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
arkygirl
Finally, we have left the topic of "predatory lending" somewhat behind us. Most borrowers here are suffering more form "predatory securitization" problems. It is nearly impossible to find out who really owns your note in order to bypass a rotten servicer or MERS to be able to negotiate with the real owner of your mortgage.

What follows is my opinion only: When the Department of Justice and the FBI finally wade through the mess investors are going to find that they have been snake-oiled. All those properties and loan interests that they thought they owned outright.....well, they may find out that it like winning the lottery. They are going to find out that the prize money has to be split with LOTS of other people.

It has always been my strong belief that the same mortgage instruments were sold over and over again to multiple investors and trusts. No one really knows who owns any of it in many cases. Those who feel they are the sole owners are in for a wake up call. Borrowers are in limbo. Illegal foreclosures are going on daily because of this mess.

These Wall Street guys did something that is only allowed by the Federal Reserve. They printed negotiable instruments with no backing and called it "same as cash" profits. When the faith left, these instruments were revealed to be worthless. They counterfeited wealth and gambled with many people's homes, ruining lives in the process.

Let the perp walks begin! May they all burn for what they've done.

Quote:
But when it comes to potentially the most pervasive frauds of all, it could take years to catch all of the crooks, officials say.

Not predatory lending, but predatory securitizations.

Namely, the asset-backed bonds cooked up in Wall Street’s “financial meth labs,” structured finance expert Tavakoli notes in her new book, its byzantine CDO factories that pumped out bad bonds that have melted down savings accounts world wide and are just pure “hot molten evil,” as one investor calls them.

“It seems to me that some investment banks knowingly participated in predatory securitizations,” says Tavakoli in her book.

But although these securitizations are as transparent as a bucket of molasses, Wall Street executives who have worked on these deals and demand anonymity say there might be a way to catch the bad guys behind them.

http://emac.blogs.foxbusiness.com/2009/02/02/crackdown-on-wall-street-the-perp-walks-are-coming/
Quote 0 0
Moose
Don't confuse CDO's and other down-stream financial instruments and tricks with your note and mortgage.

Down in the tranches of the securitized trust there are multiple layers of investors who don't know you from Adam and don't have anything but a pecuniary interest in the bond(s) they bought that are secured by the pool of mortgages in the trust. Some of those bond holders are (or were) large financial institutions that started playing games with THEIR pools of bonds - not the mortgages themselves.

The thing to remember is that no matter how many bonds change hands or how many derrivatives or CDO's off in the distance get swapped around, until the servicer acts to close or sell the loan, the trust remains the sole owner.

Moose





Quote 0 0
Even if the trust is the sole owner. Aren't they suppose to have the original note when it comes down to foreclosure?

Am I right when I say this? If I get foreclosed on and the note is not produced at that point. Or let's just say I don't even answer the suit within my 20 days and a default judgement is in place and the property is sold, they then go after me for the monies, I then pay them. Can someone later on down the road try to collect on this debt because they can prove they are the owner of the note. How does this work? I don't know.
Quote 0 0
arkygirl
I think that some (a lot, really) mortgages may have been electronically entered into several offerings and sold to more than one trust while the greed frenzy was on. It was only one mortgage but through a "multiplicity" process became the property of more than one trust through various fraudulent mechanisms. (For all I know they sold the front door to A Trust, the back door to B Trust, the roof to C Trust with each one of these trusts believing they were the sole owner) I also suspect that these "interests" were later re-bundled and resold several times in order to leverage maximum profit from each mortgage; that would be where the complicated CDOs etc. come in. Wall Street deliberately muddied the waters with its securitizations.

The original mortgage documents were stored "someplace" or maybe even thrown into dumpsters. Everything seems to be electronic these days with little to no paper trail. If that is truly what was happening it was to the benefit of the sellers to claim that the original documents were "lost" otherwise they would have to do some explaining if anyone ever managed to pay off one of these toxic loans and began demanding their note back. This may have been one of the driving forces behind the earlier foreclosure frenzy; they had to foreclose before it got exposed. They liked to use servicers to do this heavy lifting for them or hid behind MERS after it came along.

It would have been fairly easy for unscrupulous lenders to do these things when mortgages were flying around like leaves in the wind. In my mind's eye I can see Countrywide or Ameriquest drones entering all these mortgages into computers and selling them multiple times to different trusts. When the jig was up, they just closed their doors. More stuff in dumpsters. More lost originals. No one has any idea how many trusts may own interest in the same note. The original plan was to keep borrowers tied up in an endless loop of refinancings so that originals never had to be produced.

If you pay the mortgage off to Company XYZ who represents A Trust and do not receive your original mortgage document stamped "Paid in full" you may be vulnerable to later collection efforts by Company ABC and Company DEF who represent Trust B and Trust C.

I am hoping that it may be uncovered by backtracing the toxic derivatives that were generated by Wall Street. There are too few original mortgage documents and too few real properties in comparison to trusts who claim to own interests in these mortgages and properties. It just seems mathematically impossible to me. One note should equal one interest at a time in that note, not dozens.

So, yes, they should have the original note to foreclose. Most of the time they do not. Why not? If I had paid good money for anything I would want to know that I also had all the paperwork to legally prove that I had paid for it.Otherwise, I might feel that I had been scammed. I think that investors are waking up to this now causing servicing companies to attempt to "throw out" the original mortgage note and replace it with one of their own you-cannot-sue-us-at-any-time-for-any-reason "modifications". It goes against their own servicing agreements with the trusts but I suppose desperation pushes them. No one knows who or how many might step forward to claim an "interest" and they are terrified of the whole thing crashing down on them. I think it is collusion among thieves.

I don't really care how it gets exposed, only that it does. This may be one way to crack it open.
Quote 0 0
O -

Quote 0 0
Moose
cmc wrote:
Even if the trust is the sole owner. Aren't they suppose to have the original note when it comes down to foreclosure?


Yes, the Trustee should retain the originals. Normally, there would be a custodian of the documents and because they are valuable, they wind up in a vault. Where things seem to have gotten sloppy is in production of originals, in other words, going back to the custodian and obtaining it when a loan has to be sold to another servicer or foreclosed. Instead of being responsibly diligent, it proved to be faster and easier to just not go get the documents and properly sign and notarize them when they were sold. They dodged their responsibilities and cranked out a notarized affidavit of lost note so they didn't have to show they weren't playing by the rules.

cmc wrote:
Am I right when I say this? If I get foreclosed on and the note is not produced at that point. Or let's just say I don't even answer the suit within my 20 days and a default judgement is in place and the property is sold, they then go after me for the monies, I then pay them. Can someone later on down the road try to collect on this debt because they can prove they are the owner of the note. How does this work? I don't know.


If you get foreclosed on without a note, what appears in the record is typically an affidavit of lost note which, under oath, an officer of the foreclosing party has affirmed that they were the true owner/holder of the note.

If another party somehow produces the original, they have a court fight on their hands with the prior foreclosing party - not you the original borrower.

There are a lot anecdotal stories flying around the 'net about this kind of possibility, but I have yet to see an actual case where someone was dragged back into a second attempt at the foreclosure - and here's why:  What would this new third party alleged note owner have to gain from a former borrower that has already lost the property to foreclosure? What piece of property allegedly securing the note could possibly be obtained from a borrower who no longer has any interest in it? Does anyone believe people who have been foreclosed on have money laying around?

Particularly in states with judicial foreclosure, another bite at the apple by some party who produces an original note on a foreclosed property is going to really make some Judge angry at somebody, and it won't be you.

Moose





Quote 0 0
Moose,

Thanks for the info. You truley answered my questions.

At this point I have an attorney that is working with me in my foreclosure. I am an experiment at this point. I went to him with some Florida statutes about lost notes, etc. He got me an extension that was granted and he just filed a motion to dismiss yesterday. I will have a copy of it by tomorrow or thursday. I can't wait to read it.

In the mean time I am the one on the forum that had questions about the assignment of mortgage. I explained to the attorney that I researched  the assignment and found out that the certified officer for MERS is an employee for the Plaintiff's attorney as well as the notary. MERS says in their own rules that a certified officer of MERS is an employee of a servicer or company that is a member of MERS. Well, the person that signed as a certified officer is for a fact an employee of the Plaintiff's Attorney. The law office is not a member of MERS. MERS also states that a Corporate Resolution Form from the member has to be filed with the certified officers listed. So if the officer doesn't work for MERS or the servicer than what gives the law firm the right to sign as a nominee for MERS? I gathered this information and I have to forward this info to the attorney.

Do you have any suggestions. Do you think that I am right?
Quote 0 0
h gosh
Re double foreclosure - once for foreclosure of the mortgage (in rem) and once for note (in persona).  This is being done in numerous States.  Are you aware that some States are "mortgage" states?  Pennsylvania is one.  The holder of the mortgage may foreclose on the mortgage, if they claim it is delinquent.  Then, the holder of the note may enter a complaint for judgment in persona.  Hence, you must be very very sure what type of a state you live in.  If your note and mortgage has been bifurcated, with note sold into a synthesized CDO, you are in for a very, very terrible time. 
Quote 0 0
arkygirl
Gee, h gosh. Moose has never heard of it; ergo it has never happened.

Personally I strongly believe that it will be more common in future as the scamsters begin forgetting what lies they have told and what documents they have fabricated and start getting sloppy. One of these days there will be a case just as you have described.

Anyway, part two of the series is out  today:

Quote:
The US government, notably the Federal Reserve, has now become the world’s biggest junk investor, as it has taken on the rotting paper crafted by habitually self-deceiving, hubristic hustlers on Wall Street, who, unburdened by conscience, felt entitled to follow their own codes of conduct as they went berserk enriching themselves by crafting fake securities now draped like a drunken paper daisy chain around the earth.

“The credit rating agencies were complicit, too,” another Wall Street executive says, salivating after fees with their drive-by appraisals of nonsensical real estate securities, where they happily gilded the silly by rubberstamping this rubbish as Triple A.



http://emac.blogs.foxbusiness.com/2009/02/04/a-window-into-the-wall-street-frauds/



Quote 0 0
SPV
Does anyone know how special purpose vehicles fit into the mess?
Quote 0 0
arkygirl
Part three of this series has posted.

Quote:
What exactly went on behind the scenes in Wall Street’s subprime bond factory?

A behind the scenes, inside look at three asset-backed bond deals on Wall Street, deals that eventually imploded, shows exactly the danger investors were put in.

Law enforcement officials now say arrests on Wall Street will be made not just of those who hawked predatory subprime loans, but those who pushed predatory securities built on those loans, according to Fox Business’s interviews with David Cardona, head of the criminal division at the Federal Bureau of Investigation’s New York offices as well as other top law enforcement officials at the FBI.

The FBI is investigating, from top to bottom, Wall Street executives who participated in Wall Street’s financial engineering factory, where executives compulsively minted and fraudulently pushed on investors dangerous securities built on bad mortgages, bad credit card payments, bad auto loans, bad student loans, you name it.

All stuffed through Wall Street’s underwriting pipeline, and all magically emerging as Triple-A rated securities, safe as a US Treasury.

Bonds and derivatives that were then sold by companies Wall Street purposely set up offshore in places like the Cayman Islands or Guernsey, away from the prying eyes of  market regulators.

http://emac.blogs.foxbusiness.com/2009/02/06/inside-wall-streets-subprime-bond-factory/
Quote 0 0
Write a reply...