Fraudclosure

[mdman]

US bloggers are hyperventilating over the snowballing foreclosure scandal engulfing the US housing market.

The scam appears to have polluted the entire mortgage market, with banks foreclosing on delinquent homeowners using forged documents and misselling toxic mortgage-backed securities to investors while withholding material information and destroying original mortgage documentation to cover up this misselling. Here are a few choice nuggets:

Janet Tavakoli - This is the biggest fraud in the history of the capital markets. And it’s not something that happened last week. It happened when these loans were originated, in some cases years ago.

The Federal Home Loan Board of Chicago announce they will file complaints against several defendants over private label mortgage-backed securities sold between 2005 and 2007

Link

We contend that the quality of the loans that comprise the pools of securities cited in today’s complaints was inconsistent with the description in the pre-purchase documents prepared by the underwriters and issuers of the securities

Alan Grayson, Democrat congressman writing to the US Attorney General:

On September 20, 2010, after my office found evidence of systemic foreclosure fraud perpetrated by big banks and foreclosure mills, I called for a halt to illegal foreclosures.

Since then, big banks such as Bank of America, JP Morgan Chase, GMAC, PNC and others have suspended foreclosures or foreclosure sales. These banks are still claiming that the massive fraud they have perpetrated amounts to nothing more than a series of technical mistakes. This is absurd. This is deliberate, systemic fraud, and it is a crime.

So what do the panel think will happen? Congress attempted to pass Resolution HR3808 which would have forced courts to recognise interstate notarisations, possibly to decriminalise robosigned affadavits. Obama pocket-vetoed this, but it may come back. Most foreclosures have been halted in the 23 states where judicial foreclosures are required. The lawsuits by investors are starting. And some evicted homeowners have 'reclaimed' the properties they were evicted from with the police looking on. No-one can assure the house they are buying has a clean title instead of fraudulent documentation behind it.

My guess is this will set off round two of the global banking crisis. Americans are well armed. I don't think we're too far away from foreclosure murders. America is on the brink of lawlessness

[South Lorne]

US bloggers are hyperventilating over the snowballing foreclosure scandal engulfing the US housing market.

...there was a suggestion that institution(s) who hedged against the failures was(were )leading many foreclosures ....is this a conflict of interest....?....

[mdman]

...there was a suggestion that institution(s) who hedged against the failures was(were )leading many foreclosures ....is this a conflict of interest....?....

I don't think that of itself is a problem so long as the foreclosures are dealt with legally. The trouble is they weren't. A document company DOCX marketed itself as a company providing fake mortgage documentation where the original documents had been destroyed (when the mortgage entered MERS prior to the slicing and dicing securitisation machine).

There is evidence that banks knew about poor loan quality but did not disclose this to investors, and also that some subsequently short-sold the MBSs they had originated. This is criminal behaviour.

[billybong]

The US banks weren't content with burglarising (UK - burgling but why not add 4 extra letters just for the sake of it) the house contents they wanted to burglarise and steal the actual house and land itself.

The US and its banks and financial sector raddled and stupefied with fraud from top to bottom and unfortunately UK financial institutions and banks are closely associated.

Edited October 17, 2010 by billybong

[Liquid Goldfish]

So, the investment bankers destroyed the original documents so that the MBS investors couldn't find out that the MBS they'd bought weren't of the quality they were promised?

Now the documents they destroyed are needed in order to foreclose - so they fake new ones to use in court - so, presumably they should go to prison for perjury?

Edited October 17, 2010 by oldsport

[mdman]

Yes that sums it up. The line being held by the mainstream media and banking shills is that these were administrative/ clerical errors, not fraud. Signatures were clearly forged. One employee - Linda Green - apparently signed billions of dollars (up to $127bn!!!) worth of mortgage documents though the signatures do not match. Many employees were unskilled, described as 'Burger King kids'; they basically didn't know what they were signing, hired by the likes of JPM.

Good writeup here

Edited October 17, 2010 by mdman

[wonderpup]

This is it I think- does the US legal system roll over and let the bankers do whatever they want- or does rule of law apply in the United states?

[tallguy]

This is it I think- does the US legal system roll over and let the bankers do whatever they want- or does rule of law apply in the United states?

Yes to the first question

No to the second question

[billybong]

Apparently they sign general election manifestos in the UK as well.

[wonderpup]

Soo- remind me again just how smart, talented and clever these banker people are- my faith in their omnipotence is fading.

[interestrateripoff]

Soo- remind me again just how smart, talented and clever these banker people are- my faith in their omnipotence is fading.

Are they in jail?

Have any had all their earnings confiscated?

So far I would say they are pretty damn clever.

Although to be fair the fat lady is still no where in sight.

[mdman]

The monolines are getting in on the act

So they're asking for $10-20bn back from BoA alone. The GSEs are asking for another $20bn back from BoA. How can BoA not detonate? Who'd have thunk that bailing out fraudsters was a bad idea? May they live in seriously interesting times...

[fluffy666]

Soo- remind me again just how smart, talented and clever these banker people are- my faith in their omnipotence is fading.

To drag this slightly off-topic..

There is a fairly recent book 'Smile Or Die', which many on this forum would like - it's basically about the culture that has taken over in a lot of areas where you are not allowed to express negativity about anything. As in people with cancer are told they must keep a cheerful front up at all times.

And how this has spread to business, so people literally could not tell CEOs that they were doing stupid things; in the case of these documents, it's obvious that the people originating the loans were taking a no-doubt-allowed approach, and just assuming that all the documentation would just happen, just as it always did, even though the kind of people who usually insisted that the i's were dotted and t's crossed were being stampeded underfoot.

[mdman]

A summary of today's events in fraudclosure

1. BoA insist they will fix the paperwork regarding 102000 legal documents, and this will take just a few weeks. Foreclosures to proceed full speed ahead

2. Everyone but BoA realizes this is an admission that BoA presented fraudulent documents to court - they just grassed themselves up

3. Investors, including the NY Fed, Pimco and Blackrock take action to force BoA to repurchase $47bn worth of MBSs at 100c on the dollar, on the basis that the paperwork associated with the investor prospectuses was fraudulent.

4. The AG of Ohio warns BoA that proceeding with judicial foreclosure may not be such a smart idea, now they have admitted fraud against courts

Grab some popcorn - this story will run and run.

[wonderpup]

Everyone but BoA realizes this is an admission that BoA presented fraudulent documents to court - they just grassed themselves up

This is the core of it- these people are so far removed from consequences that they have lost all sense of self preservation- their profound belief that the system is totaly compliant to their needs and desires is going to be their undoing.

Plausible deniability has been lost- and even their bought and paid for legislators might not be able to save them from this.

[we the sheeple]

A summary of today's events in fraudclosure

1. BoA insist they will fix the paperwork regarding 102000 legal documents, and this will take just a few weeks. Foreclosures to proceed full speed ahead

2. Everyone but BoA realizes this is an admission that BoA presented fraudulent documents to court - they just grassed themselves up

3. Investors, including the NY Fed, Pimco and Blackrock take action to force BoA to repurchase $47bn worth of MBSs at 100c on the dollar, on the basis that the paperwork associated with the investor prospectuses was fraudulent.

4. The AG of Ohio warns BoA that proceeding with judicial foreclosure may not be such a smart idea, now they have admitted fraud against courts

Grab some popcorn - this story will run and run.

Yes, point three. Now the big players are calling FRAUD and wish to be made whole again, could be tricky for banks to eat ALL of their own sh!t.

I'm lov'in it!

[duckwomanloulou]

To drag this slightly off-topic..

There is a fairly recent book 'Smile Or Die', which many on this forum would like - it's basically about the culture that has taken over in a lot of areas where you are not allowed to express negativity about anything. As in people with cancer are told they must keep a cheerful front up at all times.

And how this has spread to business, so people literally could not tell CEOs that they were doing stupid things; in the case of these documents, it's obvious that the people originating the loans were taking a no-doubt-allowed approach, and just assuming that all the documentation would just happen, just as it always did, even though the kind of people who usually insisted that the i's were dotted and t's crossed were being stampeded underfoot.

See my sig

[Monkey]

so how much is the british tax payer in the Sh!t in this?

and would these [fradulent] mortgages be leveraged further?

if this unravels America is toast

[Liquid Goldfish]

so how much is the british tax payer in the Sh!t in this?

and would these [fradulent] mortgages be leveraged further?

if this unravels America is toast

I'm pretty sure American MBS weren't allowed into the SLS

but, the government guarantee for RBS's dodgy assets might include them

[Guest UK Debt Slave]

This is it I think- does the US legal system roll over and let the bankers do whatever they want- or does rule of law apply in the United states?

In my opinion, both America and the UK are now effectively dictatorships. Democracy and the rule of law is suspended indefinitely.

Mandelson admiited as much a few years ago regarding the situtaion in the UK.

The political systems in the UK and America are now mere window dressing. The bankers and the financial criminal class are totally in control.

[Monkey]

I'm pretty sure American MBS weren't allowed into the SLS

but, the government guarantee for RBS's dodgy assets might include them

Yeah i was talking Pre-SLS

thinking about it, this "could" highlight further exposure by world banks to this.

and are the fradulent claims only against residential property, or is commercial property included as well?

[billybong]

Seeing as US banks operate and compete in the UK and own or are strongly associated with UK banks and financial institutions it's difficult to see how they have such an endemically and blatantly fraudulent culture in the US and yet are going to be culture pristine when operating in the UK bearing in mind the total absence of financial regulation in the UK (FSA - ha ha ha).

It stretches the imagination too far.

[RufflesTheGuineaPig]

This is it I think- does the US legal system roll over and let the bankers do whatever they want- or does rule of law apply in the United states?

It's a difficult choice... would you want to be the judge that passed the decision that resulted in the US splitting into 2 countries?

[erranta]

In my opinion, both America and the UK are now effectively dictatorships. Democracy and the rule of law is suspended indefinitely.

Mandelson admiited as much a few years ago regarding the situtaion in the UK.

The political systems in the UK and America are now mere window dressing. The bankers and the financial criminal class are totally in control.

?

The EU's saga of suspicion and fraud

The ECA has refused to give the EU's accounts a clean bill of health

6 Dec 2004 ... In 2002 I was appointed chief accountant to the European ... alone there were 10000 examples of possible fraud in the EU's accounts.

For nine consecutive years the EU court of auditors has refused to sign off the budget.

13 Nov 2007 ... The auditors for the EU have refused to sign off the bloc's financial accounts - for the 13th year in a row.

11 Feb 2008 ... The Dutch finance minister is set to refuse to sign off the EU's Accounts

As of May 2009 the EU's internal auditors have refused to sign off on its accounts for the last 14 years

becoming a European tradition, they have refused to sign off on the accounts. This makes 15 years in a row the EU's own accountants have reckoned owing to fraud and mismanagement in the budget

[Mikhail Liebenstein]

I'm pretty sure American MBS weren't allowed into the SLS

but, the government guarantee for RBS's dodgy assets might include them

Well, they could be mixed in as collateral in some other instrument, then packaged and repackaged 20 times, before the varnished turd became some sort of AAA product.