FedUpUSA

Archive for the ‘Countrywide’ Category

As Many As 30 Senators or Senate Employees Got Countrywide VIP Loans

It’s what the WSJ points out today in their lead editorial. After we’ve watched the tarring and feathering of Chris Dodd (which I joined) and the fourth-and-long attempt by Team McMahon to somehow link Blumy to the whole mess there are still perhaps as many 30 senators or senate employees who got VIP loans from Angelo Mozilo. But those names are still being withheld by the Senate Ethics Committee.

From U.S. Rep. Darrell Issa’s letter to the Senate Ethics Committee sent last July: 

Courant

To go along with the previous post And So It Begins….(Countrywide Breach of PSA), I am going to show proof positive that there was never any collateral on mortgages assigned to Bank of America from Countrywide when that ‘merger’ took place.

First, we have a print-out from the Oakland County, Michigan Register of Deeds.  This is the authority in this county where all transactions pertaining to real property MUST be recorded.  The 1st mortgage on the property was originated by Countrywide.  All subsequent transactions were also with Countrywide (with the exception of the quit claim deeds, which were done by the homeowner for the purposes forming an estate trust).  There was the original mortgage in 2002, a refinance for a lower interest rate in 2003; then there was a home equity line of credit (HELOC) established at the same time as the refinance; and finally there was a refinance of the HELOC into a 2nd mortgage at a fixed interest rate in 2007. The homeowner never transacted with anyone other than Countrwide.  Notice what is glaringly missing:  Never is there any conveyance of the security interest to Bank of America by way of assignment from Countrywide.  If this ocurred, in order for it to be legal and binding, it would have had to have been recorded at the Oakland County Register of Deeds and would show up clearly on this print-out obtained directly from them.

In addition, both the 1st and 2nd mortgages were discharged in a Chapter 7 bankruptcy in 2008.  These mortgages are serviced to this day, by Bank of America. The homeonwer is not, nor has he ever been in default.

What this means is that without assignment of the Deed (which represents the collateral/home), Bank of America has absolutely no enforceable contract upon which to have any right or standing to foreclose if the homeowner were to default.  To make matters more interesting, the 2nd mortgage shows on the MERS system as held by them, with the investor being Fannie Mae as of April 2010.  So, Countrywide never assigned the mortage to Bank of America and Bank of America assigned the mortgage, to which they had no rights, to MERS who then assigned it to Fannie Mae.

The only things legally transferred here were the mortgages (the debt).  The property (collateral), has in effect, been severed from the mortgage notes, making these notes unsecured debt, which notes have been discharged in bankruptcy.  Nowhere is there any recorded rights to the collateral afforded to any entity but Countrywide, which institution no longer exists. 

So, is it any wonder the holders of Countrywide MBS (mortgage-backed securities) are a bit miffed?  They don’t hold securities – ie. debt that is secured by collateral – they own unsecured debt, much of which is defaulting and quite possibly, already discharged in bankruptcy, leaving the MBS holders absolutely no recourse to foreclose on the collateral to which their debt should have been attached.

‘Procedural error?’  I think not.  This was intentional because this is but one of hundreds of examples in Oakland County, Michigan alone with regards to Countrywide/Bank of America.  These homeowners have a LEGAL right under The Fair Debt Collections Practices Act to know to whom they are really indebted and these MBS holders have a right to know who is in possession of their promised collateral so that they may deal directly with those people in order to have any hope of collecting on their now unsecuritized securities.  The MBS holders were defrauded and in many casesa, homeowners have been illegally foreclosed upon by entities with no rights to the homes. That collateral was then dispensed (sold) without payment to the people actually owed the money!  I’m sure the MBS holders would like to know where their money went.

Bill Black describes it best:  The Great American Bank Robbery.  Indeed.

First we have Angelo Mozilo, CEO of Countrywide Financial during the entirety of the bubble years.  Countrywide was ultimately ‘merged’ into Bank of America, because they were deemed ‘too big to fail.’  Countrywide, at one time, originated more than half of all mortgages in the United States.  There’s very few people in this country who at one time or another haven’t had their lives touched by Countrywide.

Mozilo to Settle SEC Fraud Claims for $67.5 Million

Former Countrywide Financial Corp. Chief Executive Officer Angelo Mozilo agreed to a record $67.5 million settlement to resolve U.S. Securities and Exchange Commission claims that he misled investors.

Mozilo, 71, will pay a $22.5 million penalty and disgorge $45 million in gains from the sale of shares at inflated prices under the terms of the settlement read yesterday at a hearing in federal court in Los Angeles. Former Chief Financial Officer Eric Sieracki and former Chief Operating Officer David Sambol also reached settlements. None of the men, who had been scheduled to go on trial Oct. 19, admitted wrongdoing.

The SEC sued the three in June 2009, saying they publicly reassured investors about the quality of Countrywide’s loans while knowing that the mortgage lender was fueling its growth at least since the beginning of 2005 by letting its underwriting guidelines deteriorate and originating an increasing number of risky subprime loans.

Next we have Peter Bakowski, CEO of some as yet un-named mortgage lender, who was found guilty of defrauding a grand-total of 30 people, affecting 150 properties.

Tampa mortgage banker sentenced to federal prison

TAMPA, Fla. — A federal judge has sentenced a mortgage banker to more than 15 years in federal prison after he pleaded guilty on charges related to a mortgage fraud scheme.

Peter Bakowski was sentenced Friday. Officials say the Tampa resident was involved in a $20 million mortgage fraud Ponzi-type scheme.

More than 30 victims, including investors and institutions, were affected, as were more than 150 properties. Officials say Bakowski sold the same mortgage to multiple people, then pay returns on the preceding investor’s investments with money from later investors.
Bakowski was sentenced to 15 years and 8 months in prison and ordered to pay $16.1 million in restitution.

In case anyone had any doubt, it’s pretty clear at this point there are one set of rules for ‘the little people’ and an entirely different set of laws for the elite, ‘too big to fails.’   Congratulations America, you have now become a banana republic.

Listen up people….if you borrowed money from Countrywide Financial Corporation (CFC) between the years of 2003 and 2007,  you MUST read this.  While this lawsuit is in California, the fact of the matter is Countrywide (now part of Bank of America) did not confine their fraud to merely that state.  Countrywide made home loans in every state in this country.  They are, according to this Complaint, one of the primary reasons we had the huge housing bubble.  They purposely drove up prices of homes, as you will see in the excerpts from this Complaint, specifically targeting people who COULD NOT PAY.  This means the prices of homes in your neighborhood falsely went up, increasing the cost of borrowing for EVERYONE and putting homes further and further out of reach of the average American until many had no other choice but to borrow using one of these ‘creative mortgages’ – (pick-a-pay, no-doc, low-doc, etc.), which Countrywide then underwrote and re-sold in bulk for pennies on the dollar, thereby making money off of you while you went broke.  If you’re facing foreclosure or even if you aren’t, this is something you MUST read.  Time to stand up and stop the raping of the American public.  This time, the little guy CAN beat the bank.

Karl Denninger from Market-Ticker has summarized as follows:

This is an extremely-important case folks.  The pleadings here, like the case in Kentucky, lay the table in terms of the games that were played during the “Rah-Rah” years.

I am going to provide some excerpts via screenshots, and a link to the file containing the entire conformed copy in PDF format.  Due to the PDF being protected against changes, SCRIBD will not allow me to upload it – I have asked for a copy without the protection and if I get it, will update this Ticker accordingly.

Let’s start with the “meat” of the alleged violations:

And the first “meaty” part of the complaint….

In other words, Countrywide is alleged to not only have made bad loans, but also to have intentionally inflated appraisals.

Oh, that’s rich.  So not only (it is alleged) did Countrywide bamboozle borrowers, they also bamboozled investors.

There’s the base of it all….

Of course there’s the famous “let’s hide Waldo” game once the gig is pretty much up.  After all, if we have to produce the documents, well, our goose might be cooked – and that would be bad.

So what else is presented in here?  Oh, all sorts of good stuff.  Here’s a sampling:

That sounds like a problem to me……

Ding ding ding ding ding ding! 

One of the keys to this mess is that the lenders knew full well that the borrowers could not pay “as agreed”, yet made the loans anyway.

 

You mean basically everything important about the loans, their quality, who they were going to be sold to, why and how was all bogus?  And in addition, the price to be sought from investors exceeded the income stream that could be achieved even if nobody defaulted at all?

Heh, that’s a good gig if you can get it – and if you can find a way to do it legally.

Are there some facts behind this?  Oh it appears there are…

Oh my.  2004 eh?  I seem to remember tAngelo on CNBS making multiple appearances talking about how his company was going to take market share from all these subprime lenders that collapsed, and this was going to be great for his company.  Indeed, I remember chortling at the time that I believed he was a lying SOB, and of course the so-called “Fantastic Mainstream Media” lapped it up – and helped support his stock price.

It appears that the intrepid attorneys who filed this action remember that too…. and the pages surrounding 100 in the complaint document a whole bunch of them, including statements in 10Ks and 10Qs that, it is alleged, were flatly false.

And, of course, there’s this one, which I have referred to many times over the last three and a half years:

I distinctly remember the cheesy suits and ties, not to mention the sprayed-on-looking tan.

As I have repeatedly pointed out, the entire intent of these loans was not to be a mortgage at all.  It was, I allege, more akin to an asset-stripping scheme where the borrower would be effectively forced to come back to the lender after a couple of years when the teaser expired or the inevitable reset or recast occurred and effectively hand over his accumulated “appreciation” in price through yet more fees to be paid to the “lender.”

I believe that for all intents and purposes, from the lender’s point of view, this was nothing more than renting the house, as passing of a clear title to the buyer was never part of what was contemplated by the lender – but of course the borrower wasn’t told this in advance – or at all.

There’s much more in the complaint, but this will do for a start.

Incidentally, the banks tried to get this removed to Federal Court and kill it, and were rebuffed, so it appears that it’s headed to trial.  Plaintiff’s Bar 1, Banksters 0 thus far – I will be providing updates on this case as I become aware of them.

To contact the attorneys involved (if you believe you might have an issue related to this) view the PDF – contact information is found right on the top, including email addresses – use them.

Link to PDF