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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arkygirl

Banks Could Lose $80 Billion From Mortgage Mess: Bove

Published:                                                 Friday, 15 Oct 2010

Banks could face losses of over $80 billion from the foreclosure mess—not so much from the moratorium on home seizures but from the flood of homeowner and investor lawsuits likely to follow, analyst Dick Bove said Friday.

The lawsuits are likely to focus on "fraud at every level of the process"—from packaging mortgages into bonds to selling them to investors, the Rochdale Securities analyst said in a note to clients.

The legal fallout could cost the industry more than $80 billion, about 10 times the amount that Bove sees banks losing from the foreclosure halt itself.

"Huge amounts of monies have been lost and there are very angry participants at every level of the system seeking to recover the funds that they have lost," Bove wrote.

Financial stocks continued to get hammered Friday by growing worries about the fallout from the foreclosure mess. The KBW Bank Index [BKX                  45.24                    -1.10                  (-2.37%)                           ] was down 3.3 percent.

S&P Equity cut Bank of America [BAC                  11.98                    -0.62                  (-4.92%)                           ] to "hold" from "strong buy," saying the big bank is not as prepared for the fallout from the foreclosure crisis as JPMorgan Chase [JPM                  37.15                    -1.57                  (-4.05%)                           ]. S&P also cut its price target for BofA to $14 from $17 as shares of the bank hit a 52-week low.

Earlier this week, attorneys general from all 50 states launched a joint investigation into allegations that mortgage companies mishandled documents and broke laws in foreclosing on hundreds of thousands of homeowners. The move deepened worries that the use of so-called "robo-signers" to stamp mortgage documents could backfire on banks and lead to fines. Many banks have already voluntarily halted foreclosures while they look into the problem.

The growing mess has sparked fears that U.S. banks' tenuous profitability will be wiped out as they repurchase billions in home loans held by investors in mortgage-backed securities.

[Arkygirl says F*** the banks! They engaged in fraudulent actions, they knew they were fraudulent. We are NOT killing the banks; technically they committed suicide for profits!]

http://www.cnbc.com/id/39686205
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