Modification Fraud, the latest game in town

[Catherine]

Sadly after what I went through with my loan servicer this seems to make sense to those unanswered questions. Keep fighting my friends and never give up hope, Catherine

Modification Fraud — the latest game in town

Posted on September 4, 2009 by livinglies

Here is a good article from NYT but once again they are describing the news instead of reporting it. No investigation. Why do you think that servicers et al are not REALLY interested in modifying your mortgage? Why do you think they want you to believe that you are “in process” for mortgage modification when your request was denied months before? The answer is simple: if the obligation is modified then it isn’t in default. If it is not modified then it IS in default. And the pretender lender intermediary players NEED your loan to be in default.


The actions of the servicers and other intermediaries are designed to achieve two results: (1) to make you think that you are negotiations to modify your mortgage and (2) to deny your request for modification. As this New York Times article points out, the decision not to modify comes within days of receiving your request but they NEVER tell you that. Why? Because they are running the clock in order to have you in an incurable position of default. Why? Because ONLY a default will trigger the credit default swaps that “insure” your obligation along with hundreds or thousands of others. And they have “insured” your loan as much as thirty times over. So if your loan is $300,000 it is possible that they get as much as $15 million — but only if you are in default (or at least only if the pool defaults on the obligation owed to the investors). They can’t get that money if your loan is modified. And even if your particular loan is not delinquent or in default, as long as the pool defaults, they still get paid.

So adding to the misrepresentations to borrowers and investors in the creation of these securitized “loans” (which are in reality “securities”) is the misrepresentation to borrowers and their lawyers that they are in good faith negotiations to modify the loan because (a) the servicer has been promised the house as part of the scheme (even though they never put up a dime for the loan) and (2) the Wall Street players are getting a ****ographic amount of money based on the premise that your loan is in default whether it is or it isn’t, and whether it was paid by third parties or not.

And NOBODY wants to bring this to the attention of the “investors” who purchased bonds that were mortgage backed securities because some people might do a little arithmetic and quickly come to the realization that they paid as much as 3 or four times the amount actually funded in the loan and are now sitting on an unenforceable promise of security that at best is worth a tiny fraction of what they paid.

So who do you think paid for all this? YOU did along with all the taxpayers of this great nation. Do you really think that the Wall Street players like AIG who made a living assessing risk, never peeked under the hood to see what was going on? In a real deal, they inspect deals the way my grandmother inspected chickens before she made the purchase. No, they had to know that the ultimate payment on these “bad bets” (which incidentally were guaranteed to be triggered to the advantage of anyone holding a credit default swap), they must have known that the ONLY source of payment would be the Federal Government with taxpayer money and newly printed money. The TARP money went not to holders of “troubled assets” but to holders of these bets and we paid them off for a horse race that was rigged from the start.

[Evan Bedard]

Thank you for sharing this article.

[Irish Gal]

Originally Posted by Catherine

[B]Here is a good article from NYT but once again they are describing the news instead of reporting it. No investigation. Why do you think that servicers et al are not REALLY interested in modifying your mortgage? Why do you think they want you to believe that you are “in process” for mortgage modification when your request was denied months before? The answer is simple: if the obligation is modified then it isn’t in default. If it is not modified then it IS in default. And the pretender lender intermediary players NEED your loan to be in default.


The actions of the servicers and other intermediaries are designed to achieve two results: (1) to make you think that you are negotiations to modify your mortgage and (2) to deny your request for modification. As this New York Times article points out, the decision not to modify comes within days of receiving your request but they NEVER tell you that. Why? Because they are running the clock in order to have you in an incurable position of default. Why? Because ONLY a default will trigger the credit default swaps that “insure” your obligation along with hundreds or thousands of others. And they have “insured” your loan as much as thirty times over. So if your loan is $300,000 it is possible that they get as much as $15 million — but only if you are in default (or at least only if the pool defaults on the obligation owed to the investors). They can’t get that money if your loan is modified. And even if your particular loan is not delinquent or in default, as long as the pool defaults, they still get paid.

So adding to the misrepresentations to borrowers and investors in the creation of these securitized “loans” (which are in reality “securities”) is the misrepresentation to borrowers and their lawyers that they are in good faith negotiations to modify the loan because (a) the servicer has been promised the house as part of the scheme (even though they never put up a dime for the loan) and (2) the Wall Street players are getting a ****ographic amount of money based on the premise that your loan is in default whether it is or it isn’t, and whether it was paid by third parties or not.

And NOBODY wants to bring this to the attention of the “investors” who purchased bonds that were mortgage backed securities because some people might do a little arithmetic and quickly come to the realization that they paid as much as 3 or four times the amount actually funded in the loan and are now sitting on an unenforceable promise of security that at best is worth a tiny fraction of what they paid.

So who do you think paid for all this? YOU did along with all the taxpayers of this great nation. Do you really think that the Wall Street players like AIG who made a living assessing risk, never peeked under the hood to see what was going on? In a real deal, they inspect deals the way my grandmother inspected chickens before she made the purchase. No, they had to know that the ultimate payment on these “bad bets” (which incidentally were guaranteed to be triggered to the advantage of anyone holding a credit default swap), they must have known that the ONLY source of payment would be the Federal Government with taxpayer money and newly printed money. The TARP money went not to holders of “troubled assets” but to holders of these bets and we paid them off for a horse race that was rigged from the start.

Thanks for posting, C. We need to rid the econ/country of these vermin. Now.

[ManicMangaManiac]

Catherine,
Thank you very much for posting this article for the rest of us ... it just confirms what I've suspected all along, ever since I realized my mortgage was a sham. Consumer Warning Networks pretty much pointed out the same thing, that lenders/servicers don't want to work with borrowers to modify those mortgages, but instead want to snatch their homes out from under them and so on and so forth. It's all about M-O-N-E-Y!!!

The whole thing frankly makes me sick to my stomach, when I think about all the families that have been kicked out into the streets in the name of the almighty dollar. And what makes me furious more than anything else is the government's refusal to listen to the truth and act on it. ARRRRRGHHHH!

Washington needs a seismic shock wave measuring 9.5 on the Richter scale, that's how dulled our legislators' senses are to what's happening on Main Street, so out of touch with reality they are..........
Sally

[Catherine]

Amen Sally!! Your ever so welcome. Thank you, I was concerned about even posting this one. What else gets to me is how many of us have written in our complaints from the way we have been treated yet the powers that be let it fall on deaf ears. Almost like they want these loans and homeowners to go away.......foreclosure without ever being made accountable or giving us the truth. I think they are all well aware of what is going on, but the amount of fraud using our tax dollars (set in place long before we signed those loan docs) would create a war in our own country for how screwed we have been and continue to be. Actually I wish there was a way to force the truth out of these cruel heartless greedy people who set us up to fail. I am with you when I really think about it. How could this country have turned on us like it has? Justice seems to be a crap shoot IF you have a chuck of change to find out. I too can't tell you how many tears I have cried over families trying with all they have to keep a roof over their children's heads only to have someone show up to put their belongings on the front yard especially when they thought and were lead to believe a modification was a short time to wait. When the fact was the lender was doing a foreclosure behind their backs. I can't believe no law is broken for predatory lies these banks are still pulling on homeowners. My guess is there are so many dirty hands in this cookie jar we would get a new government, wall street players and banks after they are all convicted to a 12x12 cell to spend time thinking about the families they tore apart for that ole mighty dollar. Oh and since money was more important this people's lives when they land in that cell they one dollar, the rest goes back to the taxpayers. Sure wish I had a little control over my tax dollars. None of us who pay them in ever expected them to be used to lose our homes. Besides the fact I would be scared on their judgement day if I were them