The Court Finally Realized Countrywide Created 3.5 Million Fraudulent Loans
Posted on April 4, 2016 byI have written dozens of articles about the massive mortgage swindle the banks pulled over on us. The article that generated the most response was one I wrote in 2013 in which I detailed how Countrywide created 3.5 million fraudulent mortgages. They did it by creating a trade name (DBA) called America’s Wholesale Lender (AWL) that would write loans for them in all 50 states. Well, it took a little while, but we finally have a court ruling that could demolish the America’s Wholesale Lender scheme!
For those of you who don’t know the origins of this scheme, it all started with Countrywide trying to save some money. In order to avoid the licensing fees, corporate taxes, and regulatory costs that each state charges a company looking to operate within its borders, Countrywide created the trade name America’s Wholesale Lender, which they registered in each state. Then they got to work writing mortgages. The problem with this scheme is that a trade name is not a legal entity. It has no ability to own property, file lawsuits or hold security interests.
When a few state recorders noticed that AWL wasn’t an actual company, but a trade name, they refused to record the loans. Countrywide decided to go full throttle into the fraud and listed the lender on their mortgages as “America’s Wholesale Lender, a Corporation organized and existing under the laws of New York”. After that, their loans went through without a hitch.
This change is what helped the court in St. Lucie Florida rule against AWL on February 15. The court found that there is enough evidence to show that it was not, in fact, a New York Corporation, and had no right to conduct business in Florida. After AWL, a made-up entity, created the loan, MERS came in and covered for Countrywide’s fraud by assigning the loan around. The court found this was against the state’s Universal Commercial Code.
Put simply, a loan that was created by a legal fiction and then assigned by another legal fiction into a trust outside of parameters of its PSA. The court saw through this ruse, and came out on the side of the homeowner.
All around the country, the law is catching up to the banks. In January of 2015, the Supreme Court ruled as clearly as possible in the homeowners favor by clarifying the power of TILA rescission to allow homeowners and real estate investors to fight back against the banks and their ridiculous schemes, like AWL.
Not only has TILA rescission provided homeowners with a powerful tool to stop foreclosure and stay in their house longer, it also creates an opportunity for investors to do some pretty amazing deals. The tides have turned and 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 ridiculously high prices. We can now get the banks to the table and demand that they prove they have the right to enforce a loan.
This makes it more important than ever that homeowners and real estate investors act NOW. 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. This opportunity is not going to be available forever; we need to strike while the iron is hot!
We have a huge opportunity to help homeowners and do some great deals with multiple exit strategies. For more information, call me at 706-485-0162.
Bob Massey is a recovering corporate executive who is now living the dream running his own successful real estate investing business and teaching others how to do the same. In the process he has become the nation’s leading educator on the foreclosure investing process.
My wife signed a note and dot in favor of America’s Wholesale Lender in December of 2003. Surprisingly, her first payment coupons came from Countrywide Home Loans (she had told the mortgage broker she did not want to do business with CW due to negative info from friends about the Company). She made payments; Ultimately, she was given notice to make payments to a “new Servicer”, Bank of America. That was the beginning of difficulties that continued until the present day. Currently, the note and DOT have been sold to LSF9 Master Participation Trust–who hired Servicing from Caliber Home Loans. She is still struggling to keep her home (where she has lived for 40 years). A chapter 7 bankruptcy complicated the issue in 2012; but Caliber has not given up the attempt to get the residential property (worth about $280,000). She and I would appreciate your suggestions as to an exit from the exhausting problem.