Mike Dillon

CDS Regulation: Just One Simple Rule

Of course you're not making that claim, KD. But the larger picture is that books can - and oftentimes ARE - cooked, right down to loan level. And as long as the documentation/paperwork APPEARS to be legitimate then everything simply slogs on at it's usual pace.

The larger problem is that the assets that are being bet on with CDS are bogus from the get go and at least SOME of the investors - the ones on the inside - are aware of it. It's not a case of investors trying to create panic to drive market price - at least not with RMBS. It's a case of at least some investors knowing and/or being able to actually CONTROL what happens to the asset from the ground up thereby creating a "sure thing".

That's why you've got industry entities dealing in things like "ABX Index Protection" ... "Ocwen Announces $300M Venture to Acquire Residential MBS Lower Tranches and Mortgage Servicing" newsblaze.com/story/20...

CDS Regulation: Just One Simple Rule

On Nov 09 08:52 PM Kid Dynamite wrote:
"If my house really WAS on a landfill (MER, LEH, BSC) and my walls really WERE made of toxic waste (AIG, ABK), then buyers would realize that, and my home value would disintegrate. see?"

The problem with THIS argument (unlike the OTHER argument here: www.blogger.com/commen...), KD, is that the buyers wouldn't be any wiser as to the condition of your home as long as the environmental report came back good, the appraisal had been rigged, the assignments of mortgage fraudulently manufactured years after your note was actually lost by the note holder to preserve your chain of title, and the coat of paint was dry on your toxic waste walls during walk through.

If/when they catch on a year or three later, it's too late for them - but YOU'RE free and clear because you were able to liquidate your stealth toxic asset - as long as the buyer doesn't have the financial means to come after you for damages.

So why DO they call it ABX Index "Protection"? And why would mortgage servicers have any need for it?

Mortgage Servicer Ocwen: Ready to Roll (Up)

Try running Ocwen through dockets.justia.com - or even just a search engine for that matter - and see how much litigation they're involved in just at the federal level. Strictly my opinion, but I wouldn't want to be investing in a corporation with a reputation on the same level as Litton Loan or Saxon or Select Portfolio Servicing ( f/k/a Fairbanks Capital Corp.) or EMC.

Try running Ocwen's name through your favorite search engine along with " Mortgage Servicing Fraud " and see what you come up with. Again, just my opinion, and admittedly a jaded one after what I've been through the last 8+ years with SPS, but you'd be investing in a company that, judging by the litigation filed, appears to MANUFACTURE foreclosures against borrowers. If you have a mortgage and your own note has been securitized you could end up with an Ocwen or similar servicer - and similar litigation if you're not careful.

Mike Dillon
Manchester, NH
getdshirtz.com

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

First, I'm one of those 281,100 FTC-certified victims of Fairbanks/SPS that Mutant Capitalism cited above. USA/Curry v. Fairbanks happened in 2004 ($55M in exchange for admitting no wrongdoing...$40M divided by 280,000 is what?) and Mortgage Servicing Fraud has been around far longer than that. Quite possibly right back to early 90's when Dime Savings Bank imploded - if not sooner. FTC v. EMC/Bear happened in 2008. 86,000 victims split $28M if I remember correctly. Apparently, USA/Curry wasn't the "deterrent" that it was heralded to be by the FTC, HUD and other regulatory agencies.

Until the phrase "without admitting wrongdoing" is stricken from legal dictionaries, neither any of what DOJ may find nor the civil repercussions will have any meaning. Until criminal charges are brought, civil "penalties" will be viewed as nothing more than the cost of doing business - especially as long as the perpetrators (perpetraitors?) can tap into D&O and/or E&O insurance policies to cover any financial settlements.

We're beginning to see obvious signs of potentially intentional malfeasance in the industry via a recent case in NY involving Deutsche and MERS (surprise, surprise). So is it REALLY that much of a stretch to think that the rest of the gang was/is in on it?

foreclosuredefensenati...
"Significant in the ruling was the court’s observation and question as to why, 142 days after the borrower was claimed to be in default, that MERS would assign a “toxic” loan to Deutsche Bank. The court also required a satisfactory explanation, by sworn Affidavit, from an officer of the securitized trust as to why, in the middle of “our national subprime mortgage financial crisis”, Deutsche Bank would purchase from MERS, as alleged “nominee”, a nonperforming loan. The court further inquired as to whether Deutsche Bank violated a corporate fiduciary duty to the note holders of the securitized mortgage loan trust with the purchase of a loan that had defaulted 142 days prior to its assignment from MERS to the trust.

It appears that Deutsche Bank may have done so to take advantage of one or more “credit enhancements” inside of the securitized mortgage loan trust which pay benefits upon declaration of default. These credit enhancements are extremely complicated and multi-layered, and are required by law in connection with the issuance and sale of the mortgage-backed securities “backed” by the trust.

The assignment of the mortgage and note to the securitized trust, which were already in default well in advance of the assignment, would permit Deutsche Bank to both realize a profit through payment of credit enhancement benefits (which effect a pay down of the claimed “default”) while simultaneously permitting Deutsche Bank to institute a foreclosure, resulting in a “double dip” for Deutsche Bank. This is, of course, illegal, but unless competent counsel raises the issue, it goes unnoticed and Deutsche Bank, like so many other foreclosing parties, winds up stealing the borrowers’ property and getting paid for doing it. "

How Merrill Lynch Moved Its 'Microwave Ovens'

Mr. Zamansky,

I can't thank you enough for putting in writing what so many Mortgage Servicing Fraud victims have been saying for years now. In order for anything to change in the market, SOMEone is going to have to either admit or be convicted of wrongdoing. Without that, it's just going to continue as business as usual.

Mutant Capitalism has it right, from my meager understanding of ARS CDOs. If you, as a corporation, know that you can tank specific offerings either directly or through the actions of your servicer, that tends to give you a bit of an advantage on everyone else. Personally, I find it interesting that every RMBS trust that I've looked at filed a 15-15D within 12-16 months of issuance regardless of the actual shareholder numbers. That tends to cover any tracks rather nicely when you don't have to report to the SEC. And then you can polish the carnage up and sell it off as CDOs? If I wasn't so disgusted, I'd be impressed with the sheer ingenuity. We're all in trouble if this method works on REAL toxic waste...

The reason that I've been watching this? I've got a $13.5 million racketeering action against Fairbanks/SPS, LaSalle, Merrill Lynch Mortgage Capital, Merrill Lynch Mortgage Investors, and their local legal counsel, Harmon Law Offices awaiting trial in USD NH. I've already been awarded permanent injunctions and contempt orders at the state court level.

I can't help but wonder just how much of the MLMI 2002-AFC1 trust that Superior Bank sold into was "engineered". Of course, I may be completely off base with all of this...

Regardless, while it may not be immediately visible on the surface or directly related down the road, I know 281,100 FTC-certified MSF victims, and many, many others who would thank you, Mr. Zamansky, for voicing just that single thought... Maybe this time someone will listen...