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
Merrill Faces Fraud Allegations
February 2, 2008; Page B5
Massachusetts state authorities accused Merrill Lynch & Co. on Friday of fraud and misrepresentation related to the firm's sale of debt securities that rapidly collapsed during the credit crisis.

The allegations come just a day after Merrill bought back the securities, known as collateralized debt obligations, from Springfield, Mass. Merrill repurchased the CDOs at the same price of $13.9 million that the firm initially sold them to the city last spring.

These CDOs, which are pools of debt that included subprime mortgages, had plunged in value to $1.2 million, according to a recent Merrill account statement for Springfield.

In the Massachusetts complaint, the secretary of state alleges that Merrill acted in a way that was "inappropriate and illegal." The complaint said "these highly-risky and esoteric CDOs were unsuitable for the City of Springfield [and] Merrill Lynch did not properly disclose to the City the risks of owning these CDOs."

The allegations are civil and could result in fines and other penalties, but the secretary's office doesn't have criminal authority.

Merrill Lynch spokesman Mark Herr said, "We are puzzled by this suit. We have been cooperating with [Secretary of State William] Galvin's office in its inquiry."

Observers say the Massachusetts complaint will be closely watched across the brokerage community. "This is a big deal," said Mark Flessner, a partner at Sonnenschein Nath & Rosenthal in Chicago and a former federal prosecutor. "This looks to be the first case of its kind to bring charges based on the subprime crisis, and it is going to cause brokerage firms a lot of concern."

Separately, the Massachusetts Attorney General's office is also investigating Merrill CDO sales in the state. The attorney general is considering whether the firm should pay additional penalties to Springfield for not informing the city of the risky nature of the securities, according to people familiar with the investigation.

That office is also investigating whether the Merrill Lynch brokers who sold Springfield the securities were being pressured by other Merrill officials to unload the risky CDOs just as the credit crisis was reaching a boil.

Mr. Galvin said his office is continuing to investigate Merrill's activities statewide.

Write to Craig Karmin at
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Four helpful and informative posts in a row Nye.
Especially this one.

Keep 'em coming.

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This was just posted the other day... Do you guys read this forum or do you just post here?

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Nye Lavalle
Beavis, you always were and will always be a BUTTHEAD!
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Peeling the onion.

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To Mortgage Servicing Fraud victims:


The good news for us in MSF is that although the FBI investigations will
focus primarily on stock and security selling fraud there will undoubtedly
be immunity given for suddenly born again "come to Jesus" whistle-blowers
who have suddenly seen the light in the face of cold hard prison time.


These guys will come clean on *everything* they know to avoid hard time
in the joint.  Scoundrels like Ameriquest/ AMC and Bear/EMC that
encouraged and rewarded fraudulent servicing right on up to quick-disposals
of toxic bundles of high risk nitro clunkers to investors.


Indeed criminal mortgage servicing firms like AMC, CW and EMC will go
down right alongside the "Who me?" lenders and quick dumping artists
like Bear Stearns and Merrill Lynch.


Let it be noted that the investors and insurers got snapped off real good in
this financial catastrophe. And let’s make sure that the hidden villains in
this disaster, the rating agencies who made it all possible get their share of
the blame right along with the shameless appraisers.  


The losers will spend an estimated $5B defending themselves. Their
defense attorneys will darn sure get paid which ponders the question,
“Where did that $5B come from?”  


These are historic times folks..

Ultimate justice?  It depends upon one’s perspective.  

A depression? No.

A recession? Yes.

Final Justice for the oppressed victims who were largely looked upon as
95% deadbeats?  Yes but unfortunately not in monetary terms.


The total time frame?  About 24-30 months.


Money back for the victims?  Likely not much from corporate hulls.  We
can only hope that the attorneys like the James, Hoyer firm who will make
a king’s ransom on this historic fiasco don’t rush to settle too quickly. 


Innocent families and victims were unjustly deprived of their small individual
“American Dreams.” But this will be of some solace: The mortgage servicing
criminals were finally brought to justice and let it be written in bold caps,




                      (This is what they were telling us all along.)    



Ed Cage  |  1804 Cross Bend, Plano Texas 75023  |  972-596-4363 |

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