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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Ok, let's see... so far, ONLY $100 Billion in write downs among Wall St. firms. Trillions insured. $200 BILLION Needed? Who says money doesn't grow on tress?

From The Times
January 25, 2008

Mortgage bond insurers 'need $200bn boost'

Tom Bawden and Suzy Jagger in New York
America's biggest mortgage bond insurers collectively need a $200 billion (£101 billion) capital injection if they are to maintain their key AAA credit ratings, a figure that dwarfs a plan by New York regulators to put together a capital infusion of up to $15 billion, a leading ratings expert said yesterday.

The failure to maintain their AAA ratings will lead to a further round of multibillion-dollar writedowns among the Wall Street banks and other large owners of the bonds, Sean Egan, of Egan Jones Ratings Company, said.

It would also push some of them into receivership, Mr Egan added.

Egan Jones makes its money by selling its research to money managers, rather than through fees from the companies it rates.

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It has the same “nationally recognised statistical rating organisation (NRSRO)” accreditation from the US Securities and Exchange Commission as Fitch, Moody's and S&P, the mainstream credit agencies.

Mr Egan's warning comes after the New York Insurance Department, which regulates the state's insurance industry, held a hastily convened two-hour meeting this week to try to persuade key Wall Street firms to bail out the bond underwriters.

The meeting is thought to have been attended by about 25 people, including representatives of Citigroup, JPMorgan, Goldman Sachs and Lehman Brothers, which would be likely to suffer if the bond insurers went under.

Because it raises the possibility that an insurer may not meet its commitment, loss of its AAA credit rating cuts the value of the bonds it insures.

A ratings downgrade also makes it harder for an insurer to write new business, as the market loses confidence in it. Furthermore, many bond investors require that their debt holdings be underwritten by a AAA-rated insurer.

One insurer, Ambac, has already lost its AAA-rating, while Mr Egan has a B-plus rating on MBIA, the biggest bond insurer, which is 13 notches below the AAA-rating it has from S&P, Moody's and Fitch.

Eric Dinallo, New York's insurance superintendent, who is leading the talks with Wall Street, sought to play down the markets' hopes for the talks yesterday. He said: “It must be understood that these are complicated issues involving a number of parties.”

New York's attempts to prop up the mortgage bond industry are part of a US government drive to prevent America falling into recession. Washington yesterday reached a tentative deal to inject $150 billion into the flagging US economy through tax breaks and investment incentives.

This week the Federal Reserve cut interest rates by three quarters of a point, the largest cut for 26 years, as a stimulus.

Data yesterday showed that sales of existing homes in the US fell more than forecast in December. Purchases fell 2.2 per cent to an annual rate of 4.89 million, the National Association of Realtors said.

For all of last year, sales of single-family homes fell 13 per cent and prices dropped 1.8 per cent, the first decline since it began recordkeeping in 1968 and probably the first since the 1930s, the group said.
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Thanks, Nye!

For all, the LINK to the article Nye cites above is http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article3248731.ece


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It occurs to me that if EVERY American taxpayer were to devote their entire projected economic stimulus tax rebate check to recapitalizing the bond insurers, that this would furnish 75% of the capital they seem to need AT PRESENT to cover their projected losses.  Of course, this does NOT provide for the additional recapitalization needed by the primary mortgage insurers, the depository institutions and even the title insurers (who haven't even begun to fathom the depth of their exposure from litigation arising out of title guarantees issued in fraudulent foreclosures!).

Of course, even if everyone was to agree to GIVE UP their tax rebate, the IRS seems to be doubtful that it can get the money into everybodies pocket before May at the earliest.  And Congress hasn't even enacted the legislation yet.

Hmmnnnn.  It looks like the bond insurers will have to face a ratings DOWNGRADE before we can rush to their assistance with Uncle Sam's $$$.

And could someone explain to me again WHY anyone wants to contribute capital to COVER LOSSES from injudicious risk assumption??  Why not just go Warren BUFFETT's route and stand up a new bond insurer with new capital and a clean balance sheet?  Or is it because state regulators are SO MUCH SMARTER than Warren BUFFETT??   
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If memory serves, CNBC discussed the notion of starting from scratch.  Kinda of scary though, don't you think.

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There you go THINKING again, Bill

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Mike you are right about the trillions.

These bonds back CDO's that are 30-60 times the value of the underlying bonds
so that 200 billion injection on the underlying collateral represents 6-12 trillion in liquidity.

This is outrageous to bail out the system if they let it fail there would be a depression that made the great depression look like an economic speed bump and the public would hold the perpetrators accountable.

Had they let the economy go into recession or depression during the S+L crises instead of tax payer bailouts and the Fed artificially fueling a speculative high risk economy then we would have a sound and stable economy now.

There are hundreds of trillions leveraged in the derivatives market and that is an economic storm that would almost surely lead to martial law civil war of both if the bailouts prop up the domino economy any longer.

We should demand hands off of the system and let it fail so it can be fixed.

This is government bureaucracy's at it's worst and down right treasonous.

The sooner the economy is wiped out and we start all over the better this is the kind of government "protection" no one needs and no one benefits from.

The citizens need to demand a solvent, stable and lawful monetary and lending system and shut down the GSE's Fannie Mae and Freddie Mac, the Fed and the IRS that fund and sponsor lending and investment fraud.
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Here I go peeing on their pitty party.

I don't want to give them tax dollars.  I want them to give me back
the $3,000.00 my IRA went down in the last quarter of 2007.

Before these people start the begging for money, I want to know a few
things.

I want to know the amount of money coming in to their company every year
for the last 10 years.

I want to know salaries, bonus gifts and other perks down through all
vice presidents.

For instance if the CEO received a huge bonus for say 2007, 2006
they need to disgorge themselves.  This might cause some squealing
but we know they've been pigs at the trough.

Just put it back.  No? Get off our list then.  You've already taken the profits
so you don't get bail out money.

They've already decided the losses they wish to disclose so that poses no
great amount of work for them.  Of course, those of us that have had to
deal with their idiotic accounting practices deserve a bail out if these
fraud committing, cut throat, racketeers that really deserve prison terms
are going to get paid instead, they need to disgorge themselves first.

Next, I would like to know about the income from insurance for failed
mortgages.  How many times can they invest in insurance on the same
property?  Who is getting write offs plus insurance? 

When you invest your money in the stock market, you expect to lose some
and win some and I am okay with that.  What I am not okay with is to
lose my money from fraud.

I've got other statements coming for 2007 taxes.

I am probably going to lose more.

They don't deserve this money.  I do.  They didn't just have loose underwriting, they had NONE.  It is not like they didn't know making
risky loans would end up hurting them later on.  (PYRAMID SCHEMES)
Layer one gets paid.  Fewer get paid on level two....etc.

Dee


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I agree Dee if we are going to keep a system based on hard drive money and perceived value rather than actual assets we can't allow the system to be looted and destroy the perceived value and stability.

If our money and homes were stolen that needs to be returned period.

We have all these crazy bailout and write-off schemes and now the big bipartisan solution seems to be having the government pay us a few hundred dollars of our own money. They want to artificially pump up, subsidize and borrow our way out of the sub-prime crises that was caused by artificially pumping up, subsidizing and borrowing our way out of the S+L crises.

Can't these cowards just stand up and tell the truth the country is broke and fine tuning a broken system is rearranging chairs on a sinking ship.

The easy money party is over it's back to working, producing and saving as a way of life. That seems to be a radical extremist concept nowadays that will get you on an FBI watch-list but believe it or not if you save more than you spend you will not have a debt crises.

Arnold Schwarzenegger said the solution to the sub-prime crises is medical insurance for illegal immigrants. He ran on the platform of fiscal responsibility
and eliminating special interests  and now he wants California taxpayers and native American casino owners to fund the mythical Mexican reconquest.

Here in California they teach in the public schools that the Western U.S. was part of a huge Aztec empire. They acknowledge it's a myth with no historical
basis but that we have a legal and cultural responsibility to acknowledge their belief in this mythical land of Aztlan because they have unilaterally decided to replace their actual history with a belief that they were once mighty conquerors of a kingdom that exists in their imagination.

There was a period between 1821 and 1848 were five states were technically part of Mexico acquired during the period when England, Spain, France, the U.S. and even Russia were jostling to control parts of the Western New world but the handful of Mexicans who moved there and shared the land with Europeans and native Americans protested rule by Mexico City so it was never really part of governed and controlled Mexico let alone ruled for centuries by a great Aztec empire.



Whats wrong with preventing lending crime and fiscal responsibility.


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