At Loan Lawyers, LLC we consistently do research. Over this past holiday
weekend I encountered this wonderful article from Bob Massey. I was very
impressed. Here is the substance of it:
My last two articles focused on the great Securitization Swindle the banks
have been perpetrating for over a decade. It was successful because the
banks created such a tangled web that it was nearly impossible for everyday
people, lawyers, and judges to understand what was happening. But what
if they committed a comparatively straightforward fraud? Surely that would
be caught and stopped, right?
In this month's article I'm going to explain how Countrywide fraudulently
created 3.5 MILLION loans at taxpayer expense with a scheme so simple
it seems impossible they got away with it at all.
In 2003 Countrywide wanted to dominate the housing boom. The problem they
were facing was that each state has its own licensing fees, corporate
taxes, and regulatory costs that Countrywide would have had to pay in
order to do business. That's when they cooked up the scheme. Instead
of becoming licensed and registered in every state, Countrywide simply
made up a trade name (DBA) that they could register in every state that
would slide under the radar of the regulators. They made up the innocuous
name America's Wholesale Lender and got to work.
Their scheme worked and nobody noticed that America's Wholesale Lender
wasn't a corporation registered or licensed to do business in their
state. Countrywide got cranking and created 3.5 MILLION loans across every
state in the country under the DBA "America's Wholesale Lender."
The catch is that a DBA such as America's Wholesale Lender is not a
legal entity. It is simply a trade name.
A DBA has no ability to own property, file lawsuits, or hold any security interests.
After a little while some local recorders began to notice and refused to
record the loans because the lender was just a DBA, not a licensed lender
in the state. At this point Countrywide decided to commit ANOTHER fraud
by listing the lender on their mortgages as "America's Wholesale
Lender, a Corporation organized and existing under the laws of New York."
With this subtle but incredibly fraudulent change, Countrywide resubmitted
the loans and they went through without a hitch. At this point no one
realized that America's Wholesale Lender wasn't a registered corporation at all.
Countrywide figured that, if caught, they could avoid punishment by claiming
that it was all a clerical error. Even if they couldn't get away with
that, they reasoned that the money they were saving in corporate taxes
and licensing fees from all 50 states was significantly more than any
monetary punishment they might receive.
After they made the loans, Countrywide never sold them to a securitized
trust as they were required to do by the pooling agreements. Instead,
the loans were controlled by Bank of America (BOA). As a result, BOA was
collecting payments and foreclosing on loans despite the fact that it
never owned or funded any of the actual loans.
In 2008 some good Samaritans tried to stop this scheme by registering the
corporation "America's Wholesale Lender, Inc a New York Corporation"
(AWLI). They brought it to the attention of the US District Court that
BOA was foreclosing on loans that it didn't own, and that the loans
were made by a corporation that BOA held no interest in. The District
Court dismissed the case as irrelevant and BOA continued the fraud with
a few upgrades.
After the creation of AWLI, Bank of America needed to find a way to make
it so that AWLI could make no claims to the loans. What they did was get
MERS to create an assignment on behalf of AWLI which assigned the loan
to Bank of New York Mellon, Deutsche Bank, or US Bank. After these
fraudulent assignments, the bank attaches them to their foreclosure proceedings to
trick the court into believing it is the legal owner of the loan.
This is all made even more infuriating when you realize that all of these
3.5 MILLION fraudulent loans have been fully repaid by taxpayers in the
TARP bailout and by the various insurance companies who insured the securitized
trusts these loans were supposed to be a part of.
The bright side is that, if you have the right legal team on your side,
these homeowners can get justice."