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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Trading Dead Horses for Dead Cows

One thing regulators discovered during the S&L investigations was that rogue S&L operators were selling their bad loans to each other, magically making them good again because, well, there was a buyer on the other side of the transaction. These crooked thrift chiefs called the practice, “Trading dead horses for dead cows.” On Friday, we learned from published reports, that Merrill Lynch - the Wall Street poster child for this crisis - did something that may not have passed the smell test. According to The Wall Street Journal: “In one deal, a hedge fund bought $1 billion in commercial paper issued by a Merrill-related entity containing mortgages, a person close to the situation said. In exchange, the hedge fund had the right to sell back the commercial paper to Merrill itself after one year for a guaranteed minimum return.” This transaction allowed Merrill to book a profit on paper and temporarily off-load a major liability. Andy Fastow would be proud of these guys!

O. Max Gardner III

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[edit] Early career

While at Continental Illinois, Fastow helped pioneer a system of raising capital by selling notes backed by risky loans. The practice spread across the industry "because it provides an obvious advantage for a bank," noted the Chicago Tribune. "It moves assets off the bank's balance sheet while creating revenue." Continental became the largest U.S. bank to fail during the Savings and Loan crisis.

Based on his work at Continental, Fastow was hired in 1990 by Jeffrey systeming at Enron.


Andy set up the framework for converting mortgages into securities and using them to play derivatives with and create a fractional reserve on top of fractional reserve system. Of course this sytem makes it easy for the banks to steal our homes and leverage them  many times the amount of the mortgage. They then play an accounting shell game with the profits and blame the borrowers for the fictitious foreclosure "losses".
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Why are we continually surprised by this behavior? We all know that banking is a cartel:
n: a consortium of companies formed to limit competition; "they
set up the trust in the hope of gaining a monopoly" [syn:
trust, corporate trust, combine]
The organism (cartel) is made up of cells like any other organism; banks, thrifts, trusts, the Federal Reserve, Wall Street players and others.

The cells are always driven to ensure that the organism survives. Thus there are questionable transactions as the cells strive to regain a healthy status. They swap vital nutrients with each other to try to maintain an equilibrium.

Just like our own bodies' immune system will attack rogue cells, bacteria, and viruses that invade it so that the organism can survive. If sucessful, the organism does not get sick or die. If unsuccessful, disease and cancer may ensue possibly allowing or causing the death of the entire organism.

The cartel's immune system broke down long ago. It began bloating and being unhealthy years ago, but in this case the cells were too dumb to stop the disease process in its tracks at the onset. The cells thought they were thriving and that the organism was, too, so they stopped the immune reaction cold. The cells stopped doing any self-checks for health and the organism was too dumb to realize that it was sick. It only knew that it required more and more fuel to appear to thrive and WE were that fuel.

We have had a cancer or AIDS syndrome in the organism for a long time. By the time the cells finally realized that they needed to do something the organism was too far gone to save either itself or its cells. Now the doctors (the Federal Reserve and the government) seek to put it on life support by injecting it with billions in funny money.

What we wind up with is a nearly dead organism being kept alive via life support and at great expense to us. The nurses slap lipstick and rouge on it to give it the appearance of health, while underneath is a pile of festering cells, sores and creeping rot. If this were an animal we would all weep at the sight of it and demand that it be put out of its misery.

The kindest thing for all would be to let this organism die swiftly and mercifully instead of letting it consume ever increasing amounts of fuel (us) in an attempt to hang on to life. Unfortunately, we, the fuel, have no one to lobby for our health and well-being. It has become a case of spreading the infection now; if the organism does, we are all going to go down with it!

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