NOTICE: IN ANSWER TO INQUIRIES RECEIVED FROM CITIES AND COUNTIES, YES EMINENT DOMAIN IS A GOOD IDEA BUT NOT BECAUSE OF THE REASONS STATED THUS FAR. IT IS A GOOD IDEA BECAUSE THE PARTIES CLAIMING TO BE INJURED BY THE SEIZURE WOULD BE REQUIRED TO SHOW THAT THEY WERE INJURED IN REAL DOLLARS AND REAL WIRE TRANSFERS, CANCELLED CHECKS AND WITNESSES. THEY CAN’T DO THAT. INITIATION OF EMINENT DOMAIN WOULD BE THE ULTIMATE DISCOVERY TOOL THAT WOULD END FORECLOSURES ANYWHERE IT IS INVOKED. AND IT WOULDN’T COST A DIME.
And see end of this article where the federal government could recoup $2.5 trillion right now and at the same time provide a $10 trillion stimulus to the economy without spending one dime.
Modification Scam by Banks and Servicers
The above link will tell you a lot about what is happening in the industry — but it still assumes that the loans were bundled and sold when they were not. So far as I can tell in 6 years of analysis and study by myself, my team and the published reports in the public domain, there is no evidence of bundling, no evidence the “pools” or “trusts” were ever funded by either money or loans.
To understand WHY and HOW modifications would be turned into a scam by the banks you must understand their motivation for intentionally taking less in a “foreclosure sale” than they can get in the secondary market for selling a new mortgage, modified mortgage or refinanced mortgage. As Reynaldo Reyes from Deutsch Bank put it — “it is all very counter-intuitive.” In other words, a big fat lie on a scale unparallelled in human history.
The motivation lies in the fact that everything is already paid. The money from insurance, credit default swaps and federal bailouts, together with multiple resales of the same portfolio and hence the multiple sales of each loan going into the pocket of each banker. Anytime a loan goes into foreclosure, it seals the deal — allowing the banks to keep their ill-gotten gains that could amount to as much as 40 times the principal due under the loan.
So they don’t want your $400,000 even if you have it, because it endangers the $16 million they received and might mean they must pay it back. And THAT is a contingent liability not shown on any of the mega bank financial statements. If it was, they would be declared insolvent, which is exactly the case — unless they can get all the loans into foreclosure with the exception of a few modifications or settlements done for PR, expediency or other reasons.
Hence the quote from one employee of a servicer that when he asked why a perfectly valid modification proposal was being rejected the answer from his boss was “we are in the foreclosure business, not the modification business.” Unfortunately the media report ended there. I always ask for something more, however. If they consider themselves in any business, as a “servicer” why would that not be simply to process the receipts and disbursements and correspondence with the borrower and the creditor? Why would they care one way or the other whether the loan was modified, settled, refinanced, paid through short-sale or regular sale? Why indeed.
The answer lies in the fact that the subservicers and Master Servicers are the real people handling the actual money and hiding the movement of the money, while they are forced to fabricate, forge and perjure themselves in millions of recorded documents to cover up the fact that the original loan documents were a sham.
If they did the original loan right, which would take no more effort than doing it wrong, then we wouldn’t have this mess. That would be because loan origination would return to the right business proposition — loaning money with the intention of getting repaid.
But here, because of the tricks and maneuvering of the investment banks, the goal was to fund loans that (a) would not and could not be repaid and (b) even if they were repaid, would be labelled as being devalued in a non-existent pool over which the Master Servicer had the exclusive right in its sole discretion to say that the portfolio had failed and the mortgage bonds had to be written down or written off.
It’s like buying 40 different policies of life insurance on your partner and then killing him. Without a conscience, you would be looking for lots of partners even as the grieving families buried the dead, their hopes and dreams forever changed.
Modification has never been about modification. It has always been about foreclosure, which puts the state stamp of approval that the loan failed. Everything LOOKS right, so the Judges rubber stamp them, because, as stated by thousands of Judges, these securitization arguments sound like a gimmick to get out of a legitimate debt. After all would a Bank with 150 year old gold plated reputation put itself in the position where all of its managers and executives could go to jail along with the legions of lawyers representing them? Of course not. But they did.
If you look closely at modification just as I have looked closely at the loan origination, you will see that like the original documents you are left with a holographic image of an empty paper bag.
The documents don’t track the movement of money which is to say that the payee and lender and the beneficiary had already agreed never to touch the money going in or coming out of the deal. Hence the note, which is a contract, and the mortgage or deed of trust, which is a contract was never funded. Those contracts may be in writing but they are useless pieces of paper that can’t ever be worth a dime without the signature of the homeowner on new documents connecting the dots to the the real lender and allowing the non-disclosure of the real lender to stand.
All of that is presumptively cured by the appearance of a deed on foreclosure arising out of a credit bid which we all know was not from a creditor and which the auctioneer and the trustee and the stated mortgagee and the stated substituted trustee, and the lawyers using it all know is a big fat lie. Since no cash was paid at auction, and the credit bid was invalid, the sale never occurred. Bu the issuance of the deed anyway creates the presumption that the sale did in fact occur.
Now we can look at how the modifications are a total scam just like the origination of false notes and mortgages followed by false assignments, endorsements and allonges.
Probably half the “foreclosures” (I put that in quotes because someday, I hope the homes will be returned to their rightful owner) result from the servicers telling the first lie: “stop paying your mortgage payments, because we can’t consider your offer of modification without you being delinquent.” Once again, borrowers are duped because they are hearing music in the ears. Stop paying? And it is the BANK that is telling us to stop paying? What could be better?
Then the games start. You might remember that in 2007 Katherine Ann Porter did a ground-breaking study that blew the lid off of this gigantic fraud not in theory but in a scientific study which found that no less than 40% of the notes signed by borrowers were INTENTIONALLY lost or destroyed. Once again, that is an interesting fact but I asked why a bank would take a valuable piece of paper and shred it. The answer is simple: if they showed it to the investors and others, they would be in obvious breach if not accused of Madoff or Drier type fraud and Ponzi schemes. So better to claim they can’t find it and make up the rest, than to show the actual notes, many of which were not signed by borrowers ever, but whose signature was photo-shopped onto the document.
Why mention that again? Because 80% and perhaps more, of the modification proposals are claimed as not received, lost or accidentally destroyed while month after month the homeowner gets deeper and deeper in debt on missed payments (that are actually not due at all, but that is another story). So the strategy is simple. Make sure people stop paying, make sure you can declare the default and acceleration of the full amount due, and then either foreclose or tell them their proposal for modification is rejected by the investor after consideration required by HAMP.
The homeowner is faced with 9-18 months of missed payments, plus fees and costs to reinstate the loans and some of them do just that. But most people have spent at least part of the money and are unable to reinstate the loan with this “creditor” who never funded nor purchased the loan and who is the servicer for a party that never funded or purchased the loan. Wall Street wins. Half of the people who were foreclosed were losing their homes not only to fraudulent tricky documents, but because the Bank had manipulated them into going into de fault when they were not in default, even assuming the loan origination documents were actually valid and enforceable (which of course they are not).
Sprinkle a little guilt and moral dilemma into the soup and you have the perfect scenario for Wall Street to foreclose on millions of homes, thus sealing the deal on profits that were multiples of the entire funding of the mortgages but which probably never reached the investors.
Here is something to think about: $13 Trillion in loans were written, $2.6 trillion went into “default” on which the loss was around $1.3 trillion because of the residual value of the house, and last but best of all, Wall Street has received no less than $17 Trillion more than the principal of all the loans written during the mortgage meltdown.
Is there any reason anyone should be making payments on their mortgage? If so, it should be to the federal government not the banks. If the homeowners were “given”their homes free and clear, they could be taxed on the windfall since it would not be forgiveness of debt of rather avoidance of debt through third party payment.
The tax liability would be a small fraction of the original mortgage which of course is invalid, but the loan proceeds were still received by or on behalf of the borrower so an obligation does exist (albeit without documentation like a note or mortgage) and its extinguishment is a taxable benefit to homeowners. The tax liability would be around $2.5 trillion, which means that the average liability of the household would be reduced by around 80% as it relates to the house. Everyone wins except the Banks who still will come out ahead because we all know that it never happens that the scam artist doesn’t have some of the money stashed away.
21 thoughts on “Modification Scam by Banks and Servicers”
This website truly has all the info I wanted concerning this subject and didn’t know who to ask.
@carie et al – here is the mortgage bankers association’s (aka mers and its buddies) letter to fhfa re: eminent domain:
http://www.scribd.com/doc/105743569/MBA-Letter-to-FHFA-on-Eminent-Domain
‘Horrifying results’ of HAMP laid at U.S. Treasury’s door:
Foreclosed Nevada homeowners now dubious about government ‘help’
http://nevadajournal.com/2012/09/11/horrifying-results-hamp-laid-us-treasurys-door/?utm_source=news-bulletin&utm_medium=email&utm_campaign=news-bulletin
i’m still reeling psychologically & financially from dealing with my mortgage, the “servicer” & modification…like many people. frustrating that American gov is one of the last places to “get it” and work to correct this mess.
Neither the FED, STATE or LOCAL GOVTS LENT THE AMERICAN PEOPLE ANY MONEY.
WE THE PEOPLE ARE THE TRUMP CARD…WE OVERRULE ALL OF THEM BECAUSE WE PAID FOR EVERYTHING UPFRONT VIA THE TREASURY…AND WE THE PEOPLE ARE THE GOVERNMENT….THE FED, STATE AND LOCAL GOVTS ARE OUR EMPLOYEES.
THEY ARE ON THE BACK OF THE BUS. WE THE PEOPLE ARE DRIVING THIS BUS…BY THE SUPREME RULE OF LAW OF THE U.S…..
THE UNITED STATES CONSTITUTION …!
http://www.huffingtonpost.com/2012/09/10/gavin-newsom-eminent-domain_n_1870932.html?utm_hp_ref=business
NEW YORK, Sept 10 (Reuters) – California Lieutenant Governor Gavin Newsom says he wants the U.S Department of Justice to investigate “threats” against local communities considering using eminent domain to seize and restructure poorly performing mortgages to benefit cash-strapped homeowners.
Newsom sent a letter on Monday to U.S. Attorney General Eric Holder asking federal prosecutors to investigate any attempts by Wall Street investors and government agencies to “boycott” California communities that are considering such moves.
“I am most disturbed by threats leveled by the mortgage industry and some in the federal government who have coercively urged local governments to reject consideration” of eminent domain,” he wrote in a letter, a copy of which was provided to Reuters.
BEWARE OF THE NEXT SCAM AMERICA! ….They are planning on turning US into a NATION OF RENTERS….! ACCEPT NO FASCIST FIXES FOR FRAUD…THESE DEBTS ARE INSOLVENT BECAUSE THEY COMMITTED A QUADRILLION DOLLARS IN FRAUD WITH OUR E-SIGNATURES….!
AN ATTORNEY TOLD ME…DON’T SIGN OR AGREE TO ANYTHING REGARDING THESE INSOLVENT DEBTS..THEY WANT COMPLETE COMMUNISM..! BEWARE…ITS COMING LIKE A THIEF IN THE NIGHT…! MORE OBAMA FRAUD and DECEPTION..! THEY ARE SETTING US UP TO BE A NATION OF RENTERS..!
I am sensing the GOV CORP has something up their sleeve…The Treasury selling off BILLIONS dollars worth of Treasury INVESTMENTS IN AIG today…to private investors….? Tonite I heard an ad on the radio for of all corps…PHH MORTGAGE..the fraudclosers who are trying to steal my home…they are opening up in Bannockburn Ill..right where their fraudclosure law group FISHER & SHAPIRO are located…SURPRISE..! The Government(s) must be planning a really big scam because they are looking to hire lots of employees to no doubt do lots more dirty deeds with the taxpayers money…! HOW ABOUT YOU PAY US BACK OUR STOLEN WEALTH, YOU CROOKS..!
I don’t like the eminent domain idea one iota. I don’t trust the Government(s) and this is OUR PROPERTY……WE THE PEOPLE PAID FOR IT AT THE ORIGINATION…WE WERE NEVER PAID BACK BY THE FED FOR BORROWING THEM OUR WEALTH AND THEY DISHONORED OUR SIGNATURES EXPONENTIONALY BY COMMITTING A QUADRILLION DOLLARS WORTH OF DERIVATIVES FRAUD IN OUR NAMES….The State Governments are heavily engaged in this ongoing cover up for fraud and have passed laws to aid and abet fraudclosure…THE STATES HAVE NOT FOUGHT TO PROTECT THE PROPERTY RIGHTS OF WE THE PEOPLE. Therefore, IMHO…they are equally guilty as the criminals who robbed US.
The only scam with the modifications was to get your signature where in the fine words were lie after lie after lie. Their only intention was self-serving, to get liability releases …. and to get your admission (more like without your objection) that they are the owner of the note and wa..laaaaa…… AND now entitled to another lien on your already clouded title. Sheeesh!
The servicers are in the business of servicing loans. These lying, arrogant jerks! I remember the loan mod hell…all of the abuse and b.s. they put me and my family through. Hours on the phone…the wild goose chase, the lies,(no) hope for homeowners trying to coax you into accepting defeat. The debt counseling and all of the deceit and lies…It made me furious enough to want to find out what in hell was going on..? The numerous hand written letters, phone calls, and e-mails to every politician and agency imaginable complaining…complaining…complaining…
It certainly woke me up. Thank You!
Right on Neil..! What the evil masterminds behind this really want is to steal everything from WE THE PEOPLE….They want to rob the people of EVERYTHING…OUR LIVELIHOODS, OUR WEALTH, OUR BUSINESSES and OUR PROPERTY….They want a nation of RENTERS and COMPLETE COMMUNISM..This was never about monetary gain for the real players behind the scenes..it is about CONTROLLING not only everything, but EVERYONE. It’s done by mind control. Making the people believe lies like the banks lend……they don’t. They borrow from the U.S. TREASURY….THE AMERICAN PEOPLES TRUST ….. and THE CROOKS….NEVER PAY THE PEOPLES TRUST BACK.
Not only should the Investors be going after the Banks that
played a Madoff on them, but the Investors should also be
going after Fidelity National Title and like Title Companies
where their attorneys facilitated the fraudulent transfer of
Titles at the County Land Registers all across this Nation.
Ha-Ha one of your own William P Foley made billions
doing it to you.
hello all,
thank you neil.
read this article to my spouse, we love this paragraph:
“The motivation lies in the fact that everything is already paid. The money from insurance, credit default swaps and federal bailouts, together with multiple resales of the same portfolio and hence the multiple sales of each loan going into the pocket of each banker. Anytime a loan goes into foreclosure, it seals the deal — allowing the banks to keep their ill-gotten gains that could amount to as much as 40 times the principal due under the loan.”
and also
“So they don’t want your $400,000 even if you have it, because it endangers the $16 million they received and might mean they must pay it back. And THAT is a contingent liability not shown on any of the mega bank financial statements. If it was, they would be declared insolvent, which is exactly the case — unless they can get all the loans into foreclosure with the exception of a few modifications or settlements done for PR, expediency or other reasons”
so they cook their books and we get stripped of all of our assets, how do we reverse that? isn’t all that money a potential asset due us?
we have been mad and now we want to know how we get even.
NG: “….which the Master Servicer had the exclusive right in its sole discretion to say that the portfolio had failed and the mortgage bonds had to be written down or written off.” Doesn’t this lead to a conclusion that the investors have no right of recourse against the homeowner for the homeowner’s non-payment? Or, even the investor has it as long as the pool’s ‘alive’? That’s pretty funky: remedy for
default is only contingent.
@Marilyn,
“Would a Mortgagor have put in all that money, if one knew the truth of how the Banks ran their illegal business. I bet not.”
Don’t be so sure. Even after learning what the banks did and how MERS was used, people still to this day accept to buy houses and sign contracts referring to MERS. MERS can no longer foreclose in many states but it still is in operations.
People don’t learn from others’ mistakes. They’d rather make their own even when duly warned…
The people buying properties now are dumb dumbs.
Not so the Investors, they think they will out smart the system.
The fat lady has not sung yet.
The abominable banking system that is in place today, gives a bank great incentive to foreclose on an Ultra Vires contract, as the bank demands lawful money returned for the unlawful money lent.
By what Authority are the Banks doing this? There is no authority for doing this. This is in complete prohibition to Art 1 Para 10 Cl1 of our US Constitution.
All of our cases with slightly different facts all stem from the same Fraud.
The Bank did not lend you ‘LAWFUL MONEY” but the Bank intentionally wrote
a “bad check” and gave it to you –to circulate as “money”
I certainly did not know this kind of fraud was going on when I signed my mortgage and note. Did you?
The Mortgagor puts up a down payment, the Mortgagor pays a lot of fees and probably paid an attorney to represent them, all in order to get this “bad check”
Would a Mortgagor have put in all that money, if one knew the truth of how the Banks ran their illegal business. I bet not.
Did anyone notify you after that big day – the Bank’s check bounced – of course not. When the check that the Bank wrote came back to the Bank that wrote it, the bank didn’t say “we only have 5% , if that much and it was not stamped “insufficient funds” the bank stamped it “paid”
So since the Bank did not have the money sitting in the bank’s account when they wrote the check, what the bank gave you is their credit.
That is exactly what is prohibited by Art. 1 Para 10 Cl 1 of the US Constitution.
What authority gives the Bank the right to make contracts with “bad checks”
Nothing- Nada.
“Lawful money” is needed to make a contract valid.
Over and Over Mortgagors gave a Bank a mortgage on their castle , in return for a Bank giving you a credit entry on their books and charging you Interest on this credit. Also illegal.
Did the Bank give you lawful money or is that what you got, credit?
Banks are not allowed to lend their credit- Banks are in the business to lend
“lawful money” There is not a Bank charter that allows a Bank to lend their credit.
And as we continued to make monthly payments the Bank collected more money on their fraud.
You try writing a check when you don’t have funds sitting in your account to cover it.
You can be sure that check is coming back marked”insufficient funds” You are not allowed to do it and either is a Bank.
This scam of Ultra Vire contracts caused injury to us, the true homeowners.
In addition the banks are laundering “bad checks”.
The Banks violate Truth in Lending Laws.
The Banks are collecting Interest on money that doesn’t exist. (Lending you 5% and collecting Interest on 95% of thin air)
And once the Bank gets their Ultra Vire contract going, they start flipping them to MERS, Securitizations , Wall Street, Title Companies etc. there is no shortage of people all wanting to get their piece of the illegal profits
With more and more information coming out regarding this idea (or reality) regarding the lack of an actual transactions between the borrowers and the originating lenders, the empty securitized trust and the possibility that the real monies are being manipulated by the Master Servicer/subservicers…… is there a place to learn more about this process of ripping us off. I would like to learn more about how the lenders or servicer’s actually make their money.
Javagold,
Well if you have good credit you could put up a bond for the amount and request “GOOD CLEAR TITLE” but if you lose in court. You lose the house, your credit, and now you have the bond company coming after you. I looked into doing “bonded” title but the risk for me was to high so I had to go another route.
people should pool their money together and the fight the servicer pretender in court with a certified check for full amount of the mortgage in exchange for a GOOD CLEAR TITLE….of course, they will not be able to do this and the money can then be used for the next fraudclosure…rinse and repeat and rinse and repeat until every homeowner has defended their house..thats how the people will win
I would like to add that …. it Sucks for the Pretender who has Borrowers with the Means to Pay Off the Mortgage. Because the Pretender now must produce Good Title back to the Homeowner and payback the Ins & CDSs and Taxpayers! Law says they have to take the $400,000 …. its tough cramming this down thier throats… but the Banks gotta take their medicine! Right Neil?