Bank of America’s $500 Million Countrywide Settlement Approved, Investors Receive Compensation for Toxic Mortgage Backed Securities. Wall Street’s Frauds Under Scrutiny.

In a long-awaited development, Bank of America Corp’s Countrywide unit has finally obtained the final approval of a $500 million class-action settlement with investors. These investors were deceived into purchasing toxic mortgage-backed securities, a prominent factor contributing to the financial crisis of 2008. While the settlement marks a step towards justice, it sheds light on the ongoing concerns surrounding fraudulent practices within the banking and Wall Street sectors. Amidst these troubling revelations, organizations like FRAUD STOPPERS have emerged to provide assistance to borrowers who have been affected by similar mortgage-related fraud.

Bank of America’s Settlement Approval:

The approval of Bank of America’s $500 million settlement came from U.S. District Judge Mariana Pfaelzer in Los Angeles. The judge deemed the settlement as a fair outcome, considering previous rulings that hindered investors from recovering damages directly from Bank of America as Countrywide’s parent company. Additionally, Bank of America had hinted at the possibility of putting Countrywide into bankruptcy. While the settlement is a positive step towards compensation, it raises questions about the consequences faced by financial institutions for their fraudulent actions.

The Ongoing Battle Against Fraud:

Bank of America’s settlement, however significant, is just one piece of the puzzle. It is separate from the $8.5 billion case pending in New York state court, which focuses on Countrywide breaching its contractual obligation to replace delinquent mortgages. Moreover, it is distinct from the $25 billion settlement reached by 49 State Attorney Generals or the numerous individual lawsuits filed by borrowers against these institutions. These cases highlight the magnitude of fraudulent practices committed by banks and the urgent need to address them.

The Role of FRAUD STOPPERS:

Amidst the struggle for justice, organizations like FRAUD STOPPERS have emerged as a ray of hope for borrowers facing similar mortgage-related fraud. FRAUD STOPPERS is dedicated to assisting individuals who have been harmed by the misconduct of banks and Wall Street entities. They provide valuable resources, guidance, and legal support to borrowers, empowering them to fight back against fraudulent practices and seek redress.

How FRAUD STOPPERS Can Help:

1. Assessing Mortgage Documents: FRAUD STOPPERS helps borrowers analyze their mortgage documents to identify any signs of fraud or misconduct. They are experienced in detecting issues such as improper assignments, robo-signing, or predatory lending practices that may have impacted the validity of the mortgage.

2. Legal Expertise: FRAUD STOPPERS connects borrowers with skilled attorneys who specialize in mortgage fraud cases. These legal professionals possess the knowledge and experience necessary to navigate the complexities of such cases and build a strong legal strategy.

3. Fighting Foreclosure: If borrowers are at risk of foreclosure due to fraudulent practices, FRAUD STOPPERS can help them challenge the foreclosure proceedings. By utilizing legal defenses based on fraudulent practices, borrowers can potentially halt or delay the foreclosure process, providing them with an opportunity to protect their homes.

4. Seeking Compensation: FRAUD STOPPERS assists borrowers in pursuing compensation for damages caused by fraudulent mortgages. They work diligently to hold the responsible financial institutions accountable and seek financial relief on behalf of the borrowers.

Empowering Borrowers to Take Action:

FRAUD STOPPERS’ mission is to empower borrowers to take action against the institutions that have wronged them. By providing education, resources, and legal support, they enable borrowers to assert their rights and seek justice. As more cases of mortgage-related fraud come to light, organizations like FRAUD STOPPERS play a crucial role in guiding borrowers through the legal process and advocating for their interests.

The approval of Bank of America’s $500 million settlement serves as a reminder of the widespread mortgage-related fraud that occurred leading up to the financial crisis. However, it is imperative to acknowledge that this settlement is just one step towards holding financial institutions accountable. Organizations like FRAUD STOPPERS are dedicated to helping borrowers affected by mortgage fraud, offering support, legal expertise, and the opportunity to seek justice. By empowering borrowers to take action, FRAUD STOPPERS aims to bring about systemic change and prevent future instances of fraudulent practices within the banking and Wall Street sectors.

Bank of America’s $500 Million Countrywide Settlement

According to Bloomberg.com Bank of America Corp’s Countrywide unit won a final approval of a $500 class-action settlement with investors, who were duped into buying the too-big-to-fail banks toxic mortgage backed securities.

They won a final approval? I guess that’s one way of saying it.

Here’s another way you could say it: Bank of America is going to pay half a billion dollars to investors who were defrauded by Bank of America and Countrywide.

But either way you say it, it’s business as usual for the bad bankers and Wall Street who continue to commit mortgage, banking, and foreclosure fraud.

If you’re a bank and you commit fraud, you may have to pay a few hundred million dollars in fines; but who cares because after all, you have trillions of dollars in tax payer bailout money, so you can afford to break the law, right?

The Bloomberg article goes on to state that  “U.S. District Judge Mariana Pfaelzer in Los Angeles said the settlement was a fair outcome because her previous rulings prevented the investors from recovering damages from Bank of America as Countywide’s parent and because the Charlotte, North Carolina-based bank said as recently as June that it might put Countrywide in Bankruptcy.”

Heaven forbid they go bankrupt!

Just what would we do without Countrywide, Bank of America, Nationstar, Greenpoint, or any of the other zombie banks that are currently playing Pass the Toxic Mortgage Potatoes back and forth between each other?

The Bloomberg article goes on to report that this $500 million “deal” (gee what a deal) has nothing to do with the $8.5 billion case that is still pending in New York state court over Countywide’s breaching its contractual obligation to replace delinquent mortgages. You can read the full Bloomberg article here.

Even though this case may have nothing to do with the $8.5 billion case, the $25 billion dollar settlement the 49 State Attorney Generals reached,  or the hundreds of thousands of individual lawsuits that borrowers have filed against these zombie banks; one thing is for certain…with each new case, the bankers on Wall Street must be asking themselves what they will do if and when the 70 million borrowers who were harmed by their toxic mortgages decide to rise up and take action against them?

Your Mortgage Documents Might be Fake!

Ya think, maybe?

MERS alleges to have registered 71 million mortgages. There were likely another 15-20 million “non-MERS” mortgages…

Prepare to be outraged. Newly obtained filings from this Florida woman’s lawsuit uncover horrifying scheme (Update)

If you know about foreclosure fraud, the mass fabrication of mortgage documents in state courts by banks attempting to foreclose on homeowners, you may have one nagging question: Why did banks have to resort to this illegal scheme? Was it just cheaper to mockup the documents than to provide the real ones? Did banks figure they simply had enough power over regulators, politicians and the courts to get away with it? (They were probably right about that one.)

Thom Hartmann talks with Lynn Szymoniak, Attorney / President and Founder- The Housing Justice Foundation. Website: http://thjf.org/, about her efforts to help those who are getting screwed by the big banks.

If you liked this clip of The Thom Hartmann Program, please do us a big favor and share it with your friends… and hit that “like” button!

A newly unsealed lawsuit, which banks settled in 2012 for $95 million, actually offers a different reason, providing a key answer to one of the persistent riddles of the financial crisis and its aftermath. The lawsuit states that banks resorted to fake documents because they could not legally establish true ownership of the loans when trying to foreclose.

This reality, which banks did not contest but instead settled out of court, means that tens of millions of mortgages in America still lack a legitimate chain of ownership, with implications far into the future. And if Congress, supported by the Obama administration, goes back to the same housing finance system, with the same corrupt private entities who broke the nation’s private property system back in business packaging mortgages, then shame on all of us.

The 2011 lawsuit was filed in U.S. District Court in both North and South Carolina, by a white­collar fraud specialist named Lynn Szymoniak, on behalf of the federal government, 17 states and three cities. Twenty-eight banks, mortgage servicers and document processing companies are named in the lawsuit, including mega-banks like JPMorgan Chase, Wells Fargo, Citi and Bank of America.

Szymoniak, who fell into foreclosure herself in 2009, researched her own mortgage documents and found massive fraud (for example, one document claimed that Deutsche Bank, listed as the owner of her mortgage, acquired ownership in October 2008, four months after they first filed for foreclosure). She eventually examined tens of thousands of documents, enough to piece together the entire scheme.

A mortgage has two parts: the promissory note (the IOU from the borrower to the lender) and the mortgage, which creates the lien on the home in case of default. During the housing bubble, banks bought loans from originators, and then (in a process known as securitization) enacted a series of transactions that would eventually pool thousands of mortgages into bonds, sold all over the world to public pension funds, state and municipal governments and other investors. A trustee would pool the loans and sell the securities to investors, and the investors would get an annual percentage yield on their money.

In order for the securitization to work, banks purchasing the mortgages had to physically convey the promissory note and the mortgage into the trust. The note had to be endorsed (the way an individual would endorse a check), and handed over to a document custodian for the trust, with a “mortgage assignment” confirming the transfer of ownership. And this had to be done before a 90-day cutoff date, with no grace period beyond that.

Georgetown Law professor Adam Levitin spelled this out in testimony before Congress in 2010: “If mortgages were not properly transferred in the securitization process, then mortgage-backed securities would in fact not be backed by any mortgages whatsoever.”

The lawsuit alleges that these notes, as well as the mortgage assignments, were “never delivered to the mortgage-backed securities trusts,” and that the trustees lied to the SEC and investors about this. As a result, the trusts could not establish ownership of the loan when they went to foreclose, forcing the production of a stream of false documents, signed by “robo-signers,” employees using a bevy of corporate titles for companies that never employed them, to sign documents about which they had little or no knowledge.

Many documents were forged (the suit provides evidence of the signature of one robo-signer, Linda Green, written eight different ways), some were signed by “officers” of companies that went bankrupt years earlier, and dozens of assignments listed as the owner of the loan “Bogus Assignee for Intervening Assignments,” clearly a template that was never changed. One defendant in the case, Lender Processing Services, created masses of false documents on behalf of the banks, often using fake corporate officer titles and forged signatures. This was all done to establish standing to foreclose in courts, which the banks otherwise could not.

Szymoniak stated in her lawsuit that, “Defendants used fraudulent mortgage assignments to conceal that over 1400 MBS trusts, each with mortgages valued at over $1 billion, are missing critical documents,” meaning that at least $1.4 trillion in mortgage-backed securities are, in fact, non-mortgage-backed securities. Because of the strict laws governing of these kinds of securitizations, there’s no way to make the assignments after the fact. Activists have a name for this: “securitization FAIL.”

One smoking gun piece of evidence in the lawsuit concerns a mortgage assignment dated Feb. 9, 2009, after the foreclosure of the mortgage in question was completed. According to the suit, “A typewritten note on the right hand side of the document states: ‘This Assignment of Mortgage was inadvertently not recorded prior to the Final Judgment of Foreclosure… but is now being recorded to clear title.’”

This admission confirms that the mortgage assignment was not made before the closing date of the trust, invalidating ownership. The suit further argued that “the act of fabricating the assignments is evidence that the MBS Trust did not own the notes and/or the mortgage liens for some assets claimed to be in the pool.”

The federal government, states and cities joined the lawsuit under 25 counts of the federal False Claims Act and state-based versions of the law. All of them bought mortgage-backed securities from banks that never conveyed the mortgages or notes to the trusts. The plaintiffs argued that, considering that trustees and servicers had to spend lots of money forging and fabricating documents to establish ownership, they were materially harmed by the subsequent impaired value of the securities. Also, these investors (which include the Treasury Department and the Federal Reserve) paid for the transfer of mortgages to the trusts, yet they were never actually transferred.

Finally, the lawsuit argues that the federal government was harmed by “payments made on mortgage guarantees to Defendants lacking valid notes and assignments of mortgages who were not entitled to demand or receive said payments.”

Despite Szymoniak seeking a trial by jury, the government intervened in the case, and settled part of it at the beginning of 2012, extracting $95 million from the five biggest banks in the suit (Wells Fargo, Bank of America, JPMorgan Chase, Citi and GMAC/Ally Bank). Szymoniak herself was awarded $18 million. But the underlying evidence was never revealed until the case was unsealed last Thursday.

Now that it’s unsealed, Szymoniak, as the named plaintiff, can go forward and prove the case. Along with her legal team (which includes the law firm of Grant & Eisenhoffer, which has recovered more money under the False Claims Act than any firm in the country), Szymoniak can pursue discovery and go to trial against the rest of the named defendants, including HSBC, the Bank of New York Mellon, Deutsche Bank and US Bank.

The expenses of the case, previously borne by the government, now are borne by Szymoniak and her team, but the percentages of recovery funds are also higher. “I’m really glad I was part of collecting this money for the government, and I’m looking forward to going through discovery and collecting the rest of it,” Szymoniak told Salon.