UNSEALED: DOJ Confirms Holders of Securitized Loans Cannot Be Traced

Road to Securitization

UNSEALED: DOJ Confirms Holders of Securitized Loans Cannot Be Traced

Originally posted at http://mortgageflimflam.com
With additional edits by http://4closurefraud.org

In a filing unsealed on June 3, 2016, the Department of Justice (DOJ)  confirms what many of us have known for years. Nobody, not even the U.S. Government, with massive resources, can determine who owns your loan and has the right to collect on your mortgage.

The information comes from case files unsealed on June 3, 2016 by  federal Judge Yvonne Gonzalez Rogers of the Northern District of California in the case of the United States v. Discovery Sales, Inc. The case involves some 325 fraudulent loans originated by Discovery Sales, Inc. (DSI) between 2006 and 2008, many of which were then sold to Wells Fargo Bank and JP Morgan Chase to securitize.

The Discovery Sentencing document on page 9 states:

The originating lenders who made loans to purchase DSI properties, including Wells Fargo and  J.P. Morgan Chase, generally would not keep the mortgages and thus did not end up losing money as a result of the DSI fraud scheme. Instead, they would sell the mortgages to other banks who would package them in securities that were sold to other investors. These securities failed when the underlying mortgages went into default. It was impossible to trace the majority of the mortgage loans on the over 300 homes sold by DSI that were the subject of the FBI investigation; it would have been harder yet to identify individual victims of the fraud given that the mortgages were securitized and traded. (Emphasis added.)

To add more outrage to this case, while the government acknowledges the damages from the fraud scheme resulted in $75 million in damages, the amount being paid by DSI in restitution is $3 million to Fannie Mae and Freddie Mac. That is all, along with an $8.5 million fine that the government will pocket. Once again the government is taking all of the money from a settlement with a fraudulent mortgage lender, and giving nothing to the people who were damaged.

Oh, and one more thing. The “preferred lenders,” Wells Fargo Bank and J.P. Morgan Chase, who were also involved in the scheme, were not charged even though it states they knew about DSI’s “shenanigans to inflate the value of their homes” in the sentencing document:

The parties agree that the preferred mortgage lenders, Wells Fargo and J.P. Morgan Chase, were on some notice that DSI was engaged in various shenanigans to inflate the value of their homes. (Emphasis added.)

During the time of the information, DSI worked with two “preferred lenders,” Wells Fargo Bank and J.P. Morgan Chase. Certain employees and managers of those two preferred lenders knew about the incentive programs offered by DSI and the builders, and knew that the incentives were not being disclosed in the loan files. (Emphasis added.)

Even though Wells Fargo and JP Morgan Chase had the information that the loans were fraudulent, as per what has become standard procedure, the DOJ brought no charges against the banks. There is nothing new about banks selling off defective, fraudulent loans to securitized trusts, and once again the DOJ has found no reason to prosecute too big to fail banks for fraud.

There is much more to this story which we will not delve into at the moment, including the history of the Seeno family who owns DSI and their connection to other funny business…







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18 Responses to “UNSEALED: DOJ Confirms Holders of Securitized Loans Cannot Be Traced”
  1. Lori says:

    Thank you for your fantastic blog.

    LLCs are picking up on the foreclosure business now – lending, foreclosing, selling and buying.
    60 Minutes ran a story not long ago about foreigners using such corporations to launder money,
    through unethical lawyers.
    I wonder how heavy the LLC operations are.
    NY DoS doesn’t know who the members are when they approve an LLC incorporation.
    And IRS requests that if there is a Nominee of an unidentified entity, they should update info on their EINs. LoL!
    Helping a friend who doesn’t have a lawyer and have found a corrupt judge, and fraud and forgery.

  2. Kent says:

    Not surprised after battling Chase for 7 years I just received a letter from them dea celebrating my loan

    • Sam says:

      Kent, I am curious as to what you received from Chase. Not sure what this means,

      ” I just received a letter from them dea celebrating my loan.”

      Thanks for the clarification.


  3. lvent says:

    ILLINOIS 1.) FALSE PRETENSES: In ILLINOIS, whoever by any false representation or writing signed by false representation or writing signed by him of his own respectability, wealth or mercantile correspondence or connections, obtain; credit and thereby defrauds any person of money, goods, chattels or any valuable thing, or who procures another to make a false report of his honesty, wealth & chattel, shall return the money, goods & chattel & be fined & imprisoned for term not exceeding one year.

    2.) Obtaining money or property by bogus cheques, the confidence game, or three card monte, sleight of hand, fortune-telling is punishable by imprisonment from one to ten years; obtaining goods from a warehouse, mill or wharf by FRAUDULENT RECEIPT wrongfully stating amount of goods deposited is punishable by imprisonment for not less than one & not more than 10 years.

  4. lvent says:

    Then there’s the matter of if their CPA is credentialed or not which in ILLINOIS is legally required.

    The AFFIANT who is swearing they’re qualified to examine the purported loan file & have transacted business on behalf of the AFORESAID from the onset must be legally qualified to do so under the PROVISION OF THE ACT, (735 ILCS 5/13-214.2).

  5. lvent says:

    Or request their BEREP registration because without that there can be no E-DISCOVERY & they would have to withdraw.

    Though I don’t believe electronic discovery is legal because the original written receipt is the only valid legal proof money changed hands, some judges let them enter their wallpaper to hide the ORIGINATION FRAUD.

  6. lvent says:

    They don’t want you to know who the enemy is.


    • Good to see you! It’s been a long time…

      • lvent says:

        Thanks! I’ve been really busy.

      • lvent says:

        Nothing that is redacted should be considered legal evidence of nothing but destruction of evidence, uttering, fraud & forgery under FALSE PRETENSES.

        When mistakes on the face get made they must be corrected by re-entering the original with the proper correction made on the face of the original.

        They would have to have the original to do that legally & no copies would suffice because they’re copying counterfeits by entering copies without entering the literal evidence itself.

      • Sam says:

        Thank you for creating this website!
        I have been dealing with one of Fannie Mae’s “servicers” since 2014. I have been dealing with them myself, in propria persona, sui juris. I didn’t answer their complaint. I filed a motion to dismiss. They responded with their own motion and then I filed a second motion. My contention is if one answers the complaint and admits that there was/is a contract the game is over and they win. I filed motion following NJ Court rules demanding that they follow NJ Court Rules and provide me and the court with a certified copy of the original Note and Mortgage contract or the original. They have yet to produce either one for obvious reasons, they can’t because they don’t have them. They also failed to follow NJ Court rules in their complaint because they failed to mention why Bank of America was named as a defendant as well as me.

  7. mike Drouin says:

    Everybody is still swallowing the BIG LIE here !!! They weren’t Mortgage loans at all !!! They deceived you into thinking you were negotiating a mortgage contract when they brokered a SECURITIES CONTRACT . It was never the intent of the sub-prime lenders to enter into a mortgage contract with anybody !! Conduit financing was used by these entities and nobody in the alleged chain of securitization had any skin in the game !!! SO WHAT GIVE ANY OF THEM THE RIGHT OF TRANSFER ?? Rescind the bogus Mortgage contract !! they stole your personal property ( promissory note ) and used it for self gain , and without your permission !! That is against both State and Federal Law(s) There was never any CONSUMATION of a mortgage contract !!!

    • mike Drouin says:

      And by the way , you are entitled to every penny they made because of your proprietary interest in the asset ( home ) that gave value to the certificates they sold over and over again !!!

    • Ian Sopko says:

      Just saw these june 16 posts on 4closurefraud. Yours was a pretty succinct explanation of the securities contract v the mortgage contract issue which has been idling in the background of this whole mess for years-
      So you have any case law, complaints, legal papers discussions etc
      To go
      Along w this train of thought?
      Thanks, Ian Sopko

  8. perpetualWAR says:

    So, just as we suspected all along! And the douchebag government sealed this evidence allowing HOW MANY HOMEOWNERS (?) to unlawfully be foreclosed?

    I’d say this is either burning torches or bubbling vat of hot tar kind of stuff. Who wants to help me start the fire under the vat of tar?????

  9. “In 2006 and 2007, Citigroup Inc., through certain of its affiliates (“Citigroup”), securitized thousands of residential mortgage loans and sold the resulting residential mortgage backed securities (“RMBS”) for tens of billions of dollars to investors, including federally insured financial institutions. Prior to securitization, Citigroup conducted due diligence on loans (including credit, compliance, and valuation due diligence). In securitizing and issuing the RMBS, Citigroup provided representations in offering documents about the characteristics of the underlying loans. As described below, in the due diligence process, Citigroup received information indicating that, for certain loan pools, significant percentages of the loans reviewed did not conform to the representations provided to investors about the pools of loans to be securitized.”

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