MutantCapitalism

Wow: Judges Now Nixing Lenders’ Foreclosure Claims Entirely in Court

doubleguns:
MERS does not record by Assignment each and every transfer of interest in the Note and Deed of Trust. This creates an "Unperfected Title" with regard to Assignments. We are clearly in the process of finding out to what extent this will void MERS role in foreclosure activity.

www.loanfraudinvestiga...

Wow: Judges Now Nixing Lenders’ Foreclosure Claims Entirely in Court

MERS is NOT a mortgage servicer which is made very clear in Landmark National Bank v. Boyd A. Kessler decision.

“MERS did not even act as the servicing agent to receive the payments and remit them to the lender.”

MERS attempts to act “solely as nominee for Lender” however its authority to act as lender agent is flawed and dubious, which the decision also points out.

www.kscourts.org/Cases...

MERS functions as a cover-up, shielding lenders from predatory claims and thwarting consumer claims of mortgage servicing fraud. By design, MERS was conceived to save costly recording fees and to expedite time line running from servicer fabricated defaults to foreclosure.

Why Mortgages Aren’t Modified and What a Ruling Stopping Foreclosures Means

This subject matter really warrants much more reportage and discussion. Mortgage servicers are and have been for a long time incentivized to fabricate defaults but not only for their own self enrichment in phony fees and lucrative default servicing income. Mortgage servicing fraud is the engine that drives Wall Street's credit derivative casino, feeding it a steady stream of bogus defaults along with attending insider servicing data in order for proprietary traders to place highly levered rigged CDS bets. Are we forgetting that the majority of these servicers are subsidiaries of investment banks making these bets? Let's not forget, it was investment bank traders who created the ABX Index. Every single mortgage servicer to ABX reference entities has been in recent years charged with mortgage servicing fraud, not only in state and federal courts but in FTC and OTS investigations resulting in "cost of doing business" settlements and supervisory agreements.
Bloomberg recently ran a good piece on yet another angle on how profitable insider knowledge of mortgage servicing fraud can be when utilized to hedge mortgage servicing rights. No, they didn't specify "insider knowledge of mortgage servcing fraud" in the article but that 900 lb gorilla IS IN THE ROOM.
www.bloomberg.com/apps...
To date TARP has committed $27,252,750,000 incentive payments for mortgage modifications as part of the administration's HAMP program.
bailout.propublica.org...
It is a repulsive travesty that too many recipients of these "incentive funds" are the most egregious long time perpetrators of servicing fraud as investigated by FTC and OTS along with countless class action lawsuits.
EMC Mortgage Corp. - www.ftc.gov/opa/2008/0...
Select Portfolio Servicing - www.ftc.gov/fairbanks
Ocwen Federal Bank - files.ots.treas.gov/93...
Bottom line is that in order to begin to correct the problem, we need to understand first and foremost that mortgage defaults and foreclosures are more profitable than most of us can ever imagine and certainly far more profitable than the 27 billion treasury is offering them to 'do the right thing'.

Debunking the 'Too Big to Fail' Myth Once and for All

Just can not help but think the "to big to fail" crowd believes they are too big and too interconnected to prosecute. Time and a few good prosecutors will tell.

"It was four years after the crash of 1929 before the major titans of Wall Street were forced to give testimony under oath to Congress and the full magnitude of the fraud emerged. That delay may well have contributed to the depth and duration of the Great Depression."
Pam Martens: How Wall Street Blew Itself Up
www.counterpunch.org/m...

Banks still abusing borrowers

Jim,
Thanks for posting Chris Adams' fine pieces which underscore inequity of Treasury handing $27,065,760,000 in TARP funds as "incentive" for mortgage modifications to servicers who continue to engage in epidemic mortgage servicing fraud. Granted, 27 BILLION is a lot of money for Treasury to guarantee these servicers but it is a far cry from lucrative profits servicers and parent firms make in defaults and foreclosures through multiple nefarious channels. Let's just say that servicers are somewhat akin to "feeder funds" that supplied Billions to Bernie Madoff. Servicers manufacture defaults that feed CDS casinos, fabricating “credit events” for highly leveraged players to cash in on. Bogus “Manufactured mortgage defaults” became profitable with ABX Index and other CDS venues when insider knowledge of servicers’ fraudulent activities was utilized to rig these not so "speculative" CDS bets targeting specific RMBS tranches. An innocent homeowner whose mortgage payments are current, that gets dragged into this casino has a snowball’s chance in hell of ever emerging whole again. Fortunately, of late many judges are seeing some of the the fraud behind this scheme and taking appropriate action while Treasury continues its travesty of rewarding the criminals.

Lawsuit Against UBS Resurfaces to Threaten Wall Street Itself

The criminal justice system really needs to shine light on these opaque CDOs, taking a good look at CDO internal makeup, determining which specific RMBS REITs have tranches contained therein. Once these are known, Pooling & Servicing Agreements will reveal mortgage servicers involved and forensics can go to work revealing vast extent of mortgage servicing fraud. With growing amount of case law, class action and FTC settlements against these servicers on the record, it won't take much forensic work at all to reveal overall scheme pattern. Investigators' time will be far better spent uncovering investment banks that held extensive short positions on these RMBS that went far beyond prudent hedging or speculation. Was UBS shorting their own garbage while pitching it to investors as AAA rated with full knowledge servicers were simultaneously at work manufacturing bogus defaults ? Did they place short bets rigged with insider servicing information? Purported firewalls did not stem flow of information between subsidiary servicers and traders. How many integral parts of these CDOs were also ABX.HE reference entities? Criminal incentive here will soon become blatantly obvious once this case (and many others like it) move beyond incriminating e-mails that reveal UBS CDOs as nothing more than a glorified waste management facility. They ALL did it. Too big to fail is NOT too big to prosecute.

Private Label RMBS: Opportunity of a Lifetime?

In any analysis of a RMBS, it's appropriate to look at pooling and servicing agreement {PSA] to determine mortgage servicers
involved in the deal, who owns these servicers, what the servicers' track records are, what legal action has been brought against them and what settlements have they participated in, among other details of all involved parties.
Per SEC filings for GSAMP 2006-HE5, servicers are:
Wells Fargo, Litton Loan Servicing, Avelo and Select Portfolio
Servicing. Litton and Avelo are owned by Goldman Sachs.
Select Portfolio Servicing is owned by Credit Suisse.
Wells Fargo, Goldman Sachs and Credit Suisse all hold
ownership positions in Markit. No conflict of interest here!

These four servicers each have an egregious track record of mortgage servicing fraud of which their parent companies are fully aware, taking full advantage of insider knowledge of bogus manufactured defaults so they can short ABX indices for obscene profit. Despite FTC, class action settlements and ongoing litigation, these four servicers continue to engage in servicing fraud, at behest of their masters who continue to place these rigged short bets while trying to interest investors in RMBS detritus of their own making.
Hopefully investors will take note of numerous Material Instances of
Noncompliance per 10k filings of which these bad actors have many for GSAMP 2006-HE5.
Just the tip of this iceberg:
www.consumeraffairs.co...
ml-implode.com/ailing/...
www.ftc.gov/opa/2007/0...
seekingalpha.com/user/...
If GSAMP 2006-HE5 is such a good bet, why not go short for the long haul and then you too can be participating in the biggest insider trading scheme of all time.

Derivatives Probe Raises Pricing Issues for Investors

Go with insider trading and expect this to be the largest insider trading scheme in all history. Markit's ABX.HE Index, the creation Wall St. traders was packed with subprime REITs in which mortgage servicing fraud by investment bank subsidiary and contract servicers was rampant. Investment banks directed servicers to manufacture bogus defaults so they could profiteer
with insider CDS bets.
``The real question is, Are there appropriate firewalls between trading desks and captive servicing businesses,'' said Josh Rosner, a managing director at Graham Fisher & Co., an investment research firm in New York. ``If there are not, it would appear to pose real ethical and possibly legal risks in pitting the fiduciary responsibilities of those banks against those investors they have an obligation to.''
www.bloomberg.com/apps...

Shedding Some Light on the Department of Justice's CDS 'Markit' Investigation

The malfeasance of Markit owners extends well beyond the Sherman Act deep into netherworlds of financial engineering and market manipulation.
In 2006 Markit rolled out the ABX.HE Index, a vehicle for subprime CDS that went far beyond commonly accepted risk management
with participants at times utilizing 100x leverage.
www.forbes.com/2007/08...
It is no surprise that Markit's ABX.HE index was the creation of Wall Street traders, employed by Markit's owners, major Wall Street investment banks.
www.bloomberg.com/apps...
What may come as a surprise to some is the extent of complicity between Markit owners and subsidiary mortgage servicing units which these investment banks rushed to acquire in recent years. It is epidemic mortgage servicing fraud that not only fed Markit's ABX CDS frenzy, mortgage servicing fraud and insider knowledge of it rigged these bets. To give an idea of how widespread mortgage servicing fraud is, the following 2 FTC settlements involved only 2
well known mortgage servicers and yet the combined victim classes exceeded 367,000 victims.
www.ftc.gov/os/caselis...
FTC v. Fairbanks/SelectPortfo...
www.ftc.gov/os/caselis...
FTC v. EMC/Bear Stearns
There were no fire walls between trading desks and subsidiary servicers who fabricated bogus defaults, "credit events" that subprime shorters could cash in CDS bets on. Just as mortgage REITs comprising ABX series were selected every 6 months in informal meetings with a Goldman Sachs' managing director, they were also targeted for mortgage servicing fraud.
DOJ needs to look at REITs that fed Markit's ABX beast, tracing them back to servicers' loan files where they will see servicer manufactured defaults, then find out who, higher up in this food chain gave servicers their orders and who placed all the CDS bets rigged with this insider knowledge. (Well, I think we know who did that.)
There is no doubt Markit has become a cartel tightly controlled by its Wall St. owners but it goes so much deeper. DOJ needs to investigate criminality behind thes bets on Markit indices.

Goldman Sachs: The Wall Street Bubble Mafia

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MBIA and BofA: Thoughts on Litigation

Tom,
Fine piece ! One unspoken element running through these cases - Mortgage Servicing Fraud. Merrill's subsidiary and contract servicers, following orders from higher up the food chain manufactured defaults. Servicers add their toxic fraud fabricating these 'credit events' to ensure CDS profit. Case in point, FTC settlement with ML contract servicer Select Portfolio Servicing fka Fairbanks Capital.
www.ftc.gov/bcp/cases/...
This case involved some 280,000 mortgage servicing fraud victims. FTC settlement goes into great detail on how mortgage servicing fraud is inflicted on borrowers who are in good standing with their loans.

Credit Default Swaps: Financial Weapons of Mass Destruction

"With credit default swaps, banks do better if borrowers fail" Gillian Tett - Thankyou for that . . .
With all due respect and compassion for the Kazakhs, we need not look so far away as Kazakhstan to see the very same story played out by the same Morgan Stanley along with JP Morgan Chase, Goldman Sachs, Bank of America, Citibank, HSBC Bank, Deutche Bank, Wells Fargo, the former Bear Stearns, Lehman Brothers, Wachovia, Washington Mutual, a host of other perpetrators and assorted accomplices right here in the U.S.. Far too many U.S. home foreclosures were caused by mortgage servicing fraud perpetuated by subsidiary or contract servicers of these Wall St. firms who instructed servicers to manufacture bogus defaults for credit default swaps profit. AMBAC, MBIA, AIG and other insurers failed to see that these 'protection buyers' were the very same ones controlling the mortgage servicers and directing them to fabricate defaults so they could collect, often many times over on their rigged bets. CDS bets were rigged on insider trading knowledge of epidemic mortgage servicing fraud. Firewalls between trading desks and subsidiary servicers were non-existent. Insider trading has never before reached such heights or created so much destruction and havoc in the lives of American families, all too many of whom were fully current on mortgage payments. Toothless FTC settlements have done nothing to stem the tide of mortgage servicing fraud. www.ftc.gov/opa/2008/0...
www.ftc.gov/opa/2007/0...
It is time time for forensic investigators to look at subprime shorting activity, correlate it with servicer malfeasance and prosecute those responsible to full extent of the law. Maybe if we had cleaned up our own back yard in the first place, the Kazakhs would be just fine today.

What Should the 'Aggregator Bank' Do with All Those Troubled Assets?

Wells Fargo and EMC Mortgage Corp. are heinous perpetrators of mortgage servicing fraud - www.ftc.gov:80/opa/200...
They are among many egregious servicers manufacturing bogus defaults, i.e. stealing homes in order to rig CDS bets for big 'credit event' payouts. Take a good look at origin of ABX subprime index, CDS IndexCo and IIC International Index Company Limited consortiums, now Markit Partners and tell me this game wasn't 'fixed' from the get go. There are no firewalls betweening trading desks and subsidiary servicers making this the biggest insider trading scheme of all time. All participants must be prosecuted and these abuses stopped if we ever hope to regain any semblance of trust at all.

How Merrill Lynch Moved Its 'Microwave Ovens'

Not hard to see why Merrill co-opted analysts with so much Mortgage Servicing Fraud in aggressively marketed ARS CDOs, retracting less-than-sanguine research in order to dupe private investors into buying this wreckage of Merrill's own making. Anything to squeeze money out of their CDO garbage and more important, get it off their books.

Cuomo Takes Action Against Citigroup, as ABCP Buyers Wait in Vain

The name of this scheme is 'milk the CDO' - ABS, MBS, REMICs, ReREMICs, REITs - consumer, investor, taxpayer alike. Hide over leveraged CDS losses in arcane sounding off balance sheet conduits - VIEs, SPVs, SPEs, SIVs that rarely if ever see daylight, then aggressively foist CDO wreckage from MSF (Mortgage Servicing Fraud) onto unsuspecting private investors in ARS fraud. SWEET !!!