Bad Loans|Predatory Lending|Wall Street Knew!
Posted by BuddyT on April 27, 2009 · 6 Comments
Bad Loans Were Common on Wall Street
and on Your Street!
I am not surprised by the foreclosure crisis and you shouldn’t be either. I spent over 17 years in the Mortgage and Financial industries watching this mess growing.
It is a known fact that the banks, lenders, wall street often hired quality-control contractors that reviewed sub prime loans for investment banks before they were sold off on Wall Street. Or they had “In House” Q.C. as employees doing the work, or at least trying to do the work. You know, to not have loan fraud (LOL)
It was the QC persons job to dig into the loans and find the problems or “Red Flags”. Believe me between 2002 through 2006, Bad Loans were easy to find. The Financial Industry wanted VOLUME! After all, they were giving the Securities a bogus rating to begin with all in the name of progress! (can you say ponsi scheme?)
There were hotel workers in California claiming that they made,$15,000 a month so that they could qualify for a $500,000 home!
Had I known this I would have become a hotel worker is making $15,000 a month changing sheets at the Days Inn, WHO WOULDN’T want to do it. It just really made no sense. Here is another example: I saw a Lawn Service Owners application in Florida claiming to make $20,000 per month, That is a lot of grass and trees to maintain, I think I will stick with the hotel Job!
The Key Factor For Mortgage Fraud
The key factor for mortgage fraud was that the investors didn’t want the supervisors to have the auditors to do their job. If they would reject, or kick out, a loan, they usually would overrule the auditor and approve it.
I witnessed first hand a QC reviewer, at a “Now Defunct Lender” who reviewed the kicks would say, ‘Well, I thought it had merit.’ I thought to myself What? Their credit score was below 580.
And if it was an income verification, a lot of times they weren’t making the income.What kind of merit could you have determined, how can it get funded? The response would be something like ‘Oh, it’s fine. Don’t worry about it.’ ”
The main issue is: About 75 percent of the time, loans that should have been rejected were still put into the pool and sold!
A Smoking Gun?
All of this suggests that auditors working for Wall Street investment bankers knew how preposterous these loans were, and that could mean Wall Street liability for aiding and abetting fraud. …Any one speak with Bear Stearns About this Lately?
If you ask any loan-auditing firm (if they will speak with you) they will reply that the company has no incentive to give loans a passing review if they fail to meet underwriting criteria and that it uses additional quality-control measures to further check up on loan reviews.
I ask you to consider this their had to be breakdowns in quality control at a lot of companies. How else did millions of people wind up in loans that they can’t pay?
(Can you say Forensic Loan Audit for your mortgage to find the violations??)
Is There Accountability on Wall Street?
You have to understand that the auditors were hired to find the bad apples in the barrel and pull them out: borrowers with payments they couldn’t afford, houses with inflated appraisals, people lying about their income. But the investment banks had such a strong financial incentive that “They put the bad apples back in the barrel because they knew that they could sell the bad apples along with the good apples and, at least in the short term, nobody would know the difference. That’s why they put them back in — because they made more money that way, the age old bundling od credit risk as used in the Auto Sales Business
“There’s a name for this — it’s called ‘passing the trash,’ ” says David Grais of Super Lawyers Fame, an attorney getting ready to sue Wall Street firms on behalf of investors — big pension funds and others — who bought the bad loans.
“These were immensely profitable deals. One study showed that the investment banks were making a 40 percent return on equity every two months on these securitizations, which is an eye-popping number,” he says.
Grais says many people on Wall Street make huge bonuses when their business unit is making big money. So the faster they could package up loans — good, bad or ugly ones — and sell them to investors, the more money that they made, he says.
I know in speaking with a friend who was an outside wholesale representative that the managers got bonuses for how quickly they reviewed loans, not for how many bad loans they caught.
Did The Banks Agree to Limit Loan Rejections?
Other evidence is emerging….. A bankruptcy examiner in the case of the collapsed subprime lender New Century ( oops I said the name) recently released a 500-page report, and buried inside it is a pretty interesting detail. According to the report, some investment banks agreed to reject only 2.5 percent of the loans that New Century sent them to package up and sell to investors.
If that’s true, it would be like saying no matter how many bad apples are in the barrel, only a tiny fraction of them will be rejected. I have also heard that the attorney general in New York and other prosecutors are taking a look at all of this. They, too, want to know whether Wall Street firms were covering up bad loans and selling them to investors.
Think about how amazing it is... if any investment bank agreed to a maximum number of loans they would kick back for defects. That means that they were willing to accept junk. There’s no other way to put it, they got greedy and now they are going to PAY FOR IT!
In your Fight Against Foreclosure and Predatory Lending, protect yourself, get your personal forensic loan audit. Give your attorney something to work with and Stop an Illegal Foreclosure in it’s tracks!
I was doing well until I had to refinance to have my entire rough changed, then the nightmare started. I was threatened that if idid not sign the document, I stood a chance of not getting the loan. This occured when I was asked to sign some blank forms. Was always advised by the mortgage broker to get money out from the loan. Ofcourse each time that happened my mortgage payment was higher and higher. When this broker came the third tim. I refused to use him for my refinancing. He had my then property insurance company not to renew on expiration. It was very hard to prove to a new insurer why my insurance was not renewed by the same company, when I payed in full. All these happened simply because I wanted to go to the bank personally instead of mortgage lender.
My second problem started when a northampton gudge gave gaurdianship of my handicaped child to a dmr hired attorney and also gaurdian of estate to this same attorney who put a lien on my house which prevented the sale of the house two years before the sale of home crash. The same gudge futher decreed that when my house is sold, the money would be put in the bank in his name for my son whom they have refused to give him back to me. This twenty nine year old lived with me for the twenty four years of his life. I can not tell all the details here, but you can always e-mail me.
For the fear of losinf my home to these people, I stopped paying my mortgage because of the lien on my property. It became delinquent and I was served a letter by an attorney who has started a foreclosure proceedings. To save my house, I I was advised to file a chapter 13, and had authomatic stay. The lien holder has filed a motion to forclose again, because of non payment. i sought modification and all you get is a run arround. No body calls you back and will not return a call. I am losing my house and there is nothing anyone can do to save my home. The bailout only helps the rich companys, not a poor individual. Tell me where shall I go for help.
Where are you located, perhaps we can refer you to an Attorney who get’s it” Also take a look at the 32 way book, it has helped thousands of people in similar situations, educate themselves in what is happening and how to Fight Back. Best wishes, talk to you soon
BuddyT can you refer me to an Attorney that get’s it in the metro detroit area?
I purchased my home in 9/1991 for $64,900. I put $10,000 down on a 30 year fixed mortgage @ 8% interest.
In 2000, I went through a divorce. In 1/2003 I was solicited by phone, by Ameriquest Mortgage Company, to refinance my home which they said I prequalified for a 30 year fixed rate mortgage with an escrow account for taxes and insurance.
I had to refinance to pay the court order of half the equity of the home to my ex-wife. Ameriquest had the house appraised at this time at an amount of $123,500. The day I went to close on the refinance, I was told that I didn’t qualify for a fixed mortgage and I didn’t have any other options. I had to take an adjustable rate mortgage. All the terms, points, fees, and charges had changed from what I was originally been told.
Also, Ameriquest seems to have allowed my ex- wife’s attorney to place a lien on the house for her fees. At the time of closing, I was told by Ameriquest that this fee was going to have to be included in the loan.
On or about, September 2007 I was mailed a notice regarding a multi-state settlement: http://www.ameriquestmultistatesettlement.com/index.htm
I received a check for $600.00, which by this time with the variable interest rate in effect, was about half a month mortgage payment. The loan has transferred four times since it originated with Ameriquest.
In July 2008, I contacted MGC Mortgage Co, (at the time MGC was the current mortgage servicer) and spoke with a loss mitigation employee by the name of Nicole Battle. I explained that do to being unemployed and my circumstances, my income was at that time $1448 a month. The interest rate at that time was 11.62% and mortgage payment was over $1100 and I was in need of a loan modification to make my home affordable.
She said she could do that but needed me to send a copy of my federal income tax returns for the past two years, along with a copy of my bank statements for the past two months, a hardship letter explaining my situation as to what put me in this situation and a monetary determination from the unemployment insurance agency as well as a household budget. I did provide the requested information by fax, email, and mail.
At one point in time Nicole said that she would get my monthly payment down to $800.00 or less and that included an escrow account for property taxes and insurance. In the mean time it seems MGC foreclosure department was moving forward to foreclose.
It became more and more difficult to reach Nicole Battle, numerous phone calls, voicemails were made. When contact from her was made to me, multiple requests for duplicates of documentation that had already been sent made for a constant delay in the modification of my loan. Although, I provided her with everything she asked for.
MGC had the house appraised in October 2008, when I asked Nicole Battle what the house appraised for, she said $44,000. (I owed over $100,000 on the loan).
She advised me that the paperwork for the loan modification was in the mail and I was to sign and return them as soon as possible. I received nothing and after a short period of time, once again began making phone calls to which I received no response from Nicole Battle. After approximately 3 weeks, I spoke to an operator at MGC’s main number who informed me that Nicole Battle no longer worked there. I explained the she was working on my loan modification and asked who is working on my file now? The operator checked and told me that it was Chevette Wade and transferred my call to her.
After speaking with Chevette Wade she said that I needed to pay a down payment for a loan modification, which I did over $2000. & she needed to submit my loan mod for review and get back to me. Finally after numerous contact attempts to reach Chevette Wade I got a hold of her in late November she said a loan mod was approved 9% fixed for 2 years, this included an escrow account for property taxes and insurance. She said not to make a December payment, she also said to keep an eye on my mailbox for the paper work for the loan mod., sign the documents on the loan modification and send them back as soon as possible. Nothing was every sent to me.
The same scenario with Nicole Battle was now playing out with Chevette Wade. She was difficult to get a hold of, didn’t return calls, and documents were never sent. I again called the MGC main phone number I was told by the operator Chevette Wade no longer worked there, I explained the she was working on my loan modification and asked who is working on my file now? The operator checked and told me that it was a new person handling my case. I cannot recall his name, but I explained to him that 2 other MGC employees were suppose to be taking care of my loan mod and it seems nothing has been done by either Nicole Battle or Chevette Wade. He replied, he’s been told by several customers that they were having the same problem. He also stated at the time of our conversation that he had a large stack of files, including mine that he had been unable to review yet.
In April 2009 a notice was posted on my front door that my house was being foreclosed on and going to sheriffs sale.
I, as well as an authorized representative of Prestige Benefits LLC, contacted MGC Mortgage Co., spoke with a Mr. Stansberry, and we both informed him of the pending loan mod.
Mr. Stansberry stated he needed to speak with his supervisor, and he did. He informed us that MGC agreed to remove the house from sheriff’s sale. I never received another posted notice on my front door, but per the summons paperwork I received in the mail December 18, 2009, my house was sold at sheriff’s auction to Beal Bank for $95,000, on May 15, 2009.
In September 2009, I was sent notice by MGC that CLMG Corp was my new mortgage servicer. After intense research, I have found that both MGC Mortgage Co. and CLMG Corp. are servicers for Beal Bank.
On December 18, 2009 I received, in the mail, SUMMONS to be in 41B Judicial Court January 7, 2009 at 10 am. The summons states the complaint is for the purpose of eviction.
Please help me save my home.
BRUCE