

Seriously, what's the agenda here. I'm skeptical.

Notwithstanding the above, it's a great find and post. Thanks for sharing.

Fri, 02/03/2012 - 13:09 | 2123680 HoofHearted
HoofHearted's picture

So time to short the hell out of it. All my love to our local heroes, from Hoofy here in CLT.

Fri, 02/03/2012 - 13:18 | 2123731 Silver Pullet
Silver Pullet's picture

I threw a grand at that over a dollar ago. It may defy gravity forever...

Fri, 02/03/2012 - 21:54 | 2125684 DeadFred
DeadFred's picture

Short it at $12.

"the bank is about to suffer a multi-billion impairment shortly" Is 'shortly' measured in nanoseconds? If not I'd wait on the shorting thing. It will tank but likely not until long after you think it should.

Fri, 02/03/2012 - 13:39 | 2123844 spastic_colon
spastic_colon's picture

priced in etc etc....another piece in the propaganda puzzle, this will drag on until Nov. 3rd when we find out that they will collectively pay $3 in settlement money to the lawyers

Fri, 02/03/2012 - 14:24 | 2124076 TheGameIsRigged
TheGameIsRigged's picture

Actually, if you knew anything about mathematics you would know that, with the numbers you just threw out there, in an exponential curve - the money would be worth 0 right now.  Refernce asymptotic lines.

Fri, 02/03/2012 - 14:35 | 2124116 blindfaith
blindfaith's picture

 

 

Ok Here are some fix it numbers...for the banks:

Google 'savings', every click thru costs the named bank $10.00

Google 'structured investiment' every click thru to a bank cost them $50.00

NO JOKE !!!!!

Fri, 02/03/2012 - 18:05 | 2124977 YesWeKahn
YesWeKahn's picture

% has no limit. 99% of the remaining 1% still ha a value.

Fri, 02/03/2012 - 13:07 | 2123674 HedgeAccordingly
HedgeAccordingly's picture

up up and away -http://hedge.ly/zbdijL

Fri, 02/03/2012 - 12:59 | 2123636 chancee
chancee's picture

This is from an article written in 2003:

"Heller had just left the Fed when he gave a speech suggesting that the central bank should step in and take direct action to keep the stock market from collapsing. The Fed had taken action before. It made sure there was enough liquidity during the crash of '87 to keep the system going. It may have even strong-armed a few banks into propping up the market. And it has often lowered interest rates at opportune times.

"But Heller's idea was different. He wanted a more direct approach, especially when the bond and currency markets were becoming uncontrollable [like they are these days]. Heller believed that in an emergency, the Fed should start buying stock index futures contracts until it managed to pull stocks out of their nosedive. Essentially, whenever there is heavy buying of these futures contracts it causes the underlying stock market to rise. The futures contracts can be bought cheaply; they are highly leveraged so you can get more bang for your buck, and they eliminate the need for a rigger to purchase, say, all 30 stocks that make up the Dow. Heller explained that the process was simple.

Here is the whole article...

http://www.gold-eagle.com/editorials_03/hultberg032603.html

Fri, 02/03/2012 - 13:00 | 2123645 Iam Rich
Iam Rich's picture

"....as this news confirms that the taxpayer is about to suffer a multi-billion impairment shortly".

Fixed.

Fri, 02/03/2012 - 13:03 | 2123659 Poetic injustice
Poetic injustice's picture

Any ideas, how Fed will name this help to banks?

Need to find a good, sound acronym.

Fri, 02/03/2012 - 13:21 | 2123756 Silver Pullet
Silver Pullet's picture

How about FUR (Fuck You Reality)

Fri, 02/03/2012 - 13:04 | 2123660 alien-IQ
alien-IQ's picture

this is, naturally, either

a) priced in

b) bullish

c) both

Fri, 02/03/2012 - 13:13 | 2123699 fuu
fuu's picture

C!

Fri, 02/03/2012 - 14:06 | 2123968 resurger
resurger's picture

Can i call a friend?

C

Fri, 02/03/2012 - 20:04 | 2125388 Zero Govt
Zero Govt's picture

D) a farce

you think a NY Attorney General is going to bring down a NY Banker?

check the last 100 years of utterly bent NY justice ...an excellent record as a protection racket

Fri, 02/03/2012 - 22:34 | 2125757 Yes_Questions
Yes_Questions's picture

 

 

This time is different..

 

Electrolytes.

Fri, 02/03/2012 - 13:04 | 2123661 maxmad
maxmad's picture

Free houses, if you didn't foreclose already!

Fri, 02/03/2012 - 13:06 | 2123666 Yen Cross
Yen Cross's picture

 Maybe we can catch a pullback to that 11654 (10%) ish area, over the next couple of weeks?

Fri, 02/03/2012 - 13:06 | 2123671 justanothernerd
justanothernerd's picture

Fuck it all, just buy. BAC is up 50% since hitting 4.99 a little while back. 

 

If banks want QE3, I'm wondering what the hell is going on with the ramp up in the market... 

Fri, 02/03/2012 - 13:10 | 2123683 slaughterer
slaughterer's picture

I cannot see how the QE-3 trade can go on with this NFP report today.  Someone clarify how.  

Fri, 02/03/2012 - 13:17 | 2123725 LawsofPhysics
LawsofPhysics's picture

With ZIRP forever and open swap windows working overtime to keep the Euro ponzi going, who needs QE3?  We fucking have infinite-QE already in play!!!

Fri, 02/03/2012 - 13:08 | 2123673 eatthebanksters
eatthebanksters's picture

This is a start...I wonder if Geithner and Obama crapped in their pants?

Fri, 02/03/2012 - 13:07 | 2123675 Freegolder
Freegolder's picture

Phew, thank God for some bad news, all is not lost.

Fri, 02/03/2012 - 13:08 | 2123676 PicassoInActions
PicassoInActions's picture

if hanorble Corzine can walk away, i don't see how NY will get anything out of this bastards

 

Fri, 02/03/2012 - 13:10 | 2123684 Seasmoke
Seasmoke's picture

any day now , Fraudclosure settlement.......Greece settlement........Fraudclosure settlement......Greece settlement........Fraudclosure settlement.......Greece settlement

Fri, 02/03/2012 - 13:12 | 2123687 FreeNewEnergy
FreeNewEnergy's picture

Yippee! MERS is the nominee on my mortgage - the one I inherited from my deceased father in July 2009. In foreclosure since March 2010, BAC (previously Cuntrywide) hasn't made a single move since I answered the complaint.

I've been contemplating filing for quiet title and this is just the news I needed to jump start my efforts.

$82,000 loan on a home valued somewhere less than that, probably, PFFFt!

Hearing that Bank of America is being sued: Good

Living in New York: better

Owning a home with a MERS loan and fraudulent assignment documents: PRICELESS!

Go, Giants. Make my great week complete.

Fri, 02/03/2012 - 13:31 | 2123812 pepperspray
pepperspray's picture

 +

Fri, 02/03/2012 - 16:16 | 2124503 Joseph Jones
Joseph Jones's picture

Here I am, a 9er fan for 50 years...Giants vs. Belicheat...gotta root for the Giants. 

Fri, 02/03/2012 - 13:12 | 2123689 Catman
Catman's picture

The NY AG will suddenly be an mysterious one car accident or his name will end up splashed across the Post's front page because his name is in some madame's little black book.  It worked once already  . . .

Fri, 02/03/2012 - 13:42 | 2123862 pods
pods's picture

For this type of challenge they will up it.  Someone will slip in some childporn on his computer and it will all be fixed as the case is withdrawn by the new DA.

pods

Fri, 02/03/2012 - 13:12 | 2123694 cossack55
cossack55's picture

Isn't it about time to change momos to mofos?

Fri, 02/03/2012 - 13:13 | 2123697 Careless Whisper
Careless Whisper's picture

I hope Linda Green(s) has been placed under the witness protection program.

Fri, 02/03/2012 - 13:17 | 2123728 Gubbmint Cheese
Gubbmint Cheese's picture

Which one?

Fri, 02/03/2012 - 13:19 | 2123734 dick cheneys ghost
dick cheneys ghost's picture

we are all Linda Green

Fri, 02/03/2012 - 15:18 | 2124262 Ying-Yang
Ying-Yang's picture

Soylent Linda Green

Fri, 02/03/2012 - 16:40 | 2124600 Return2Sanity
Return2Sanity's picture

Linda Green is people! Lots of them.

Fri, 02/03/2012 - 13:13 | 2123698 Yen Cross
Yen Cross's picture

 If Europe is so great, why did the euro and gbp just post new HISTORIC lows against the aud today. I can't wait for the RBA 50 bps cut next week.

Fri, 02/03/2012 - 13:15 | 2123707 Atomizer
Atomizer's picture

The return of BAC $5 debit card fee to commence in 3,2,1

Fri, 02/03/2012 - 13:16 | 2123714 Kaiser Sousa
Kaiser Sousa's picture

FUCK ALL BANKERS AND THEIR BITCH OWNED POLITICIANS..........

NY Attorney General excluded for the moment....

Fri, 02/03/2012 - 13:37 | 2123835 Schmuck Raker
Schmuck Raker's picture

NY Attorney General Eric T. SeanOfTheDead?

Fri, 02/03/2012 - 14:08 | 2123984 eatthebanksters
eatthebanksters's picture

Obama's mantra..."I jon't don't want things to get worse"...it doesn't matter if thngs don't get better...

Fri, 02/03/2012 - 23:06 | 2125810 Problem Is
Problem Is's picture

NBLB - No Bankster Left Behind

Obama Bin Lyin' aka Barry Soetoro economics in action...

Fri, 02/03/2012 - 16:19 | 2124517 Joseph Jones
Joseph Jones's picture

Could we, might we, should we temporarily bring back the stocks and tarring/feathering...just for the special occassion of the banksters?   

Fri, 02/03/2012 - 13:16 | 2123718 Widowmaker
Widowmaker's picture

I want bodies and faces on the news.

If there isn't disgrace running down the street gutters and families with kids crying at the empty chair at the table there is more to prosecute, and crimes to solve.

 

Fri, 02/03/2012 - 13:17 | 2123722 Jumbotron
Jumbotron's picture

In other words, kiss that foreclosure settlement goodbye. In the meantime, the  electronic momos keep taking BAC ever higher even as this news confirms that the bank is about to suffer a multi-billion impairment shortly.

 

Nothing personal Tyler...but bullshit on the multi-billion dollar impairment.  As long as there are both taxpayers and Ben Bernanke.....there will never again be a bank profit impairment.

Fri, 02/03/2012 - 13:19 | 2123741 LawsofPhysics
LawsofPhysics's picture

Precisely.  In fact, let ben add another zero to that "settlement" - here you go "click", happy now?

Fri, 02/03/2012 - 13:20 | 2123747 maxmad
maxmad's picture

Nothing personal Jumbotron, but pass the HOPIUM!  You've had to much!

Fri, 02/03/2012 - 13:20 | 2123745 Threeggg
Threeggg's picture

Obama will create a settlement to benefit the banks. You think BAC being up 5+% today is special ?

Wait !

LOL

Fri, 02/03/2012 - 13:20 | 2123746 Seasmoke
Seasmoke's picture

still no one says a word about the worthless HELOCS

 

everyone stay in your houses (that have been paid for) and the fight the foreign criminals who are trying to steal them  !!!

Fri, 02/03/2012 - 13:24 | 2123774 DavidC
DavidC's picture

ANYONE who's approached about modifying/changing any existing mortgage should JUST say 'Show me the original paperwork' - nothing more.

DavidC

Fri, 02/03/2012 - 13:30 | 2123802 Threeggg
Threeggg's picture

From last October................

Oct. 7 (Bloomberg) -- Losses on home-equity and other second mortgages may cost the four biggest U.S. banks $22.6 billion more than budgeted, with Wells Fargo & Co. most at risk, according to Glenn Schorr, an analyst with Nomura Holdings Inc.

The tally for Wells Fargo, the largest U.S. home lender, may reach $8.79 billion after accounting for taxes and existing provisions, followed by Bank of America Corp. at $6.2 billion, JPMorgan Chase & Co. at $5.51 billion and Citigroup Inc. at $2.12 billion, Schorr told clients in a report today. Before taxes and reserves, losses could total $73 billion, he wrote.

http://www.irvinehousingblog.com/blog/comments/second-mortgages-and-helocs-the-black-hole-on-banks-balance-sheets/

 

Fri, 02/03/2012 - 16:47 | 2124627 Omen IV
Omen IV's picture

chase alone has $100 billion face value in second mortgages - based on short sales - they are settling at 8-15 cents so there is a lot to go yet

Fri, 02/03/2012 - 13:23 | 2123764 DavidC
DavidC's picture

I'm surprised we aren't seeing new highs with all this good news today, Papademos possibly resigning, ANOTHER postponement on the Greece problem, 30 record lows in labour participation, banks being sued over the use of MERS, etc etc...

What's that...?

DavidC

Fri, 02/03/2012 - 13:23 | 2123768 Northeaster
Northeaster's picture

"In other words, kiss that foreclosure settlement goodbye." -

I think you're underestimating as to the lengths which government will go to in order to further destroy or usurp the Rule of Law.

Fri, 02/03/2012 - 13:25 | 2123781 SillySalesmanQu...
SillySalesmanQuestion's picture

Impair their asses!

Fri, 02/03/2012 - 13:31 | 2123813 Careless Whisper
Careless Whisper's picture

The lawsuit also seeks a court order requiring defendants to take all actions necessary to cure any title defects and clear any improper liens resulting from their fraudulent and deceptive acts and practices.

Hmmmmmmmmmmmmmmmmmmmmm

Fri, 02/03/2012 - 13:48 | 2123889 Money 4 Nothing
Money 4 Nothing's picture

That's weird? I thought it was irresposible homeowners? Stop blaming the banks. /sarc

Fri, 02/03/2012 - 23:10 | 2125815 Problem Is
Problem Is's picture

Tune in MSNBC then CNN for re-indoctrination...

You irresponsible home owner, you...

Fri, 02/03/2012 - 14:11 | 2123994 eatthebanksters
eatthebanksters's picture

I wonder if I'll b able to go after JPM for a wrongful foreclosure depending on the outcome of this suit?

Fri, 02/03/2012 - 19:51 | 2125349 Kali
Kali's picture

What if you have no mortgage (paid) or a current mortgage (not in arrears or foreclosure) where MERS is listed.  They will have to correct those titles?  There is no guarantee that the title is clear, what if one has to sell that property?  What a fookin mess.

Fri, 02/03/2012 - 13:33 | 2123815 chunga
chunga's picture

Go Schneiderman go.

Something very important is happening in this regard today in response to the following events:

Federal Foreclosure Judge Requests Evidence. In Fact He Insists.

That was back in July of 2011...nothing happened so Judge McConnell issued this Order January 5, 2012. (Mandatory mediation, all indispensable parties MUST attend)

The Playing Field Has Been Leveled

Nothing happened, so at the LAST HOUR, on the EVE of the first day of mediation - ALL the foreclosure mills jointly file this objection and a request for "clarification"

How LOW Will These Foreclosure Mills Go? (Collectively Slap Federal Judge John J. McConnell Right In The Face)

I'm very anxious to learn Judge McConnell's reaction and will report back with an update.

I'd be pissed. If he isn't; this is just another judicial burlesque show...

Here's some more...just for fun.

Bank of America CEO Moynihan to be Named as Defendant in Federal Foreclosure Lawsuit

Bank of America Responds to Moynihan Lawsuit - Cites Criminal Act Committed By Rogue Foreclosure Mill Harmon Law

Fri, 02/03/2012 - 14:29 | 2124098 chunga
chunga's picture

For those interested....

Judge McConnell was not amused. Score 1 for the good guys.

Docket Text:
TEXT ORDER: Certain Defendants Objection To And Request For Clarification (ECF No. 253) is OVERRULED and DENIED. In as much as Certain Defendants request reconsideration of various parts of this Courts Order dated January 5, 2012 (ECF No. 156), that too is DENIED. The stay of the litigation imposed by this Courts Order dated August 16, 2011 (ECF No. 1) remains in place. These matters are held in temporary abeyance in all respects to allow the parties to engage in meaningful mediation. As to Certain Defendants objection and request for clarification regarding the division of fees and expenses, any request for relief can be made when the parties receive a Summary Statement. - So Ordered by Judge John J. McConnell, Jr. on 2/3/12. (Barletta, Barbara)

Fri, 02/03/2012 - 15:31 | 2124308 AmericanBulldog77
AmericanBulldog77's picture

Woot Woot, +1

Fri, 02/03/2012 - 13:33 | 2123816 JLee2027
JLee2027's picture

Excellent

Fri, 02/03/2012 - 13:36 | 2123819 Below Zero
Below Zero's picture

This suit was filed so that it will quickly get appealed to the US Supreme Court where they will rule MERS and the rest of the crooks....errr...banks are doing everything hunky-dory. Everything is fine, no one can ever question foreclosures or titles again, the housing market wil rocket and BAC will become a $100 dollar stock. It is all good!

Fri, 02/03/2012 - 13:40 | 2123848 MachoMan
MachoMan's picture

Appellate Courts don't act as fact finders...  they're stuck with the facts they're given...  I sincerely doubt your assertion.

Fri, 02/03/2012 - 13:47 | 2123884 Below Zero
Below Zero's picture

Really?

Fri, 02/03/2012 - 13:51 | 2123901 MachoMan
MachoMan's picture

It's a state determination...  if they lose at the state level, they will not win higher up...  and, practically speaking, the standard of review will likely make it impossible to win on appeal from any judge's discretionary calls.

So, the question is who gets assigned the case and what he or she decides...  if you win at the trial level on this case, I think you win all the way up...

Best case scenario they blame everything on the defunct institutions that created a lot of the documents...  still, I don't think that they can very well bury their heads in the sand either...  civil conspiracy is a pretty...  broad cause of action (probably limited only by its vagueness).

Fri, 02/03/2012 - 21:48 | 2125672 debtandtaxes
debtandtaxes's picture

I'm a lawyer in Canada and not familiar with your jurisdictional issues so I can only hope you are correct.

It's true that the facts found to be true by trial judges are supposed to be given wide discretion by appellate courts.  But here in Canada appellate courts often overturn trial judgements by telling judges that

1. they have reasoned improperly upon those facts and/or

2. they "misapprehended" the facts.

If appellate courts were so tightly bound by trial level findings, no appeal would ever win!

Mon, 02/06/2012 - 10:56 | 2130501 MachoMan
MachoMan's picture

Your #2 would effectively turn our judicial system on its head...  your #1 is applied a little differently...  often times, the appellate court looks for an "abuse of discretion."  Realistically, this is a very difficult standard...  pretty much requiring objective instances of abuse.  More or less it's a safeguard/check and balance in the system, rather than a highly utilized vehicle to overturn trial courts.

Generally speaking, appellate jurisdiction is broken into two (2) parts: factual determinations and application of the law.  The trial court is given very broad discretion in the former and virtually none on the latter.  In short, the vast majority of appellate decisions are looking to the application of the law, not trying to second guess the trial court's factual or discretionary decisions.  The whole point is to not re-invent the wheel...  judicial efficiency and all (probably our most prominent public policy, albeit trumped every once and a while).

Fri, 02/03/2012 - 14:00 | 2123932 Northeaster
Northeaster's picture

Appeals Court don't retry cases, they only look at a case when a Rule of Law is in question, and rule on that only, not review the case as a whole.

Fri, 02/03/2012 - 14:57 | 2124187 MachoMan
MachoMan's picture

depends on the standard of review...  might be de novo...  but that is a rare bird and I don't see that coming up in this case.

Fri, 02/03/2012 - 13:35 | 2123828 tony bonn
tony bonn's picture

it's fun to fantasize about justice, but in the end the banksters will prevail.....whether through bought and paid for jurors and judges to outright assassination, the banksters will walk away with no more than slap on the wrist....

Fri, 02/03/2012 - 13:36 | 2123833 eddiebe
eddiebe's picture

When the laws don't suit the 1%, they just change them. Great system for them. The 99% found out a while ago how protesting works out for 'em.

Fri, 02/03/2012 - 13:38 | 2123834 BlackholeDivestment
BlackholeDivestment's picture

...well kick me in the Fannie Mea I have another bailout bonus. Did the stimulus check just bounced at the Great Wal Mart of China? Sign them up and Short your clients down. ...you mean racketeering ain't legal? Thought they called it market making. Lol

Fri, 02/03/2012 - 13:45 | 2123877 chet
chet's picture

Jesus.  It only took 4 years, but there is apparently one law enforcement official left in the country with a nutsack between his legs.  Of course, that doesn't mean this will go anywhere.

Fri, 02/03/2012 - 14:15 | 2124024 eatthebanksters
eatthebanksters's picture

Truly amazing that the AG of New York has greater resources available to him, for investigations and prosecution, than the Ag and the Justice Department of the US.  How do you think Eric Holder and Lanny Breuer are taking the news?

Fri, 02/03/2012 - 14:42 | 2124137 chet
chet's picture

I am not as knee-jerk against this Administration as many around here, but how in the world Eric Holder still has that job is beyond me.  I can only guess that powerful people like having a completely impotent non-entity in that role.

I thought that Obama should have brought in Spitzer to clean house on Wall Street after the financial crisis.  Even if he couldn't get confirmed, just hire him as a czar or something.  Spitzer and Bill Black should have been given  offices and staffs and just turned loose.  Pass any cases they put together to Holder when they're all ready to go.

Fri, 02/03/2012 - 16:29 | 2124560 Joseph Jones
Joseph Jones's picture

Congress subpeonead Eric Holder to testify yesterday re. gun-running case resulting in a dead border patrolman. 

Did you hear Eric tell Congress, "...I think I'm doing a pretty good job..."? 

Sun, 02/05/2012 - 12:40 | 2128598 Archduke
Archduke's picture

+1MM for Eric Holder.  put him and Elisabeth Warren and Joseph Stiglitz in charge,

 

What's amazing is the perversion of the whole concept of regulator and enforcer.

 

Since when does the SEC, the FSA, the attorney general, need to SUE in civil law?

These are regulators and enforcers of our justice system.  they are supposed to be

Authorities, meaning the teeth of the law that seize, fine, and prosecute summarily.

It's then up to the defendants to prove their innocence and appeal if possible,

 

but this passing the buck into the courts is nothing but a mockery of the process.

This is pure posturing and pandering for the benefit of MSM kangaroo justice.

 

 

Fri, 02/03/2012 - 13:46 | 2123881 serog
serog's picture

So what are the plausible outcomes here?

 

Fri, 02/03/2012 - 14:37 | 2124124 chet
chet's picture

If this really progresses and goes somewhere, I'm betting on a leglislative fix from Congress to basically retroactively clean up MERS and give the transactions legitimacy. 

I think that banks-getting-screwed/people-getting-free-houses because the mortgage ownership is cloudy is a non-starter. 

Fri, 02/03/2012 - 13:47 | 2123886 MachoMan
MachoMan's picture

I'll throw out an early cursory analysis.  The AG is spot on the money regarding the filing of fraudulent documents and lack of standing to foreclose.  However, the AG is way fucking out of bounds regarding the purpose of MERS (policy to avoid recording fees) and needs to drop it...  a cursory google search revealed the following link: http://www.nytimes.com/2011/09/18/realestate/saving-on-mortgage-taxes-mortgages.html  My assertion is that the State of New York has adopted model law that allows assignments without recording (most states adopted the model law, including mine)[again, I haven't searched NY's laws].  These laws set the policy of the State...  meaning, it is the public policy of the State to not require MERS to record these things...

The circumvention of recording fees is a non-starter...  keep the focus on the fraudulent documents and it seems like a slam dunk.  Plus, a criminal probe by the AG and winning a criminal case (and/or civil case) should make it really, really easy for individuals to piggy back with their own suits (discovery costs dramatically diminished). 

Fri, 02/03/2012 - 13:56 | 2123923 Miss Expectations
Miss Expectations's picture

The circumvention of recording fees is a non-starter...

NO, it's not.  Once the fraud thing is proven, the circumvention of fees case is easy to prove.  Texas, North Carolina and Massachusettes are lined up and ready to go:

http://www.totalmortgage.com/blog/mortgage-rates/dallas-attorney-general...

Fri, 02/03/2012 - 14:17 | 2124031 eatthebanksters
eatthebanksters's picture

While I'm not an attorney, I seem to remember that in New York you don't have to prove intent for a fraud conviction...which should make things much easier.

Fri, 02/03/2012 - 15:07 | 2124220 MachoMan
MachoMan's picture

The public policy of each state is recorded in each state's laws, respectively.  Texas may be very well different than others (aside from the whole superiority complex thing).  However, in this case, I doubt it.

These issues of recording fees cannot be brought by the states...  you can't pass a law that says you don't have to record an assignment and then punish people for not recording assignments...  this is sour grapes...  the states were too fucking stupid to understand what the banks were selling them...  now they have to pass blame whereever it may stick (probably not on the recording fees).

Aside from the fact that rarely in any jurisdiction is recording mandatory...  if you want to be afforded the protections of the state's recording acts (e.g. priority in your claim), then you HAVE to file...  however, if you don't give a shit, then you don't...  your claim is still good against the mortgagor, albeit at the back of the bus.  [obviously a mortgagor can't avail himself of the fact that he got a loan and pledged the home he bought with the proceeds as collateral; however, other creditors of the homeowner can raise a fuss that the mortgage was never recorded and they never knew about it and, as a result, the unrecording party should not have priority].

Further, the fraud case has not a damn thing to do with the fees...  fraudulently foreclosing on someone doesn't have shit to do with circumventing recording fees...  they're effectively two separate cases...  nor does a determination of one aid in the determination of the other...  the elements of either claim are completely separate.

Fri, 02/03/2012 - 13:59 | 2123937 chunga
chunga's picture

+1

The recording fees are chump change in the big picture. The question is why the need to alter or lose so many documents? Are the documents bad only for those in default? Seems unlikely.

My opinion is - it's the CDS (thanks bailout king AIG) and other third-party payments. The PR campaign to blame reckless homeowners is great and all, but this hole is so big people who aren't even born yet will be paying for this fiasco.

Fri, 02/03/2012 - 15:26 | 2124296 MachoMan
MachoMan's picture

Yep.  There's no telling how big the number is, but so many things have been deemed systemically important that the threshhold is probably not too great.  We probably have a good guess as to the counter-parties though.  I think they shit the bed with AIG and I doubt they'll get another favorites game out of the next insurer gone bust episode.  (although one might have thought about that with the GM bk and then been madly spanked with the MFG bk).

The recording fees are just a joke of political grandstanding.  The states are just trying to save face after giving rise and creation to MERS...  whocoodanode?  Hopefully the states understand where deferring their sovereignty gets them.

They're trying to buy time to trickle defaults to market, but the states are about to take a pound of flesh with unpaid taxes...  I know I keep harping on it, but states have them bent over a barrel...  the states own title to an incredible amount of the shadow inventory...  and if the TBTF or even federal government think that states are going to walk away from that revenue, they're fucking crazy.  My suggestion is to increase your default provisions asap and in a big way.  [states are even going to streamline tax sales to help push that shit through and the standard for due process is not very difficult, although the states routinely fuck it up with their sales].  They can either pony up the unpaid taxes and redeem the properties or eat the loss.  [further, I can't see how in the shit you can be in default of property taxes for 4 or 5 years but still have an unimpaired loan].

They'll keep trying to eat their cake (prop up the banks) and have it too (keep debtors on the notes) for as long as possible...  eventually they'll lose the battle to gravity...

Fri, 02/03/2012 - 16:11 | 2124442 chunga
chunga's picture

Not sure how it is in other states but if you don't pay property tax here in FL (at least in my county) it's up for auction in no time.

The deal in RI (above) was awesome. I'll refrain from posting all the defendants' council emails but a whole slew of Pro Hacs flew in for a good bitch-slap.

This is an automatic e-mail message generated by the CM/ECF system. Please DO NOT RESPOND to this e-mail because the mail box is unattended.
***NOTE TO PUBLIC ACCESS USERS*** Judicial Conference of the United States policy permits attorneys of record and parties in a case (including pro se litigants) to receive one free electronic copy of all documents filed electronically, if receipt is required by law or directed by the filer. PACER access fees apply to all other users. To avoid later charges, download a copy of each document during this first viewing. However, if the referenced document is a transcript, the free copy and 30 page limit do not apply.
 

U.S. District Court

District of Rhode Island

Notice of Electronic Filing


The following transaction was entered on 2/3/2012 at 9:53 AM EST and filed on 2/3/2012

Case Name:

In re: Mortgage Foreclosure Master Docket

Case Number:

1:11-mc-00088-M-LDA

Filer:

Document Number:

No document attached

Docket Text:
TEXT ORDER: Certain Defendants Objection To And Request For Clarification (ECF No. 253) is OVERRULED and DENIED. In as much as Certain Defendants request reconsideration of various parts of this Courts Order dated January 5, 2012 (ECF No. 156), that too is DENIED. The stay of the litigation imposed by this Courts Order dated August 16, 2011 (ECF No. 1) remains in place. These matters are held in temporary abeyance in all respects to allow the parties to engage in meaningful mediation. As to Certain Defendants objection and request for clarification regarding the division of fees and expenses, any request for relief can be made when the parties receive a Summary Statement. - So Ordered by Judge John J. McConnell, Jr. on 2/3/12. (Barletta, Barbara)


1:11-mc-00088-M-LDA Notice has been electronically mailed to:

 

I love the ALL CAPS...lol. (Judge McConnell stated in his Order all of these cases would be looked at de novo)

Fri, 02/03/2012 - 15:49 | 2124364 AmericanBulldog77
AmericanBulldog77's picture

+1

Fri, 02/03/2012 - 13:48 | 2123894 Miss Expectations
Miss Expectations's picture

I haven't felt like this in a long, long time.  Finally, something makes sense.

THANK YOU Eric T. Schneiderman, thank you!

Sat, 02/04/2012 - 08:58 | 2126274 falak pema
falak pema's picture

Schneiderman, the successor to SPitzer? They got him on his pecker urge in wanton surge. I wonder what they will concoct for Schneiderman...Never say die to the power of corporate spin wielded by the TBTF guys, in collusion with legal sin judges.

Fri, 02/03/2012 - 13:55 | 2123918 Joebloinvestor
Joebloinvestor's picture

Someone threw a spanner in the works!

 

WHEE!

 

Back to the drawing board room.

Fri, 02/03/2012 - 13:55 | 2123919 Eric L. Prentis
Eric L. Prentis's picture

Hurray for Attorney General Eric T. Schneiderman. Please run for President in 2012. 

Fri, 02/03/2012 - 13:59 | 2123936 Unk Pers
Unk Pers's picture

Can someone explain why BAC always has hundreds of millions of volume everyday?

Most days no one even comes close to their volume.

Fri, 02/03/2012 - 14:59 | 2124194 sgt_doom
sgt_doom's picture

Dood, you've got to study forensic economics and auditing sometime.

These bankster cretins are essentiallyowned through interlocking stock ownership --- examine their institutional shareholders and almost the same exact names keep reappearing:  State Street Corporation, AXA Holdings, etc., ad nauseum.

The entire thing is rigged; when Louis Brandeis originally outed JP Morgan and his Money Trust (interlocking directorates explaining how a small group effectively owned almost everything, and also through interlocking stock ownership back then) -- they pushed back with the legislation passed in 1913:

establishing the Federal Reserve System (the Fed loaning the US gov't, the people, money at interest)

the federal income tax (taxes going to pay the Fed the interest on said loans --- back then the tax went directly to the Fed, now it goes via IRS)

the oil depletion allowance (as the banksters own the oil companies and vice-versa)

the tax exemption and financial restructuring of foundations, so they could be tax exempt while owning stocks, bonds, other companies, etc., thereby allowing for the hiding, and sheltering and tax-free capital of the super-rich, along with hiding their ownership of endless companies and holding companies.

Time to catch a clue, dood!

Fri, 02/03/2012 - 14:06 | 2123972 Atlantis Consigliore
Atlantis Consigliore's picture

Dos Mortgage documents,  does refi no doc loans, dos 100 LTV ez no income docs, and applications, thru fraudie mac and mae I:

7 Million foreclosed homes and 10 million negative equity;   its not a home,  ITS AN INVESTMENT,  

 

did it all just go  Vaporized?   LOL   its   MF'D  in the Madoff Ass.

 

Ponzi scheme, what ponzi scheme,  print more,  nothing to see here, move on.  LOL

 

ANYBODY WANNA BUY ANY BONDS.????LOL. 

Fri, 02/03/2012 - 14:19 | 2124041 Joseph Jones
Joseph Jones's picture

At this late date, several years after hundreds of thousands (or more) innocent persons were wrongly evicted, what kind of court judgement could possibly make those wronged "whole", and the criminal enterprises (the banks) still exist?

It boggles the mind.  

Also, it's painful to wrap one's mind around the fact that Americans still suport the status quo (or worse) by supporting the 2-party system at the national level.   

Fri, 02/03/2012 - 15:32 | 2124312 MachoMan
MachoMan's picture

A nominal award?  $1?  Do you dispute they are in default?

The money isn't in getting something for being foreclosed on (although you might get some jury sympathy), the money is in holding it over the banks' heads that you can overturn the decree of foreclosure at the drop of a hat...  pay up or else.  The nuissance value in these types of cases is probably pretty decent...  and you'll have already set the precedent that you get to stay in the house indefinitely due to the fact they have no idea who has standing to foreclose...

big judgment?  probably not...  but big benefit in getting to stay indefinitely rent free and sticking it to assholes...

Fri, 02/03/2012 - 14:32 | 2124110 Newsboy
Newsboy's picture

Schneiderman is exhonerated from recent suspicions of complicity with Holder et al.

Fri, 02/03/2012 - 14:56 | 2124185 W10321303
W10321303's picture

The New York Times has revealed new details on how the Securities and Exchange Commission has repeatedly allowed Wall Street firms to skirt punishment for fraud. An analysis shows the SEC has granted nearly 350 waivers to financial companies, allowing them to maintain privileges even after admitting fraudulent practices. JPMorganChase received at least 22 waivers over the past 13 years while settling six fraud cases, while Bank of America and Merrill Lynch received 39 waivers and settled 15 times. In a speech on Thursday, Treasury Secretary Timothy Geithner said deceptive practices by Wall Street firms are now under control.

Timothy Geithner: "The financial system, itself, is getting strong and safer. Much of the excess risk-taking and careless and damaging financial practices that caused so much damage to the American economy have been forced out of the financial system. These gains, though, will erode over time if we are not able to put these full reforms in place."

Fri, 02/03/2012 - 15:10 | 2124231 sgt_doom
sgt_doom's picture

JUST HOW RIGGED IS IT ???

JPMorgan Chase (this applies to Goldman Sachs & Morgan Stanley, but more so to top rat JPM) was responsible for lobbying congress for the overturning of Glass-Steagall, while it created the credit default swap, and countless variants of CDOs. It has enjoyed the strongest derivatives position since that time.

JPMorgan was responsible for structuring the securitized-mortgage-foreclosure profit cycle:

they profit from lending the mortgage, then profit from its securitization, then profit from its foreclosure (especially the FHA loans, where they automatically are reimbursed almost all of the original amount), then profit from its reselling, then profit when it's securitized again.

And JPMorgan Chase has been involved, both directly and indirectly, in offshoring jobs and promoting massive offshoring of jobs -- when then leads to economic problems and unemployment, thus leading to default on mortgages, resulting in foreclosures, further profiting JPMorgan Chase.

And if those unfortunate souls then must put in for food stamps, JPMorgan Chase profits from that program, as it is routinely, nationally and locally, handled by them and their banks.

And it doesn't end there, as those jobs are offshored to countless foreign factories, and foreign production facilities, and state-of-the-art research & development laboratories and training centers of which normally are financed -- over the past three to four decades -- by US foreign aid (USAID, OPIC, various and sundry other programs, etc.).  [And people thought all those executives doing stints at those former government agencies -- they've now all since been privatized -- were actually performing public serivice?]

That's correct, you the taxpayer and your descendants, have paid for the multinationals' foreign enterprises -- while they pay almost no taxes, or usually none at all (over 70% of American-based multinationals and corporations at last count paid no federal taxes).

Just how rigged is it??? It's completely rigged.


 

Fri, 02/03/2012 - 15:11 | 2124242 sgt_doom
sgt_doom's picture

Oh yeah, God bless Schneiderman and nothing untoward had better happen to him or any member of his family.

We are monitoring....

Fri, 02/03/2012 - 15:21 | 2124280 non_anon
non_anon's picture

slap on the wrist and all will be well

Fri, 02/03/2012 - 15:43 | 2124343 AmericanBulldog77
AmericanBulldog77's picture

You had better be wrong.

Fri, 02/03/2012 - 15:45 | 2124349 williambanzai7
williambanzai7's picture

Schneiderman gets a Banzai7 Oscar! Best news in a very long time, simply because the plain truth that we were all told was careless mistakes, is now on the table.

G.F.Y. Debt Brother!

Fri, 02/03/2012 - 17:14 | 2124752 Dingleberry
Dingleberry's picture

Why has BAC go up so much? Everyone knows their loans are shit, what gives?

Fri, 02/03/2012 - 18:07 | 2124981 Joseph Jones
Joseph Jones's picture

God bless and keep Schneiderman and his loved ones. 

Fri, 02/03/2012 - 18:18 | 2125025 LawsofPhysics
LawsofPhysics's picture

Hey look, everyone named in this suit has seen a great up tick in their stock so far this year!  Conincidence?

Fri, 02/03/2012 - 21:21 | 2125598 dogismyth
dogismyth's picture

NY AG is just a front man and he will stifle this issue until it fizzles out.  Do you really believe the NY AG is on the side of the law when it comes to banksters?  Do you think any AG would risk his life?  Sorry to say, its merely a well-defined plan to put the fuse out on this explosive issue, or delay it.  Either way, they'll be no substantial accountability. 

Sat, 02/04/2012 - 04:29 | 2126164 The Navigator
The Navigator's picture

I fear you are probably right on. Corzine theft, no action. Dominique Strauss-Kahn, no law suit. The list of high priced crooks (with friends in high places) going free is endless.

Just remember, laws and taxes are for peons and peasants. 

Like George Carlin said "It's a big club, and you ain't in it"

http://www.youtube.com/watch?v=acLW1vFO-2Q


Sat, 02/04/2012 - 19:01 | 2127322 Lord Koos
Lord Koos's picture

So does this action by the N.Y. state A.G. mean that government and regulation isn't always bad?  I'm confused.

Mon, 05/07/2012 - 04:58 | 2402712 jaanp444
jaanp444's picture

Grooming that is obligatory sorry quotes before you touch a blackamoor. Form outlook before kissing a caucasian life status.

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