Showing posts with label Balance sheet. Show all posts
Showing posts with label Balance sheet. Show all posts

Wednesday, July 13, 2011

BANK OF AMERICA IS THE WORST BANK IN THE WORLD

BOA SCREWING INVESTORS IN LATEST DEAL

Posted on July 13, 2011 by Neil Garfield

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DEAL TRIES TO “FORECLOSE” ON INVESTORS THAT ARE NOT PART OF THE DEAL

EDITOR’S NOTE: At least they are consistent. BOA, in another attempt to use complexity to hoodwink investors and borrowers alike, has fashioned a “settlement” that is in actuality a cover-up for hundreds of billions of dollars in false assets on its balance sheet and liabilities that could reach into the trillions. They just don’t get it. Investors by definition have money. The megabanks may have drained all the resources available to homeowners but they didn’t get all the investors’ money. They have clout and they are using it.
In the end, the ONLY way out for BOA et al is to get a signature from the homeowners in at least 80 million transactions that have corrupted the title system in all 50 states. Without that signature, which is going to cost BOA untold billions of dollars, it will not be possible to sustain the foreclosures past, present and future and it will not be possible to sustain transfers of title or satisfactions of mortgage either.

Bank of America’s Mortgage Deal Questioned

By 
Eric Schneiderman, the New York attorney general, has asked for information about the $8.5 billion settlement agreed to late last month by Bank of America and representatives of 22 large investment firms holding soured mortgage securities, indicating that he may intervene to challenge the deal.
Letters sent by Mr. Schneiderman’s office to the firms that agreed to the settlement point to concerns by the attorney general that the deal may have been struck without full participation by all investors who would be affected by its terms. The letters, obtained by The New York Times, were sent to BlackRock Financial Management, Metropolitan Life Insurance, Pimco, Goldman Sachs Asset Management and 18 other parties, asking for information “regarding participation by both your firm and clients” in the settlement.
A spokesman for Mr. Schneiderman declined to comment. But this request for information is part of a broad investigation that he has begun into all aspects of the mortgage bundling process that has led to billions of losses for investors.
The proposed Bank of America settlement covers 530 mortgage pools issued by Countrywide Financial, the lender purchased by the bank in a distress sale in 2008.But the investment firms that agreed to the deal held interests in only about one-quarter of those pools, leading some investors to question its fairness.Furthermore, the proposed settlement does not allow investors who do not like its terms to opt out and bring their own suits against Bank of America. Any outstanding claims against the bank by investors who hold any of these securities would be extinguished under the deal.
The agreement could also speed up the foreclosure process, pushing more delinquent borrowers out of homes more quickly.
The terms of the proposed settlement appear to be favorable to Bank of America. Given that the unpaid principal amount of the mortgages covered by the settlement is $174 billion, the $8.5 billion to be paid by Bank of America represents just under 5 cents on the dollar. On June 29, when the deal was announced, Bank of America’s shares closed almost 3 percent higher.
A final court hearing to approve the settlement is scheduled for Nov. 17. One investor, Walnut Place L.L.C., has already objected to the terms of the settlement in filings made last week with the court. Earlier this year, Walnut Place sued Bank of America, contending that many of the loans in the pools it invested in breached the underwriting characteristics and other representations made by Countrywide when it sold the pools. Under the terms of the Bank of America deal, this lawsuit will not be viable.
In objecting to the deal, lawyers for Walnut Place argued that the Bank of America settlement was negotiated in secret by Bank of New York Mellon, trustee for the Countrywide mortgage pools. As negotiator, Bank of New York Mellon was also conflicted, Walnut Place contends, because Bank of America has agreed to cover all the trustee’s costs and liabilities related to the settlement.
“It is very unusual, to say the least, for a trustee that says it is representing the interests of the beneficiaries of a trust, to demand and obtain an indemnity from the very party that is adverse to that trust and its beneficiaries,” lawyers for Walnut Place wrote in its filing.
David J. Grais, a lawyer at Grais & Ellsworth who represents Walnut Place, declined to comment. A spokesman for Bank of New York Mellon declined to comment. But in its legal filings the bank maintained that Bank of America was required to reimburse legal costs under the terms of the original mortgage pools.
Additional questions about the terms of the settlement were raised by Representative Brad Miller, a North Carolina Democrat. In a July 8 letter to the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, the mortgage finance giants, Mr. Miller asked whether the regulator would join other investors objecting to the deal. He said the concerns of some investors that Bank of New York Mellon and Bank of America had refused to provide “information necessary to determine adequacy of the settlement.” For example, investors have been unable to review loan files to assess how many of the mortgages in the pools satisfied the characteristics and representations promised to investors who bought into them, Mr. Miller noted. “Independent investigations show that perhaps two-thirds of the mortgages did not comply with the representations and warranties,” he wrote.
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2 Responses

  1. cubed2k, on July 13, 2011 at 9:10 am said:
    “Quote from a great piece in this month’s Vanity Fair, penned by the illustrious Mr. S…
    “Much of today’s inequality is due to manipulation of the financial system, enabled by changes in the rules that have been bought and paid for by the financial industry itself—one of its best investments ever. The government lent money to financial institutions at close to 0 percent interest and provided generous bailouts on favorable terms when all else failed. Regulators turned a blind eye to a lack of transparency and to conflicts of interest. When you look at the sheer volume of wealth controlled by the top 1 percent in this country, it’s tempting to see our growing inequality as a quintessentially American achievement—we started way behind the pack, but now we’re doing inequality on a world-class level. And it looks as if we’ll be building on this achievement for years to come, because what made it possible is self-reinforcing. Wealth begets power, which begets more wealth.”
    – Joseph E. Stiglitz, economist and Nobel laureate”
  2. E. Tolle, on July 13, 2011 at 8:43 am said:
    A remarkable stench follows Bank of America wherever it goes, and lingers on everything it touches. The world will be a much better place when it’s put into receivership and parted out. No good can come out of that entity as it’s simply a vehicle of and for fraud. Rid humanity of this blight now, not later.

















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Friday, June 3, 2011

NEIL GARFIELD'S LIVINGLIES REPORT

WAKE UP CALL: COMPTROLLER OF THE CURRENCY STOPS MERS DEAD

Posted on June 3, 2011 by Neil Garfield
“We’re a nation of laws. Everyone knew that MERS didn’t have the right to appear as a beneficiary, but it would have been inconvenient to act on this because MERS was in widespread use throughout the banking industry. It was wrong, wrong, wrong, but everyone was doing it. Just like they were doing ‘no-doc’ loans and other sleights of hand. Just like the banks were doing so many bad things to homeowners. All they wanted to do was increase their profits – no matter who it hurt or how wrong their practices might be.” — Philip Kramer

BANKS THOUGHT THEY HAD IT FIXED, BUT AGENCY GOES FORWARD ANYWAY

Editorial Note: The agencies are starting to realize that MERS is like a cancer that spread throughout the mortgage markets and spilled over onto the balance sheets of banks who were “members.” The banks that are regulated by OCC now must deal with the fact that their balance sheet assets, many of which are considered to be tier 1 assets are not just downgraded to Tier 3, but in actuality are wiped off completely.
The effect of this action, is to cast doubt, at a minimum, on a substantial amount of the assets on the balance sheets of such banks. This in turn reduces the reserve that banks must keep against lending and other activities. The net effect is going to be a reduction in the size of many banks as they crank down to reflect the reality that has been true all along: the mortgage, notes and obligations claimed on the balance sheet neither existed, nor were they ever assets of the bank.
In turn, the effect on the marketplace and the cases that have gone through the court system and the cases that are going through the court system, is that any MERS mortgage or Deed of Trust is obviously flawed, defective, unenforceable just as we have been saying all along. The effect of naming MERS was the same as naming Donald Duck as Mortgagee or Beneficiary. There was, in effect, no Mortgagee or beneficiary, which means that (a) the loan specified in the promissory note executed by the borrower was never secured by a perfected lien and the Mortgage Deed or Deed of Trust, can now be attacked in a quiet title action, and (b) any foreclosure based upon a MERS deed should be dismissed. This would reduce the “asset” to an unsecured claim against a homeowner who is probably broke, and without any collateral on which to they can rely to mitigate “damages.”
But there are no damages. The effect also includes a probable consequence with respect to the obligation itself. As the agencies unravel this scheme of the illusion of securitization, they are coming to realize that the note itself does not describe the actual transaction that occurred. At a minimum this would allow in parole evidence, but beyond that it creates the presumption that the note was invalid to begin with and was merely a sham instrument used as an excuse for the feeding frenzy that followed the sale of mortgage bonds to investors. Thus not only is the “asset” unsecured, it obviously does not even exist. The real asset is the obligation that arose as a result of the Borrower accepting the benefits of funding of the loan, and that was and remains undocumented, because the real creditors are the investors — no matter how you split hairs.
Since the real creditors are the investors, the asset, if it belongs to anyone, is held strictly for the benefit of the investors who can use said asset as a derivative asset on THEIR balance sheet. In fact, this is what they do. But the investors have marked down the value of their “asset” to whatever claim they have for being tricked into buying empty defective bogus mortgage bonds. The investors, who now know of all the fraud perpetrated against themselves find no difficulty in accepting the fact that the homeowners were deceived as well by the same fraud. Thus the investors, who are the creditors, have chosen NOT to pursue the collection of the obligation against homeowners who have all sorts of affirmative defenses and counterclaims for fraud, violations of statute and a long list of other torts and breaches of contract.
Instead the investors, who are the real creditors in the actual cash transaction, since the money came from them, have elected to sue the investment bankers for 100 cents on the dollar rather than bring a claim against the homeowner for pennies on the dollar, which could morph into a net loss if the damages owed to the homeowner exceed the putative damages owed to the investor for advancing the funds.
Philip Kramer Weighs in on latest settlement agreement between the U.S. government and MERS Corp.Kramer Kaslow: Office of Comptroller of the Currency signs Cease and Desist Order with MERS Corp.
Calabasas, CA (PRWEB) June 03, 2011
The Office of the Comptroller of the Currency has just signed a Cease and Desist settlement agreement with MERS Corp (Mortgage Electronic Registration Systems). Among other things, the Cease and Desist order finds, “We have identified certain deficiencies and unsafe or unsound practices by MERS and MERSCORP that present financial, operational, compliance, legal and reputational risks to MERSCORP and MERS, and to the participating Members.” (OCC No. AA-EC-11-20; Board of Governors; Docket Nos. 11-051-B-SC-1,11-051-B-SC-2; FDIC-11-194bOTS No. 11-040; FHFA No. EAP-11-01)
Noted attorney Philip Kramer, a senior partner at the law firm of Kramer & Kaslow provides insight, “MERS Corp is the owner of Mortgage Electronic Registration Systems (MERS), one of the cornerstones of the current banking crisis. In order to cut up loans and move the pieces around the world at the speed of electronics again and again and again, until no one is sure who owns what, financial institutions have been using MERS as the “beneficiary”, a legal term which in practical terms means they are entitled to foreclose on behalf of the lender – except MERS is nothing more than an electronic database. They are often named as beneficiary. However in order to legally be named as beneficiary they would have had to put up funds on the loan. Not to mention the fact that the recordation itself is not even official. BUT most importantly, MERS is never a Holder in Due Course.”
Philip Kramer goes on to observe that, “We’re a nation of laws. Everyone knew that MERS didn’t have the right to appear as a beneficiary, but it would have been inconvenient to act on this because MERS was in widespread use throughout the banking industry. It was wrong, wrong, wrong, but everyone was doing it. Just like they were doing ‘no-doc’ loans and other sleights of hand. Just like the banks were doing so many bad things to homeowners. All they wanted to do was increase their profits – no matter who it hurt or how wrong their practices might be.”
The full text of the consent decree can be found at the following URL:
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