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.
Articles |The FORUM |Law Library |Videos | Fraudsters & Co. |File Complaints |How they STEAL |Search MSFraud |Contact Us
Angelo
This is from 4closurefraud.org, MERS v. Romaine was a case in NY that made it all the way to the court of appeals in NY, highest court in NYS.  It was a case brought on by a county recorder in suffolk county, NY in 2001.  He refused to record mortgages with MERS as nominee.  He lost and it was a major decision that had helped these pretenders steal millions of homes in NYS.
Now Mr. Romaine is a county legislator and is going after MERS again, just like a dissenting justice said would need to done to rectify this situation.

"Admittedly we do not know, at this juncture, the extent to which these concerns will be realized. But it would seem prudent to call to the attention of the Legislature what is at least a disparity between the relevant statute—now 55 years old—and the burgeoning modern-day electronic mortgage industry."

Here is the artice
http://4closurefraud.org/2011/04/24/a-man-ahead-of-the-curve-former-suffolk-county-clerk-ed-romain-to-revisit-mers/

Also, here is the decision from back in 2001

http://www.nycourts.gov/reporter/3dseries/2006/2006_09500.htm 
Quote 0 0
    What these "sages" of New York failed to contemplate was the fact that
the investors in these Notes would ALSO not be able to tell if they were the only Note holder of a Note that corresponded to a particular mortgage deed.
    We can see by the enormity of the financial collapse in 2008 that this was
not caused by a few subprime borrowers defaulting on their loans. It was caused by the fact that the investors in the CDO's realized they were being
had and stopped investing their money in these instruments. Once the reserve funds being held by the major servicers ran out, the Ponzi system
started to collapse and the pension funds, insurance companies and money
market funds which had been buying these CDO's were on the verge of collapse. The TARP money that was required to prevent everyones' ATM
card from malfunctioning was probably anywhere from ten to a hundred times
the size of the subprime defaults. Only future researchers and historians will
be able to tell us the ratios but my guess is that it was leverage of at least
10 to one, meaning 10 notes were sold to investors for each existing mortgage deed. As long as they could keep the investors buying in at the
base of the pyramid, they could replenish the reserve accounts needed to
make monthly payments to the prior investors.
     Without the MERS cover, such an enormous Ponzi scheme would have
been impossible because each investor would have been able to verify that
it was the one and only holder of the Note that corresponded to the mortgage deed. So, it is clear, that MERS statement that its purpose was to
facilitate the trading of Notes between investors is pure hokum. ITS REAL
PURPOSE WAS TO DEFRAUD THE INVESTORS. The borrowers were minor
pawns in the game so that the fraudsters could manufacture Notes and sell
them multiple times. THAT'S WHERE THEY MADE THEIR PROFITS!
      They sold the "chump change" servicing rights to the servicers so they
could obtain a "free house" from time to time when a borrower defaulted.
      When we look at the enormous profits of Wall Street Banks and the
rediculous salaries and bonuses they were being paid for "producing nothing",
we can only reach the conclusion that they made their money by massive
theft from the Nations savers, the pensions,insurance companies and money
market funds.
       The solution is to declare all MERS mortgages as unsecured loans and
facilitate the return of the investors stolen funds from the thieves on Wall
Street. This way both the investors and the borrowers would be made whole
again at the expense of the perpetrators of this massive fraud.
Quote 0 0
Bill
  
Quote:
We can see by the enormity of the financial collapse in 2008 that this was not caused by a few subprime borrowers defaulting on their loans. It was caused by the fact that the investors in the CDO's realized they were being had and stopped investing their money in these instruments. Once the reserve funds being held by the major servicers ran out, the Ponzi system
started to collapse and the pension funds, insurance companies and money
market funds which had been buying these CDO's were on the verge of collapse


Mike H,
 
I'm not sure this makes any sense.  The investors already PAID the money for the Certificates when the trust was formed.  Any collapse was because in order to create these trusts they used very low standards for these loans giving a loan to anyone with a SSN pretty much.  A lot of these trusts received very high ratings when they did not receive them.  When a mortgage went into default the trust had that much less to pay the investors.  If you were owed 1000.00 a month from your certificate and 40% of the mortgages in your trust went into foreclosure you would only be receiving 600.00.  
Quote 0 0
The notion that the investors don't get paid when the borrower fails to make payments isn't exactly correct.  Servicers are bound to advance the borrower's missed payments to the investor.  Then again most PSAs allow the servicer to back charge the investor for certain fees when a loan defaults. 

This is why servicers are foreclosure crazy.  Once the property is sold at auction the servicers obligation to advance the borrower's payments to the investor ends and the investor normally comes out on the short end of the stick.

The bus next stops at the REO stage and this is where the servicer gets to begin charging the investor again for things such as property preservation, marked up insurance and in some cases they take a cut of the real estate commission when and if the foreclosed property sells.

Quote 0 0
Dear Bill,
    I understand your objection but in my opinion, you have failed to take into
account that most of the investor money was never even loaned out. It was
stolen by Wall street.
    To quote the example given by Neil Garfield, let us say a pension fund decided to invest $100 million in CDO's. W.St. would steal $ 50 million right
off the top in various fees and commissions before a single loan was ever
made. They would set aside $20 million in a reserve account with the servicers so that monthy payments on the $100 million could be made for
a few years. $10 million would go for expenses and commissions to manufacture the Notes by making the subprime loans and the other $20
million would actually be loaned out to the subprime borrowers.
     Even though perhaps 20% of the subprime borrowers defaulted, 80%
did not, so the collapse of 2008 could not have been caused by subprime
borrowers defaulting.
     It was caused by the investors catching on to the fact that they were
being defrauded, so they stopped buying CDO's. Without new money coming
in to replenish the reserve accounts, those accounts ran dry and the servicers could not make monthly payments on the prior CDO's that were
held by the big pension funds, insurance companies, and money market funds. This is where the TARP money came in, ie to replenish those reserve
accounts so payments could continue to the investors and they in turn could
make payments available to their account holders. Unfortunately the market
value of the CDO's dropped because of all this, so if they were marked to
market all these investors would be in big trouble. That's when the Fed had
to intervene with "quantitative easing" a buy up these deflated assets.
      The servicers bought the "servicing rights" for about 2.5% of the face
amount of the Note. When the borrower defaults, it is them foreclosing, not
the investors in the CDO's. As Niel Garfield has stated, only the original
investors would have standing to foreclose, not the servicers. In essence
the servicers are obtaining a "free house" every time they foreclose because
they never advanced the money for the original loan that was made to the
borrower. The originating lender got paid multiple times on the same Note when they sold the same Note multiple times to investors on the secondary
market. MERS held the mortgage deeds in its name so the investors would
not realize that there were other investors who owned the same note that
corresponded to the one and only legitimate mortgage deed recorded in the
Official Records of the County where the property was located. So as Neil
Garfield has stated, the ultimate defence of any borrower with a MERS mort
gage is stated in one word "PAYMENT"! The original lender was paid in full,
the servicer has no STANDING, and the true owners of the obligation are
not in Court, so the case should get dismissed if the Judges truly understood
the securitization scam. Mr. Garfield is 100% right on!
Quote 0 0
Write a reply...