U.S. Sues UBS for Fraudulent Sales of RMBS But Still Manages to Get It Wrong

Nov 12, 2018

The bottom line is that the loans themselves were fatally defective in terms of the loan documents. The money was delivered but not by the named “lender” nor anyone in privity with the named lender. At all times nearly all of the loans were in actuality involuntary direct loans from investors who had no knowledge their money was being used to originate loans without any semblance of due diligence.

All the other parties were conduits and brokers for conduits. None of them were brokers for a plan of investment to which investors agreed. and all of them were based upon fraudulent inflated appraisals.

In equity, as I have repeatedly said, the debt, regardless of to whom it is owed, should be reduced by the excess appraisal amount, a fact that ought to be presumed when anyone attempts to bring an action in collection or foreclosure.

This is because the source of the loan, regardless of who it might be in actuality, assumed the risk of loss associated with affordability and most importantly the risk from a false inflated appraisal. Licensed appraisers warned congress as early as 2005 when 8,000 of them petitioned Congress to do something about them being forced to either bring in false appraisals or not get any work at all.

Contrary to popular myth there is no such responsibility for borrowers to figure out if they really can afford the loan or if the appraisal is accurate. That is the state of the law under the Truth in Lending Act. The “conventional wisdom” that home buyers and borrowers don’t need a lawyer or a financial adviser on the largest investment of their lives leaves a vacuum where consumers are entirely at the mercy of predatory and fraudulent operators like Wells Fargo, Bank of America, Citi, Chase, US Bank, Deutsch, and others.

“Don’t bother getting a lawyer. Save your money. They can’t change anything anyway.” That is the catch phrase used to make certain that the fraud being perpetrated on consumers will not be revealed until it is too late and the courts presume that the fraud never occurred (or that if it did occur, it’s somehow too late to complain about it).

Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult.

I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM. A few hundred dollars well spent is worth a lifetime of financial ruin.

PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.

Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).

THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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Hat tip to Dan Edstrom

see United States vs UBS

see https://dtc-systems.com/us-sues-ubs-to-recover-penalties-for-fraud-in-the-sale-of-rmbs-securities/

So once again the Federal government sues a major bank for fraud and corruption causing “catastrophic” damages to investors and fails to mention any losses to homeowners. Piling the entire loss on the backs of homeowners is the third rail. Nobody touches that because of the erroneous perception that the rule of law is contrary to public policy. That may come as something as surprise to those of you who thought we were a nation of laws and not public policy decided behind closed doors.

The successful myth perpetrated by the banks is that since borrowers stopped paying the wrong people on their loan, that they should nevertheless be held liable and lose their home to the wrong people because otherwise (a) borrowers would get a free house and (b) applying the rule of law would undermine the financial system. Both the premise and result are contrary to good sense and our existing laws. The courts generally twist themselves into pretzels to avoid the law and arrive at the public policy result rather than the legal one.

Everyone is willing to accept that the entire securitization process was a gigantic process to perpetrate fraud and, as some lawyers who resigned rather than draft securitization documents, part of a “criminal enterprise.” But somehow the victims are only investors who are still called “beneficiaries” even though it is well established that the trusts named in foreclosure lawsuits never participated in a single business transaction and were neither organized nor existing under the law of any jurisdiction, much less the owner of loans..

Once again the suit fails to state that the loans were at best problematic in the sense that transactions utilizing undisclosed third party money compromised the efficacy of the loan closing documents.

And once again it doesn’t say that the securitization plan itself was fraudulent in that the entities represented as owning the loans did not exist and/or did not own the loans. It also doesn’t say that the use of fraudulent inflated appraisals (a) hurt homeowner and and that therefore (b) UBS lured investors into an investment plan fraught with liabilities.

Nor does the new lawsuit say that investors were promised that their interests would be remote enough to avoid liability for lending violations and bankruptcies of the originators but in fact the money from investors was directly used in the loans and did not go through the alleged “Trusts” that were supposedly purchasing loan portfolios from aggregators who in fact had no interest in the loans and were merely conduits for a paper chain bearing no relationship to the money trail.

But it does hint at what the banks were doing. The review of the loans by UBS was simply a sampling and that sampling, was in fact a method of picking low hanging fruit to serve as benchmarks. From that false process of sampling, UBS hoped to avoid liability for mischaracterizing the real defects in the securitization process. In other words they were using their cherry-picked samples to describe the entire “loan portfolio” which in fact was neither owned nor conveyed to the special purpose vehicle (REMIC Trust) that was created (on paper only).

You may remember that in my seminar in Malibu in 2008, I described this process as covering a pile of dogshit with gold plating. In the end it is still almost entirely dogshit.

Thus we have revealed the unwillingness of Federal law enforcement to get to the real issue, which would in fact protect both investors and homeowners — the fraudulent nature of the loans themselves, the fraudulent nature of the so-called loan portfolios, and the fraudulent enforcement of documents that fraudulently named the wrong party as the lender and are fraudulently brought to courts on a mass basis for fraudulent enforcement that keeps adding to the pain and anger of Americans who continue to suffer from the discard of the rule of law in favor of “public policy.”

Tags: FIRREA, housing, principal, TRUTH
Posted in Corruption, discovery, evidence, Fabrication of documents, Servicer |

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