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Articles: POOLED MORTGAGES:
Did a Securitization Trust
Purchse Your Note Directly?
Fraud to Get a Trust Deed for a Security?
SHARED LOSS AGREEMENTS:
Most LOAN MODS FAIL Because
FDIC Agreements Pay More
for Short Sales & Foreclosures
LEHMAN BROTHERS COLLAPSED:
Many Banks Failed Because
After Securitization Failed
They weren't able to Lend

Are you in Foreclosure? / Is Your Friend in Foreclosure?
Did the Broker Convince You to Take the Wrong Loan?
(Common Argument: We'll Refi You Later, Before It Goes Up)

Lehman, Indymac, Countrywide, New Century, Greenpoint, Bear Stearns etc Planned This Fraud
To Bribe Brokers to Convince Homeowners to take Adjustable Rate No-Document Loans
They Defrauded both the Investors and the Homeowners.
The Banks may end up Owning most of American Homes.
As a Result, 13 Banks now Dominate US Politics and Politicians.

Low Initial Payments to Tempt Borrowers

Many People were talked into an Option ARM or Alt-A Loan with a Reduced Payment for a few Years with the suggestion: "Take the Lower Payment Now, and we'll get you a better loan later."
Many of them could have gotten a fixed rate loan at a lower interest rate, but the broker tempted them with the low payments.
Lehman, New Century, Indymac and others set up Investment Trusts that bought Loans from Borrowers tempted by initial low payments to either get a worse loan than they otherwise qualified for or to buy a home they couldn't afford.

Did the Lender Pay the Broker to Shaft You?

Many brokers got paid by the Lender as well to convince you to take a loan with high interst and payments within a few years, even though you qualified for better.
A Yield Spread Premium (YSP) is considered by many to be a bribe to the broker to convince you to take a worse loan than you qualify for.
Many brokers didn't provide the required disclosure that they were being paid by the Lender as well.

Did they Double your Payments? - or Will?

Some Loans have already adjusted UP and the payments are now beyond their means.
This is not a surprise - they tried to give loans to people that wouldn't be able to afford them later.
I've talked to people on Social Security that got them, but their SS check couldn't cover the adjusted payment.
The Bank knew this in advance from their Income Statement.
The Lenders often offered these loans without Income Verification, hoping they would lie, or their broker would lie for them.
From:

A Colossal Failure of Common Sense: The Inside Story of the Collapse of Lehman Brothers by Lawrence G. McDonald and Patrick Robinson

The Lenders set these Option-Arm and Alt-A Loans up with the intent that they would fail.

Lehman Brothers set things up to collapse, and everything is according to their plan.
A Collosal Failure of Common Sense: The Collapse of Lehman Brothers, a book by Lawrence G. McDonald, on page 185 states:
"Was proof of income or assets needed before the mortgage is granted? Hell, no. They just need to state their income. No docs. That's why we work here.
You guys ever worried some of these no-doc borrowers might just take the money and run, without making payments? I just told you, it's not our problem. We;re salesmen. New Century makes it easy for us."
Ibid, p. 186:
"...an elderly lady about to be evicted from her three-bedroom home northwest of Stockton, had been made an enormous "senior citizen" loan."
"On checking the documents ... her incom section had been left blank." "How does it even get past the first person who looks at it?" "Right there I guess we had the New Century way... This was a corporation that unloaded thousands of mortgages, every month, onto Wall Street mortgage securitization guys who weren't...smart...."
From:

Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System--and Themselves by Andrew Ross Sorkin

When the Financial Collapse of 2008 happened, executives of the leading banks fought to save their companies. Lehmann Brothers, New Century, Greenlight Financial, and many other lost.
JPMorgan Chase and Goldman Sachs won: Those Wall Street executives kept their jobs, their bonuses and their pensions; they benefited from unprecedented rule changes and unlimited monetary and fiscal support; and their firms became even bigger and more dangerous to the economic health of society. Andrew Ross Sorkin explains our financial crisis, with the blow-by-blow story of how rich bankers fought to save the Wall Street they knew and loved. The details in "Too Big To Fail" will turn your stomach. The arrogance, lack of self-awareness, and overweening pride are astonishing. Sorkin puts you there -- you see events unfold moment by moment, you hear the conversations, you can sense the hubris. The executives of our largest banks ran their firms into the ground, taking excessive risks that even now they fail to understand fully. But, as these individuals saw it, unless they personally were saved on incredibly generous terms, the world's economy would grind to a halt.
There is a revolving door between Wall Street and Washington, and powerful people bend the rules to help each other out.
In the face of these developments, Andrew Haldane, head of financial stability at the Bank of England, has become blunt about the way our banking system interacts with (and rips off) taxpayers. In a recent paper that represents the straightest talk heard from the official sector in a long while, Haldane puts it this way: The government may say "never again" to bailouts, but when faced with the choice to either "rescue big banks or allow the world economy to collapse," it will reasonably choose the route of rescue. But, knowing this, the people running our biggest banks have an incentive to take more risk -- if things go well, bank executives get the upside, and if there's a problem, the taxpayer will pick up the check. If a financial sector boss wants greater assurance of a bailout, he or she should make bigger and potentially more dangerous bets -- so the government simply cannot afford to let that bank fail. This, Haldane argues, is our "doom loop" -- big banks know they can get away with the same behavior (and more) again, and we are doomed to repeat the same boom-bust-bailout cycle. A long time ago, President Andrew Jackson's private secretary, Nicholas Trist, described the Second Bank of the United States, the last financial institution to seriously challenge the power of the president, thus: "Independently of its misdeeds, the mere power, -- the bare existence of such a power -- is a thing irreconcilable with the nature and spirit of our institutions." Unless and until we break the political power of our largest banks, the middle class will be hammered down. Whose taxes do you think will be raised to reflect the costs of repeated financial shenanigans? The financial sector will become even richer and more powerful. If you didn't like where inequality in the United States was already heading, wait until you see the effects of this recession. The most significant result of the financial crisis is the emergence of six large banks that are undoubtedly too big to fail and therefore enjoy a strengthened government guarantee; Goldman, JPMorgan, Citigroup, Bank of America, Wells Fargo and Morgan Stanley are the beneficiaries of the doom loop. The most significant non-result is the fact that no comprehensive legislation has yet been passed to reform the financial sector. Without really serious reform, we have every reason to start counting down to the next financial crisis, and to the next fleet of Mercedes lining up before the New York Fed. Copyright 2009, The Washington Post. All Rights Reserved.
From:

The End of Wall Street by Roger Lowenstein

The roots of the mortgage bubble and the story of the Wall Street collapse-and the government's unprecedented response-from our most trusted business journalist.
The End of Wall Street is a blow-by-blow account of America's biggest financial collapse since the Great Depression. Drawing on 180 interviews, including sit-downs with top government officials and Wall Street CEOs, Lowenstein tells, with grace, wit, and razor-sharp understanding, the full story of the end of Wall Street as we knew it.
The End of Wall Street is rife with historical lessons and bursting with fast-paced action. Lowenstein introduces his story with precisely etched, laserlike profiles of Angelo Mozilo, the Johnny Appleseed of subprime mortgages who spreads toxic loans across the landscape like wild crabapples, and moves to a damning explication of how rating agencies helped gift wrap faulty loans in the guise of triple-A paper and a takedown of the academic formulas that-once again- proved the ruin of investors and banks. Lowenstein excels with a series of searing profiles of banking CEOs, such as the ferretlike Dick Fuld of Lehman and the bloodless Jamie Dimon of JP Morgan, and of government officials from the restless, deal-obsessed Hank Paulson and the overmatched Tim Geithner to the cerebral academic Ben Bernanke, who sought to avoid a repeat of the one crisis he spent a lifetime trying to understand-the Great Depression.
Finally, we come to understand the majesty of Lowenstein's theme of liquidity and capital, which explains the origins of the crisis and that positions the collapse of 2008 as the greatest ever of Wall Street's unlearned lessons. The End of Wall Street will be essential reading as we work to identify the lessons of the market failure and start to rebuild.
From:

13 Bankers: The Wall Street Takeover and the Next Financial Meltdown

From Publishers Weekly Though this blistering book identifies many causes of the recent financial crisis, from housing policy to minimum capital requirements for banks, the authors lay ultimate blame on a dominant deregulatory ideology and Wall Street's corresponding political influence. Johnson, professor at the MIT Sloan School of Management, and Kwak, a former consultant for McKinsey, follow American finance's rocky road from the debate between Jefferson and Hamilton over the first Bank of the United States through frequent friction between Big Finance and democracy to the Obama administration's responses to the crises. The authors take a highly critical stance toward recent palliative measures, arguing that nationalization of the banks would have been preferable to the bailouts, which have allowed the banks to further consolidate power and resources. Given the swelling size of the six megabanks, the authors make a persuasive case that the financial system cannot be secure until those banks that are too big to fail are somehow broken up. This intelligent, nuanced book might be too technical for general-interest readers, but it synthesizes a significant amount of research while advancing a coherent and compelling point of view. (Apr.)
Copyright Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

Banks are turning down loan modifications, because they are making more money with short sales and foreclosures.
(The Government set it up that way in the FDIC Loss Sharing Agreement)

The videos below will give you the numbers showing how a lender can typically make over $100,000 on a short sale.

They end up making more than they bought the loan for, from the FDIC

Loan Modifications are Difficult

Millions are attempting to save their homes through loan modification.

Forebearance Plans are Easy, but short-lived

Right now, it's very easy to get a 3 month "temporary plan".
Call the bank and 10 minutes later you have a temporary reduction in your payment for 3 months.
But you normall won't get a permanent modification that really works!
Less than 5% get permanent modifications.

Why Won't Lenders Do Loan Mods?

Lenders don't make nearly as much money with Loan Mods, but make much more money in Foreclosures or Short Sales.
Most people, with legitimate hardships that propely fill out all the paperwork so the loan modifications will avoid foreclosure, are denied the Loan Modification and their home is sold in Foreclosure.

How it Works?

It can start with a bank failure.
One of the biggest culprits in the loan modification mess is OneWest Bank. Have you heard of them?
Extremely difficult lender to deal with if you need a loan modification.
The Lenders will almost always choose the option with more profit. Is it surprising that they almost never choose the loan modification?
You can download a copy of the 38 page IndyMac Shared Loss Agreement from the FDIC website



So, What Can You Do?

We suggest:
1) get a Forensic Loan Audit to Find How the Lender Violated the Law.
2) get a Non Profit to suggest a Short Sale to a Buyer you Know.
3) consider hiring a Lawyer to prepare and file a complaint.
Call Jim at (562) 867-3230 or (at ) ,
for a FREE Evaluation for your Situation.

(We only do Audits, not Loan Modifications or other help. We just provide the data to the Lawyers.)
Relevant Books:


Structured Finance and Collateralized Debt Obligations:
New Developments in Cash and Synthetic Securitization
Just Published late 2008










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