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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Nye Lavalle
C-BASS LLC Responding to Liquidity Challenge

Company Exploring Strategic Options
July 31, 2007: 05:00 AM EST

C-BASS LLC, an affiliate of MGIC Investment Corporation (NYSE: MTG) and Radian Group Inc. (NYSE: RDN) today issued the following statement in response to the announcements made last night by MGIC and Radian regarding the liquidity challenges faced by C-BASS.

While nothing fundamentally has changed at C-BASS, like many other firms in the industry, the current severe state of disruption in the credit markets has caused C-BASS to be subject to an unprecedented amount of margin calls from our lenders. The frequency and magnitude of these calls have adversely affected our liquidity. To address this, C-BASS is in advanced discussions with a number of investors to provide increased liquidity and is exploring all options to mitigate the liquidity risk in this difficult market.

At the beginning of 2007, we had $302 million of liquidity, representing greater than 30% of our capital of $926 million. During the first 6 months of 2007, a very tumultuous time in the subprime mortgage market, C-BASS' disciplined liquidity strategy enabled the company to meet $290 million in lender margin calls. During the first 24 days of July alone, C-BASS met an additional $260 million of margin calls, representing greater than a 20% decline in the lender's value. We believe that nothing justifies this substantial amount of margin calls received in such a short period of time, particularly as there has been no change in the underlying fundamentals of our portfolio.

C-BASS remains confident in the overall credit quality of its portfolio and the performance of its highly rated servicing subsidiary Litton Loan Servicing. This confidence has been supported by C-BASS' results relative to the recent widespread downgrades from the rating agencies. Out of a total of 487 subprime bonds downgraded by Standard & Poor's, only 4 C-BASS bonds were downgraded. Moody's downgraded a total of 399 subprime bonds, only 5 of which were C-BASS issued. In addition, Moody's downgraded 184 bonds from 91 CDOs, none of which were C-BASS issued.

Even while our liquidity has been under attack, C-BASS has been one of the most prolific issuers in this highly disrupted market, as we managed to price and issue 2 CBOs and 11 RMBS deals from January 1, 2007 to-date. Our deals all priced among the tightest spreads in the market, and we expect our deals to continue to be well received by Wall Street and the investor community.

The C-BASS and Litton businesses remain sound and the fundamentals remain strong. C-BASS has been profitable 41 out of the 42 quarters it has been in business, including the 2nd quarter of 2007.

Finally, these margin calls have had no impact on the loan servicing activities of Litton, and Litton continues to provide innovative, industry leading solutions for customers as we enter an unprecedented period of subprime defaults.

About C-BASS

C-BASS is a New York-based company, long regarded as a leading issuer, servicer and investor in credit-sensitive residential mortgage assets. C-BASS is a limited liability company capitalized by MGIC Investment Corporation (NYSE: MTG), Radian Group Inc. (NYSE: RDN), and C-BASS management. MGIC Investment Corporation, based in Milwaukee, WI is the parent of Mortgage Guaranty Insurance Corporation (MGIC), and Radian Group Inc., based in Philadelphia, PA is the parent of Radian Guaranty Inc. For more information, please visit

About Litton Loan Servicing

Houston-based Litton Loan Servicing, a wholly owned subsidiary of C-BASS, is a mortgage servicing company specializing in loss mitigation and default management for residential loans. Since its inception in 1988, Litton has grown from a handful of employees servicing customers exclusively in Texas to more than 1,000 employees servicing more than 400,000 customers nationwide. Throughout its substantial growth, Litton has maintained its primary objective of preserving homeownership and keeps thousands of customers facing foreclosure in their homes each year. For more information, please visit

Lisa Brzezinski
Vice President
212.850.7724 phone
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Ann Holden

Out of a total of 487 subprime bonds downgraded by Standard & Poor's, only 4 C-BASS bonds were downgraded.
The question is...
Bankers Trust did the very same thing.
It worked back in the day.
Will it work again in 07?
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Thanks Ann for pointing that out.  The FBI is still gathering information on "MUNICIPAL BONDS"  I understand included many CBASS.  The Fat Lady is beginning to warm up for CBASS/MGIC/LITTON LOAN.
Im guessing here MGIC stock in the low 20's by the end of next month, and perhaps MGIC having to file Chapter 11 by the end of the year!  That's a bold prediction, but everything I see is pointing to it.  MGIC does  not have the money to cover its loss's, and BLACKSTONE is more or less a take over company that breaks up companies,  I recall what they did with the IC Railroad! Tens of thousands of employee's out of work, and the entire railroad broken up and sold off in parts, Blackstone made a lot of money, only one problem, the liability's remain and go forward.  Many of us have said this crisis, (mortgage fraud) is many times large than the S&L crisis.  I believe so, and I suspect many others are now coming around to this conclusion also. The entire mortgage industry is involved, not just sub prime.  I still shake my head when someone says its "Restricted" to the sub prime area.  Well big Tony Ettinger is largely responsible for creating "Sub Prime" through his company Litton Loan, knowing falsely reporting payment history's, and with holding payments, and returning payments.  It all in his radio interview, from 12% to over 40% of the population! 
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