(Reuters) – Wall Street’s reaction to the allegations that some banks cut corners while foreclosing on 3 million homes since 2007: Pay your mortgage in the first place.
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The building furor over whether the largest U.S. mortgage lenders used so-called robo-signers and incomplete paperwork to force delinquent borrowers from their homes has mushroomed into a probe by the attorneys general in all 50 states, with U.S. Congressional hearings not far behind.
Those on Wall Street, however, are largely unsympathetic, insisting that possible errors in the foreclosure process are beside the point, that the process begins only when a borrower starts missing mortgage payments.
“If you didn’t pay your mortgage, you shouldn’t be in your house. Period. People are getting upset about something that’s just procedural.” said Walter Todd, portfolio manager at Greenwood Capital Associates.
Just procedural?
Actually these are FELONIES Mr. Toad…
Some said the issue is one of personal responsibility for one’s own debts.
“Everyone’s responsible for following the law. If we all don’t have to pay our mortgage, should we just stop paying taxes, too?” said Anton Schutz, president of Mendon Capital Advisers. “Your mortgage didn’t get to a robo-signer by accident, it’s because you’re not paying.”
And now you want to talk about following the law?
Whatever, dude…
Check out the rest here…
Be sure to get involved in the comments on the original post…
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“If you didn’t pay your mortgage, you shouldn’t be in your house. Period.”
So, if you paid your mortgage, you should be in your house. Period.
I am filing legal papers this week.
I suggest all homeowners go to the county courthouse and records dept and ask for your address or you name be checked for recorded mortgages.
You’ll be suprised that in most cases there is NONE filed against you. To any outsider, you own your home free and clear. according to the records. The problem I see is who do you owe? That is reason enough to quit paying until you can see a note held by someone that you should pay.
Send a registered letter to whoever says you owe them and sometimes it is more than one saying it. Ask for an officer of that company to sign and be notorized that they have the original and send you a copy before continuing to pay. All I got awas a copy of a copy and from two of the ones wanting me to pay them. Wouldn’t it be a shame to finish your last agreed on payment and not receive like we did in the past, athe original marked paid in full.
How can you sell your home without giving a clear title and now title companies won’t give you clear title so you are stuck. Some call it title as usual, but check added paragraphs that eliminate real clear title language.
Question: what are the 45 States mentioned above where Mortgage is just an addition to the NOTE?
the only mortgages that should be paid are the ones from small community banks. I would suggest anyone that doesn’t pay a mortgage obtained from a large money center bank to not feel guilty about it. The american people will drive them out of business; no matter what it takes.
Mr. Toad made a statement and I must agree with him,,” Your mortgage didn’t get to a robo-signer by accident”.. it was no accident…he is correct there….robo-signers were GIVEN the documents to sign with orders to ‘push out’ a quota every day. Common sense would tell anyone that whoever put the information on the documents or affidavits would be the person responsible to state the truth. So if that person was given orders to fudge the truth, than the ball keeps rolling to the next giving the orders..well, need I say anymore on this…how high on the ladder must we climb. The higher you climb on a ladder the closer you are to the problem you want to solve.
To say ” possible errors in the foreclosures process are beside the point”… 1% may be an error…the rest just may be called a deliberate fraudulent ‘ACT’ to deceive. In foreclosure, nothing is beside the point. The process did not begin when the payments stopped. The process began when Sub-primes and the ARM’s were part of the ploy…these mortgages were doomed before the ink was dried. From than on it just got deeper…with the laws and rules changed by the banksters to seek all angles to grab with greed. Madoff was a peach compared to these rotten apples…and he is in prison.
To blame this on borrowers not being responsible to paying their debt..I cannot blame them..the writting was on the wall all along. Borrowers were struggling to stay afloat with NO help from the banks..or let’s say their servers…to see what was going on behind closed doors. The doors are open now and those quilty will have to come out and face the world. It’s a shame that those who have felt the pain of foreclosure or are facing foreclosure cannot receive and claim security of the financial industry with a slice and dice given to each person that has a story of foreclosure.
I am 72 years young and own my home, paid from my properties for retirement. I am lucky to say I lived when banks were home town banks…a pleasure to remember.
Mr Todd,
You are indeed a moron.The best thing that could happen to you is to lose your job, then find out that your wall st buddies had stolen your 401k and other investments. After all of that, then find out the robber barons are giving you the run around for a mortgage modification. Your next step will be finding out you too have been swindled and your little mcmansion is being taken by you neighbor banker down the road, who has no real right to do so.
Watch out sir, God almighty has a way of turning these things back on people, who show no compassion for others. I guess your compassion went with that first million. What goes up will sometimes come back down.!
You know, I lost my home in a non-judicial foreclosure. I’m not even trying to get it back. But after the fact, as I learned how my wife and I had been manipulated into taking an ARM, how the appraisal had been a complete sham, how the actions of the servicers were not in the best interests of the people who actually put up the money for the loan, and how they forced us into foreclosure when a reasonable (real) lender would have gladly taken the short sale offer we had in place…well, that’s when I got royally pissed off.
And then I discovered the robo-signers. And then I discovered the lies in the Pooling and Servicing Agreement. And then I even discovered that my previous mortgage may never have been legally discharged. And then I learned that the current owner of my house might have a loan just as bad as the one I had, and most certainly has a huge title mess to deal with.
And with a deficiency that should not exist at all, and possible tax consequences, hanging over my head, getting a “free house” is the furthest thing from my mind.
And pissed off doesn’t even begin to describe what I’m feeling now.
You’ll feel alot better when you get an attorney and file a wrongful foreclosure suit. In my state, I believe that ALONE is a $150K fine… This is why Bank of America’s stock hit a 52 week low this week… they are terrified of wrongful foreclosure suits and suits from investors who want their money back from securities that were never delivered to the trust they bought into.
It’s going to be a circus, and there isn’t enough money in existence to compensate everyone as the law allows. I have NO IDEA how this will play out.
Good luck!
Its Skank of America-not Bank of America!!!!
Banksters, investment or portfolio mngrs…………..all greedy liars,,,,,,,,,,,,,,, scumbags,,,,,,,,, F-CK EM’.
Jamie Dimon is a liar. What about all of us that were NOT in default until Chase used Unfair and Deceptive Practices, among several others, to manipulate and place homeowners in default? The only way to seek justice is a JURY TRIAL. I don’t care how long it takes. It WILL happen and the media will report it unless Chase can come clean and admit exactly what happened and compensate for the severe damage it’s caused. Not possible because Chase refuses to admit to any wrong doing. Chase screwed with the wrong Oklahoman this time. I’ll never stop fighting until I get what my family deserves. Every month makes me stronger and more determined. 21 long months. You think it’s bad now with the media reporting the news and depositions being released, my goal in life is to defeat Chase and help many others in this world of hurt they victimized. I will fight and report it from every direction. I made a promise to my family, myself and to Chase, I WILL win this battle. Jamie Dimon talks out of both sides of his mouth. Your staff did this to you Jamie Dimon so stop blaming everyone else. You know it’s the truth…
Okie
Fannie Mae is a GSE. They were given trillions of dollars to keep homeowners in their homes. Instead of facing the loan modifications head on they let the mortgage servicing industry lie and decieve us into foreclosure. I feel that this is an act of government sponsored terrorism towards struggling homeowners by Fannie Mae.
The Mortgage Fraud Scandal Is The Biggest In Human History
L. Randall Wray, Benzinga | Oct. 14, 2010, 9:30 PM | 5,181 | comment 48
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L. Randall Wray
L. Randall Wray is a professor of economics at the University of Missouri — Kansas City.
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We have long known that lender fraud was rampant during the real estate boom. The FBI began warning of an “epidemic” of mortgage fraud as early as 2004. We know that mortgage originators invented “low doc” and “no doc” loans, encouraged borrowers to take out “liar loans”, and promoted “NINJA loans” (no income, no job, no assets, no problem!). All of these schemes were fraudulent from the get-go. Property appraisers were involved, paid to overvalue real estate. That is fraud. The securitizers packaged trash into bundles that ratings agencies blessed with the triple A seal of approval. By their own admission, raters worked with securitizers to provide the rating desired, never looking at the loan tapes to see what they were rating. Fraud. Venerable investment banks like Goldman Sachs packaged the trashiest securities into collateralized debt obligations at the behest of hedge fund managers–who were allowed to choose the most toxic of the toxic waste—then sold the CDOs on to their own customers and allowed the hedge funds to bet against them. More fraud.
Indeed, the largest financial institutions were run by their management as what my colleague Bill Black calls “control frauds”. That is, the banks used accounting fraud to manufacture fake profits so that they could pay huge bonuses to top management. The latest data out on Wall Street bonuses show that these institutions are still run as control frauds, with another record year of bonuses paid by cooking the books. The fraud continues unabated.
This is the biggest scandal in human history. Indeed, all previous scandals from around the globe combined cannot even touch this one in terms of scale and scope and stench. This is the mother of all frauds and it will be etched into the history books for all time.
Many have called for a national moratorium on foreclosures. Even some of the banks that have been run as control frauds have voluntarily stopped foreclosing. And yet President Obama, ever the centrist, has taken sides with the Securities Industry and Financial Markets Association, which warns that “it would be catastrophic to impose a system-wide moratorium on all foreclosures and such actions could do damage to the housing market and the economy”.
No, it would expose the securities industry, itself, as the chief architect of the biggest scandal in human history.
Now we know that it was not just the mortgage brokers, and the appraisers, and the ratings agencies, and the accountants, and the investment banks that were behind the fraud. It was the securitization process itself that was fraudulent. Indeed, the securities themselves are fraudulent. Many, perhaps most, maybe all of them.
Some are trying to argue that this is just a matter of some missing paperwork. A moratorium would allow the banks to get all their ducks in a row so that they can supply all the documents needed to foreclose.
However, as reported by Ellen Brown (at Web of Debt) and by Yves Smith (at Naked Capitalism), the paperwork does not exist. Worse, as Yves has discovered, the banks are furiously working to manufacture documents, aided and abetted by companies like DocX that specialize in “document recovery solutions”—for a fee they will create fraudulent documents that banks can use in court.
The banks would like us to believe that in the speculative frenzy of the real estate boom they “forgot” to do some of the required paperwork. That is not likely. The absence of the documents was required to run the scam.
Recall that the banks invented “no doc” mortgages. This was not at the behest of no-account borrowers, high school dropouts with bad credit histories who were duping investment bankers into making mortgage loans they could not repay. No, these mortgages were created and endorsed by originators and securitizers and credit raters to create a patina of “plausible deniability” to be used later in court when they were sued for fraud by investors who bought the securities and by the borrowers who could not possibly service the mortgages. Because if the originators had ever requested the documentation from borrowers it would have demonstrated that the mortgages and the securities were frauds.
Similarly, the paperwork required for the securities was never done because the securities were fraudulent. Yves helps to explains why. The trust that purportedly underlies a mortgage backed security must hold the “note”—the borrower’s IOU (in 45 US states the mortgage that is a lien on the property is an “accessory” to the note, and is not sufficient to do a foreclosure). If the note is not conveyed to the trustee (usually before closing but sometimes up to 90 days after signing) the securities are no good.
This is not just some pesky little rule imposed by a pin-headed regulator. This is IRS code. As reported by Brown, MBSs are typically pooled through a Real Estate Mortgage Investment Conduit (REMIC) that must according to the Internal Revenue Code hold all the paperwork demonstrating a complete chain of title. Done properly, taxes are avoided. Since a number of intermediaries are usually involved from the mortgage originator through to the trustee of the REMIC, there must be endorsements all along the line. However, it now appears that most of the original notes are still held in the loan originator warehouses. There are no endorsements. The trustees do not have the notes. Can anyone say “tax fraud”?
So why weren’t the notes conveyed to the REMICs? There seem to be two possibilities—probably both of them correct. Karl Denninger at MarketTicker believes it was because the REMIC trustees feared an audit by investors in the securities. If the documentation existed, it would show that the mortgage loans were fraudulent. Far better to “lose” the docs, then later manufacture new ones for the foreclosure.
According to Brown (quoting Steve Liesman and Neil Garfield), the other possibility is that the tranching process actually prohibited assignment of the notes to the REMICs. Bundles of mortgages of varying quality would be tranched into a variety of securities, say from AAA to BBB. But no individual mortgage is actually assigned to a particular tranche—until it defaults. When one defaults, it is assigned to a lower tranche security and then the foreclosure process begins. This means that from inception of that BBB security, there was no way to assign a note to the trustee because the trustee did not know in advance which mortgage would default. The REMIC trustees tried to get around that by using a dummy conduit called MERS (Mortgage Electronic Registration System) that would “hold” the mortgages and assign them to the proper tranches later. But they do not have the paperwork either, and some courts have rejected their claims as owners.
This is a complete mess. What President Obama must understand is that fraud is endemic at every level of the home finance food chain. We were long told that securitized mortgages cannot be modified because of the complexity involved—modification of most mortgages would require consent of the holders of the securities that each have a piece of the mortgage. But actually it is impossible to tell how many—if any—of these securities holders have a legitimate claim on any of the mortgages. Simply imposing a moratorium will not be enough—it will just give the banks time to manufacture false documents, encouraging even more fraud. Meanwhile, half of all homeowners with mortgages are already underwater or are within spitting distance of being underwater. Many of these are drowning because the epidemic of fraud perpetrated by financial institutions destroyed our economy and caused housing prices to collapse.
The President needs to try a different approach, consisting of the following series of steps:
1. Declare a national bank holiday that would close the biggest financial institutions—say, the top dozen or so. Send in the supervisors to examine their books to uncover fraud. Determine which ones are insolvent and resolve them. While resolving them, net their claims on one another (including derivatives). Do not allow any insolvent institutions to reopen, and do not use the resolution process to merge institutions (we don’t need even bigger “too big to fail” banks). Prosecute the crooks and jail the guilty.
2. Stop all foreclosures. Investigate and prosecute all institutions that have been selling or buying fake documents to be used in foreclosures. Prosecute the crooks and jail the guilty.
3. Announce that all homeowners who occupied their homes on October 1, 2010 will be allowed to remain in their homes indefinitely. Create a national mediation board to adjust all mortgage payments to “owner’s equivalent rent”—the fair value of rent for the home. Establish a fund to provide rental assistance to keep low income homeowners in their homes.
4. Give purported mortgage holders 30 days to produce the original notes; if they cannot find them, hand the homes over to the owner-occupants—free and clear of debt.
5. Create a process to allow securities holders to sue for recovery of value. This must be national—state courts will not be able to handle the case load.
6. Direct the GSEs to refinance mortgages at a low fixed rate. Mortgages would be provided against real estate appraised at fair market value to any borrower for a primary residence. The GSEs would pay holders of existing mortgages only current fair market value. Those holding these mortgages can seek redress through the process outlined in step 5. Only in the case of borrower fraud would the homeowner be held responsible for losses attributed to the refinancing.
7. There will be fall-out from losses. It is better to deal with the collateral damage directly than to prop up the control fraud banks. For example, pension funds hold toxic waste securities as well as equities in the control fraud banks, and by all reasonable accounting the Pension Benefit Guarantee Corporation is already insolvent. But it is better to directly bail-out pensions than to maintain the charade that fraudulently created securities have value.
Bill Black likes to joke that economists are afraid to use the “F” word (fraud). The President must come to realize that there is no other word that can be applied to the US home finance system. Until we deal with the fraud we will never resolve this financial crisis.
(Go to http://www.nakedcapitalism.com for Yves Smith, “4ClosureFraud posts lender processing services mortgage document fabrication sheet”, October 3, 2010; and to http://www.webofdebt.com for Ellen Brown, “Foreclosuregate and Obama’s ‘pocket veto’”, October 7, 2010.)
L. Randall Wray is a Professor of Economics, University of Missouri—Kansas City. A student of Hyman Minsky, his research focuses on monetary and fiscal policy as well as unemployment and job creation. He writes a weekly column for Benzinga every Tuesday.
He also blogs at New Economic Perspectives, and is a BrainTruster at New Deal 2.0. He is a senior scholar at the Levy Economics Institute, and has been a visiting professor at the University of Rome (La Sapienza), UNAM (Mexico City), University of Paris (South), and the University of Bologna (Italy).
Read more: http://www.businessinsider.com/mortgage-fraud-scandal-2010-10#ixzz12SFTHIus
So the RAPIST is blaming the victim for him having committed the crime?
Well, then the RAPIST should call and let all the other victims, who have no idea they were also involved in the gang bang, that they are also guilty of having forced him to commit his crimes.
That is a very nice twisted matrix of opinion. So we, the ones that are fighting, and those who for some reason were current and are now allegedly in arrears, those whose loans have been paid off several times over by a myriad of different financial vehicles so we forced them to financially, emotionally and socially rape us.
we forced them to cut corners, to become predatory servicers, to run to the federal Government and get bailed out. So they claim we the American people forced to devise a fraudulent pyramid scheme and to as Mr. Garfield says, we force them to ” sell empty oil tanks” to investors and to provide non compliant, unenforceable, usurious, fraudulent loans to all of us, even those who somehow claim to be more responsible than us the DEAD BEATS of America, as the so have baptized us all.
as far as i am concern Mr. Wall Street guys F&**k you and your companies as well.
You will not get a call nor a visit from me once you get your orange suit. And I hope that for one of THOSE TECHNICALITIES, you get to drop your soap in the shower, so bend over baby, now it is your turn.
“Your mortgage didn’t get to a robo-signer by accident, it’s because you’re not paying.”
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That statement is pure gold. One problem, though, how do you explain the fact that President Obama’s Satifactions of Mortgage were signed by robo-signers? Was that his fault?
Wall Street is full of morons. As stated in the documentary “Plunder!” – IT’S JAIL OUT TIME NOT BAIL OUT TIME
Mr Walter Toad’s comments are not only ignorant but also inspiring. I only wish I had a soap box big enough
to reach all hard working Americans and tell all of the m to stop paying mortgages and credit card debt for 6 months. If anyone in this great country of ours needs to be put straight it is Wall Street, Banks and so called investors who are nothing more then those who take our retirement monies and use them for personal gains then have the audacity to say we are the ones that are wrong.
We who owe mortgages did not commit fraud, you and your cohorts did and in my, United States that is criminal and you should got to jail not get a slap on the wrist because the entire monetary system and the economy are at stake who cares let if fail. Let the chips fall where they may but I for one will not buckle.
50 Attorney Generals all must believe this needs investigation but this one idiot “Toad” thinks we are taking advantage well guess what we have been pushed into this and now we want our day in court so Mr Toad or frog or whatever go and ———- yourself.
What a moron !
He talks like a fool, acts like a fool,must be a fool.
“If you didn’t have the money to roll over yesterday’s short-term loan, you shouldn’t be in business.”
Isn’t this what happened to the entire financial industry when Bruce Bent’s money-market fund broke the buck? No, the government stepped in and saved the banks, along with Mr. Toad’s and Mr. Schutz’s assets and careers. Ask your aged relative how ZIRP, the government policy that replaced the failed money market, has decimated their government-based incomes.
“Everyone’s responsible for following the law, except the banks when it comes to transfers and assignments of loans into trusts.” Mr. Schutz asks that he be allowed to amend his statement to save his assets and career.
Funny thing that tax question.
You see, REMIC’s are only tax exempt if the notes were attached within 90 days of the pool closing. Otherwise, I’m guessing they’re subject to corporate income tax. Tax, interest, and penalties on all those mortgage payments that may not have been adequately attached adds up to paying off the national debt. Better yet, since the money was likely used to pay the bonuses of people like Anton above, and since I’m sure Anton managed it well (cause he likes to talk about responsibility and all), the IRS can just go get it back from him.
Note to bankers: it’s time for all of you to shut-up. We’re tired of hearing about “irresponsible” borrowers when the US Treasury has spent $13 trillion and counting to subsidize your irresponsible, reckless, dishonest business practices.
Daym skippy! Agreed!!
First of all, the BANKS set out to DEFRAUD the HOMEOWNERS at the ONSET. THE BANKS created “no money down” and “interest only ” mortgages to ENTICE the homeowners into mortgages with the SOLE and ONLY Purpos to AMASS numerous homes to FUNDS their DEFAULT SWAPS. Even when the Homeowner PAID the unlawful MORTGAGE the BANK then UNLAWFULLY RAISED the mortgage monthly payment by hundreds of DOLLARS to ENSURE the homeowner DEFAULTED. Why? So the BANK could collect 10x the homes value in insurance payments.
Furthermore, no broke ass home owner can go to a bank and get money if the BANK does not GIVE IT TO THEM. The BANKS perpetrated this fraud from the begining. Like DRUG DEALERS, first targeting the ELDERLY with REverse mortgages, then MINORITIES with ridiculous mortgage packages and now the WORLD because the BAD FAITH ACTS OF THE BANKS Are FINALLY CATCHING UP WITH THEM.
So over 2,000,000 Homeowners DUPED the BANKS? GIT REAL!!
That’s right Mr. Todd, people should be foreclosed on when they don’t pay their mortgage. No argument there. He’s one of those people that think the woman who got raped brought it on herself and deserved it by being to attractive in public.