Good for the Mass. Supreme Court, someone has a soul after all.

this chart is not handy, you need to explain what everything means.

When does someone present evidence that the banks oversold their securitizations in triplicate and the reason they desire massive forecloses is it makes the fraud disappear.

Keep up to date at http://www.swarmthebanks.com and http://www.parallelforeclosure.com

“What does “soul” have to do with a legal transaction? “Swarmthebanks.com” speaks for itself, and the idea that a physical loan could be sold “in triplicate” is naive. The security into which the loan was assigned as collateral could be referenced synthetically, but that is another topic. Yes, there was demonstrable laxity in the securitization process; however, that in itself does not absolve a debtor from their obligation. What if the bank made an error in someone’s checking account giving them several hundred thousand extra dollars? Under this logic the money would be considered some sort of windfall. This fiasco was fueled by moral hazard of epic proportions. There is ample evidence of fraud among the mortgage brokers, and many borrowers stretched the truth, to put it charitably, when attempting to qualify for loans. That said, I believe that there are serious issues of corner cutting and broad based lack of adherence to well codified clerical procedures in the assignment process. It is a problem that begs a solution, not free money. How many of these aggrieved borrowers were jubilant to get loans to buy homes that they couldn’t afford to install showcase kitchens with acres of granite and restaurant grade appliances, or pull out cash to buy expensive new cars? Grow up.

Ernest, you say it is “naive” to believe loans were sold in triplicate. I say it is FACT. Check out these case files where BofA and Freddie Mac loans are in dispute because they were double and even triple-pledged to various constituencies…

http://wp.me/pFWnq-4sJ

http://4closurefraud.org/

The thing is I see every state and lower court victory overshadowed by the make-up of the nation’s Supreme Court…

I just don’t put it past those “conservatives” to claim that a corporation - for instance, a bank - is “naturally” more “right” because they’re bigger/wealthier “people” than a real American citizen is.

I mean they named corporations “people” and gave them the ability to influence elections on a level that no human citizen can match with Citizens United…

So just what, pray tell, is outside the realm of possibility?

Michael, It appears that both links that you reference are to 4closurefraud.org. Upon reading the material, my takeaway was that it was, lets say, heavy on conjecture and not even handed in the least. More like the ranting of a crank with an agenda. Let me just say that there are indeed serious lapses in the assignment process, and there should be consequences for these improprieties. It is evident that the tsunami of origination volume overwhelmed the process, but conceptually securitization is a valuable tool, and does lower the cost of financing for borrowers.

With regard to the issue of loans being pledged to several trusts simultaneously, it is logical to objectively assume that this was done more as a clerical error rather than a broad based nefarious practice. (In no way am I defending slipshod clerical practices, nor the bank’s ex-post facto solutions for them.)

Why do I arrive at this conclusion? Simply because the cashflows from that particular loan need to be accounted for as flowing through the securitization. Since MBS pay monthly, the missing cashflows would immediately be flagged as a default in the trust to which they had been assigned in error, thereby exposing the problem. Since early payment defaults were the foremost indicators of fraud, they garnered a fair amount of attention, to say the least. Indeed, in the waning days of subprime securitization, it was specifically the requirement for originators to repurchase EPDs (early payment defaults) that put the weakest ones into bankruptcy.Without exception, early defaulting loans were expected to be bought back by the seller. So conscious multiple assignment simply did not lend itself as a practice for originators to pad their incomes.

Anybody ever noticed how there is a direct correlation between the amount of specialization in a word salad and the likelihood that somebody is trying to drown you in B.S.?

ibesteve2u-Oh yeah, I’m following you brother! It is especially disconcerting to me, that there are still people who believe homeowner’s who over bought, lied about their income, used their newly purchased home for an ATM machine and installed all the latest bells and whistles (“acres of granite” etc.) are the main reason for our housing mess.
I am seeing first hand the main reasons we are in this position…and it’s definitely not the homeowner’s
In my case (which I am not going to extoll on again…my position and situation has been explained many times here in this particular forum) after almost a year of dealing with BoA, their position is that they have previously offered me a modification and I refused. FALSE. This stance is in retaliation for me having stood up against their false reporting affecting my credit score and ability to be gainfully employed. I am an honest person, I strive to do what is always right. I’m just ONE of the sorry a..es who put most of their life savings into a house at absolutely the worst time ever. BoA would have walked away from the same situation I am facing a long time ago. I am by no means a wealthy man, but I don’t believe anyone would be happy with putting almost 90k into a property only to have it be underwater almost 80k in 3 years. Now I am more than willing to pay my last dime to hold BoA accountable for their dispicable actions. I have enough evidence on my side…but more than anything I have the TRUTH! So all the trolls who want to say how it is the homeowners fault…I ask you to look through my glasses and see what I have seen, as my glasses are in no way rose-colored.

Great report.

Also great to hear that these wicked companies have bitten the dust !

“What does ‘soul’ have to do with a legal transaction?”

It’s an ancient American idiom for describing a certain type of legal (or extralegal) consumer transaction. See, e.g., Merle Travis: “You load sixteen tons, what do you get?
Another day older and deeper in debt.
Saint Peter, don’t you call me, ‘cause I can’t go;
I owe my soul to the company store”

“the idea that a physical loan could be sold ‘in triplicate’ is naive.”

What seems “naive” to me is the idea that human beings would *not* find a way to game a a deal structure that’s so complex that a foreclosing lender can’t point to a public record document that establishes that it has a property interest in the property it claims. If you don’t believe me, just Google “Billy Sol Estes ammonia tanks” or “OPM Leasing Services.”

“Yes, there was demonstrable laxity in the securitization process; however, that in itself does not absolve a debtor from their obligation.”

Debtors’ obligations were not at issue in the Ibanez case: ownership was. The debtor was evidently able to demonstrate an ownership interest in the property. Nobody else could. Why should our courts or legislatures intervene to grant an ownership interest to someone, other than the debtor, who can’t demonstrate ownership? I’m a strict constructionist. I don’t want our courts or legislatures

“... there are serious issues of corner cutting and broad based lack of adherence to well codified clerical procedures in the assignment process.”

You call them “clerical procedures.” I call them “a millennium or two of Anglo-American property law.” Po-tay-toes, po-tah-toes ...

“It is a problem that begs a solution, not free money.”

Certainly not. Free money is reserved for the counterparties of AIG and other Very Important People. It’s necessary to provide free money to those parties because, otherwise, our very social fabric could fray. We wouldn’t want unimportant Americans getting any free money, though. That would create moral hazard.

“Grow up.”

People who assert the immaturity of others (e.g., NJ Gov. Christie “It’s time for the adults to take charge”) needlessly invite scrutiny of their own ability to meet that criterion.

“Since MBS pay monthly, the missing cashflows would immediately be flagged as a default in the trust to which they had been assigned in error, thereby exposing the problem.”

You may be right. But you may be wrong. Your assertion suggests that whoever “immediately ... flagged” a bad loan on behalf of a lender/servicer was more diligent than those people who kept track of what loans the lender/servicer actually owned. But how do we know that the flaggers and the trackers were working with the same set of loans?
The Ibanez case stands for the proposition that U.S. Bank could not prove that it actually owns the Ibanez loan; in fact, it seems like the court was working overtime to try to help U.S. Bank provide that proof, but U.S. Bank couldn’t do it. That’s pretty darned basic (see ibid., Google “Billy Sol Estes ammonia tanks” or “OPM Leasing Services”).

So, let me wrap my mind around this. If you put $90k( of presumably borrowed money) into a property, only to see the value decline by $80k over 3 years, somehow that is BofA’s fault? Sorry about your job and all that, but it seems like you got caught in a bad trade and are looking for a scapegoat. Again, to reiterate my position here, I think that there are many poorly documented or fraudulent loans that legitimately should be re-purchased by lenders, and BofA’s Countrywide exposure is enormous, but if you levered yourself up to the hilt and the wheels came off, that is your problem dude, and the bank should work with you to reach a solution.

Ernest Frankly on your comment today, 8:47 a.m Here you go, another one blaming the borrower This like if an Arliene offers incredible cheap tickets to passengers, Passenger go and buy the tickets do to the incredible offer, then the plane is fly by a bunch of Monkeys, Plane crashes and then you blame the passenger for buying the cheap tickets in the first place, by the way on top of this the owner of the Arline buys insurance that the plane is going to crash because they know that a bunch of monkey are flying the plane (they put the monkeys to fly it) and then they collect the insurance win win for them, lose lose for the passengers (homeowners)
Are you kidding me ?

Ernest Franklin on your comment at 3: 08 You end up saying that the bank should work with the borrower to reach a solution. The problem is they don’t.  Even that they received money form the government and money from the HAMP program to help the borrowers in distress (that the same bankers cause by the way) , Instead, they put the borrower in a worse situation by delaying a solution, lying, ruining his credit, overcharging, doing a parallel foreclosure and more…

Ernest Frankly-Sir you do not know even 1/10th about what I have been through these past few years. No reason I feel you should, as we have never been acquainted.
Short as possible…bought my FIRST home in July 2007. The almost 90k I brought to the table was mine…HARD earned mine. Minus 20 degrees below zero…not a dry stitch of clothes on me by 9 a.m. summers MINE. Injured July 2008 (tore rotator and labrum in dominate right shoulder) didn’t miss ANY work other than visits to Drs. Couldn’t afford to as I had bills like everyone else. Work comp company ran me in circles…considered arthritis was pre-existing condition. Fought through the pain and insurance company’s standard bullshit. Did well enough to stay employed until Nov. 2009, as I was one of last 4 men to be laid off. Along with money I brought to the table at signing, I also had almost 12k in savings upon being laid off. Within a few months of being unemployed I realized I might be having a problem with making mortgage payment in the future. Future at that tyime was no work and possibility of surgery. Went through 2 weeks of HUD certified counseling…then contacted BoA in hopes of maybe modifying my loan. Wasn’t looking for principle reduction…hoped for extended terms and lower interest rate. All were provided and outlined via HAMP. Boa sent paperwork via FedEx and I filled out and returned same day. Received letter from BoA stating they had received all documents necessary on April 4, 2010. I will not boar you with all the details between then and now, do know I have VERY explicit recordings, witnesses who can verify all my actions and those of BoA. I went through my “rainy day” savings account in about 10 months, now all I have left is 401K and pension. BoA CONTINUALLY delays and outright lies concerning my situation. They have specifically ruined my credit to the point of me not being accepted for work. I am still current and have never been late in regards to my obligation to them.
When I first started this journey…I was extremely skeptical of all those who were having problems dealing with the banks, surely all was not that bad. Now I know differently. I feel I have been sucker punched…at least now I know who and what they are about. My mistake was to believe they could be reasonable…at least maybe give me an honest answer. My only relief in all of this ...I do not have children and a wife who would be put in this awful situation. I have seen way too many children of friends going through this…seeing their faces and hearing their cries when I help to relocate them from their homes. I grieve over these things more than anything else. There were measures put in place to prevent a lot of this happening. Unfortunately, I have had to witness firsthand what the banks are actually doing. They got theirs…we are sh.t out of luck. I am not looking for a “scapegoat”. Hoped for some honest answers…whether they were to my liking or not. Somehow after almost a year of fighting this battle…“we offered a modification, but you wouldn’t accept” just is not going to cut it. The lies and deception has gone on too long. Sorry for the rambling.

Mr. Larsson, you are one SMOOTH articulator! I truly envy your impressive intelligence, with your abilities of expression.

Mr Ernest Frankly and if you think Roy story is not horrifying here is another one
Once upon a time…
Story begins back in 1995 when Michael and Pamella Negrea built their 2400 square-foot, colonial style home in Eastlake, Ohio, and took out a $200,000 mortgage.  Michael’s 53 years old, a Willoughby, Ohio police officer for 25 years… Pam, a graphic designer, is 57.  They’ve never been late on, much less missed a single mortgage payment.  Nary a one… they should be quite proud.
Since that time, however, GMAC has foreclosed on Michael and Pamella Negrea’s home three times… so far. 
The first time GMAC foreclosed on the couple’s home was back in 2002.  Totally current on their mortgage payments, it must have come as quite a shock.  Once in foreclosure, GMAC wouldn’t accept their monthly payments, so each month they deposited them into a bank account and awaited their day in court.
The attorneys finally worked out a settlement in 2004.  Since the couple had never actually missed a payment, the Negreas would only be required to pay the actual payments owed… not a dime in penalties or interest would be charged, and the foreclosure case was dismissed by the court.
In the written settlement agreement, GMAC also agreed to erase the foreclosure and late payments from the couple’s credit reports, although here we are… EIGHT YEARS LATER, and the Negreas say that still has not happened.
The Negreas resumed making normal payments again in early 2005. They were probably relieved that the whole ordeal was finally over.
It was June, when GMAC sent the couple yet another default letter.  Michael and Pam not only had copies of their canceled checks, but they also had the return receipts from the U.S. Postal Service that showed the exact dates they had sent their payments and when they GMAC had received them.  As always, the couple had made all payments on time, as agreed.
The rest of the summer was fairly uneventful, but in October, the Negreas received yet another default letter from their friends at GMAC.
And right after that they got another letter from GMAC, this time saying that their homeowners’ insurance, which was $500 a year, had not been paid.  GMAC was notifying them that the bank had taken out a new policy on their home.  The new premium would be $3,200 a year.
here was only one small, teensy-weensey, almost insignificant, little detail:  The Negrea’s homeowners’ insurance policy HAD NOT lapsed.  Like the couple’s mortgage payments, it had been paid as agreed.  They’d been with the same insurance company ever since buying the home back in 1995, and although it must have seemed foreign to GMAC, the insurance company’s policy was not to cancel homeowners’ policies when the premiums were paid as agreed.
It got worked out though… and GMAC sent the couple another letter apologizing.  Ooopsie, again!
The couple must have been hoping that they could finally have a wonderful Christmas that year, without GMAC foreclosing and all that, but as the month went on, they noticed that the check they’d written to make their December payment had not been cashed.  Uh oh…
The very next month, January of 2006, just two short years after the first case was dismissed, GMAC, who is apparently every bit as tenacious as they are incompetent, foreclosed on the couple’s home YET AGAIN.  And this time the bank would not back down.
Not much had changed since the last time around.  The Negreas were still current on their mortgage payments, darn them… and ultimately the foreclosure would be thrown out of court once again. But this time the couple, quite understandably, had lost some of their patience with the bank, so they sued GMAC for breach of contract, fraud and unfair debt collection… and this time they insisted on going all the way to trial.
Michael Negrea told Cleveland Plain Dealer reporter, Chuck Crow, that as the evidence was presented, “you could hear some of the people on the jury saying, ‘Oh my gosh.’”
The Negreas were awarded $217,000, which you would think would have been enough to wipe out their $200,000 mortgage, but it took GMAC… are you sitting down… THREE YEARS to make the payment as ordered by the court…  and by that time, GMAC had added $50,000 in fees to the balance of their loan.
It was 2009 when the couple received another troubling statement from GMAC.
The bank was now DEMANDING PAYMENT for its attorneys’ fees… the ones incurred by the bank during the second foreclosure case.  That’s right… the case that the bank LOST… the case where the Negreas filed the counterclaim and won the $217,000 that took GMAC THREE YEARS to pay… the case where GMAC had to pay the couple’s legal fees.
GMAC just keeps accusing the Negreas of not having homeowners’ insurance.  And not only that, but right after that the bank started insisting that it had to make monthly home inspections, and started charging the Negreas $700 or more for each such inspection.
GMAC told the couple that the inspections were being done in order to make sure that they still lived there.
Okay, so the couple goes back to making normal payments throughout much of 2009, when all of a sudden… wonder of wonders, miracles of miracles… GMAC stopped cashing their monthly mortgage payment checks AGAIN.
This time GMAC said the couple owed nearly $310,000… plus attorneys’ fees… on what was their $208,000 mortgage, and in August of 2009, GMAC filed for foreclosure AGAIN… this time in federal court instead of Ohio’s common pleas court.
The couple’s attorney, Mr. Futterer told the Cleveland Plain Dealer…
“We feel they’re court-shopping.”
The trial, by the way, is scheduled for later this month.
Mr Ernest Frankly, do you still blame the borrowers?

Pardon me…but having grown up on a farm, you would think I might know the difference between “boar” male hog…and “bore”, which was my intended meaning and spelling!

Everyone wants to turn this into a political issue, or find satisfaction in the fact that the bank is finally getting what it deserves.  The reality is a lot more mundane.  When you go to the court and try to foreclose out a borrow, you have to at least be able to prove that you own the note (or are servicing it).  If you can’t connect the dots, you can’t foreclose.  It’s that simple.  It was a sloppy process, and now they have to figure out a way to clean up after themselves, which won be that difficult.  We won’t be talking about this a year from now…sorry.

Roy, it’s Dave, please. I don’t read you at all as looking for a scapegoat for a bad trade. I’ve made bad trades, too, I imagine most people (including corporate “persons”) have. The problem I see is that the BoAs of the world have the power to get society to help make their bad trades (e.g., buying Countrywide and Merrill Lynch)  good (or at least better), while most of us don’t have the power to even get a human being at BoA to answer the phone. And the reason that’s a “problem” in this country is that “the mass of mankind has not been born with saddles on their backs, nor a favored few booted and spurred, ready to ride them legitimately, by the grace of God.” That’s from the last letter that Thomas Jefferson ever wrote. He was declining an invitation to attend a celebration of the 50th anniversary of the Declaration of Independence on July 4, 1826, which is the day that both he and John Adams died.

Dave-I appreciate all your words of wisdom. Truth be told, everyone in some shape or form has had a hand in these matters. In my case…maybe I should have waited a little while longer before purchasing (my thinking was if I waited much longer I’d of been priced out). If I’d foregone the upgrades I’d paid cash for I’d of had more in reserves for these bad times. I truly felt i yr. in reserves was plenty to weather any significant storm…who knew the “perfect storm” was just around the corner. Anyway, I considered I was buying a home (my first) more than an investment. For the first time in my life, I finally had a place that was truly mine. Knowing after a long hard day of work I was assured of a place to rest my head. I hadn’t always had that satifaction at times in my life, so to have that luxury meant a lot to me…still does.
Bottom line now…banks are still not doing the right things. The thing that bothers me the most now, is they are treating people with an absolute disregard of their basic rights. In my case…how do they expect me to be able to secure a “good” job, when they are deliberately (and falsely) ruining my credit. One of the things I hoped to do upon rehabilitating my shoulder and securing “good” employment, was to refinance my loan with a local bank. No way I can do that when they have absolutely destroyed my credit score with blatant lies. Please don’t feel sorry for me…as I have faith in myself, as do many others fortunately. Believe me…before it is all said and done, BoA will know they kicked the wrong dog.Just a crying shame they couldn’t do what was right.
Your Jefferson quote was a new one to me. I haven’t read as much about him as his legacy surely demands. I feel that Lincoln and Jefferson were the two greatest Presidents of our nation. Could I bother you for a recommendation of a book concerning his life, achievements and especially his writings? I would appreciate.

Well, now that you guys are on Jefferson here is a good one:
“If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”
– Thomas Jefferson, Letter to Treasury Secretary Albert Gallatin (1802)

In reality the gushing of the collaterliized debt markets meant the original lenders had no motive to actually vet the recipients-they wouldn’t be trying to collect the debt themselves anyway, instead they would do anything to to entreat consumers to borrow far beyond their means reassuring in a booming economy they would be suckers not to buy buy buy !

How Chase and B o A Lie !

http://www.youtube.com/watch?v=8J6wfkQoC64

Roy,

I like the Jefferson/Adams chapter in this book:

http://en.wikipedia.org/wiki/Founding_Brothers:_The_Revolutionary_Generation

Like America, I am ambivalent about Jefferson, but he sure could turn a phrase. Adams is definitely the less glamorous Founder, but I would personally like to thank him for not getting my ancestors killed in the war with France that he avoided via diplomacy, thereby destroying his prospects of re-election. Thanks are few and far between for someone who prevents a disaster from occurring.

Dave

Roy, Your situation sounds like a real nightmare. You have held up your side of the bargain, and it’s evident that you’ve run into a wall of dissembling and lack of competence on the part of your lender, BofA.

Going back to my earlier posts, I was trying to explain how the system is supposed to work, while acknowledging that it clearly isn’t. I was trying to address the chain of title issue, that is pretty cut and dried. Many notes were endorsed in blank, apparently as a cost/time saving issue in anticipation that they would be reassigned numerous times. If this was done improperly, it can’t be simply fixed by the lender after the fact, as I said earlier. They cannot foreclose, if they can’t prove ownership.

I didn’t mean to stir up a hornet’s nest of people that apparently have vested interests like “acmodspecialists,” whom it wouldn’t surprise me in the least had been involved in the origination of these loans and is now trying to once again make money by “helping” borrowers.

Again, Roy, you are one of the victims here, and I’m sorry to say there are many others caught in this mess, but you should resent the fact that for every legitimate victim in this nightmare, there are many people who knowingly overextended and are now claiming to have been victimized. That is a sad fact.

I’ll leave you with this last thought. BofA’s mortgage problems, the ones that they are desperately trying to prevent from coming to light, are going to wipe out a lot of their capital. The reason that they can’t address this problem equitably is that it would sink them to admit the full extent of their losses.

I wish you the best of luck. You’ve been honorable in your actions and deserve redress.

Mr Ernest Frankly, I’m sure you mean well, but once again you blaming someone else, this time loan originators, and not the Banks who by gushing of the collaterliized debt markets meant the original lenders had no motive to actually vet the recipients-they wouldn’t be trying to collect the debt themselves anyway, instead they would do anything to entreat loan originators with incentives and consumers to borrow far beyond their means reassuring in a booming economy they would be suckers not to buy buy buy !
This madness was allowed and the Banks knew what they were doing
Blame the borrower, blame the broker, blame the loan originator, blame the consumer,  but not blame the limitless power of Wall Street, the banks lobbyist and the corruption of political leaders who did their bidding while sacrificing the public interest.
And now because the banks can’t address their problem equitably which it would sink them to admit the full extent of their losses now they can do fraud-closures?

@Dave-Thanks for the book recommendation, I have Founding Fathers on order. Although the personal relationship shared by Jefferson and Adams is the last chapter in this paticular book…it will be the first I’ll read. I feel that any endeavor of diplomacy seeking a peaceful result is to be especially commended. How cool to know Adams noble efforts affected your life, possibly your existence! Funny you brought up the old Merle Travis song. I must have been somewhere around the first or second grade when it came out. Thought the line was “sole” for the longest time, that he owed his shoe leather to the company store. Later, upon learning of the word “soul” and its meaning, the song made a lot more sense. Anyway, I do thank you for the book recommendation.

@Ernest Frankly-I appreciate what I take as your having faith in regards to my explanation concerning my situation with BoA as being the truth. With GOD as my witness, I assure you it is the truth. It has been quite a shock to me to learn firsthand how horribly wrong they are in dealing with people in my situation. Speaking with my Mother yesterday, she related how we were brought up to believe what they told us…much like police officers and doctors. Sadly, this no longer is the case. Sure there were people who gamed the situation. I know of a few personally, although they were not my friend then and certainly aren’t now. People of their character have made things harder for those of us who have tried to do things honestly. In your defense, you came into a forum where you were the minority. This is not an excuse for your words not to be considered, it is just that those in here have heard and been through the whole gauntlet. I honestly believe people (especially “acmodspecialists, Parrallel Foreclosure, Gabor and Anne…just to name a few) here are mainly venting, due to frustration of being PUT into this situation. There is comfort in #‘s. along with being able to help others with having been down this path. The majority in here will have NO sympathy for the banks, as in most cases they are not only not willing to help (as they profess to our elected officials), but are in many cases making things extremely more difficult with their actions. Many times these actions are illegal. This is very disheartening to have to face. You are an intelligent man…I know you know the difference between right and wrong. I applaud your efforts in explaining the many complex issues involved with all of this. I for one would appreciate any and all knowledge you might have in the future, whether or not you might think we don’t want to hear. That will surely be the case at times. Better to know, than to be ignorant of the facts. Besides, my instinct tells me you are one dog that doesn’t bite (good “soul”). GOD bless all!

Interesting light shed on an observation that Ernest Frankly made: “Since MBS pay monthly, the missing cashflows would immediately be flagged as a default in the trust to which they had been assigned in error, thereby exposing the problem. Since early payment defaults were the foremost indicators of fraud, they garnered a fair amount of attention, to say the least. Indeed, in the waning days of subprime securitization, it was specifically the requirement for originators to repurchase EPDs (early payment defaults) that put the weakest ones into bankruptcy. Without exception, early defaulting loans were expected to be bought back by the seller. So conscious multiple assignment simply did not lend itself as a practice for originators to pad their incomes.”

The Ambac lawsuit that was unsealed in the past couple of weeks and hit the news today (  http://www.theatlantic.com/business/archive/2011/01/e-mails-suggest-bear-stearns-cheated-clients-out-of-billions/70128/ ), if accurate, explains why this may turn out to be a pretty “naive” assumption, because the alleged game was:

1. Bear Stearns lines up mortgage insurer Ambac to buy mortgages;

2. Bear Stearns is fully aware—both via internal due diligence and third party due diligence—that “80% of Loans Went Bad Almost Immediately;” and

3. Bear Stearns sells the loans to Ambac AND puts back many bad loans to the originator—a Costanza-esque “double-dip of the chip”—AND never tells Ambac about the put-backs. In fact, this is coming out now because JP Morgan, which bought Bear Stearns, has fought Ambac (now bankrupt) tooth and nail, including persuading a judge to seal the complaint from 2008 until just this month.

So, the next question is, how could Bear Stearns be *sure* that so many loans were going to go so bad so quickly? Could it be that they knew that the loans had been re-pledged in other securitizations? Stay tuned!

By the way, we’re not just speaking ill of the dead here: one of the two Bear Stearns guys at the center of the controversy is now the head of mortgages and securitization for Bank of America. The other is an executive in Goldman Sachs’ mortgage division. Their lives are about to go through some changes.

Dave

Excellent post Dave. JS has a similar one in here (In States Where Foreclosures Bypass Judges, New Evidence of Robo Signers) that also has some very informative links. So one of the persons involved is now running the show at BoA? Absolutely ridiculous!

This people just go to one bank, to the other, to the government, to the bank again, same cat just wallowed.
They just change places and keep running the show keep stealing from the middle class, they just change the place and the method but keep doing the same and nobody can touch them

I was a loan officer for over 17 years licensed I might add, and for a long time I saw people that had no business being in the mortgage business, the lazzy standards of hiring finally caught up with the mortgage business, good good good !!! I work in a freaking call center now for 10 bucks an hour !!!