Author Archive
Court Rules Chase Made Up Documents to Foreclose – What Does It Mean For Investors?
Posted on September 2, 2014 byIn July, fans of common sense and decency everywhere won a huge victory – in California of all places! The California Appellate Court ruled that Chase created and recorded false documentation in order to prove ownership of a property so they could foreclose on it. This is big news because it shows that the major courts in some of the biggest states in the country are catching onto the long con the banks have been playing in this country for over a decade. Not only is this a good thing for the country in general, it is creating a huge opportunity for real estate investors to do some killer deals while helping homeowners in need.
In 1998, Jan and Rosalind Kalicki secured a mortgage for their home in San Marcos California. A specialty mortgage banking company originated the loan, and Washington Mutual became the servicer. After WaMu went into receivership, Chase bought a large amount of WaMu’s interests, including the Kalicki’s loan. After being foreclosed on in 2008, the Kalicki’s filed a suit for wrongful foreclosure against Chase in 2009. The Kalicki’s claim was that Chase claimed ownership of the loan based on fraudulent documents.
In 2012, the court ruled not only that Chase had created and recorded fake documentation to show that ownership of the loan had been transferred to Chase, it was also exposed that a Chase executive had created a document that “fraudulently represented that a prior assignment had been lost and that Chase owned the Kalickis’ mortgage.” The judge ruled that the Kalicki’s owned the property and quieted the title in their favor. Chase appealed the ruling, but lost. Read More→
The Biggest Theft in the History of the World and Our Government Bails Out the Perpetrators!
Posted on July 28, 2014 byDid you hear the news? Citigroup may have to pay a $7 billion settlement to resolve mortgage probes. Why? To get the government to stop looking into whether it defrauded investors on billions of dollars worth of mortgage securities. Most of the payment will be in cash, but it will also include a few billion dollars to help struggling homeowners. How magnanimous of them! Citi created hundreds of billions of dollars worth of fraudulent mortgages, and now that they’ve been caught after 7 years of foreclosing like crazy on their fraudulent mortgages, they’re finally going to cough up a few billion to help out some of the people they haven’t foreclosed on yet.
This news brings to mind a case I read about recently where a REGIONAL bank had the owner of a property falsify mortgage documents in order to originate a riskier loan. That’s right, the regional bank has the owner of two VACANT lots certify that there were houses on the two lots. Then the bank made a loan as if the nonexistent homes were actually on the two vacant lots. Why on Earth would the bank lie and increase their risk by loaning out so much more money than the land was worth? It was all part of a large scale scheme to rake in as much money as possible by defrauding the bank’s investors. Read More→
How to Fight a Foreclosure and Win
Posted on July 1, 2014 byOver the last two years I have covered in great detail the Securitization Swindle the banks have been perpetrating for over a decade. The banks were successful because they created such a tangled web that it was nearly impossible for everyday people, lawyers, and judges to understand what was happening. For years homeowners just couldn’t catch a victory in court, but things have been changing… Courts across the country have started to see the light and rule in the homeowner’s favor. In this month’s article I’m going to explain how an ordinary homeowner can stand up to the banks and win.
The first step is to find an attorney who truly understands securitization. This was a process that was specifically designed to confuse intelligent people and convince them nothing fishy was happening. You can’t expect just any attorney with an ad in the yellow pages to understand the process well enough to convince a judge that you were wronged. You must find an attorney who can convince a judge that the transaction laid out in the mortgage paperwork never happened. The lender never loaned a dime of their money to the homeowner.
In a securitized loan, the money for the loan was provided by an unrelated third party who was never named on the note. The bank got this money from investors who believed they were buying into trusts that funded mortgages. Instead of creating these trusts, the bank pocketed the money and used some of it to fund mortgages in its own name. The bank then covered up its tracks by fabricating a series of sham transactions it called “proprietary trading.” Read More→
What the Mortgage Forgiveness Debt Relief Act Expiring Means for Investors
Posted on May 31, 2014 byOMG! The Mortgage Forgiveness Debt Relief Act has expired! Homeowners owe the IRS more than they could ever pay. This is a catastrophe – not really.
On December 31, 2013, the Mortgage Forgiveness Debt Relief Act expired. For months prior to the expiration and immediately after, there was a rush of “experts” howling and screaming about how homeowners and the housing market were going to suffer. Well, we’re now five months into the 2014 and the sky hasn’t fallen. Were the experts wrong? For the most part, yes they were.
On December 20, 2007, President Bush signed the Mortgage Forgiveness Debt Relief Act into law. The point of the law was to provide tax relief to the millions of homeowners who would have faced regular income taxes on any forgiven debt after going through a foreclosure, short sale, loan modification, or cash for keys scenario on their primary residence. Normally, forgiven debt is taxed at the homeowner’s income tax rate. For example, let’s say your annual salary is $60,000. You bought your house for $325,000 during the anything goes days of 2005. In 2009, you still owed $300,000 but had to sell it for $200,000 through a short sale. The bank forgave the deficiency for the $100,000 you still owed. Before the Mortgage Forgiveness Debt Relief Act was passed, that forgiven debt counted as income, making your total taxable income $160,000 in 2009! The resulting $53,000 income tax bill is almost your entire year’s salary! After the Act was passed, the forgiven debt would have been waived, and you would only owe taxes on you regular income of $60,000.
You can see now why that law was a major help for homeowners during the foreclosure crisis… Read More→
The Government Politely Asks the Banks to Please Double Check Their Foreclosures
Posted on May 2, 2014 byWere you or someone you know foreclosed on by a lender who is widely known to committed massive and systemic fraud in their mortgage practices? Have no fear. After having been bilked by independent consultants to the tune of $2 billion dollars, the Office of the Comptroller of the Currency has given up investigating the issue itself and asked the banks to please hand over any proof they might have of having improperly foreclosed on people.
That’s right. After being provided with $17 trillion in various forms of taxpayer-funded relief, the government is now allowing the banks to be in charge of the investigation into their own foreclosures.
There is a charitable way to view this development. The regulators could be setting up the banks to nail them for failing to comply with regulations. This would extend the statue of limitations for future federal actions against the banks. This tactic is possible, but forgive me for thinking it slightly more likely that the government is abdicating its responsibility to the banks after having been nailed for squandering the time and money it was given to handle the problem on its own.
If you were worried that this was a sign that the government wasn’t serious about prosecuting the people and institutions responsible for setting up one of the biggest financial crises in history, fear not! The District Attorney for New York County has moved forward with the prosecution of Abacus Bank. Read More→
So You Proved The Bank Lied About Your Loan. Now What?
Posted on April 4, 2014 bySay you are fighting a foreclosure on a securitized loan that you took out during the housing boom. Using a fraud investigator you were able to prove that the foreclosing entity forged your signature on the note. You rest your case and wait for the judge to come back with a ruling in your favor. Ten minutes later the judge rules that the foreclosure can continue as scheduled. This is surely a miscarriage of justice, right?
Not so fast. The judge made the right call, and you need a better attorney.
Here’s an example. Let’s say a friend lends you $1,000 and you agree to pay him back in installments. After a few months of making payments on time, you default on the loan and your friend sues you. In court your friend produces a promissory note that lays out the terms of the loan with your signature. You acknowledge that you were lent the money by your friend and then defaulted on the loan, but you have never seen this promissory note before. Furthermore, you have evidence that your signature on the note was a forgery. Under the rules of evidence, your proof of forgery should be tossed out. The reason is simple. You have already admitted to owing your friend the $1,000 and that you defaulted on the debt.
A note is merely documentation of the debt. If you have already acknowledged that you owed the money and then defaulted on the terms, the note itself, whether forged or legitimate, is irrelevant. Read More→
The Legal Tides Are Turning In Homeowners’ Favor
Posted on February 28, 2014 byFor centuries the courts have been rigged in favor of the banks. The banks have the kind of time and money that homeowners could never dream of, and they are more than willing to use both to get their way. You’d be wrong, however, to think that’s the only way the system was crooked.
If a homeowner whose loan was securitized tried to force the bank to show the chain of title, the court would tell the homeowner that they didn’t have standing to make that demand. The homeowner then is left with no way of proving that the foreclosing bank/entity does not have the authority to foreclose. Not anymore!
In the case of Steinberger v OneWest Bank, et al, the court ruled in a special action that the homeowner does have the standing to demand that the foreclosing bank/entity provide a securitization timeline in order to establish their claim of authority to foreclose. This timeline of assignments and transfers would prove whether or not assignments were made after a note had already been transferred to a securitized trust and could be declared invalid.
This is a huge win for homeowners because we now have the right to demand that banks prove their authority to foreclose before the court. Read More→
A Step by Step Guide on How the Banks Committed Massive Fraud
Posted on January 24, 2014 byBy this time, most people are at least aware that mortgage banks were less than honest in how they created and sold mortgage backed securities over the last 15 years. It has driven a lot of negative sentiment towards the banks since the housing market crashed in late 2007, but very few people have a clear understanding of exactly what the banks did. That is completely understandable because the banks set up an extremely convoluted system of fake transactions specifically to avoid people catching on to what they were doing. In this article I am going to attempt to break it down into simple terms.
As the housing market heated up in the early 2000s, investors began to invest in what are known as mortgage backed securities. These are securities that consist of large pools of mortgages. The idea behind these investments was to capitalize on the housing boom while minimizing their risk.
In order to do this, investors had to work through brokers who compiled mortgages into securities on the investors’ behalf.
The way the investors would invest in these funds was to use their money to fund a trust that would acquire mortgages either by originating them as the lender, or by purchasing existing mortgages. In a perfect world, the trust itself would then be the lender or purchaser designated on the mortgage. Read More→
Why Do Courts Let Banks Steal Houses?
Posted on December 30, 2013 byIf the courts rule against the banks in the homeowners’ favor, but no news outlets report it, does it really happen? That’s the situation we’re in now. If you’ve been digging deep, you might have seen that the estimate of bank losses from mortgage related lawsuits has increased to $100 BILLION in future payouts. This number includes settlements and judgments as well as legal fees for defending all of the lawsuits. How many stories about this have you heard on the major news outlets? Zero.
Over the last 15 years, the banks concocted a scheme to defraud their investors and borrowers that resulted in over 15 million people being displaced from their homes, and you have not seen a single story detailing the fraud the banks perpetrated and the damage it caused. You would think this is the type of story that would be all over the news, but the media remains silent.
Despite the lack of coverage from the media, the payouts and estimates of future payouts from the banks keep getting bigger. The reason for this is simple. Investors and homeowners are filing valid claims of fraud against the banks and judges and juries keeping awarding bigger and bigger settlements. Read More→
Why Are Banks Letting Criminals Steal Homes From Them?
Posted on November 26, 2013 byThe last several months have been extremely encouraging for real estate investors who are purchasing notes from banks! Every day more and more judgments in foreclosure cases are coming down in the homeowner’s favor as judges become aware of the depth of fraud the banks have committed. What we are seeing in the market is more judges making the right decisions, and the banks starting to run scared of this turning tide.
Several judges across the country are clearing their dockets with surprising speed using one simple trick. They are forcing banks to prove that they made a loan to the homeowner. Simple, right? All of the signed documents the banks can throw at the judge don’t matter if they can’t prove that they ever loaned money to the homeowner. The fact of the matter is that the banks never actually loaned out any money to the borrowers. For years judges have been taking the banks’ word that they have all of the signed paperwork from the homeowner that they need, and inferring that a loan was made, but that is starting to change. The number of judges accepting this smokescreen, while still too large, is shrinking. Read More→
How Countrywide Created 3.5 Million Fraudulent Loans and What It Means to You
Posted on October 30, 2013 byMy last two articles focused on the great Securitization Swindle the banks have been perpetrating for over a decade. It was successful because the banks created such a tangled web that it was nearly impossible for everyday people, lawyers, and judges to understand what was happening. But what if they committed a comparatively straightforward fraud? Surely that would be caught and stopped, right?
In this month’s article I’m going to explain how Countrywide fraudulently created 3.5 MILLION loans at taxpayer expense with a scheme so simple it seems impossible they got away with it at all.
In 2003 Countrywide wanted to dominate the housing boom. The problem they were facing was that each state has its own licensing fees, corporate taxes, and regulatory costs that Countrywide would have had to pay in order to do business. That’s when they cooked up the scheme. Instead of becoming licensed and registered in every state, Countrywide simply made up a trade name (DBA) that they could register in every state that would slide under the radar of the regulators. They made up the innocuous name America’s Wholesale Lender and got to work.
Their scheme worked and nobody noticed that America’s Wholesale Lender wasn’t a corporation registered or licensed to do business in their state. Countrywide got cranking and created 3.5 MILLION loans across every state in the country under the DBA “America’s Wholesale Lender.”
The catch is that a DBA such as America’s Wholesale Lender is not a legal entity. It is simply a trade name. A DBA has no ability to own property, file lawsuits, or hold any security interests. Read More→
What Is Securitization and Why Is It Fraudulent? Part 2
Posted on October 5, 2013 byIn last month’s issue, I began to explain exactly what securitization is and why it is fraudulent. For several years the mortgage banks in this country were flat-out making up transactions and trusts to cover for the fact that they were pocketing their investors’ money. But that wasn’t enough for them. They bundled up the loans, intentionally loaded them with toxic mortgages to increase their rate of return, and sold them to themselves for a “profit.”
But what does this all mean for the title on a property that had a loan go through this process?
Basically, the title was flawed from the get-go. Nobody who was a signatory to the loan had ANY interest in the repayment of that loan. MERS and all the others were just filling a role by pretending to be officials of the bank that was lending the money, when in reality they were a signature factory. If the trusts had been managed correctly from the beginning, the name of the trust should have been on the note and on the mortgage. They weren’t. Instead the banks set up a huge maze of companies to process the loans with defective notes and mortgages. Read More→
