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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Looks like Nye was right after all, eh? Follow the money and go after the wall street firms.

Wall Street Firms Are Subpoenaed
New York Examines Treatment
Of Debt Tied to Risky Mortgages
December 5, 2007; Page C2
New York state prosecutors have sent subpoenas to several Wall Street firms seeking information related to the packaging and selling of debt tied to high-risk mortgages, people familiar with the matter say, the latest legal woe to hit the stressed industry.

The subpoenas, sent by the office of New York state's attorney general, Andrew Cuomo, are broadly written and request information from firms including Merrill Lynch & Co., Bear Stearns Cos. and Deutsche Bank AG, people familiar with the matter say.

The review, part of a broader investigation into the mortgage industry, is examining how adequately the investment banks reviewed the quality of mortgages before packaging them into products that were then sold to investors, these people say. The subpoenas also requested information about how the debt was pooled into securities, including the banks' relationship with credit-rating firms.

A spokesman for Mr. Cuomo couldn't be reached. A Merrill spokesman declined to comment on the subpoena, saying: "We always cooperate with regulators when asked to do so." Bear Stearns and Deutsche Bank declined to comment.

The state-prosecutor inquiry is the latest twist in the fallout stemming from residential subprime mortgages. A rise in defaults and foreclosures, particularly among low-end borrowers, has whipsawed global stock and bond markets, led to the dismissal of two Wall Street chief executives, and resulted in losses by banks, hedge funds and securities firms. The Securities and Exchange Commission has opened about two-dozen investigations stemming from the collapse of residential subprime mortgages, a person with knowledge of the situation said. In addition, the role of credit-rating firms is being examined by federal and state regulators.

The role being played by Mr. Cuomo's office is reminiscent of the path taken by his predecessor, Eliot Spitzer, who as New York attorney general shined a spotlight on conflicts of interest on Wall Street, trading abuses at mutual funds and bid-rigging at insurance companies.

The inquiry into what role securities firms played in the current crisis is likely to look at Wall Street's underwriting standards. In particular, the probe appears to be examining the relationships between mortgage companies, third-party due-diligence firms, securities firms and credit-rating firms.

The inquiry raises questions about the extent to which securities firms are obligated to dig into the mortgages before slicing them up to sell to investors. Many securities firms rely on third-party vendors to do this work; among the questions is whether this effort was adequate, or if securities firms had a duty to do further due diligence. Securities firms that underwrite securities have an obligation to make sure that statements included in offering documents are accurate.

In a news conference last month announcing subpoenas to mortgage giants Fannie Mae and Freddie Mac, Mr. Cuomo said "investment banks wanted the mortgages." That suggests he is raising questions about whether banks turned a blind eye to what Mr. Cuomo says were inflated appraisals in order to package and sell the products to make fees. "The follow-the-money expression is, 'follow the mortgage'" into the secondary market, Mr. Cuomo said.

Write to Kara Scannell at
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Talking about yourself Nye? We all knew this was coming.  

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Ohhh please
Anybody who has been following the news for the last 6 months knew this was coming. Moreover, anyone who has a clue about MS Fraud knew this was coming from someone for years... Now, the reality check!

Does anyone really believe that anything significant will come out of this? Does anyone really believe that any of us will see relief as a result of this? Does anyone really believe that these companies will do anything other than maybe pay a fine, promise to behave themselves, admit no wrongdoing, and go back to business as usual?

Come on, Fairbanks pays $40M and promises to be better corporate citizens. Ask Mike Dillon how that's been going. Ask Joe B if it's true. Come on folks, this is nothing more than Cuomo flexing his muscle, and preparing for his next political office. It's a lot of sabre ratting, and that is all!

I wish it were more, but so far, the only way we are going to get relief is to go after these folks ourselves, because if you are waiting for the politicians, we may all be dust by then!

Now back to your regularly scheduled programming...

Ohhh please
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