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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Wall St firms in FBI subprime probe

By staff writers with wires

January 30, 2008 10:30am

Article from: NEWS.com.au

 

WALL Street banks are among the 14 corporations under investigation by the Federal Bureau of Investigation for possible crimes relating to the subprime mortgage crisis.

The FBI will not identify the companies being investigated, but said the probe was industry-wide and included investment banks, developers, subprime lenders and companies that securitized loans.

The sub-prime crisis has already cost some of the biggest banks in the US in excess of $US130 billion ($147 billoin) in bad debt. Sub-prime loans were typically made to people with bad credit or low income who would typically not have qualified for traditional loans.

Neil Power, chief of the FBI's economic crimes unit told Bloomberg the criminal cases involved “valuation-type stuff.'' He said the probes include reviews of subprime lenders, housing developers and Wall Street banks that package loans as securities.

Mr Power also told reporters the criminal probes involved potential violations such as accounting fraud and insider trading. The FBI will look through the books of firms that have been forced into bankruptcy as a result of the mortgage crisis to look for instances of insider trading or other wrongdoing.

The FBI said cases involving individual loans had risen sharply after a crackdown on subprime lending irregularities.

"We anticipate in the next year that another wave of adjustable rate mortgages will reset and with that we anticipate that the mortgage corporate fraud potential cases to increase," said Sharon Ormsby, head of the FBI's financial crimes section.

The Securities and Exchange Commission has also opened about three dozen civil investigations into the subprime market collapse.

Some of the probes overlapped, an official said.

Targets of the SEC probe include Swiss bank UBS AG and US investment banks Morgan Stanley , Merrill Lynch , Bear Stearns , as well as bond insurer MBIA .

The SEC, which has formed an internal subprime mortgage task force, is looking at how financial firms priced mortgage-based securities and whether they should have told investors earlier about the declining value of those securities.

The US attorney in Brooklyn, New York and the FBI earlier launched a criminal investigation into two mortgage-related hedge funds at Bear Stearns which collapsed in the middle of last year.

There are also state investigations.

The corporate investigations are part of an FBI crackdown on improper subprime lending, which also includes a focus on fraud in loan origination.

The agency had about 1200 active cases, up 40 per cent from 2006, with 321 criminal complaints or indictments, officials said.

"Subprime loans are decreasing but ... suspicions of mortgage fraud are increasing," Ms Ormsby said.

Some of the loan origination cases were spurred by individuals lying to qualify for mortgages, but about 80 per cent of the cases involved fraud for profit, Mr Power said.

Particular problem areas included California, Texas, Arizona, Florida, and the Midwest, officials said.

 

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(Adds Bear Stearns throughout)
 
NEW YORK, Jan 29 (Reuters) - Bear Stearns Cos, Goldman Sachs Group Inc and Morgan Stanley said on Tuesday that government investigators are seeking information from them about their subprime mortgage activities.
 
Separately, FBI officials said they had opened investigations into 14 corporations as part of a crackdown on improper subprime lending but it was not immediately clear if the disclosures by the three banks were linked to the FBI probes.
 
Bear Stearns said it was cooperating with requests from government entities and regulators for information relating to subprime mortgages, mortgage securitizations, collateralized debt obligations and synthetic products tied to subprime mortgages.
 
Goldman said it was cooperating with similar requests related to securitizations, collateralized debt obligations and synthetic products tied to subprime mortgages.
 
Morgan Stanley, meanwhile, said it was responding to subpoenas and information requests from governments and regulators concerning subprime and non-subprime mortgages.
 
The investment banks disclosed the various requests and subpoenas in their respective annual reports filed with the U.S. Securities and Exchange Commission on Tuesday.
 
Morgan Stanley also said it was a defendant in lawsuits over its role as an underwriter of preferred stock offerings for mortgage lenders New Century Financial Corp and Countrywide Financial Corp.
 
New Century is liquidating in bankruptcy. Countrywide agreed on Jan. 11 to be acquired by Bank of America Corp.
 
Subprime mortgages go to people with poor credit. The U.S. housing crisis has caused dozens of mortgage lenders to go out of the business in the last year, and led to more than $100 billion of write-downs at banks worldwide.
Bear Stearns, Goldman and Morgan Stanley are among 21 banks sued on Jan. 10 by the city of Cleveland. The city alleges that fee-hungry banks created a foreclosure crisis by offering mortgages that borrowers couldn't afford but which could be packaged into securities that investors could buy.
 
Goldman has been the only major Wall Street bank so far to escape major damage from the turmoil, posting a $3.22 billion fourth-quarter profit. Morgan Stanley, in contrast, suffered a $3.59 billion fourth-quarter loss from continuing operations, while Bear Stearns' quarterly loss totaled $854 million.
 
(Reporting by Jonathan Stempel; Additional reporting by Christopher Kaufman; Editing by John Wallace and Tim Dobbyn)  
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I wonder how many CBASS Bonds have been looked at so far by the feds?  I'm betting that's why I still have not received my mortgage and note back.  Oh here is a kicker,  Litton Loan alleges I altered documents in a recent motion, mmmm only one problem, I don't have the mortgage, they do.  and the altered and forged documents that have been discovered were manufactured by them!
 
My home was sold over a year ago, and Litton is arguing before the court that I altered documents!!!  That they produced.  I have only asked for all the original documents, of which I'm entitled to now!  They don't own them I do!   So Larry send me the originals.
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WhatNoMayo?
Deutsche Bank analyst Mike Mayo downgraded Morgan Stanley to hold from buy, reflecting concerns about weaker-than-expected revenue.
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