FOIA Requests Reveal the Truth About JPMC-WAMU "Purchase"

Jan 17, 2023

The bottom line is that JPM Chase did not actual purchase or pay for anything. The net “price” was negative including an IRS refund due to WAMU but transferred to JPMC.JPMC did acquire the book value assets and liabilities of WAMU and subsidiaries, but there was was litttle in the way of book value for assets which would have included loans — if there were any “loans” (debts+notes + mortgage liens) that were owned by WAMU at the time of its collapse..

The representation that loans originated by WAMU became the property of JPMC was always false and JPMC knew it was false. WAMU owned no usch “loans” or any rights to the transctions with homeowners. The fiction that it retained servicing rights was employed to pretend that somehow there still existed a creditor. That role was exintguished in the process of securitization.

Lawyers for Wall Street investment Banks can successfully argue, perhaps, that their style of securitization should be made legal. But they cannot argue successfully that it is currently legal.

Hat Tip to Summer Chic, who made the FOIA request to FDIC. Dozens of letters and notices from lawyers for JPMC were included in the response. They clearly show knowledge and intent of JPMC management about what they ere really doing despite what they were saying in court.

It is very interesting. Among other things, it clearly demonstrates that JPMC has taken the position that it cannot incur any losses unless it results from JPMC action. Anything that happened before 9/25/08 is the responsibility of the FDIC, which has indemnified JPMC against any losses for damages, costs or expenses. It even shows that the FDIC allowed the settlement of such claims by JPMC even though the FDIC was responsible for reimbursing JPMC for any and all costs involved.

Further, it shows that no Power of Attorney ever existed in which the FDIC gave JPMC the authority to act for the FDIC or the WMU estate except as specifically set forth in the Purchase Whole Bank Agreement.

And it shows that WAMU subsidiaries sold off certificates contemporaneously with alleged loan closings such that there were few, if any, loans acquired by JPMC — although it is possible that JPMC preserved “Servicing rights.”

But if they were servicing and were not the creditor, they were agents without a principal. And that is the problem that runs throughout the securitization infrastructure created by Wall Street. And it is why the only rational conclusion is that securitization extinguishes the actual debt and replaces it with a faux debt that is only implied by documents. There can be no debt without a creditor to whom it is owed.

And it shows that what I have been saying for 16 years is the same thing that both JPMC and the FDIC accepted as fact —- JPMC repeats again and again that they acquired only the book value of liabilities and presumably the book value of assets as shown on the books and records of WAMU and subsidiaries.

I repeat that no schedule of “loans” has ever been prepared or produced that was attached to or offered as a supplement to the 9/25/08 agreement. The “book value” only gets reported under GAAP if there are corresponding entries based upon a memorialization of transactions conducted in the real world.

And it shows that the repurchase agreements, disputes, and settlements were rampant. This is the central reason why the banks want us to focus on the paper rather than the money trail. Because the ultimate question is to whom doe the homeowner supposedly owe money? It can ONLY be someone who owns their debt.

The repurchase obligations and settlements underscore the obscurity of the ownership of the debt and, therefore title since a paper transfer of the mortgage lien without a contemporaneous transfer (purchase and sale) of the debt is considered a legal nullity in all US jurisdictions.

In practice, you would want to see all repurchase demands and settlements (and lawsuits based on those demands) during the period in which JPMC was asserting ownership or serving rights over transactions that had previously been the subject (before 9/25/08) of securitization issuance and sale.

As a reminder, I will repeat the counterintuitive nature of this scheme. The fact that unregulated securities were issued does NOT mean that the certificates conveyed any right, title, or interest to any debt, note, or mortgage lien. The fact that certificate holders exist does NOT mean they are beneficiaries of a trust. And the fact that a bank is named as trustee does not mean they possess any duty, obligation, or authority to act on behalf of the certificate holders.

If you don’t pay attention to the details, you are doing what the banks want you to do — lose.

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Neil F Garfield, MBA, JD, 75, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business, accounting and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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