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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Does any wonder if there are assets to get with the servicers down the food chain?

Do you think anybody is going to insist that criminal charges be filed?

Hmmm investors and borrowers all in the same boat?  Yep.

A scam is a scam.

Has anybody discussed a bad faith action against the hedge funds?

If they are thinking of it, they'd better be drawing up the papers before
all assets are located in the Cayman's.

Just so Bear Stearns has to pony up reserves for the upcoming litigation
from every direction.

Dee
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arkygirl
Dee, the servicers will be eviscerated by Wall Street banks and assets (I believe) will disappear into a cloud of paper confusion when that happens. (American Home Mortgage is an example....this story makes me imagine a goldfish surrounded by circling piranhas with a courtroom serving as their bowl....)

Excerpt:

"The clamor from lenders is complicating American Home's attempt to liquidate its assets in an orderly fashion, the attorney, John T. Dorsey said at a hearing in the U.S. Bankruptcy Court in Wilmington, Del.

One of the country's largest home lenders, American Home filed for Chapter 11 bankruptcy Aug. 6, with plans to shut down its business under court protection. Those plans, Dorsey told the judge presiding over the case, did not include "running in here every day" to fend off lenders anxious to grab their collateral.

On Friday, Impac Funding Corp. and Deutsche Bank's DB Structured Products Inc. initiated actions similar to those already begun by Morgan Stanley and Credit Suisse First Boston.

On Thursday and Friday, Melville, N.Y.-based American Home clashed in court for hours with CSFB, which was trying to get permission to immediately seize $46 million worth of home loans. American Home goes up against Morgan Stanley Tuesday in a battle for control of $519 million worth of home loans owned by Morgan Stanley, but serviced by American Home.

Dutch bank ABN Amro has also filed papers staking a claim to $146 million worth of mortgages that American Home is servicing.

Dorsey, who is with the law firm of Young, Conaway, Stargatt and Taylor, asked the judge overseeing the case, Judge Christopher Sontchi, for "breathing room," as the company prepares for asset sales in bankruptcy while jousting with major lenders.

The automatic stay of bankruptcy protects distressed companies from abrupt demands by creditors. Big investors in the mortgage boom of recent years, however, structured their deals with lenders like American Home so that they could move quickly in the event of a bankruptcy and reclaim the mortgages that were made with their money."

http://biz.yahoo.com/ap/070820/american_home_mortgage_bankruptcy.html?.v=1

American Home Mortgage does not appear to be on our list of "evil ones". So we must assume that this servicer did its job properly and did not rape people just because they could. Because they were surviving on the meager servicing fees, they were unable to withstand the drying up of the revenue stream. And you can see how the big banks covered themselves in these deals...they are disgusting in their greed.

So, one may think that the honest servicers will be the first ones to go. The more crooked they are, the longer it will take to "kill" them since they have pillaged for profit that they did not deserve and thus have more reserves. Shameful, indeed.

Suing hedge funds? That will happen. But shoot, let's just skip them and go right to the source of the problem, lol:

"The regulators and the entire Congress are at risk of being sued by the general population in America, but most particularly by a class of homeowners/debtors for having failed and allowed the massive fraud which has been unfolded by very powerful grassroots investigators.

One small group is looking to amass an army of lawyers to file a $50 trillion dollar suit naming the Department of Justice, thousands of negligent FBI agents, the Securities & Exchange Commission and their three thousand lawyers for the trillion dollar fraud, but not a single lawyer in the country can stand up for this without being blacklisted.

“The darkest shadows currently hanging over the US mortgage industry are about liquidity, or the lack thereof, as a result of the corrupt accounting practices at such places as Fannie Mae, Freddie Mac, Washington Mutual, and Countrywide Financial” according to one investigator who says that “all four of these once stalwart pillars of phony money politics are being severely scrutinized newly after many years of government settlements by both Fannie and Freddie, new massive fraud allegations in the trillion dollar debacle have resurfaced.”

http://www.americanchronicle.com/articles/viewArticle.asp?articleID=35705

I am sure that the yellow cowardly lawyers will hide like rats where this suit is concerned so it will never happen. But it doesn't make me stop thinking that this suit is exactly what SHOULD happen.



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Thats a good qiestion Dee
 
 
I found this today, It has a few major players.
Sarbanes-Oxley internal control rule hits today - MarketWatch

WASHINGTON (CBS.MW) -- Arriving Monday, about a year later than originally planned, new rules for corporate reporting will likely show a weakness of internal controls at financial services firms.
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Moose
Not to throw cold water on this:
Quote:

One small group is looking to amass an army of lawyers to file a $50 trillion dollar suit naming the Department of Justice, thousands of negligent FBI agents, the Securities & Exchange Commission and their three thousand lawyers for the trillion dollar fraud, but not a single lawyer in the country can stand up for this without being blacklisted.



They'd be laughed at but not blacklisted. At most, they might be sanctioned for filing knowingly frivolous suits. (There are rules against such).  Sovereign immunity is one of the concepts a lawyer learns early on, and this kind of nonsense demonstrates just how people will make stuff up to try and make a lot of noise.

Moose

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Dee,

Re: Does anyone wonder if there are assets to get down the food chain?

Yes, there are assets to get at down the food chain, plenty of them too......
REOs......all the stolen homes....and guess what?

These assets can NEVER be shipped off to the Caymans.

Question.....Has anyone approached hedge fund litigators w/ MSF part of the scheme? 

If I were an imploded hedge fund investor, not one of those with moral compass in a blind trust while raking in huge credit default swaps profits........I'd be rip$hit over manufactured defaults and foreclosures. 

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Moose

Gumshoe wrote:
...If I were an imploded hedge fund investor, not one of those with moral compass in a blind trust while raking in huge credit default swaps profits........I'd be rip$hit over manufactured defaults and foreclosures. 

And you wouldn't be alone. You'd be mad about the manufactured defaults and you'd be just as mad about the ones that didn't show up in default because the servicer chose one over the other to improve their position.

Something a lot of people don't realize is that there are tiers of investments in these things, with the upper tiers carrying insurance and the lower tiers basically being junk. The real gamblers went hot and heavy for the junk, and now their crying about it.  Sorry, I have to say "Whaaaaaaa."  They relied to some degree on the raters like Fitch and now, no one should have any sympathy for them because THEY ALL KNEW the servicers were paying for those ratings.

As I've pointed out any number of times, servicers analyze their portfolios very carefully to let them take advantage of their position to not only capture equity from borrwers but they can also move cashflows to trustees in any way they see fit.  They will create reports that their real customers (trustees) want to see because there is no granularity in their accounting.

In other words, income from borrowers goes into a giant tank of water.  Where the various cups and quarts came from can't be determined when the tap is opened for trustee X vs. trustee Y. It's all on paper the way the servicer wants it to appear.

If you want a visual analogy, think of what it would take to make sure borrower BLUE's payment went to trustee YELLOW.  It can't happen. The water going out is all clear.

Defaults work any way the servicer wants them to work, and this cannot be a surprise to investors in the RMBS market.  As has been explained to me, none of the players are virgins in this game and they'll have a hard time trying to make themselves look like they are.

Then again, the only impact any of that can have on a current borrower with one of the predators servicing their loan might be that they're supposed to get hello-goodbye letters when the servicing lands somewhere else.

Moose



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Moose,

Actually some investors are going Wha Hoo! Yippy Kay yo! about it if you read my post from last night:
http://www.websitetoolbox.com/tool/post/ssgoldstar/vpost?id=2105175&trail=#3

I do like your analogy.  Good one!
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