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
October 14, 2007, 11:02 pm
A Bailout for Citigroup?
Posted by Dennis K. Berman
When does an “improvement in liquidity” represent a “bailout”?

We’ll be studying the details of the new “superconduit” when they’re expected to be released on Monday.

But in the meantime it’s hard not to look at the current details — ably scooped by Journal colleagues Carrick Mollenkamp, Deborah Solomon and Robin Sidel — as a big Treasury-blessed assist for Citigroup.

Consider that an estimated 25% of the total $400 billion SIV universe comes from Citigroup-affiliated SIV funds. And that Citigroup-affiliated funds have already sold $20 billion in assets.

At its most simple, the superconduit is a means by which a large collection of banks can keep “reasonable” pricing on some of their affiliated securities. And it is this pricing that is the key to the whole operation.

It’s obvious they won’t be priced at market rates because there’s not much of a market to begin with (and why the superconduit exists in the first place).

But where exactly do they get priced? To whose benefit? And by which standard?

Even without specifics, it’s clear that Citigroup has the most to gain from this operation. And it’s clearly bad if the balance sheet of the country’s largest bank were frozen for months on end as it poured money into contractual unwindings of SIV positions.

Liquidity syndicates were what helped save the day during the Panic of 1907. Given the partial return of investors to the LBO credit markets, there is plenty of reason to hope that investors will once again be buying SIV-related paper in the months ahead.

But until that time, four main points still remain oustanding:

* How much pricing confidence can be created in a market when banks are in essence buying paper from themselves?

* Might the mere existence of the superconduit create more doubts about the financial sector, stoking even more panic than the amount it was meant to quell?

* How will the banks structure their public relations to answer the simple question: Are they throwing good money after bad?

* What responsibility will be taken by the bank CEOs who blessed the rush into these structures in the first place? In other words, how will Citigroup CEO Chuck Prince explain this on Monday morning?
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That is why MERS came into the state statutes that required the registering of a change of ownership of a note could circumvent state law. MERS said recording of changes of ownership of a mortgage was now unnecessary since their computer system would do it for the county recorders.

Sworn deposition testimony by MERS' corporation counsel in our case indicated that MERS only knows what a member "posts" on MERS' database. MERS only knows what financing institution owns the note if the data was inputted into their system. This allowed members to collateralize a note several times to different investment trusts that ultimately sold the securitized debt to others like several European and Asian Banks. In this way they magically took several trillions of dollars in money in exchange for the legal claims to foreclose on the houses. The bet was that Americans typically do not allow their homes to be foreclosed on and therefore the debt instrument, the note itself, was sold several times to multiple parties. The banks were rolling in dough as every street corner in America that now has a bank is a testimonial to the high times enjoyed by the banks.

The owner of the note was considered to be only those that were indicated to own the note as appeared in the database on the MERS system. But, the reality was that several domestic banks were making copies of these notes and selling them to several parties.

By arranging for its members to make posts directly to its database MERS could claim that they are innocents when any fraud by the members became a counter-claim raised against the service companies in litigation by victimized homeowners. It is apparent that MERS' real function (MERS is owned by government sponsored enterprises Freddie Mac, Fannie Mae and other major financial arms) was to hide the fraud of the banks selling the note to unsuspecting foreign investment banks and hedge funds several times over.

MERS as a component part of the fraud was necessary so as not to alert Attorneys General of the several states and their regulators. Thus, MERS was born and came into existence. The bill of goods for the necessity of its existence was to "reduce operating costs to benefit consumers." But, the real reason was to serve as the key component part to allow the paper trade of mortgage backed securities hundreds or thousands of times without having to record the ownership of the debt.

Then, to assure that the mortgage debtor did not ever pay off the note debt, the servicers had to do their part to keep that mortgage debtor in debt so as to never allow them to get out of debt. In that way, they never had to take a payoff of a mortgage and lose that cash cow of monthly payments flowing through the servicer and then to the note owner. So, keeping a mortgagor in a debtor's prison by servicing fraud was created to keep that cash flowing and the fraudsters at the various financing institutions in green.

The recently announced creation of a super fund by Citicorp, Bank of America and J.P. Morgan Chase is to assure the hedge funds that their legal claims will be paid. This is done by a digitized entry onto these banks' balance sheets.

Did anyone see the Jon Astin film from the 1970's titled "Evil Roy Slade" or something like that?  In that film Evil Roy (played by Astin...Sean Astin's dad and Patty Duke's ex) instructed the accountant from the gang to give him a check to take to town so he could whoop it up. The mousy accountant explained that the books showed that they had no money and showed Roy the entry balance of $0.00. Roy explained that he needed to go to town anyway so he took out his gun and demanded that the accountant put a couple of more zeroes in there with a one in front of them. Thereby, giving him a balance of $1,000.00. The imbalance problem was solved for Roy. That is pretty much what is now going on..... the digitized entry of ones in front of zeroes to create a negative into a positive. Draw your own conclusions. But, the privileged banks are creating something from nothing with the regulators blessings. If the miracle of creating money from nothing doesn't occur the fallout is potentially huge.

The next and final attack on the American public is the lobbying effort now under way in Congress and the Senate to allow the mortgages to be only electronically databased without any real paper signed by the debtor. In this way, there could never be a proof of the fraud involving the servicer's creation of a fraudulent default. In our own case, we've obtained this proof of the fraud only by way of the lack of an actual note signed in ink by us. For the Congress to enact any legislation that further compounds the problems in the system by enacting legislation to allow electronic documentation of mortgages and notes would be a huge breach of the public trust and interest. Without a paper trail, there is no legitimate way for a vicitmized debtor to obtain relief in the courts. The electronic mortage could be and would be altered to conform to whatever reality was needed at the instance of a problem such as a debtor attempting to pay off the debt in its entirety.

The real story behind our falling dollar and huge oil prices is that the oil producing nations need assurance that the mortgage backed debt that they have bought and was purchased with our oil dollars is risky to hold as the dollar may become worthless some day should someone decide to take the steps necessary to purge the huge fraud from our system.

Starting with the dismantling of the necessary components of the fraud is a good place to start. Is any regulator interested in his children's and grandchildren's welfare?? If there is...then do something.

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I have REPEATEDLY warned the powers that be about MERS, yet my warnings fall on deaf ears.


The powers that be KNOW about MERS, and what MERS is doing.

Just how much revenue is Summit County Ohio losing to MERS?

I asked the Recorders Office this question.

They do not have info on how many loans are even listed as a MERS loan, and for that matter, they don't care.

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