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8/6/2019 Mortgage Fraud- AG v2
http://slidepdf.com/reader/full/mortgage-fraud-ag-v2 1/21
“The moment the idea is submitted into society that property is not as
sacred as the laws of God, and that there is not a force of law and public
justice to protect it, anarchy and tyranny commence. Property must besecured or liberty cannot exist.”
• John Adams
8/6/2019 Mortgage Fraud- AG v2
http://slidepdf.com/reader/full/mortgage-fraud-ag-v2 2/21
Bad Public Policy, Bad Actors The 1992 Community Reinvestment Act (CRA) required banks to make bad loans to unsuitable
homebuyers in the guise of social justice. This contravened long-established and well-justified lending and underwriting practices
The CRA created cover for shoddy and predatory lending practices
Banks turned to Mortgage Backed Securitization to get the toxic loans off their balance sheets
MBS is a well established capital markets instrument, well underway in the 1980s.
MBS/ABS debt can be very creditworthy if the underlying loans are properly underwritten, because only a small
percentage of individual loans will default
The Fed’s artificially low rates from the 1990s fed the housing bubble, because money became too cheapand it was easy to pile on leverage
The bubble, and ability to manufacture AAA-rated MBS and Sub Prime MBS created a never-endingdemand for mortgage ‘product’ to feed the machine
The MBS tool became the end goal; everyone was in on the deal:Mortgage originators aggressively pushing product out the door by giving mortgages to unsuitable borrowers who
never should have been homeowners in the first place;
Banks funding the originators through warehouse ‘financing’
Banks packaging and selling the subprime loans to MBS trusts through third party sponsors;
Rating agencies blessing the packages with strong ratings;
Bond insurers picking up premiums for insuring tranches;
Homeowners who saw their investment rise with the asset bubble;
Home flippers who used the cheap mortgages as credit cards.
8/6/2019 Mortgage Fraud- AG v2
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But the Worst Was Yet to Come .After 2006, suspicion arose in the capital markets that subprime mortgages, and even supposedlyprime mortgages were even worse than they should be.
• ‘Liar’ and ‘No-doc’ loans were an open cultural admission that something was amiss.
• Fly-by-night mortgage origination shops, many of which have disappeared.
• Over-inflated appraisals and home valuations.
But, at least the underlying loans were secured by a mortgage on property.
• Weren’t they?
On top of the collapsed housing market and economy, it now appears that the chain of property
ownership was broken in the course of MBS creation.
• In contravention of centuries of property rights, the deed of trust was separated from the note; the DoT was not
regularly passed on from the originator through the sponsor to the MBS trust.
• This means that neither borrowers nor MBS investors have the protection of clear title
State courts are beginning to wake up the contravention of property law and are refusing to allowforeclosures based on suspicious or incomplete documentation.
• The January 7 decision by the Supreme Judicial Court of Massachusetts to void home seizures by US Bancorp and WellsFargo is a fire bell in the night.
8/6/2019 Mortgage Fraud- AG v2
http://slidepdf.com/reader/full/mortgage-fraud-ag-v2 4/21
Patterns of Behavior
Federal bank regulators are scrutinizing more than 150 lawsuits :
50 home loan-related lawsuits directed at lenders and mortgage companies
Five biggest servicers -- Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial -- currently face up to $30billion in penalties from state attorneys general and federal agencies for wrongful foreclosures and other mortgage-relatedmisdeeds.
67 pending class-action suits in more than 20 states that challenge foreclosures based on so-called "robo-signing"
57 additional suits in 25 states over alleged improprieties resulting from loan modifications in the Obama administration'ssignature foreclosure-prevention initiative, known as HAMP, and 24 lawsuits over non-HAMP modifications
Investors in mortgage securities have filed 21 suits that allege misconduct and seek to force banks to buy back the loans at facevalue, an outcome that could cost banks hundreds of bill ions of dollars.
The FDIC is also tracking separate suits launched by state attorneys general in Ohio, Nevada and Arizona against Ally and Bank of
America.
FDIC Director of Depositor and Consumer Protection Mark Pearce's prepared remarks for a Congressional Hearing, July 7, 2011
8/6/2019 Mortgage Fraud- AG v2
http://slidepdf.com/reader/full/mortgage-fraud-ag-v2 5/21
The Mortgage ElectronicRegistration System (MERS)• Separated the Note from the
Deed• Clouding Title on 60M Homes• 5-7M illegal foreclosures• Affects most home-owners• Eventually Title Companies will
refuse to write policies onhomes that have/hadsecuritized mortgages
• Home value will plummet• Cash only purchase• Almost impossible to restore
title
MERS Ate Your Mortgage
8/6/2019 Mortgage Fraud- AG v2
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MERS:Energizer Bunny for Mortgage Fraud
MBS subprime flourished whenMERS went online
Massive fraud would have beenimpossible without it
Business model violates settledproperty law
It is nothing more than a giantelectronic excel spread sheet
• Never a lender• No employees
• No power to assign mortgages
Nearly 80 million mortgages weresecuritized from 1997 to today
8/6/2019 Mortgage Fraud- AG v2
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Fraud? Or a Really Bad Business Decision?
U.S. Bankruptcy Judge Robert E. Grossman
“By MERS account, it took no part in the assignment of the Note in this case, but
merely provided a database which allowed its members to electronically self-report transfers of the Note,” wrote Judge Grossman. “[T]here is nothing in the
record to prove that the Note in this case was transferred according to the processdescribed above other than MERS’s representation that its computer database
reflects that the Note was transferred to U.S. Bank.”
“The Court recognizes that an adverse ruling regarding MERS’s authority to assign mortgages or
act on behalf of its member/lenders could have a significant impact on MERS and upon thelenders which do business with MERS throughout the United States. However, the Court mustresolve the instant matter by applying the laws as they exist today. It is up to the legislative
branch, if it chooses, to amend the current statutes to confer upon MERS the requisite authorityto assign mortgages under its current business practices. MERS and its partners made thedecision to create and operate under a business model that was designed in large part to avoidthe requirements of the traditional mortgage recording process. This Court does not accept the
argument that because MERS may be involved with 50% of all residential mortgages in thecountry, that is reason enough for this Court to turn a blind eye to the fact that this process
does not comply with the law.”
8/6/2019 Mortgage Fraud- AG v2
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MERS: In Their Own Words
MERS
“Saved” its
customers
$2.4 Billion
in
property
recording
fees
Counties
in MI and
otherstates are
suing to
reclaim
fees.
8/6/2019 Mortgage Fraud- AG v2
http://slidepdf.com/reader/full/mortgage-fraud-ag-v2 9/21
400 Years of Property Law Violated
When a closingoccurred on
sub-primemortgage
(eitherrefinance or
new purchase)
The originator
recorded themortgage in the
county clerk’s
office
However, whenthe mortgage
was sold on the
secondarymarket, allsubsequentassignments
were NEVER
recorded
As a result, thechain of title is
broken andcannot be
cured on 60M-80M mortgages
1997-present
8/6/2019 Mortgage Fraud- AG v2
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• Legal challenges in State Supreme,
Federal Bankruptcy, Appeals and
Appellate Courts
• Home-owners are fighting foreclosure
• Investors are demanding accounting of the trusts
• Discovery process reveals fraud
throughout entire mortgage and
securitization process
• There are no mortgages to back
mortgage backed securities• Home values plummet
• Investors hold unsecured consumer
debt
Proof of Fraud is Mounting
8/6/2019 Mortgage Fraud- AG v2
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• Original Note and Mortgage were
destroyed
• Pretender lenders dummied up fake
documents, forged by Burger King Kids
to slide foreclosures thru the courts• Real reason for robo-signing was to
hide fraud from investors
• Pretender lenders do not have original
documents because they have NO real
interest in the property
•
Attorneys committed fraud before thecourt
• Big Government and Big Business
collude to cover-up the fraud
Foreclosures Expose the Fraud
8/6/2019 Mortgage Fraud- AG v2
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• How much?
– TARP, Credit Default Swaps, Insurance
have given investors a revenue stream
– What constitutes a default?
•
The identity of the lender andborrower were hidden
• The ethical man recognizes a debt is
owed but it is foolish to pay the wrong
party – only to have clouded title at the
end of the 30-year schedule
• How do we continue revenue stream to
MBS investors?
• All American families and communities
are affected
A Debt is Owed
8/6/2019 Mortgage Fraud- AG v2
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But to Whom?
8/6/2019 Mortgage Fraud- AG v2
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Anarchy & Tyranny Commence
8/6/2019 Mortgage Fraud- AG v2
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Illegal Seizure of Private Property
8/6/2019 Mortgage Fraud- AG v2
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MBS Global Investment
•
MBS collapse has profound impact on global economy• Securitization is a myth. All NYS security laws were violated
• There are no mortgages to back mortgage-backed securities
• Investors are holding pools of unsecured debt
• Investors have chosen to sue banks - get all their money back
•Big Government has vested interest in propping up the markets, even if it meanscovering up massive fraud
• Crony Capitalists may declare an emergency that will undermine US property
rights and harm home-owners
• TILA revision
• HR3808
• TBTF Bailout
8/6/2019 Mortgage Fraud- AG v2
http://slidepdf.com/reader/full/mortgage-fraud-ag-v2 17/21
Constitution Based Solutions
8/6/2019 Mortgage Fraud- AG v2
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Restore The Rule of Law
•Property law isbased on state law
• Home-owners go
thru state courts
• Clear & Quiet Title
• Bankruptcy
• Cancel all Sheriff
sales, evictions of
foreclosed
properties
• NJ AG and
Consumer Affairs
investigate fraud
hold the guilty
accountable
8/6/2019 Mortgage Fraud- AG v2
http://slidepdf.com/reader/full/mortgage-fraud-ag-v2 19/21
Public Officials and State at Risk
The mortgage fraud case law, federal agency actions andabundant evidence of massive mortgage fraud have beenwidely publicized
NJ Tea Party Coalition has met with Congressman ScottGarrett, Bergen County Clerk, Bergen County Sheriff and NJAttorney General and Consumer Affairs Senior Staff
As a result, public officials may be held accountable for
illegal foreclosures, evictions and any subsequentconsequences that affect individual or public safety
8/6/2019 Mortgage Fraud- AG v2
http://slidepdf.com/reader/full/mortgage-fraud-ag-v2 20/21
To Sum it Up
ThroughMERS andillusion of
securitizationCrony
capitalistshave:
Clouded titleon 60M-80M
properties
Illegally seized7-10 million
homes(100,000month)
DefraudedMBS investors
Deprivedcounties of
$2.4 billion inland recording
fees
Impoverisheda nation
Wreckedfamilies andcommunities
Only 1executive has
beenconvicted andsentenced to
jail
8/6/2019 Mortgage Fraud- AG v2
http://slidepdf.com/reader/full/mortgage-fraud-ag-v2 21/21
It’s Time to Act
Restore• States’ Rights
• Property Rights
• Rule of Law
“America is a nation of
laws, not men”
Is true once again…