Random Repost Blast from the Past. Going to start off each day with a random repost from the archives…

The Story of Bear Stearns Direct Involvement In And Support Of Predatory Lending In America!

Here is a 105 page report witten by Nye Lavalle going back over ten years…


This report documents what is now known to be one of the largest predatory lending, servicing and financial scandals in America. The report documents and provides conclusive proof of widespread corruption, accounting fraud and abuse existing at Bear Stearns & Co., a major Wall Street investment bank and related subsidiaries.

This report is being provided as a service to Federal and State regulatory agencies; members of the media and press; politicians and congressional committees investigating predatory lending; concerned Bear Stearns stockholders; Bear’s auditing firm, Deloitte & Touche; partners, employees and members of the board of directors of Bear Stearns; and civic, consumer and legal groups investigating predatory lending.

The objectives of this report are as follows:

(a) Shed focus and light on Bear Stearns and its predatory lending practices;
(b) Cause Bear Stearns to cease its predatory lending practices;
(c) Cause Bear Stearns to change its policies, practices and procedures;
(d) Insure that Bear Stearns complies with Federal and state laws and regulations;
(e) Cause Bear Stearns to provide fair, reasonable and just compensation to the victims of its predatory lending abuses;
(f) Provide regulators, lawyers, press, media, civic groups, Congress, State AGs and others investigating predatory lending with a “blueprint” and “genetic” map of how predatory lenders actually operate and their various schemes, scams and programming methods;
(g) Focus attention on the national and community crises called predatory lending;
(h) Educate consumers, the public, the courts, Congress and corporate America on the subject of predatory lending; and
(i) Define and highlight actual predatory lending practices, schemes and abuses.

Bear Stearns & Co. [Bear Stearns] is one of the nation’s leading “market makers” in what is called the mortgage backed securities market. From complex mortgage backed securities, collateral mortgage obligations and other mortgage “derivative” products, Bear Stearns has been actively involved in the development, placement and market [“manufacturing”] of mortgage securities in what is termed the sub-prime B & C markets for the past decade.

Sub-prime lending has recently come under intense scrutiny by various federal and state regulatory agencies, the U.S. Congress, state legislatures and various civic groups for “predatory lending” abuses. Attention, however, has been primarily focused upon unscrupulous mortgage brokers who use a variety of fraudulent, predatory and abusive practices to take advantage of elderly, disadvantaged, minority and disabled Americans.

Yet, what is unreported is that the mortgage brokers are mere “street” dealers that only sell, at the highest price, the supply “made available” to them with investment help from the “suppliers.” Without the supply and support of “key suppliers” and “manufacturers” there would be no supply of such mortgages for the brokers to sell. The brokers only “make the deal” and then immediately “sell the deal” [the actual mortgages] to various Wall Street firms. Bear Stearns is one such firm. However, In Bear Stearns case, besides “manufacturing” and “supplying” the product for the dealers to sell, Bear also provides “enforcement and protection” though the use of various other subsidiaries and affiliates. In Bear Stearns case, the enforcement and protection activities are left to EMC Mortgage Corporation in Las Colinas, Texas. Classified as a “mortgage servicer,” EMC actually acts as “collectors and henchmen” to secure and collect mortgage mortgage loans with predatory provisions and even “usurious” debts. Unlike mob loan sharks and henchmen however, EMC employs a factory of collectors, lawyers and “foreclosure specialists” to literally steal the roof from under its customer’s noses.

EMC Mortgage is one of the nation’s leading practitioners of what is termed predatory lending. However, EMC is not an actual lender, but mortgage servicer. That is why I use the word “predatory servicing” in this report for it is after the loan is closed that EMC does its most damage. In reality, EMC operates like an “enforcer” for the suppliers [Bear Stearns and other investors]. Though a variety of abusive, aggressive and even illegal collection acts, EMC willfully engages in extortion and threats against its customers. First, EMC intentionally programs its computers to unlawfully increase customer’s payments and escrow and account balances. It’ collectors then go to work to collect such unlawful payments. Then, by using threats against property, home and family, EMC collectors are taught by their own collection manuals to use “fear” as a method for collection. Instead of threatening the breaking of bones however, EMC collectors threaten to take someone’s home away, ruin their credit, destroy their business, and/or ruin their family unless the unlawful payment is made and continued to be made. When questioned, EMC refuses to provide rightful answers to their customer’s questions about increases of their customer’s payments.

EMC also uses a variety of doctored, fraudulent and confusing accounting records to support the collector’s demands upon EMC customers. The customers, typically elderly, disadvantaged, minority and disabled homeowners who have high equity in their homes, usually do not possess the sophistication, education or means to challenge EMC and its collectors or fight their acknowledged “deep pockets.”

While the pain and suffering of broken bones inflicted by mob henchmen and loan sharks may eventually heal or go away, the pain and suffering inflicted by EMC many times lasts a lifetime; costs a livelihood and occasionally even costs a life! I have conducted a six year [over 8000 hour] investigation and examination of the mortgage banking, financing and predatory lending and servicing operations and practices of Bear Stearns and EMC. This report and the exhibits and evidence attached will detail my findings.

I have reached my findings, opinions and conclusions at great personal risk, suffering and cost to my family and I. However, their silence and ours cannot be bought. I will leave you to reach your own opinions, verdicts and conclusions by the careful reading of this report and a careful examination of the attached supporting exhibits and evidence.

It is my hope that this report, and the “decoding” of the various predatory lending scams, schemes and frauds perpetuated by Bear Stearns and EMC, will lead others to fight similar predatory lenders in America. I pray that your silence as well cannot be bought and that each of you who reads this report will take positive and constructive steps to end and stop this American nightmare!


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