Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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Amazing! When will people stop believing the lies, wise up and stop buying this crap? Chop, chop, slice and dice. They more they chop them up and put them in shiny new boxes, the bigger and better they get? Better than a Ginzu any day!

Bank of America Corp., seeking to reduce risk and meet new capital standards, upgraded billions of dollars of distressed mortgage bonds by repackaging them into new securities using a variation of a Wall Street technique that failed during the credit crisis.

The transactions, known as re-remics, are designed to add a layer of protection to residential mortgage-backed securities that sustained losses, enabling them to regain investment-grade ratings. The strategy helped the bank pare its RMBS holdings by $5.2 billion in the second quarter, or about 15 percent, according to a company filing.

With bank stocks mired near historic lows in relation to book value, firms such as Bank of America and JPMorgan Chase & Co. are searching for alternative ways to meet rules set by global regulators since the 2008 financial crisis. By turning junk-rated securities into investment-grade bonds, Bank of America will need to hold less capital under rules agreed to by the Basel Committee on Banking Supervision.

“The larger banks are going to do anything and everything they can to create capital other than issuing stock,” said Matthew Pieniazek, president of Darling Consulting Group Inc., a Newburyport, Massachusetts, firm that provides asset-liability management advice to banks. “The most punitive way of raising capital is by issuing highly dilutive common equity in the current marketplace.”

‘Scrubbing’ Balance Sheets

Re-remics, short for re-securitizations of real estate mortgage-investment conduits, are one way for lenders to improve capital ratios without issuing stock, according to Pieniazek, who also runs educational programs for bank regulators. Firms such as Bank of New York Mellon Corp. have been doing re-remics since the credit crunch began in 2007, primarily to restructure private-label RMBS to make the bonds easier to divest.

Bank of America repackaged $13 billion of mortgage-linked securities in the first half, according to Jerry Dubrowski, a spokesman for the company, and filings with the Securities and Exchange Commission. The Charlotte, North Carolina-based bank is the only one of the five biggest U.S. lenders to disclose that it used re-remics this year for regulatory capital purposes.

More banks may turn to the technique as they come under pressure to boost capital, said Marty Mosby, an analyst at Guggenheim Securities LLC in Memphis, Tennessee. While the transaction may trigger a writedown, improved profits this year can cushion the blow.

“Re-remics are a way of doing some scrubbing of the balance sheet at a time when banks have other gains that give them a lot of flexibility,” said Mosby, who was chief financial officer at First Horizon National Corp. in Memphis, Tennessee’s largest bank, from 2003 to 2007.

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