HAMP – The Modification Scam …and NOW SETTLEMENT SHAM!

By Shelley Erickson, January 18, 2013

HOC_slide01_01The contents in the synopsis of the Wall Street and the Financial Crisis: Anatomy of a Financial Collapse will bring you up to speed on how, why and what happened causing the recent crimes against the homeowners by the banks, S&P and our politicians that led us into the HAMP & MOD SCAM AND NOW SETTLEMENT SHAM.

These schemes negatively affected American tax payers, jobs and incomes, pensions, equity, our properties and our property rights… just to mention a few issues.

Senate Crisis ReportDue to the Ponzi schemes and criminal acts discussed in detail in the actual U.S. Senate PERMANENT SUBCOMMITTEE ON INVESTIGATIONS’ Financial Crisis Report involved banksters and politicians, the blatant deceptive HAMP program scam appears to have led to modification fraud. The HAMP program was a scheme put in place by our government that was afraid if all the foreclosures were to have happened all at once it would cause the Wall Street banks to go under.

Their crime was so outrageously huge and wide spread, their default nets so well orchestrated that millions of homeowners’ homes wound in their lair of deception causing the largest, deadliest catch of foreclosures of all time. Yes, the bankster’s had done a great job of selling defective, deceptive mortgages on a massive scale apparently constructed to profit from defaults.

See, the banks are not in the mortgage business to loan, they are in it to default and profit by defaults; to collect servicing fees and bid on defaults in the market and to sell a house multiple times… until their investors got wise and wanted their money back.  Thus, the creation of TARP, and then HAMP, a scam to support the banks by foaming the runway, deceiving the mortgagors that they could actually get a modification while they paced the timing of their foreclosures. These bailout plans were never for you and me.

The banksters’ eyes must have burst into tears of joy when they realized they could use the already deceptive HAMP program to confiscate even more homes. The homeowners 3512095_370were promised modifications which neither the federal officials nor banks intended to give as the only intent was to slowly foreclose and parallel a modification program which they knowingly had no intention to approve. They went one step farther and found if they lied to the homeowner who was not in default or behind in payments and just wanted a modification, that they would gain the homeowners’ confidence and tell them to stop making payments for 3-4 months in order to qualify for the modification.

The banks knew full well that the homeowners would rely on the banks to be telling them the right thing to do. After the homeowner was in default (per the banks’ instructions – all verbal of course), the banks would foreclose on the homeowner instead of approve the modification.

The federal rescue of Wall Street didn’t fix the economy – it created a permanent bailout state based on a Ponzi-like confidence scheme. And the worst may be yet to come.
Read more.

loan-modification-deniedIn some cases the bank would approve trial modifications to make it look like they were approving some modifications and after five – nine payments the servicer for the lender would tell the homeowner they were now disqualified for various fabricated reasons.  Many times the modification payments were considered partial payments and the house was literally dragged into foreclosure as intended from the start. Therefore, the HAMP program that the homeowners believed was designed to give them relief became the modifications program from hell.

Misappropriated funds also brought unlawful foreclosures. The game became “heads you lose – tails you lose,” a plan in place by the banks, and our government – while using the media and public relations of  the disingenuous HAMP plans to appear to save the homeowners… when in actuality the HAMP plan led them to the slaughter of foreclosure.  These programs were intended to help the bank at the taxpayers’ expense and to their detriment.

All the while the mainstream media was reporting this financial force majeure as a result of deadbeat borrowers when the truth was the banks had committed unspeakable frauds.  Instead of slapping handcuffs on the banksters, government officials like Bernanke and Geithner were conspiring with Wall Street to buy time while the banks tried to clean up their financial mess by unloading toxic assets caused by their own dubious mortgage frauds and other unscrupulous related activities.

obama-The banks wanted the public to believe that 84 million American families woke up one day and decided to fraudulently mortgage their homes – that they planned to default and that the banks were the victims of irresponsible homeowners.

Even President Obama chimed in with his messages that the government was only helping “responsible” homeowners who were still paying their mortgages – BECAUSE THEY STILL HAD JOBS! Over 100 million Americans were losing income, equity, savings, pensions because of the banksters – but the media played another tune until they began to catch on … the homeowners were not the bad guys. Click here for The Reality of Mis-Perception – Bankster Brainwashing & Barack.

Banks used the modification scam to parallel the foreclosures and literally dragged people into foreclosure that were still paying their mortgages, telling them to get behind in order to qualify began to multiple in numbers. Everyone began repeating the same story that the banks told them to default in order to qualify which was false information. The homeowners did not have to default to qualify – it was a scam.

no-surprise1Now comes the $26 Billion settlement (sounds like a lot, yeah?) to get the banks off the hook again.  This deal should be at the very least a couple of TRILLION dollar$ settlement and every unlawfully foreclosed home returned to the homeowner. And treble damages for economic crimes, along with CPA and FDCPA violations, only a few mentioned to start. Instead, this lousy settlement works out to about $2,000 per family – goofy and degrading!

WhistleBlower small picThe government never intended once again to help the homeowners. We are left in ruin and rubble. The independent review is botched as reported by a whistle-blower (thank you very much), by five hundred independent reviewers at $250.00 an hour being watched over by the bank inside the banks walls, by over 800 Chase Bank employees alone, and God only know how many from all the other banks.

Chase alone had one employee for every independent employee that was doing the review. Wonder how many BOA and the other banks had. Was this seventeen bank employees per every claims reviewer for the independent review company watching over the independent review? Bad, bad, bad banks. Some independent review!

It’s time for America to catch up on the real news – the non-partisan issues affecting everyone as dirty politics are played at the entire public’s expense. Take some time – please read the following articles, because you need to know this stuff – it will affect you for the next decade or longer, whether you are in or out of foreclosure.

Here are a few of my personal recommendations:



THE LETTER | In the Wake of Wrongful Foreclosures

Register John O’Brien Calls on the Court for Restitution on Behalf of Homeowners

U.S. Justice Department details guilty plea in UBS Libor rigging case

Read the Smoking Hot, banks intentionally and thoroughly violated the law complaint

More Whistleblower Leaks on Foreclosure Settlement Show Both Suppression of Evidence and Gross Incompetence – Read more at http://www.nakedcapitalism.com/2013/01/more-whistleblower-leaks-on-foreclosure-settlement-show-both-suppression-of-evidence-and-gross-incompetence.html#m7aM5FACevivJMRf.99



Shelley Erickson a small business owner of over 32 years, running a day spa and tanning parlor in the State of Washington. Shelley was the victim of a WaMu modification scheme and through her own research understands what American homeowners are experiencing. “We have a fight to fight and I am helping others fight it to the best of my knowledge,” she writes, “I am a homeowner and know the crimes committed against the American people, and I try to help others catch up on what I have learned so they know what hit them and what they are battling.”

Thank you Shelley Erickson for your submission.
The information is greatly appreciated.  DeadlyClear

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Whether or not you are represented by an attorney understanding the legal system is an asset.  The more you learn, the less likely you are to be taken advantage of or scammed.  Knowledge is power!


33 thoughts on “HAMP – The Modification Scam …and NOW SETTLEMENT SHAM!

  1. The information, as always, is interesting (and has been out there for a long time) – the problem is finding a solution, this is an education; however, people need a solid path to solution to work with so they can actually save their homes etc………

    • The solution, however convoluted, is to constantly call, email, and write your Congressional Representatives and Senators in Washington, DC, the White House and all of your state legislators and keep them informed in addition to stressing your views on these issues. Do not leave it up to anyone else to keep the pressure on our political representatives – because pressure is only effective if it is backed by large numbers.

      Right now there are still no regulations, the banks are getting off with minimal penalties and the government is allowing them to deduct their settlement deals as business expenses – which mean taxpayers (us), again, are taking the hit because politicians aren’t taking action.

  2. And everybody says America the great more like America the shit. These lawmakers and judges all have there pockets full from the banks. This country is going to the dogs. How do we fight these fraud judges and fraudster Congress jerks that goes for Obama to.

  3. Keep up with these articles. You need to screem it on a megaphone .Every single American needs to know how this governbanksment (us government ) is screwing all of us. As long as there pockets are full everything is fine and Dandy

  4. The tragic reality folks is that we’ve heard enough already, we now know what a criminal enterprise our institutions have become, and what they’re doing to us and our children. By hearing any more, we’ll just become desensitivized to what is happening to us and become mind numb zombies, unable to help ourselves. We must take action now or be forever doomed.

  5. The solution is that the Republic Congress needs to stop given the Democrats the advantage of alleged protector of the housing victims but who are these New York banker? They are Democrats like everybody else in New York and were the biggest contributors to Obama’s campaign.

    Obama got one of two position in the mess and that is he was stupid to the crimes or he ignored the fact that his contributors had and were committing crimes. Now in caught in some middle of the night backroom deal we got the Fed which is not the Federal Government and the OCC which is a part of the Treasury but independent part of, that has worked out something involving funds by way of insurance claims paid out, when we know for a fact that the wrong parties initiated the foreclosure.

    The reason the wrong party initiated the foreclosures is because Ginnie Mae is the holder of these blank endorse Notes and in the case of Washington Mutual government loans Wells Fargo succeeds in tricking the local counties by saying they are the legal holders of the Notes.

    However they are only holding the Notes as the custodian of records and cannot submit to the local land recorded to make this statement to put themselves into title. Wells Fargo should not even be the servicer of the loans because there is not a “holder of the debt” for the debt (monthly payments) to be legally collected.

    I must own you a debt in order to call a Note due, and since there is no legal agreement between borrowers and Ginnie Mae the contract cannot be enforced and is non-valid as there is no purchase by Ginnie Mae who is in possession of the blank Note. To foreclose is a non issue due to the fact of the transaction!

  6. A warning should be published nationwide if legal experts and lawmakers cannot collectively brainstorm to correct the illegitimate use of the government sponsored HAMP program. Troubled homeowners are attracted to the HAMP program with the belief that the government program is intended to give relief to homeowners in the same way taxpayer’s dollars were supplied to the banks allowing them the time and capital necessary to correct their financial errors.
    Enticed homeowners followed the bank official’s directions like lemmings jumping into the sea, bypassing alternative and real productive measures that may have achieved actual relief.
    Without HAMP giving promises of hope, the efforts of most troubled homeowners could have achieved real and positive results. With the bait of HAMP financial assistance, the banks attracted impaired homeowners like flys to honey. What a cruel injustice. Stop the madness. Kill or correct the HAMP program. Too many nearly broken homeowners are spending their last dollars to watch their homes and equity slip away.

  7. One of the real answers to this crime is constant individual complaints to all government represenatives, so the mass of people overwhelm the polititicains into doing justice instead of injustice. Unless the masses send, email, and write complaints to everyone possible and overwhelm the politicians, the politicians will believe the masses dont know about the crime and they are getting away with it. Waives of complaints contacting politicians and your DOJ’s, filing complaint to investigate with the Sheriffs, will intimidate the people who should be doing their job. by knowing massive people are aware of this crime. Sending letters and proof and claims to the OCC and the FED, the better business bureau. We know all the above protect the banks. However massive out cry will cause these people do something when it is obvious this crime is well known to the public and they may not get into office again. The tax paid jobs and the power politicians gain by our votes is worth more than the banks can pay them. However if the politicians believe they are fooling the tax payers/ and most voters, they will do the banks bidding. Inform everyone you can and get those pens and paper out and keyboards and send complaints and ask your friends to send complaints. Put public petitions together and petition laws to be voted on by the public that stop this crime. You can all do something big by following what I have said above. It takes less time and money than moving and losing your home to theives and thugs. We are stonger than a few bankers. Like the movie It is a bugs world. The masses are the power. Not the theives and thugs. WE DON’T NEED THEM! THEY NEED US! YOUR CONTACT MAKES A DIFFERENCE! This is why 60 minutes makes a difference. The politicians are aware the entire public is aware. Frontline made a difference, and made the public aware and the politicians know this and the next day Lanny Bruer was let go. Public outcry and public awareness is a key to winning this battle.

  8. Pingback: The Banks Evade Responsibility Again - Pilant's Business Ethics

  9. Deposing the employeof the banks has been very beneficial. These employees have admitted fraud and conspiracy. Ha Dao in Washington state is making gains by discovery, evidentiary hearings and deposing the NW Trustee forclosers. One judge has just recently refused to have a note investigated for authenticity. WHY? And of course West One whom would have had the benefit of proving the note was authentic or NOT objected to having the note examined and refused to leave the note he claimed he had in possession with the judge. WHY the judge sure trusted him. Sure smells rotten doesn’t it.?

  10. Hello Shelly,
    I want to thank you for this post of yours. Every word in it is absolutely true, as I and my family lived it, thoroughly; but thanks be to our Almighty God, we realized the fraud, paid the mortgage current (of the accumulating “past due” amount generated fromt the modification “trial” period) and then cancelled the application. Went to a large, highly reputable Credit Union and got the house refinanced, even though it was greatly “underwater”. Thank you again for this commentary of yours and I hope you do not mind if I direct people to it in order to assist them in their plight. All government agencies listed as supposed watchdogs are definitely not interested in helping homeowners and people like you are the true heros.

    • Your are very welcome. Please spread the word. The truth needs to be known and people who think they are alone need to know they are not. We are victims. I am grateful to hear you were able to evade the crime committed on you by the banks. I suggest to everyone to go to credit unions and boycott these criminal banks. Giving them one dime of business is enabling their crime spree. God Bless and tell the world so we can stop this crime. To many still do not know what is going on.

  11. This is the best article I have ever read on HAMP. There are still so many people out there who are falling victim to this scam. People still say “Obama is helping homeowners.” This scam was certainly designed to help the banks and increase foreclosures. The fact that nobody has investigated it and the mainstream media hasn’t touched it is, typical, yet disgusting. Great work

  12. As Virginia states, the solution is massive complaints and exposure in the millions of people. Dont expect change if you don’t personally get involved in some way, be it large or small. Just like in a Bugs Life, evil will prevail if good people do NOTHING! From exposure, to boycotting the banks and all associated to the crime and voting out the enablers and helping to raise funds for litigation. For every single family you raise funds to litigate it creates case law that helps all of us. Pick a family to support and do fund raisers. Good attorneys can not survive doing litigation for free. The attorneys are up against organized crime with our own tax dollars supporting their lawyers appearing to commit 18USC4 violations among many more crimes and deceitful acts. Paying for good lawyers is cheaper than paying for guns and losing life. Litigation and voting the enablers out! Boycotting the banks and talking to your neighbors. The people allow this if you do nothing.

  13. I do not promote any kind of violence. Violence only harms the cause and endangers you and your loved ones. Litigation, boycotts, exposure and votes by the masses will win this war and it is a war. An economic war with a trojan horse.

  14. Go to senate meetings police the laws being de regulated and the bad laws being put into place and expose the bad politicains the bad judges. Go to foreclosure courts in the mass. This helps a lot. The judge is more likely and had been witnessed to be more likely to be a fair judge when the court room is full of advocates for the homeowner and many witnesses of what the judge is ruling.

  15. Pingback: Pilant's Business Ethics Blog | Is Obama Pointless?

  16. I didn’t want to do this in a comment but couldn’t figure out how to contact you directly. I thought you might to know, my two brother attorneys and myself (a 2nd year law student) are in the process of suing Wells Fargo for enrolling my brother’s brother in law in Colorado in a program that looked exactly like HAMP, without signatures or their acceptance, and then treating them exactly like everyone here was treated. We are just getting to motions for summary judgment and are very optimistic. In the mean time, another individual has stepped forward who had the same HAMP horror story that is prevalent everywhere and we are looking to start up on that one soon. I’ll let you know, if you’re interested, of the outcome

    • Yes contact me at 206-255-6324 This is an ongoing crime todate against homeowners. Post the 26 billion dollar settlement nothing has changed and the American people are being subjected to Extortion.

  17. Pingback: Is Obama Pointless? | Pilant's Business Ethics


  19. Reblogged this on Deadly Clear and commented:

    Dear Hillary – Over 84 million families have been affected by the patented seamless automated computer program securitizing homeowners’ collateral without their knowledge. When you state “5 million” have lost their homes due to this financial collapse – you are way off base. Have your staff poll each state of their foreclosures since 2003 and you’ll find the figures are much, much higher.

  20. Pingback: REAL ESTATE INVESTING – Foreclosures, REOs and HAMPs… Oh NO! » Carol Stinson's Real Estate Wholesaling Resources

  21. The independent companies investigating the mortgage crime were not so independent but wre watched over by bank employees and have been in the get out of jail business for big business. The average homeowner recieved three hundred dollars for having their home stolen. The independent foreclosure list of how the checks were dispursed shows at least thirty percent of the foreclosed homes were not in default and that is a very low underestimated admitted figure by the banks in my opinion.

    Monday, February 11, 2013
    See Bank of America Foreclosure Reviews: How Promontory Became a Shadow Regulator (Part VA)

    Today we release the two latest posts in our whistleblower series on the Bank of America foreclosure reviews, focusing on the role of the “independent” consultant hired to perform the reviews, Promontory Financial Group.

    The Plot So Far

    As we described in earlier posts in this series (Executive Summary, Part II, Part IIIA, Part IIIB, Part IV, and Part IVB), OCC/Federal Reserve foreclosure reviews meant to provide compensation to abused homeowners were abruptly shut down at the beginning of January as the result of a settlement with ten major servicers. Whistleblowers from the biggest, Bank of America, came forward to provide compelling evidence that the bank and its independent consultant, Promontory Financial Group, attempted to suppress evidence that borrowers had been harmed by the false and deceptive practices of the mortgages lenders. Together, they reviewed over 2500 files. When asked to estimate the percentage of harm and serious harm they found, the lowest estimate of harm was 30%, with the majority judging the rate of harm at or over 90%. Estimates of serious harm ranged from 10% to 80%.

    In this post and the next, we focus on how Promontory was badly conflicted and incompetent. Here we discuss how it has become a powerful, yet unaccountable shadow regulator. In the next post, we show how it made a hash of the foreclosure reviews and probe what the egregious expenses might be hiding.

    Promontory, the Shadow Banking Regulator

    Promontory has increasingly come to serve as the dominant shadow regulator in the financial services arena. It is difficult to name a player who occupies a similar role in any other heavily regulated industry.

    Promontory has been an influential player virtually from its inception. Its founder and CEO, Gene Ludwig, was the Comptroller of the Currency under Bill Clinton and recognized the potential of the then-sleepy agency to end run other regulators.* After a stint as vice chairman of Bankers Trust, Ludwig established Promonotory and began hiring former regulators, along with attorneys with financial industry experience and former bank officers. The firm gained public visibility when Ludwig prepared a review for the board in the wake of a currency trading scandal at Allied Irish Bank.

    As the firm became larger, Promontory recruited more senior and well connected former regulators, both to work at the firm and to serve on its advisory board. Its roster includes former SEC chairman Arthur Levitt, former Nixon and Ford administration official and NASD chief Frank Zarb, and Fed vice chairman Alan Blinder as advisors. Uber lobbyist Ken Duberstein is also on the advisory board. Fed governor Sarah Bloom Raskin is a former Promontory managing director. Their current staff is virtually an alumni association of the people who ran TARP, 1990s deregulatory advocates in Europe and Australia, and examiners from the OCC and Fed. And it doesn’t hurt that their public relations is handled by a former executive editor of American Banker. Analyst Josh Rosner has described Ludwig and the pre-eminent bank regulatory lawyer Rodgin Cohen of Sullivan & Cromwell as probably the two private sector parties most responsible for bank deregulation in the U.S.

    Since Promontory is private, it is impossible to know its mix of revenues. However, its activities focus heavily on the adept circumvention of regulations. For instance, it operates CDARS, the Certificate of Deposit Account Registry Service, which is a service that divides large deposits and distributes them across a network of over 3000 banks. This is regulatory arbitrage, taking deposits that would otherwise exceed FDIC deposit insurance ceilings and breaking them into amounts that fall below the limits. A Bloomberg article, “Exploiting FDIC Loopholes Enriches Former U.S. Bank Regulators,” noted:

    “These guys know how to work the system,” says {Sherrill] Shaffer, [former chief economist at the New York Fed] who’s now a professor of banking at the University of Wyoming in Laramie…Promontory charges banks more in fees, about $12.50 per a $10,000 one-year CD to get access to federally insured funds, than the FDIC itself charges in insurance premiums, typically $5-$7 per $10,000 deposited.

    Another one of its major activities is getting financial firms out of hot water. From Promontory’s website (emphasis ours):

    Promontory Examination and Enforcement Advisory Services offers financial and regulatory risk diagnostic and remediation services aimed at preempting, complying with, and mitigating the severity of regulatory enforcement action.

    As one reader quipped,

    Promontory has been running this scam for a long time. I used to be involved in Patriot Act/Anti Money Laundering Compliance industry working with the largest banks in the world. Every time there was a regulatory action, Promontory was brought in to be the overlord. The running joke was that there the OCC and FRB stapled Ludwig’s business card to consent orders.

    Marcy Wheeler has called this the “Get Out of Jail Free industry”. But recently, Promontory’s most visible engagements have involved failed efforts at prettying up diseased managements. For instance, it told MF Global’s board that the broker-dealer had “robust risk management” a mere five months before it failed. And not only was this reading “absurdly sanguine,” but it was remarkably self-serving. Promontory was retained in 2009 to help implement reforms in the wake of an alleged trading scandals, so the report was an assessment of its own work. Similarly, Promontory prepared an analysis for Standard Chartered of wire transfers with Iran and other sanctioned countries, and reported only $14 million were out of compliance. The bank later admitted that at least $250 billion were impermissible, an over four order of magnitude difference.

    But unlike the formal regulatory apparatus, whose actions are subject to supervision in the form of Congressional elbowing, Inspector General investigations, and Freedom of Information Act requests, Promontory is accountable only to its clients. It’s unlikely that prospects will be deterred by a few high profile failures. After all, in the overwhelming majority of cases, egregious massaging of the facts by bank-friendly consultants gets a free pass from regulators. Sheila Bair provided examples in her book Bull by the Horns. For instance, she described how she was pressing for management changes at Citigroup in the wake of a bailout in the form of guarantees on $306 billion of toxic assets. A consultant was brought in to shield CEO Vikram Pandit:

    I met with Parsons, Grundhofer, and O’Neill on June 22 to discuss their willingness to boost capital and change management. They showed willingness to make some management changes, but resisted further capital raising….Throughout the ensuing negotiations…we were able to get significant management changes…Citi also agreed to hire an independent consultant to review its management from the top down and benchmark their qualifications and performance against other banks’…

    When the “independent consultant” report came back in the fall, it compared Pandit to small European bank CEOs and gave him glowing marks. As for its review of the rest of Citi’s management, it gave high grades to Pandit loyalists while criticizing those who were not viewed as part of the Pandit team…

    That was my first and last experience in asking bank consultants to assist regulators in reviewing bank operations. They are hopelessly conflicted, given their desire to secure future consulting work at those big banks. The consultants clearly considered their primary client to be Vikram Pandit. Indeed, they reported to him regularly on their review and sought his input until we found out about it and objected…..But Citi’s primary regulators, the OCC and NY Fed, didn’t seem to mind one bit.

    Troublingly, Ludwig is also the Managing Principal of GenCap, a private equity firm that “invests in financial services businesses with a particular focus on community and regional financial institutions, specialty finance and related services.” It is impossible to maintain any sort of a Chinese wall between an investment business and a consulting business where the firm gets not only inside information about bank operations but also pending regulatory actions when the same person heads both businesses.**

    Promontory was Badly Conflicted at Bank of America

    The track record of “independent” consultants hired when banks are under regulatory scrutiny is their real job is not to investigate but put lipstick on pigs.

    Since the official policy of the Obama Administration has been to declare peace with honor in the struggle against bank misdeeds, it was well understood by observers that the independent foreclosure reviews were never meant to be a serious exercise. The reviewers were conflicted, and Promontory was no exception. It had performed a “corporate governance review” for Countrywide’s board in November 2007. Recall that Bank of American had already made a $2 billion investment in the troubled subprime player in late August. The review is credited with getting Countrywide CEO Angelo Mozilo to accept that the bank was a goner and Something Needed to Be Done. Accordingly Bank of America announced its acquisition of Countrywide in early January 2012.

    In other words, the Promontory work seems to have led directly to Countrywide getting Bank of America to stump up for the rest of bank at a rich price given the distress it was in (over market prior to the leak of the acquisition news). So finding a lot of borrower damage resulting from the Countrywide lending and subsequent servicing would show Countrywide to have been an even bigger garbage that it is already known to be. Given Promotory’s role in moving the deal forward, that’s hardly the sort of adding-insult-to-injury news that Bank of America would want to hear.

    And it isn’t simply that Bank of America is a juicy potential client for Promontory. The firm already has close ties to the bank. It was deeply involved in a cost-cutting project launched under new CEO Bryan Moynihan called Project New BAC. And don’t think that expense reduction programs are tedious bean counting exercises. They are arguably the most lucrative consulting service. Cost cutting advisors are paid a percentage of the savings, and at a large bank, the rewards are rich. And the consultants naturally never question whether the assignment is warranted. As we wrote when the project was made public by a flattering article in the New York Times:

    The New York Times piece is hagiography about the cost cutting process at Bank of America, in which the Charlotte bank will shed 30,000 jobs, more than 10% of its workforce. It starts with the misrepresentation of calling the belt-tightening a “turnaround plan.” That implies that the business of the bank is in trouble and the headcount reduction measures can save the day.

    This is utter bunk. Bank of America was already a very cost and efficiency driven bank, to a fault. It botched its acquisition of the private bank US Trust by imposing its stingy ways on customers who had every reason to demand a bit of cosseting. It went so far as to impose ATM fees on a customer base that typically held 6 to 7 figure balances in checking accounts.

    Banking expert Chris Whalen has called the cost cutting effort “criminal”. He points out the obvious: there is nothing wrong with the bank’s operating businesses. The threat to BofA’s survival comes from litigation on its mortgage backed securities business….

    It is important to understand the business model of these firms… the whole project [is] accounted as a restructuring, with their compensation buried in the total.

    To give an sense of how large the fees might run…a guesstimate by an informed source is that the fees on a medium-large project, say $400 million in savings, would be 5% or $20 million. Fees presumably scale down as deal sizes increase, so the $5 billion BofA assignment would presumably be set at a lower percentage. By contrast, the going rate for bona fide restructuring specialists like Houlihan Lokey or Gordian Group (remember these deals are accounted for as restructurings) are in the 0.75% to 1.5% range.

    So given a high profile, high stakes project for a large and extremely profitable client, the last thing Promontory would want to do was to find borrower harm in the foreclosure reviews, since that would not only cost the Bank of America dearly through mandated payments to wronged borrowers but could also stoke litigation from homeowners*** and investors.

    Our next post will discuss what whistleblowers told us about how Promontory managed its foreclosure reviews at Bank of America and PNC.

    * I engaged Ludwig when I lead the Mergers & Acquisitions Department at Sumitomo Bank to advise on a complex international real estate syndication venture. We would meet infrequently over the 1990s. Ludwig mentioned with some pride that at the OCC, he had outflanked the Fed on certain issues.
    ** This isn’t the first time Ludwig has been insensitive to issues of propriety. See here for details of a brouhaha over a Ludwig coffee meeting with Clinton, bankers, and Democratic fundraisers.
    *** The OCC consent order that included the foreclosure reviews stipulated that borrowers who received a payment under the review did not waive their rights to litigate for additional damages.

    Topics: Banana republic, Banking industry, Legal, moral hazard, Politics, Private equity, Regulations and regulators

    Email This PostEmail This Post Posted by Yves Smith at 5:05 am

    Read more at http://www.nakedcapitalism.com/2013/02/bank-of-america-foreclosure-reviews-why-the-occ-overlooked-independent-reviewer-pr


    · After you get a check admitting the banks wrongfully attempted to foreclose on you one is still fighting the foreclosure in the courts or through the servicers constantly changing who is servicing the alleged loan, due to one does not continue to pay is even allowed to pay payments on a mortgage the banks are attempting to foreclose on. I have thousands of dollars in attorneys fees out there and paperwork and servings as a pro se and continue to be trying to save my home and helping many others to information and attorneys to help them save their homes in the same situation. THERE HAS BEEN NO JUSTICE NOR ENOUGH COMPENSATION FOR THIS WRONG DOING. OUR AG’S SIMPLY DID NOT CARE ABOUT THEIR CONSTITUENTS THEY WERE TRYING TO LET THE BANKS OFF THE HOOK FOR PENITENCE PAYMENTS. I am still trying to save my home. .

    Have not heard from you Is Monday still on? One real sad part of reality is that these checks for wrongful acts have stopped nothing. The banks continue to do the same wrongs. Due to the attempts to wrongfully foreclose I and many were not allowed or quit making payments to the crooks, fighting to save our homes from wrongful foreclosures. So were not so lucky, and more homeowners were added to the list of wrongful foreclosures. Perhaps a million or more that have no compensation coming from any review. I have spent over fifteen thousand in attorneys fees and going Pro se and now with an attorney again, to save my home that is still being wrongfully foreclosed on when modification fraud happened to me, with the wrong party attempting to steal my home. WAMU never transferred the loans. The judges in our state like many are a crap shoot, if they go by the rule of law or do not. Pechman is the worst who I have dealt with. The judges have held the homeowners and their attorneys hostage to the banks, ruling for the banks with out any due process. They have to much power to enable the criminals to take the houses. And the senators have passes bill 1435 that can only be vetoed by the governor now to allow reconveyance without authentic notes and real parties of interest to selll the stolen homes.


    naked capitalism

    Links 2/11/13 – 02/11/2013 – Lambert Strether
    Bank of America Foreclosure Reviews: Why the OCC Overlooked “Independent” Reviewer Promontory’s Keystone Cops Act (Part VB) – 02/11/2013 – Yves Smith

    Monday, February 11, 2013
    Bank of America Foreclosure Reviews: Why the OCC Overlooked “Independent” Reviewer Promontory’s Keystone Cops Act (Part VB)

    This post continues our discussion of the role of “independent” foreclosure review consultant Promontory Financial Group. Here we focus on what happened, or more important, didn’t happen in Promontory’s conduct of the reviews, and how that contrasts with the staggering fees the firm is widely believed to have earned.

    David Einhorn has a saying about the companies that he has shorted: “No matter how bad you think it is, it’s worse.” Promontory’s and the OCC’s performance on the foreclosure reviews epitomize this dictum.

    As much as the foreclosure reviews were widely expected to be a charade, given the conflicted roles of supposedly independent review firms like Promontory, there was no reason to expect the reviews to also be an ineptly managed, costly fiasco. Promontory’s inability to man and adequately oversee the project also meant what little useful work was accomplished was done overwhelmingly by contractors and temps, who were far enough removed not to have gotten the wink and nod that no borrower harm was to be found. So individuals who have no lasting loyalty to Promontory and Bank of America, and whose confidentiality agreements are likely inoperative due to defective drafting, public policy exceptions to these agreements, and enhanced whistleblower protection under Dodd Frank, have unearthed widespread evidence at all of Promontory’s clients on the independent foreclosure reviews of borrower harm. No wonder the OCC rode to the rescue to shut the reviews down.

    It is hard to overstate how badly the project at Bank of America and other sites was operated. We have spoken to multiple contractors who worked for Promontory on its OCC foreclosure reviews for PNC (Promontory was acting as “independent” consultant to Bank of America, Wells Fargo, and PNC). They also have knowledge of the process at Bank of America because some contractors moved between the Bank of America and PNC engagements and compared notes with their colleagues.

    Doug Smith, former McKinsey partner and co-author of the international best selling book, The Wisdom of Teams, reviewed their accounts. His reaction:

    It’s hard to imagine a more unprofessional, atrociously managed effort. In my more than three decades of working with, observing and advising teams and projects, I cannot identify a single worse example.

    But the surprise was how inept Promontory proved to be in its efforts to hide how much damage was done to borrowers. The scale of the exercise, combined with the pervasive reliance on contractors and temps who were told only the official story that their mission was to find evidence of damage done to borrowers, meant they went down that path, often surprisingly far. That produced further complications as Promontory then had to stymie and redirect their efforts.

    Promontory’s Incompetence

    Promontory was not even remotely up to handling this foreclosure review assignment, either from a competence or an operational standpoint. And this wasn’t simply due to the scale of the project at Bank of America. The whistleblowers who worked for Promontory on the considerably smaller engagement at PNC, present a picture of complete disorder. Moreover, some contractors went from PNC to Bank of America and they indicated that some pieces of the PNC engagement that had been organized by the contractors (as opposed to Promontory) were in better shape than the work at Bank of America.

    One basic problem was that Promontory had no meaningful knowledge of mortgage securitization or servicing; if you look at its areas of expertise, there’s nothing close. That put it in the dangerous position of not knowing what it did not know, and also of being dependent on its client.* While that may not seem to be much of a problem if the name of the game is to find nothing, it turns out the OCC had unwittingly required that servicers like Bank of America make a serious-looking stab at it.

    As we documented in detail in our earlier posts, the result was that the work of going through six of the seven substantive tests was performed on Bank of America premises with personnel under the control of Bank of America. Promontory did provide the software with the endlessly-revised questions that the personnel at Bank of America tried to answer, along with various information guides. It visited the staff in biggest center, Tampa Bay, only four times in thirteen months, and its interaction with the people doing the review work was extremely limited. In other words, this was not a Promontory foreclosure review, it was a Promontory-decorated Bank of America foreclosure review.

    By contrast, the project at PNC was modest in scale, yet it proved be well beyond the managerial capabilities of Promontory. At a bank with a comparatively small servicing portfolio, Promontory put in place a team composed almost entirely of contractors (140 to 150 when staffed up) only one Promontory employee in a managerial role, the managing director on the project, Michael Joseph.** PNC hired even more contractors to do clerical work to support this team’s efforts.

    Anyone who has worked in a real organization can appreciate how insane this arrangement was. One person cannot effectively lead 150 people, particularly on a customized project operating in several locations. The only professional firm activity that routinely has such extreme ration of partners to working oars is foreclosure mills. And there it is more viable, since the work in rocket dockets is routinized.

    Predictably, the contractors (who were higher level than our earlier whistleblowers) describe a project in chaos. This contractor explained how no useful work was done for the first three to four months:

    Consultant D: – essentially what I witnessed in the 10 to 12 months was the fact that Promontory did not manage the project. Their effort to manage the project with any real due diligence, to me, they just, they fell short from A to Z. For example, from the time I joined the project to the time it ended, I saw the leader of the PNC part of the project two times, and the total time was less than 10 minutes….

    So, in any event, to address that question, very minimal management from Promontory. Essentially what we were, we were all contract people. I had seen from the bank’s perspective and the OCC’s perspective that, you know, maybe we weren’t qualified, we didn’t have the right skills, and there was a lot of back-and-forth about that,…What I’m trying to say is that the vast majority of the people I worked with as contractors, even the reviewer level people, were competent enough to get the job done. What I saw was that Promontory – they didn’t come to the table. [Details of the types of review work done by some of the contractors] So there was borrower harm in almost every occurrence.

    Yves Smith: Right. Right….

    CD: As we started that review, like I said, Promontory played very little role in helping us do that, so we were essentially left to our own, our own devices, and the bank had provided us a bunch of information. PNC was very open in the beginning…But because Promontory didn’t give us any guidance, we felt we were obligated to review all of these transactions, and obviously we were, you know, given the task of finding borrower harm….we would go out and do our own research online to find, you know, the different …

    YS: Applicable regulations, yeah, exactly…

    CD: And our MO was essentially, “Hey, we’re going to all treat it the same way and we’re going to all include it in borrower harm when we see this and we see that, and that way if at some point in the future when Promontory catches up to us” – because, again, at this time we’re giving Promontory the benefit of the doubt. We’re just too busy. We’re ahead of them. And we said, you know, “If we find out that this shouldn’t be borrower harm, or etcetera, it should be treated this way, then we’ll know that we all treated it consistently in our conclusions.” So that was the way we proceeded. And, you know, I have to tell you we were finding significant borrower harm. So as that unfolded…..

    Well, as what I just described unfolded over several weeks, and then our results were then communicated to PNC, and immediately PNC, you know, their arms went up, their eyes got big, and they started to push back. “Wait a minute!” Their first, you know, I guess, exclamation was that, “Hey, you guys aren’t supposed to be looking at all of this stuff,” because again, remind you, Promontory didn’t give us any guidelines…Because we hadn’t been given those guidelines, again, we decided as a team that we would err on the side of the borrower and then we would get explanations and let the bank, you know, have their rebuttal period, etcetera.

    YS: Right.

    CD: So once they saw what we were doing, you know, they’re like, “Wait a minute. You’re supposed to only be looking at [X], not the actual integrity of [Y].” And we said, “Well, you know, Promontory said we’re here to find borrower harm. They’ve given us no other guidance.” And when that conversation took place, everything stopped.

    The detailed work that was done to support the tests at Bank of America, such as matrixes with state and Fannie/Freddie/FHA/VA fee limits and HAMP mod rules, was essential for PNC to do the work properly. It clearly couldn’t afford to reinvent that wheel. So why didn’t Promontory propose paying BofA a modest license fee to use that work? Both sides would have been better off and Promontory would have cultivated a bit of good will. But aforethough was not Promontory’s long suit. This came from Consultant B:

    Well, there was – one thing I can tell you, generally speaking, the planning was piss poor. Piss poor. And when you have no planning whatsoever, you have chaos (laughs) until such time as people start to figure it out. And it took them four to five, six months to really get to the point where they were starting to figure out, well how are we going to do this, and about the time we got cranking then the whole question of independence came up and then we were going to have to trash everything we’d done and start all over again and design our own process without any interference from PNC.

    Another observation:

    After concluding that there were too many individual specialized pieces of a loan review to achieve consistency across the large number of reviewers, PNC pushed an attempt to break the reviews up into individual subsets that could address particular borrower harm issues, with the intent of bringing them all together at the end. That was the plan, but then they couldn’t figure out how they were going to bring all the subsets together at the end and gave up on that approach. Then, complaints as to “lack of independence” grew louder, and the OCC and Promontory were faced with junking what limited deliverables they had after 10 months of work, and starting all over with review procedures designed and blessed by Promontory alone. While that could have been done, the design stage was going to require a considerable amount of time, energy, and beta testing to get right.

    Step back and understand what that section says. After 10 months, there was virtually nothing to show for this effort. Promontory had to junk what little it had done at PNC because the work to date was insufficiently “independent”. And in fact that is what happened. The work done through October 2012 was thrown out.

    Not that that mattered to Promontory:

    CD: We kept saying, you know, as we approached the end of the project, we kept – our confidence that Promontory was being truthful and was really going to come through with this stuff, was diminishing, obviously, over time. To the last month, in a meeting, I actually was in a meeting where it was called out once again, “When are we going to look at fee limits?” …The last comment to come from Michael Joseph, the lead of Promontory, was, “We’re not going there.”

    YS: Mmmm.

    CD: So he finally came –

    YS: Wow.

    CD: He actually said in the meeting, “We’re not going there.”

    YS: Wow…

    CD: I – you know, so that was, that’s when it solidified it for me, that this was all by design, they never had any intentions of getting the right answers.

    Another reviewer stressed that the bending-over-to-the-bank posture came not just from Promontory but also the OCC:

    While the general lack of “hands on” oversight and planning by Promontory contributed mightily to the failure of the project, Promontory was compromised from the get go by the OCC’s cultural bias toward keeping their “client” happy. Review process design decisions by Promotory had to be blessed first by the OCC and then by PNC.

    Obviously, any “independent” bank review that give the bank the final say is fundamentally corrupt.

    So How Much did Promontory Rip Out of Bank of America?

    One way to appreciate what a Guinness-record-level project management disaster the Bank of America review was is to try to understand how the fees charged related to any sort of discernible work product. The costs reported on how much the banks spent on the reviews are so stratospheric that most observers simply go into My Eyes Glaze Over mode. That serves to gloss over a very ugly fact: when you look at Bank of America, where the bank itself did the overwhelming majority of actual review work on its own nickel, with its own staff and temps, the amount that Promonotory is rumored to have charged is so excessive that it raises questions of what exactly was being done on behalf of the bank.

    We’re going to identify what we call “dark matter”, the magnitude of probable billings that are beyond any generous estimate of legitimate activity. Due to the extensive whistleblower reports, we can do a pretty decent job of estimating what the work at Bank of America (the part it paid for) cost, and what hefty estimates of the Promontory costs directly related to that activity should have amounted to. We can also make a good stab at what another major undertaking that was included in the foreclosure reviews ought to have cost, based on Promontory’s own statements as to how long it was taking. We can then use those to show how much dark matter remains.

    Admittedly, Promontory has never ‘fessed up to how much it billed to any of its clients on these reviews. While we could not definitively confirm the total, several informed sources indicated that the gross fees Promontory earned across its three clients, Bank of America, Wells Fargo, and PNC, were roughly $1 billion. Because we have good information on the PNC team level and what the contractor’s rates were, it’s safe to say that that Promontory’s charges to PNC were probably not over $60 million. The Wells Fargo reviews were contemplated in Promontory’s engagement letter to be somewhat smaller than the Bank of America effort. Whistleblower accounts indicate they were almost certainly smaller, since the bank was more stringent about reviewing borrower complaint letters in such a way to make it hard for any to be candidates for a real investigation (for instance, if a borrower failed to provide dates of particular incidents, the letter was rejected). So it’s reasonable to assume that Promontory earned $500 million in gross fees from Bank of America.

    Recall, as we have stressed, that the six of the seven substantive tests, B through G, were performed at Bank of America sites under the bank’s control.*** Promontory performed test H, the determination of harm. Preliminary tests, which allowed it to exclude some borrowers, were also performed by Bank of America. As we’ll discuss below, Promontory helped design and provided critical components for this process, such as the frequently-revised CaseTracker program and the related information sources, such as “matrixes” of state fee limits. It is also the likely source of the “resource guides” that helped the claim reviewers understand where to look to answer questions. It also over time resolved the considerable ambiguities, gaps, and errors in these components.

    Thank to extensive input from our seven Bank of America whistleblowers, we have been able to construct the staffing and pay levels at the all of the Bank of America reviews sites. We’ve set out the assumptions in Appendix III at the end of this post. Please note that our assumptions are consistently “conservative” which also means “generous”. For instance, at all the sites, temps were added over time. The later temps were brought on at lower hourly rates than the earlier temps. We’ve used the hourly rates of the early hires.

    Similarly, while most of the claim reviewers and related personnel were temps, there were also Bank of America full time employees in the same roles. The full time employees all in (even when you allow for benefits) were less costly than the temps’ hourly costs plus assumed agency markups. So for simplicity’s sake, we’ve assumed temp pay levels across the board, another generous assumption.

    Model of Costs Incurred at Bank of America Foreclosure Review Sites by

    The part that is a bit tricker to estimate is the higher level supervision costs, legitimate start-up and wind down costs, and the cost of the special information tools, which were essential but were clearly not contemplated in the engagement letter. Our assumptions include what securitization experts see as an extremely generous allowance for these components ($3 million, when they estimate a securitization law firm would have charged $500,000 plus a premium for ongoing hand-holding) as well as an allowance for off site supervision in excess of the proportion provided for in the Promontory engagement letters. If you look at Appendix III below to see the salary and billing rates assumed for these personnel, you’ll see that they are also generous.

    What we get is:

    $90 million of expenses at Bank of America foreclosure review sites
    $5.5 million of Bank of America executive level involvement in project design, oversight, and wind-down
    $22.6 million of Promontory billings for staff
    $3 million additional Promontory billings for possible third party expenses for development of fee matrixes

    Total: $121.1 million, of which $25.6 million was Promontory billings

    Recall that even though this process was extremely inefficient (the earlier hires report periods of one to seven months, depending on what test they were assigned, or performing no useful work), by August loans were being reviewed in a fairly orderly manner, even though the system was also designed to suppress finding of harm.

    For this part of the project, the test that was clearly performed by Promontory was test H, the determination of harm. We’ll return to that in a bit.

    Promontory’s other major task was to review a sample of 35,000 foreclosed loans separate from the reviews requested by borrowers. When the foreclosure reviews were abruptly halted, media sources claimed the banks were only 1/3 of the way through the process. We’ll be generous and assume Promontory had gotten through half of the 35,000 loans. We’ll also assume it had a learning curve, so it wasted 50% of its time figuring out how to review the loans. So that brings us to the equivalent of 3/4 of the loans, or 26,250.

    Promontory told the Tampa Bay staff it took them only 8 hours to review a loan. That is remarkable, since just doing a proper fee review took a trained Tampa Bay staffer at least 10 hours. For 10 file reviewers, there was also one Quality assurance staffer and one “Senior File Reviewer”. There was also a 7.5% senior managers for every file reviewer. We’ve omitted a few roles to keep this simple; we’ll compensate by increasing our result by 5%.

    The highest figure ever reported in the press for file reviewers was $250 an hour (the contractors on PNC were paid $60 an hour and believe they were billed out at $150 an hour, so again, our assumption is generous). We’ll assume the Senior File reviewers and Quality assurance types billed at a 30% premium to the file reviewer rate or $325 an hour. We’ll assume the higher level managers were a mix of top billers ($650) and more not quite as expensive people ($400-$500 an hour) for an average rate of $500. So for every $250 an hour file reviewer, you also have .4 x $325 plus 0.75 x $500 or $417.5. You then have the 5% for ancillary people plus 15% for expenses, or $501. So call it $500. In other words, even that $250 per hour per file reviewer has all sorts of project overhead and expenses piled on top of him.

    We take that 26,250 loans time the fully loaded cost of a file reviewer of $500 per hour times eight hours. That takes us to $105 million.

    Now go back to that $121.1 million figure before for tests A through G. Of that, only $25.6 million was actual Promontory billings. So far, we have accounted for

    $95.5 million spent by Bank of America on activities performed under its control
    $130.6 million of generous but defensible Promontory billings

    Compare that $130.6 million to the estimate of $500 million billed.

    How can Promontory justify nearly $370 million of dark matter?

    $370 million is an utterly implausible amount for the mystery test H.

    There is at least one troubling way to fill the gap. Readers may recall we interviewed a firm called SolomonEdwards that advertised that it was in the “file scrubbing” business. We called one of the partners to understand what those services were about. He made clear, in his coded way, that his firm engages in document fabrication, specifically allonge fabrication (allonges are falsified to remedy the failure of the originators to transfer notes properly to the foreclosing party.****). They also do other types of document “remediation”.

    At the time of our conversation, March 2012, he said he had 600 people at a bank doing “OCC consent order work”. The partner made it sound as if his firm was engaged directly by his client. But the story may be more complicated.

    That bank is almost assuredly Bank of America. At PNC, some of the contractors were recruited through a company that played a “staffing” role, Hilltop, which means it acted as a body shop to Promontory. Others were hired directly by Promontory. One of the PNC consultants was also approached by SolomonEdwards to work at Bank of America under a similar “staffing” arrangement and said that 975 Solomon Edwards people were working at Bank of America. That is confirmed indirectly by a 63 member “alumni of Solomon Edwards B of A project” group at LinkedIn. So it seems clear there was a large group of contractors working through SolomonEdwards at Bank of America.

    Now on the one hand, this may simply mean that SolomonEdwards was doing file review and “remediation” with a 600+ person team and on side was also acting as a body shop for Promontory. However, regardless, Promontory did bother getting Hilltop cleared for conflicts in with the OCC (Hilltop was mentioned in the PNC engagement letter) but not SolomonEdwards (in other words, neither firm was cleared for conflicts on the Bank of America conflicts by the OCC, even though Promontory did mention the names of each firm on other engagements, Hilltop for PNC and SolomonEdwards for Well Fargo. It would thus seem a matter of good order to have cleared them both for Bank of America, but that appears not to have happened).

    And even if most of the 975 SolomonEdwards employees were working as contractors to Promontory, we still are in the dark as to what they could possibly have been doing, particularly since we believe their billing rates were lower than the levels we’ve assumed in our estimates above.

    This is a long way of saying that even when you make allowance for high billing rates, the fact that so much of the real review “work” was actually done by Bank of America on its nickel means that there is a tremendous amount of dark matter in the Promontory billings. On the one hand, this may simply be egregious incompetence; there was certainly plenty of that on display at the far more manageable PNC project. Even so, it is extremely difficult to explain the numbers that credible sources (including people in senior oversight capacities in a position to get good intelligence) believe the Bank of America charges were with any plausible level of review related work. This strongly suggests that Promontory, either in concert with or separately, may have been aware of and was potentially involved in various file “remediation” and records-doctoring activities.

    Keep in mind that we’ve provided account from the Tampa Bay contractors of document fabrication of multiple types as well as of deletions from servicer notes that appeared to be to remove incriminating evidence. So there seems to be a very strong likelihood that crimes were committed.***** The only open questions are how wide ranging this activity was, who carried it out, who else was an accessory, and how much were they paid.

    *One proof: the tool used by body shops to qualify candidates for Promontory work looked for expertise in mortgage underwriting and servicing. Underwriting experience is worth very little for analyzing foreclosure issues. Similarly, having servicing people review foreclosure issues is wrongheaded. While they might have experience in the area, the whole point of the foreclosure reviews was to analyze how servicers had managed the loans. It certainly isn’t independent or a “review” to have the people check to see if their own type of work was legitimate or not. Lawyers should have been reviewing these issues.

    **There were “staff attorneys” and IT people tasked to the project in Miamisburg, Ohio, the biggest site, who were also Promontory employees, but Michael Joseph was the only Promontory employee in a managerial role in the foreclosure review process. And it was light on supervision of any kind. The “underling” managers were contractors, one of which had had OCC experience, the other had worked at Countrywide.

    *** In the unlikely event Promontory or the Bank of America rouses itself to protest that Promontory did perform tests B though G, we’ve provided not only detailed whistleblower reports but also documents used in the reviews that demonstrate otherwise. See posts Part IIIA and Part IIIB

    **** Specifically, allonges are separate pieces of paper that are required per the Uniform Commercial Code to be “affixed” to the borrower note. They are used to create space for additional signatures when room on the note has run out. Allonges were simply unheard of prior to 2008, since it is permissible to use the sides and back of a note for signatures (notes are endorsed like a check to convey ownership to the next party [this is a simplified but adequate for this discussion]). There is no need for them in the ordinary course of business, but foreclosures have long ago ceased to resemble a legitimate business. Allonges, which remember are supposed to be affixed, have this funny way of appearing out of nowhere when a borrower about to lose his house points out that the note was never properly endorsed to the party that is trying to foreclose, and only the proper party can foreclose.

    ***** For starters:

    18 U.S.C. § 1512(c) (as amended by Sarbanes-Oxley Act § 1102) (offense encompasses any person who corruptly “alters, destroys, mutilates, or conceals a record, document, or other object, or attempts to do so, with the intent to impair the object’s integrity or availability for use in an official proceeding”; or corruptly “otherwise obstructs, influences, or impedes any official proceeding, or attempts to do so.”).

    18 U.S.C.§ 1519 (created by Sarbanes-Oxley Act § 802(a)) (offense encompasses any person who “knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States or any case filed under title 11, or in relation to or contemplation of any such matter or case . . . .”).

    See United States v. Trauger, No. 3 03330 (N.D. Cal. filed Sept. 25, 2003). In this complaint, the government alleges that the lead audit partner of a public company concealed the alteration of computer and hard copies of audit workpapers, as originally produced to Office of Comptroller of Currency (OCC) and then produced to the SEC, because he wanted to “beef up” the files to make it appear that he had thoroughly considered the accounting issues and available facts during the course of the audits and reviews. The partner allegedly found out how he could de-archive an audit in order to revise and then re-archive the working papers; directed a colleague to backdate the system date on his computer in order to make it appear that printed copies of the altered working papers had been created during the course of the audit; added an undated handwritten note to an original and all copies of a memorandum; and directed that the e-mail evidence of the requests to alter and delete documents itself be deleted.

    Read more at http://www.nakedcapitalism.com/2013/02/bank-of-america-foreclosure-reviews-why-the-occ-overlooked-independent-reviewer-promontorys-keystone-cops-act-part-vb.html#zZbrLkiFVivydrwK.99

    LOOK UP 18 U.S.C. 2 AND 18USC 3 AND 18 USC 4. ALL OFFICERS OF THE COURT(judges and attorneys are to report fruad holding the courts and judicial system first and their clients second) They are in the know or should be in the know to recognize fraud and are mandated to report it. Not to aid in covering it up! 18 USC 241.




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