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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The Equitable One
Whenever Wall Street people tried to argue - as they often did - that the subprime lending problem was caused by the mendacity and financial irresponsibility of ordinary Americans, he'd say, "What - the entire American population woke up one morning and said, 'Yeah, I'm going to lie on my loan application'? Yeah, people lied. They lied because they were told to lie."

Quoting Michael Lewis quoting Steve Eisman in "The Big Short."

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The losses were sufficient to wipe out not only the bonds Michael Burry had bet against but also a lot of the more highly rated ones in the same tower.  That the panic inside Wall Street firms had begun before June 25 (2007) suggested to Michael Burry mainly that the Wall Street firms might be working with inside information about the remittance data.  "The dealers often owned [mortgage] servicers," he wrote, "and might have been able to get an inside track on the deterioration in the numbers."   Pg 197 - The Big Short by Michael Lewis
 
This is from a part of the book where Burry is following OOMLT 2005-3 a pool of OptionOne subprime and by end of 2007 more than a third of this pool of borrowers had defaulted - 37.7%.  One of the things that Burry, Lewis' main character mentions contrary to media spin is that these CDO deals started to go bad prior to rate reset dates.
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The Equitable One
We could just about quote the entire book here as so much of it is relevant.
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Stephen

That defense didn't work.  Primarily, because the general public are not pathological liars, like mortgage brokers and realtors, and all loan applications were approved at at least 2 levels.

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You know something??? The way you guys are talking is the same way I "SEE" it....

The sad part of all of this is that the same people (Like Us) have been hurt. And the people that don't get it just walk away....

I am learning more and more as each day passes (since 2007). I was on the web with Keith Sadler. The guy that made a stands in reference to his home. The swat team had to take him out of his own home. This is an every day guy just like us.... He tried to deal with the so called holder of his note. And what happened???? "NOTHING". Just like the rest of us...

I just don't get it.. Something has to be done. No one is listening. Don't they know that something is better than nothing??? I guess not. They can all make a whole lot more by foreclosing on us. That's a fact. Why doesn't anyone else (but us) see this?????????

Back in the day our parents stood outside with signs when the gas prices went up. They also had signs going up for everything else. They would party as us kids were suppose to be sleeping and the only thing we heard was some harsh voices about politics.....

This is some of the problem here... No one wants to get involved. Only "US" the people that keep this site alive.... I am disgusted over all of this. I can just pray for my grand children and try to teach them how I grew up. And to make a stands....

cmc
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Sara
When I went to be preappoved, the mortgage companies kept trying to get me to buy a more expensive house.  They approved me for much more of a loan with a higher monthly payment than I wanted to make.  I knew my limits...

I can see how some people got in over their heads.  Everyone wants to have their own home and some got sold on "the dream" of a bigger and better home.  But not every single one of them!

I too don't believe everyone of them lied on the loan application.

S
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Sara,
We didn't lie on one piece of paper. We gave them everything they wanted. You may get a kick out of what I am about to tell you:
We moved from NJ to Fl. We bought a mobile home before hand when we were going back and forth in 1999, so we didn't have to stay with family when we came to Fl. we had a place to lay our heads in peace. When we moved to Fl full time we decided that we needed to buy a piece of land and put a new mobile home on it and in the future we could build a home (we owned the mobile home but rented the land. Not a park. It was private property.) We went to the bank in 2005 and asked for $50,000. We had to put down more money than we have saved so we said forget it. In 2006 we were just looking at homes (new ones). Low and Behold, a mortgage broker said let me run your credit (670) and all of a sudden we were approved for $350,000. We bought a brand new home from an investor. Later on we had problems with the soil. We were built on expansive soil. Everything is wet here. I got in touch with the builder and the county and everyone's mother. At last I got in touch with the bank. (This is how I found out about all of this). No one at that time knew who I should speak to. Searching deeper and deeper leads me to today. "I DO" have the money to make my payment every month. But they are not getting it. They have lied, cheated, etc...I signed for a 30 yr fixed and all of a sudden it is now an ARM.  I have been fighting them since 2007. "Going strong."

So when someone talks about "Dead Beats" Us people fighting this is not in that catagory. Every one of us has a reason, weather a job was lost, we were lied to, got sick, etc...... If we had just let these "DEAD BEAT" banks fail maybe everyone would have a different opinion. No one seems to understand except for some of us. What this all comes down to is the Greed, Lies, etc.. And in my book the only Dead Beats I see is the banks that took over other financial institutions to hide it "ALL". So if I do loose because of the Greed, Lies, Fraud than they will still get nothing. I will just file BK. I have been preparing for this since 2007. If they can get away with it so can "WE".

cmc
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Wow cmc, that is an interesting route that you took, trying to borrow 50K and couldn't, so they ended up loaning you 350K.  That is a shame that it went that way, as well as a shame that prop values got so inflated by the use of the "greater fool theory".  (No intention of calling anyone a fool, that is just what it is referred to in investing psychology terms, one person buying an investment at an unrealistically high number but they are able to find someone else to pawn it off on for an even higher number, and so on).

Too many mtg lenders with their proverbial trench coat open trying to sell us all a watch.  The system was far too vulnerable for the ultimate scams that took place, and unfortunately you were in the middle of it, from the sounds of it.  You are what is referred to as a "strategic default", in that you are planning the (hopefully) soft demise.  Hope it works out in your favor w/o having to do the Bk.

Who is your lender...? and do you have any inkling of other similar situations where the lender has been willing to renegotiate on better terms or forgive a deficiency w/o collection action so that you might avert the Bk?  Good luck on it. 
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anon

I read the Big Short as well as Liars Poker.Awesome books. IMO the "investment" banks discovered that securitization of mortgages was so lucrative that they actively sought out more mortgages to sell in much the same way that a drug dealer actively seeks more clientele with about as much integrity of a street pusher.

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A.R.
Anon,

I agree.  They knew they were going to make a ton of money securitizing sh*t loans, so what did they do ?   They actively sought out people they could give loans to and Intentionally lent them more then they qualified for.  Or they bait and switched people.  Some of these trusts were put together BEFORE they even had loans to put in the trust.    The plan wasn't to loan money to people so that they could fulfill the BS dream of owning a home.  The plan was to sell a sh*t product, knowing full well that the product was going to fail, and then blame it on the average American who just wanted a piece of the dream.  I'm not saying that there weren't people who Actively knew they couldn't afford their payment and borrowed money anyway.  This mess is only comprised of a small amount of those people.  The rest of us played by the rules.  Quite frankly, if you bought a home anywhere from 2004-2007, the only loans out there were the sh*t ones.  NO ONE was selling a decent product.  NO ONE.  So if you didn't lie on your application they lied for you.  They didn't disclose the stuff they were suppose to disclose.  If you applied for a certain loan and then went to the closing table only to see they switched you into another loan.  What were people suppose to do ? Not sign, lose their deposit money and essentially be homeless ?  Not only that, they knew that most people CAN NOT possiblly read all the documents they sign at closing.  They are being rushed to sign so everyone could go home.  How do you expect people to read hundreds of papers at a closing.  Sh*t, it takes hours to just do the signing !!

How can WE be held to a different standard then the rest of these crooks ?

This whole situation makes me very afraid for my kids and their future .This country is looking less and less like America.  The only thing we have LEFT in this country is our Judicial System.  I hope that doesn't fail us as well.

Peace.
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April
anon and A.R. - I totally agree with both of you.  After all the info. I've read on the subject I fully believe this was intentional.  As A.R. said "a bait and switch."  If it weren't intentional it is completely incompetent!  In either case the average person could be in deep $*#!

Knowing what I know, I actually think more people should file bankruptcy and/or strategically default.  It's the only way to stop the abuse and companies do it ALL THE TIME!  Since we went through bankruptcy 2 years ago, we used retirement money to buy a house with cash, moved our money, and I have one credit account we used to rebuild our credit with a very small credit limit - which we're paying off next month and closing.

People can win at this, even if doesn't look that way on the surface.  We said good-bye to a house, which was hard, and damaged our credit with the bankruptcy.  But we are more than our house or our credit score and we've severed all ways they had to suck from us (save being a tax payer, but that's another thing).
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A.R.
April,

I think the whole "FICO" score is what keeps people enslaved to their debt.  My inlaws and their parents never had to have a FICO score to purchase a home.  It's some BS # they made up to keep you and me slaves to them.  Think about it.  Who cares what your credit score is. 
My Mother in law has always paid ALL her bills on time.  Purchased a home for $10,000 (I know ridiculous) paid it off over 30 years.  Sold it last year for over $400,000.  She put her money away in CD's and savings accounts.  The kicker is that she has a horrible FICO score !!   It's hysterical !!  She would be considered a risky buyer.  Why ?  Because she didn't purchase ANYTHING on credit. Ever.  She has 1 credit card for emergencies and has used it 1 in about 20 plus years.  Not even sure if they've closed that account on her. 

They made it so that tax wise it made sense to own a home.  Otherwise you lose all your money in taxes.  But if you think about the actual benefit of mortgage interest, cost, and real estate taxes.  Does it really make sense to "own" a home for the tax right off ?  They just make you believe that.  Essentially you are renting your home until it's paid off anyway.

UGH !  I wish I knew back then what I know now.   I keep telling my kids to RENT when they get older.  Don't buy into the "American Dream" campaign.

BTW, I've started reading The Big Short.  It's a book that once you pick up  you won't be able to put down.  Michael Lewis does a fantastic job !


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April
A.R. - I feel ya on the FICO score thing.  It's a secretive calculation about us, controlled by the same institutions that are scamming everyone!  It's totally an inside job and a vicious cycle, cleverly wrapped in the package that is consumer credit and debt.  That's why I am advocating that people use any legal remedy possible to extricate themselves from it.  I am not advocating that people be deadbeats.  Nor should people walk away from obligations that they can afford to pay.  However, if you are being abused by a creditor you don't just have to stand there and take it.  And as I said, businesses do this sort of thing all the time - and notice when businesses file bankruptcy it's seen as a good business strategy in some cases, while when individuals do it it's seen as a sign of irresponsibility or weakness. 

I'll have to check out this book, though I fear it will just make my blood pressure rise!
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I can back up cmc's story with my own. I personally built this house by myself and when the property tax man found out he levied me with back tax's of around $14,000. I went seeking a $15,000 loan and could only get a $100,000 one. 
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