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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Agency Warns of Ch 11 Secrecy
Forbes, NY 11.14.07, 5:50 PM ET
PHILADELPHIA -

A U.S. watchdog agency says businesses are buying and selling assets with growing secrecy in bankruptcy cases, warning the trend could mask the true financial state of businesses operating under Chapter 11 protection.

"Our office is concerned," Joseph McMahon, an attorney for the Office of the U.S. Trustee, told U.S. Bankruptcy Judge Christopher Sontchi Wednesday.

He said actions by several Wall Street banks to keep secret their purchases of loan-servicing rights held by American Home Mortgage Investment Corp. could have a "cascade of consequences" involving accountability in bankruptcy reorganizations.

The Trustee's office is an arm of the Justice Department. McMahon, an attorney in its Wilmington, Del., office, told Sontchi that precedent being set by secret sales of mortgage-related assets could undermine broad financial-disclosure standards currently embedded in the Bankruptcy Code.

Among other things, he said, it could allow Chapter 11 companies to avoid having to make public disclosure of their monthly financial statements.

"The Bankruptcy Code actually requires information of this type to be disclosed, regardless of what impact it might have on the purchaser," McMahon said.

Sontchi on Wednesday overruled McMahon's objection to American Home's sale of loan-servicing rights to a unit of Bear Stearns & Co.  Bear Stearns hasn't disclosed the sale price, and Sontchi authorized it Wednesday to keep the amount out of public view.

Lawyers for American Home and Bear Stearns argued the secrecy was justified because the buyer is a major financial institution engaged in the business of buying and selling mortgage-related assets. An attorney for Bear Stearns also said the secrecy is necessary because "the competition is stiff" in the mortgage-sales arena.

Sontchi said that, by one measure, Bear Stearns paid a higher price for the small loan-servicing portfolio it's buying from American Home than W.L. & Co. is paying for a much bigger portfolio.

W.L. Ross, a private equity firm affiliated with billionaire investor Wilbur Ross, is paying $500 million for rights to service about $40 billion in loans. Measured as a percentage of the face value of the loans, Bear Stearns price is higher, Sontchi said.

That revelation, Sontchi said, should "go a long way" toward calming concerns that Bear Stearns was getting a "sweetheart deal."

Copyright 2007 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed


 
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~beenawhile
Infuriating,

It's not that Big ugly Bear wants to keep the competitive edge on the market, with the undisclosed figures.


It's because they don't want anyone to be able to tack them down, to any specific "financial status quo" to be used against them later.

They have once again managed to cover their backs with the filth, and scum, I thought they had already been covered enough in.

The hatred resonates deep within my soul for all of the disgrace this company has managed to cause hundreds of thousands of people.

Evil, vile, putrid, filth, disgust, are some of the words I can think of. But yet, none of them specifically describe any area of Bear enough for the onlooker to fully comprehend their Ungodly souls.

Isn't it just freakin incredible how they always manage to get their way?
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Sweet Spot

Judge fears American Home's loan-servicing arm could lose value

By PEG BRICKLEY,
AP
Posted: 2007-10-15 18:25:40
arb-jf

By PEG BRICKLEY

Dow Jones Newswires

WILMINGTON, Del. (Dow Jones/AP) - A judge on Monday rejected a bid to delay consideration of American Home Mortgage Investment Corp.'s plan to sell its loan-servicing unit, saying he's worried the business is losing value.

"I'm extremely concerned about the wasting nature" of the loan-servicing business, said Judge Christopher Sontchi of the U.S. Bankruptcy Court in Wilmington. He turned down a request to postpone a hearing on American Home's bid to sell the business for $500 million to an affiliate of billionaire investor Wilbur Ross .

Sontchi said he's had experience with companies that "lost monumental amounts of value" because of prolonged stays in Chapter 11, and said he did not want the same to happen to American Home. He also said he was "extremely concerned" about American Home's ability to retain loan-servicing employees as the company liquidates assets.

James Patton, an attorney for American Home, told Sontchi at a court hearing Monday that a delay could cause the company to lose the sale to WL Ross & Co., the Wilbur Ross affiliate. That's because the portfolio of loans being serviced is dwindling as homeowners pay down their loans.

American Home stopped making new loans shortly before its Aug. 6 bankruptcy filing. Ross can walk away from the sale if the portfolio of loans American Home services drops below $38 billion, said Patton, who is with the law firm Young, Conaway, Stargatt & Taylor. That portfolio was $46 billion just a few weeks ago.

Eugene Weil, a financial adviser to American Home, on Monday estimated that the company will be servicing $40 billion to $44.5 billion worth of loans at the end of October, when the first of two stages of the Ross deal are scheduled to close.

The proposed sale has aroused fierce opposition from several Wall Street investment banks - including Citigroup  Inc., Goldman Sachs & Co. and Bear Stearns & Co. - that say American Home lost its right to service the loans and therefore cannot sell that right to WL Ross.

At least one bank, an affiliate of Bear Stearns , has also warned that WL Ross isn't a licensed loan-servicer and that obtaining a license could take up to 10 months.
 
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Insider
This is because the sales were not true sales and depositors and servicers know that they have been shuffling assets to pay investors and hide a few key facts. First, they were and aree hiding the true rate of delinquencies and defaults from investors and ratings agencies. Second, there were hidden recourse provisions and the deals were not supposed to be off balance sheet and should have been on the balance sheets of the banks

The Chinese own much of this and have been exerting presure to get their cash back and our major banks like Citi, can't pay them. It's one holy hell!
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~beenawhile
ut oh,
I think i just picked up on something that maybe i wish i hadn't.

you said "The" Chinese.
not just plain Chinese....... but thee, "THE".

for what ever reason I'm not liking the way that sounds too much, as it seems to specificy, that "THE" Chinese, as in the influentual ones with possible polltical b/g's could be some of thee "THE" you are referring too.

If this is thee, case then Man, this just sure isnt good.

Something, such as this could have dire, and i do mean dire consequences for America, all brought on by those in the Big cozy comfy chairs laced with gold threads, whose souls should forevermore rot in "THE" hell.


If thee "THE'S" comeacallin' and they can't get their due. They won't blame the big companies that have done this to them, instead they will blame ALL of AMERICA.

This truly sucks............. Money is the root of all evil.
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Insider
Means the government, nothing more and nothing less
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