Why are modifications being undermined when they would so obviously preserve the value of the “loan?” The answer is because the real party in interest in the foreclosures is the servicer, not the trust, which doesn’t own the loan anyway, nor even the investor/beneficiaries, who reap very little out of the proceeds of foreclosure.

The servicer wants the loan to fail. The investor expects the servicer and trustee of the REMIC trust to make sure value is preserved. But that isn’t the game. If the property goes to foreclosure sale then the “servicer” can make its claim for “recovery” of “servicer advances.” The fact that “servicer advances” are made from a pool of funds established by investor money and the fact that the servicer accesses these funds to make payments, regardless of whether the borrower pays or not — all of that makes no difference in the game.

In that…

The newest Federal Reserve policymaker dismissed concerns that his call for radical action to rein in “too big to fail” banks was a partisan move, and instead said on Wednesday it highlighted the U.S. central bank’s independence from politics.

COULD THE SUDDENESS OF SUPREME COURT JUSTICE SCALIA’S DEATH BE SOMEHOW RELATED TO THE LANDMARK SCOTUS RULING AGAINST MASSIVE FRAUDCLOSURES WRITTEN BY HIM?

By: Adam B. Brandon

The Truth in Lending Act (“TILA”) requires lenders to make certain disclosures to borrowers before the parties close on a residential mortgage.  TILA also affords borrowers the right to rescind a mortgage for any reason for three day after the transaction.  Furthermore, if a lender fails to make the disclosures that TILA requires, then the borrower may rescind the transaction within three years or until the sale of the secured property, whichever comes first.

On January 23, 2015, the U.S. Supreme Court issued a significant opinion that clarifies how a borrower may exercise the right to rescind.  Previously, many federal courts required a borrower seeking rescission to file a declaratory judgment action.  If the borrower failed to file suit within three years, the…

And I concur!

William K. Black
February 12, 2016     Bloomington, MN

The Bank Whistleblowers United announce the inaugural Financial Fraud Lemons of the Week award.  There can be no more fitting recipient than the ironically named Department of Justice (DOJ).  The “lemon” is used in the economics and criminology literature to refer to a car of surpassingly terrible quality.  The quality is so bad that the car can only be sold through fraud.  We will award it each week to an example of dishonesty or cowardice about financial fraud that is worthy of public ridicule.  We want to leave room in our scale for truly spectacular examples, so this first award will only receive Four Lemons.  The first award is for what has become a routine example of dishonesty and cowardice by DOJ.  Its conduct should be a scandal of national proportions, but by now everyone expects DOJ to…

The New York Times has taken notice of Bank Whistleblowers United (BWU). You can read it here.

Source: New Economic Perspectives

Dimon bets the farm on the House of Morgan…

Chairman said to buy 500,000 shares to boost confidence in banking industry

J.P. Morgan Chase & Co. Chairman and Chief Executive James Dimon bought 500,000 of his bank’s shares on Thursday, a person familiar with the matter said.

The $26 million purchase is designed to stem the tide of negative sentiment overwhelming bank stocks this year. The big-ticket stock purchase from one of the country’s most well-known bankers followed a 20% decline in J.P. Morgan’s JPM, -4.41% share price so far this year and a broader selloff that has hit big banks such as Citigroup Inc. C, -6.50% and Bank of America Corp. BAC, -6.84% particularly hard.

Bank stocks have fallen about twice as much as broader stock-market averages this year as investors fret over slowing economic growth, falling energy prices and the possibility that interest rates will fall, a tough…

Fannie Mae announced Wednesday that it selected the winning bidders in its latest sale of non-performing loans, with a subsidiary of one of Wall Street’s biggest names among the winning bidders.

The total sale included four pools of loans that total $1.32 billion in unpaid principal balance spread across 6,540 loans.

The winning bidder for two of those pools, representing 2,068 loans that carry an unpaid principal balance of $418,414,683, was MTGLQ Investors, L.P., a “significant subsidiary” of Goldman Sachs.

According to the Securities and Exchange Commission, Goldman Sachs owns, directly or indirectly, at least 99% of the voting securities of MTGLQ Investors, L.P.

Read on.

This is an article back in 2009 where Fannie Mac CFO committed suicide. It makes me wonder what happened to the probe as well Freddie Mac’s accounting practices and why this case remains unsolved and silent:

Police Investigating Death of Freddie Mac Official, Dead Of Apparent Suicide

WASHINGTON (AP) — The chief financial officer of money-losing mortgage giant Freddie Mac was found dead in his basement early Wednesday morning in what police said was an apparent suicide.

David Kellermann, 41, apparently hanged himself, said a law enforcement official familiar with the investigation. He asked not to be identified because the investigation was ongoing.

Kellermann’s death is the latest in a string of blows to Freddie Mac since it was seized by the government last September. The company, which owns or guarantees about 13 million mortgages, has been criticized for financing risky loans that fueled the real estate bubble and are…

Now this is a joke. Freddie Mac is educating consumers on mortgage fraud!

Housingwire:

As part of a continuing series that aims to educate consumers on all aspects of the home buying process, Freddie Mac released a short video that tells consumers how to avoid mortgage fraud when applying for a loan.

In the video, Freddie Mac identifies several “red flags” that consumer should be on the lookout for, including:

• Being told to exaggerate your income, assets, credit, or provide false information someone says will help get the loan approved

• Being pressured to sign paperwork that you haven’t had a chance to read or that you don’t fully understand

• Being asked to release personal financial information online or over the phone by someone you don’t know

Last year, as a part of the same education effort, Freddie Mac issued a warning to buyers and lenders about scams that offer the…