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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William A. Roper, Jr.
A regular MS Fraud Forum participant called my attention recently to an NPR interview of New York Times business columnist Gretchen MORGENSON relating to the mortgage fraud mess.

Gretchen did an absolutely tremendous job in explaining various aspects of the problem.

I would encourage each of you to listen to the interrview online, if only in the background to hear Gretchen's articulate and eloquent exposition on the problems.

The main link to the NPR story is at:

"Untangling The Complex Foreclosure Mess" (October 27, 2010)

The radio interview is at:

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    What she fails to explain is that many of the correspondent lenders were
making counterfeit color photocopies of the Notes and selling them to multiple investors thru the Note Pools. It was all a gigantic Ponzi scheme where the old investors were getting payments from the new money investors. Once the new investers got wind of the fraud, they stopped buying into the Pyramid and the whole thing collapsed.
    The servicers were key players in this Ponzi scheme by giving it an air of
respectability. The reason the servicers can't find the Original Note when
they try to foreclose, and are forced to use a COLOR COUNTERFEIT, or a
LOST NOTE AFFIDAVIT, is because the originals were in many cases destroyed to hide the CRIME OF COUNTERFEITING by the original correspondent lender which no longer exists. Securitization provided a massive smoke screen behind which the criminals could hide their counterfeiting operation. Just like a counterfeiter who makes phony $100
bills, they had to destroy the templates so they could not be used as evidence in a criminal case. We know the counterfeit Notes exist, we see
them presented in foreclosure cases all the time. The problem is in determining who the original culprit was because the counterfeit Notes
changed hands so many times.
     For the homeowner in foreclosure, the presentation into evidence of a
counterfeit Note means a "free house" because the presenter will not be
able to redeem them. It is the same when one receives a counterfeit $100 bill
and tries to get change for it at a bank. The bank will confiscate the bill and the bearer will get nothing. So it is with a counterfeit Note in a foreclosure
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William A. Roper, Jr.
Mike H.:

I believe that your paradigm as to what transpired is erroneous.  ANd I believe that those litigating based upon a false paradigm are very likely to ask the wrong discovery questions and will ultimately be disappointed and may LOSE their case because of it.

But I also think that it is very important that defendants be informed about various alternative theories of the fraud so that they may choose the paradigm and the theory that fits their understanding of the facts and their comfort level in assuming risk based upon the strategy employed.

And if defendants also understand various possible alternatives, they can also craft discovery which isn't fatally dependent upon the correctness of a particular theory.
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Mike, if what you say is true, and I believe that it is, I just hope the investigations reveal it and it hits the front page of every paper in America.

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     The selling of counterfeit Notes and bonds to gullible investors is not a new thing. If we read the classic "The Great Gatsby" about the shady but
heroic Jay Gatsby who made his wealth in the 1920's during the last great
era of monumental Wall Street fraud, we can see that what occured in the
"Roaring 20's" happened again in the "Roaring 00'"s, and with the same results, the Crash of 1929 and the Crash of 2008.
      There is really nothing new under the sun, it is just that new generations
tend to forget the lessons learned by past generations, and history repeats
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