Even the Banks Can’t Believe What the Banks Are DoingPosted on January 1, 2015 by
The banks are turning on each other! Over the past few years, Americans have become aware of the financial fraud that was committed against the country by the major banks. The more the public hears about the Federal Reserve spending $60-70 billion dollars every month to buy garbage loans back from the banks that created them at 100 cents on the dollar, the more upset they get. Well it looks like the banks are starting to get upset with each other, too. Bank of New York Mellon (BONY) has sued JP Morgan Chase for misrepresenting the value of a pool of loans that was sold to BONY for nearly $1 billion. You would think that BONY would expect this sort of thing from Chase. After all, it has been common knowledge for years that the banks have been lying about the values of their loans and mortgage backed securities since the beginning of the housing boom. In fact, we now have the first person testimony of a person who tried to stop the fraud at Chase.
According to Chase whistleblower Alayne Fleischmann, Chase knowingly bundled up garbage loans with good ones, slapped a good rating on them, and sold them off to investors. These garbage loans were referred to as “scratch and dent” in the industry because they were a lot like dinged up cars – worth nowhere near the same amount as cars in good condition. This isn’t just an accusation though. Chase has admitted to selling hundreds of millions of dollars’ worth of these loans to investors by lying about their quality. Not only do they admit to doing this, they also admit that they were warned by people like Fleischmann that they were committing fraud by knowingly selling these mortgage backed securities.
So why aren’t these executives who knowingly committed fraud going to jail? Because they paid literally BILLIONS of dollars to get the government off their backs. Fleischmann herself was used by the government as leverage to get more settlement money out of Chase. This tactic worked, and Chase increased their settlement offer from $3 billion to $9 billion after Fleischmann’s involvement was mentioned in the press. Chase was allowed to stroke a check and continue to deny any wrongdoing. The astonishing part, as explained by Matt Taibbi in Rolling Stone, is that the taxpayers are on the hook for part of the settlement because Chase was able to treat $7 billion of the settlement as a tax write off!
Not only have we been pouring money into the banks’ pockets to the tune of $70 billion every month, but they are even able to treat their hush money as a write off!
It is despicable that this amount of fraud has been allowed to go unpunished. A beautiful thing is happening, however. All of this publicity is causing the courts to catch onto the fact that the banks have been up to some incredibly scummy stuff. As a result, the courts are questioning the banks’ claims more than ever. Fortunately for homeowners fighting back against foreclosure, the more the courts look into what the banks are saying, the more the courts are finding in the homeowners’ favor.
So the public and the courts are starting to wise up to the fraud committed by the major banks. But how is this news supposed to help real estate investors make money? As the tides turn in our favor, the banks are being forced to negotiate on our terms. No more begging the banks to accept our short sale and REO offers only to have them demand ridiculous prices. We can now get them to the table and demand deep discounts on defaulted or underwater notes.
By buying defaulted and/or underwater notes at a discount, real estate investors are able to help homeowners move on from a horrible situation. The homeowner walks away from a boat-anchor property, and you pick up a home at a deep discount with virtually every exit strategy available to you.
This is a massive opportunity for real estate investors. If you know of anyone with a defaulted or underwater note, you need to get in contact with my office immediately at (706)-485-0162. I have spent the last two years building up a team of experienced attorneys and fraud examiners/forensic auditors who specialize in exposing fraud committed in the mortgage process and using that fraud as leverage to negotiate the sale of notes.
Since we assembled our team, we have not had a single deal rejected.
We have a huge opportunity to help homeowners and do some great deals with multiple exit strategies. Even if the homeowner has already been foreclosed on, we still may be able to help.