Showing posts with label Long Beach Mortgage. Show all posts
Showing posts with label Long Beach Mortgage. Show all posts

Thursday, September 19, 2013

Order Instituting Cease-And-Desist JPMorgan Chase

Order Instituting Cease-And-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing a Cease-And-Desist Order
 http://www.sec.gov/litigation/admin/2013/34-70458.pdf


Its also time they do an internal audit of all of Washington Mutual and Long Beach Loans that Chase has. Also the Washington Mutual (WAMU) SEC Filings, as well as Long Beach Mortgages
This is long overdue. 
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Wednesday, September 18, 2013

Looking for answers

Hi everyone,
This is a long shot , but hoping someone will know . I am looking for employees of Dana Capital , mostly a man named Joe. He would of worked for them in 2004. I want to know if he knows if my note was securitized . I am sure he will.

Dana Capital Group
Category: Mortgage Brokers 
8001 Irvine Center Drive
Irvine, CA 92618

I am also looking for investors for this security

 Roosevelt Mortgage ( bought the loans from Archbay Mortgage LLC 2010B) This would be in Jan- Feb of this year. The actual sale was Dec.29. 2012.
Rushmore - Servicer
US Bank Corp - Trustee 

 Inside this security is a loan , stating its worth 180,000.00 , this is NOT true, the house is worth 116,000.00. Their are 3 liens on this house, one is a US FEDERAL Lien for 201,000.00, Plus 32,000.00 Tax lien ( not for the house) and a 19,000.00 lien for Beneficial. 

 Their is also , questions concerning the actual ownership of this loan. It was originally with Long Beach Mortgage in 2004- 2010. According to land records. However DB Structured Products claimed to of bought it in Sept 2006, but their is no assignment, no land records , nothing they proved to of bought it. In 2010 Deutsche Bank sold it to Archbay holdings LLC 2010B, with a robo signed document, yet, never showed how they were able to sell it, when no land records showed they owned it . ( title now no good) Than in 2011 Chase  claims to own it, ( received by Washington Mutual) Archbay and Deutsche Bank lawyers also have a robo signed assignment signed 6 years after the fact , stating it came from Chase, which Chase has also denied in doing, and was to be sent back to a M.E. Wilderman at Orion Financial group. ( 2nd title defect) Archbay never showed how they were able to buy it, also , why would they request an emerg assignment from Chase , if they in fact had all the required paperwork to buy it? Why robo signed? Why an incomplete assignment? Why if Chase did this , they state they didn't?  Now it was sold to Roosevelt mortgage Dec 29, 2012. 

I want to buy the house and pay in cash . Or I go to federal court and everyone loses. This house has been in foreclosure since May 2006, my only fault was taking on this loan when I didn't have to , and all I wanted was to know who owned it to pay for it. I never asked for a free ride , every work out was walked away from , not by me.

Please contact me , if you can help in this matter.








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Wednesday, September 11, 2013

These cases could help save your homes from fraud

How to chase Chase


2. RESOURCES — Pleadings, Orders, and Exhibits

On this page you will find descriptions and links to various pleadings, orders, and exhibits filed by attorneys as well as individuals representing themselves. Where the outcome is known, that information is included. These documents are public records and are made available for your information, but their accuracy, competency, and effectiveness have not been verified. Only a judge can rule on a pleading and only an appellate court opinion that is certified for publication can be cited as precedent. That said, it can be both educational and entertaining to see how the great race is unfolding in the historic controversy of People v. Banks. For an entertaining public outing of history's all-time greatest pickpockets, go see the documentary "Inside Job."

Federal Court

Javaheri v. JPMorgan Chase, 9th Cir. Court of Appeal, No. 12-56566 (CV10-8185 ODW)

Otis D. Wright II, Judge, U.S. District Court, Central District of California, Los Angeles
Douglas Gillies, attorney for Daryoush Javaheri
Plaintiff sued to halt two foreclosures initiated by JPMorgan Chase. Judge Otis D. Wright denied Chase's motion to dismiss five causes of action - wrongful foreclosure, quiet title, violation of Cal Civ. Code Sec. 2923.5, quasi contract, and declaratory relief, but later Summary Judgment was entered in favor of Chase in the two cases. Plaintiff appealed to the Ninth Circuit.

Gillies v. JPMorgan Chase (Gillies 3), 9th Cir. No. 13-55296 (CV12-10394 GW)

George Wu, Judge, U.S. District Court, Central District of California, Los Angeles
Douglas Gillies, Plaintiff in pro per
Plaintiff sued Chase in state court (Gillies 1) to halt a foreclosure initiated by JPMorgan Chase on the grounds that he could not find a recorded Notice of Default in the County Recorder's office. Chase produced a recorded NOD with plaintiff's name misspelled. The trial court ruled that a NOD had been recorded, sustained Chase's demurrer, and dismissed the case with prejudice. Plaintiff appealed and the Court of Appeal affirmed.
Chase recorded a second Notice of Trustee’s Sale (“NOTS”) with Plaintiff’s name misspelled and Plaintiff sued again in state court (Gillies 2) alleging that the NOD and NOTS did not provide constructive notice because they could not be properly indexed. The trial court sustained a motion to strike on the basis of res judicata and the Court of Appeal affirmed. In all, California courts ruled that a NOD had been recorded and the indexing issue was barred by res judicata.
Chase recorded a third NOTS with a misspelled name on November 8, 2012. Plaintiff filed a complaint in Federal District Court against Chase for attempting to sell his property at a trustee's sale without knowing the identity of the lender, note holder, or beneficiary. He alleged that subsequent to filing the NOD, Chase had invested thousands of dollars pursuing a strategy of executing a defective foreclosure based on intentionally stating a fictitious name for the trustor in a recorded Notice of Default and three recorded Notices of Trustee’s Sale, when it simply could have requested that the lender contact Plaintiff and ask him to sign a correctly spelled document. The District Court dismissed the Complaint with prejudice on the grounds that the action was precluded by the demurrer in state court, and Plaintiff appealed to the Ninth Circuit. The key issue is the scope of the doctrine of res judicata.


Naranjo v. SBMC Mortgage, 2012 U.S. Dist. LEXIS 103735, Case No. 11-cv-2229-L(WVG)

M. James Lorenz, District Judge, U.S. District Court, Southern District of California
Penelope Bergman, Deborah Gutierrez, Los Angeles, CA, attorneys for Carmen Naranjo
"The vital allegation in this case is the assignment of the loan into the WAMU Trust was not completed by May 30, 2006 as required by the Trust Agreement. This allegation gives rise to a plausible inference that the subsequent assignment, substitution, and notice of default and election to sell may also be improper. Defendants wholly fail to address that issue. This reason alone is sufficient to deny Defendants' motion with respect to this issue."
The case was settled on June 21, 2013. Happy Solstice, Carmen.

Ansanelli v. JPMorgan Chase, 2011 WL 1134451, Case No. CV10-03892 (WHA)

William Alsup, District Judge, U.S. District Court, Northern District of California
Cotchett Pitre & McCarthy, Burlingame, CA, attorneys for Angela Ansanelli
Chase took over servicing two Ansanelli loans after it purchased WaMu's assets. Plaintiffs tried to negotiate a loan modification and landed in loan mod hell. Chase moved to dismiss the SAC, and plaintiff's lawyers prevailed on almost every count. The court refused to dismiss causes of action for breach of contract, fraud and deceit, negligent misrepresentation, RESPA, and unfair business practices (Cal. B&P Code sec. 17200).
Additional motions were filed, plaintiffs filed a Fourth Amended Complaint on May 12, 2011, and defendants filed an Answer. At a mediation session on June 22, 2011, the case was settled.

 Bakenie v. JPMorgan Chase, Case No. SACV12-0060 JVS
U.S. District Court, Central District of California (Santa Ana)
Joseph Arthur Roberts, Newport Beach, CA, attorney for Ernest Bakenie
Plaintiff alleges that Chase is engaged in the business practice of deceiving bankruptcy judges, creditors, debtors, and attorneys as to Chase's status as a secured creditor in thousands of bankruptcy cases filed nationwide.
Through fabricated assignments, endorsements and affidavits that purport to transfer Deeds of Trust, notes and the rights to money due under thousands of non-negotiable promissory notes, Chase is playing "hide-and-seek" with debtors and judges.
The 171-paragraph complaint seeks an order vacating all Bankruptcy orders, claims and awards granted based on Chase's misrepresentations and deceptive business practices.
Balderas v. Countrywide, Case No. 10-55064
Opinion by Alex Kozinski, Chief Judge, Ninth Circuit Court of Appeals
Kevin Griffin, Griffin Johnson LLP, Dana Point, CA, attorney for Victor Balderas
Plaintiffs alleged that Countrywide gave them defective copies of the TILA Notice of Right to Cancel, which remained at the bank rather than were given to Plaintiffs. Therefore they were entitled to rescind within three years, rather than three days of signing the papers.
Chief Judge Kozinski's opinion begins, "The Balderases allege that they are immigrants who were rooked by a bank that signed them up for loans it knew they couldn't afford, on terms they didn't agree to."
The opinion continues:
Webster's New International Dictionary defines "deliver" as "to give or transfer" and "to yield possession or control of." Webster's New International Dictionary 693 (2d ed. 1939). We interpret "deliver" to mean that the consumer must be allowed to keep the notice. When you have pizza delivered, you don't sign for it and let the deliveryman take it back to the restaurant. And when a newspaper boy delivers a paper, he doesn't show you the headlines and then return it to the printer.

Countrywide claims that the Balderases didn't allege enough facts to rebut the signed notice's presumption of delivery. But presumptions are not rebutted by allegations; they are rebutted by evidence. And the time for presenting evidence has not yet arrived. Complaints need only allege facts with sufficient specificity to notify defendants of plaintiffs' claims. Here, the Balderases pleaded that the notice they were given was defective...

As we've said before, "so long as the plaintiff alleges facts to support a theory that is not facially implausible, the court's skepticism is best reserved for later stages of the proceedings when the plaintiff's case can be rejected on evidentiary grounds." In re Gilead Sciences Securities Litigation, 536 F.3d 1049, 1057 (9th Cir. 2008). Here, the Balderases clearly alleged in their complaint that they were never given a Notice of Right to Cancel that complied with TILA. If they can prove up this allegation at trial, they'll win. A complaint containing allegations that, if proven, present a winning case is not subject to dismissal under 12(b)(6), no matter how unlikely such winning outcome may appear to the district court.

Carswell v. JPMorgan Chase, Dist. Ct. No. CV10-5152; 9th Circuit No. 11-55423
George Wu, Judge, U.S. District Court, Central District of California, Los Angeles
Douglas Gillies, attorney for Margaret Carswell
Plaintiff sued to halt a foreclosure initiated by JPMorgan Chase and California Reconveyance Co. on the grounds of failure to contract, wrongful foreclosure, unjust enrichment, RESPA and TILA violations, and fraud. She asked for quiet title and declaratory relief. Chase responded with a Motion to Dismiss. At a hearing on September 30, 2010, Judge Wu granted defendants' motion to dismiss with leave to amend. Plaintiff's First Amended Complaint was filed on October 18. It begins:
It was the biggest financial bubble in history. During the first decade of this century, banks abandoned underwriting practices and caused a frenzy of real estate speculation by issuing predatory loans that ultimately lowered property values in the United States by 30-50%. Banks reaped the harvest. Kerry Killinger, CEO of Washington Mutual, took home more than $100 million during the seven years that he steered WaMu into the ground. Banks issued millions of predatory loans knowing that the borrowers would default and lose their homes. As a direct, foreseeable, proximate result, 15 million families are now in danger of foreclosure. If the legions of dispossessed homeowners cannot present their grievances in the courts of this great nation, their only recourse will be the streets.
Chase responded with yet another Motion to Dismiss, Carswell filed her Opposition to the motion, and at hearing on January 6, 2011, Judge Wu asked Plaintiff for an Offer of Proof. Her Offer of Proof included written argument, 19 exhibits, and a powerpoint presentation. Judge Wu granted Chase's Motion to Dismiss, and Carswell appealed to the 9th Circuit (Case No. 11-55423).
After a hearing on November 7, 2012, the Ninth Circuit Court of Appeal affirmed the District Court's order of dismissal.


Khast v. Washington Mutual, JPMorgan Chase, and CRC, Case No. CV10-2168 IEG

Irma E. Gonzalez, Chief Judge, U.S. District Court, Southern District of California
Kaveh Khast in pro se
A loan mod nightmare where Khast did everything right except laugh out loud when WaMu told him that he must stop making his mortgage payments for 90 days in order to qualify for a loan modification. As Khast leaped through the constantly shifting hoops tossed in the air, first by WaMu, then by Chase, filing no less than four applications, Chase issued a Notice of Trustee's Sale.
Khast filed a pro se complaint in federal court which included a request for a Temporary Restraining Order. The District Court granted a TRO to stop the sale. The court wrote that the conduct by WAMU appeared to be "immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers," and thus satisfied the "unfair" prong of California's Unfair Competition Law, Cal. Bus.&Prof.Code §17200. Plaintiff stated that he possessed documents which supported his contention that Defendant WAMU instructed him to purposefully enter into default and assured him that, if he did so, WAMU would restructure his loan. Accordingly, Plaintiff demonstrated that he was likely to succeed on the merits of his claim.
The court also relied upon the doctrine of promissory estoppel, whereby a promisor is bound when he should reasonably expect a substantial change of position, either by act or forbearance, in reliance on his promise. He who by his language or conduct leads another to do what he would not otherwise have done shall not subject such person to loss or injury by disappointing the expectations upon which he acted.
At a later hearing, the court denied a preliminary injunction when Chase argued that WaMu's immoral conduct was a liability that was not assumed by Chase under the Purchase and Assumption Agreement dated September 25, 2008. The court's TRO on October 26 nevertheless provides borrowers with ammunition to raise claims of unfair competition and promissory estoppel.
Plaintiff's claims under TILA were dismissed because the 3-year Statute of Limitations had passed and Plaintiff did not allege facts in support of suspending the limitations period under the doctrine of equitable tolling. The Fair Debt Collections Practices Act did not apply because mortgagees, servicers, and trustees are not "debt collectors" subject to FDCPA. The court declined to exercise supplemental jurisdiction under 28 U.S.C. Sec. 1367 over Plaintiff's state law claims.

Saxon Mortgage v. Hillery, Case No. C-08-4357
Edward M. Chen, U.S. Magistrate, Northern District of California
Thomas Spielbauer, attorney for Ruthie Hillery Hillery obtained a home loan from New Century secured by a Deed of Trust, which named MERS as nominee for New Century and its successors. MERS later attempted to assign the Deed of Trust and the promissory note to Consumer. Consumer and the loan servicer then sued Hillery. The court ruled that Consumer must demonstrate that it is the holder of the deed of trust and the promissory note. In re Foreclosure Cases, 521 F. Supp. 2d 650, 653 (S.D. Oh. 2007) held that to show standing in a foreclosure action, the plaintiff must show that it is the holder of the note and the mortgage at the time the complaint was filed. For there to be a valid assignment, there must be more than just assignment of the deed alone; the note must also be assigned. "The note and mortgage are inseparable; the former as essential, the latter as an incident...an assignment of the note carries the mortgage with it, while an assignment of the latter alone is a nullity." Carpenter v. Longan, 83 U.S. 271, 274 (1872).
There was no evidence that MERS held the promissory note or was given the authority by New Century to assign the note to Consumer. Without the note, Consumer lacked standing. If Consumer did not have standing, then the loan servicer also lacked standing. A loan servicer cannot bring an action without the holder of the note. In re Hwang, 393 B.R. 701, 712 (2008).

Serrano v. GMAC Mortgage, Case No. 8:09-CV-00861-DOC
David O. Carter, Judge, U.S. District Court, Central District of California, Los Angeles Moses S. Hall, attorney for Ignacio Serrano
Plaintiff alleged in state court that GMAC initiated a non-judicial foreclosure sale and sold his residence without complying with the notice requirements of Cal. Civil Code Sec. 2923.5 and 2924, and without attaching a declaration to the 2923.5 notice under penalty of perjury stating that defendants tried with due diligence to contact the borrower. Defendants removed the case to federal court on the basis of diversity jurisdiction. The District Court granted defendants' motion to dismiss without prejudice, and described in detail the defects in the Complaint with directions how to correct the defects. Plaintiff filed his Second Amended Complaint on 4/01/2010.

Sharma v. Provident Funding, Case No. 3:2009-cv-05968
Vaughn R Walker, Judge, U.S. District Court, Northern District of California
Marc A. Fisher, attorney for Anilech and Parma Sharma
Defendants attempted to foreclose and plaintiffs sued in federal court, alleging that defendants did not contact them as required by Cal Civ Code § 2923.5. In considering plaintiffs' request for an injunction to stop the foreclosure, the court found that plaintiffs had raised "serious questions going to the merits" and would suffer irreparable injury if the sale were to proceed. Property is considered unique. If defendants foreclosed, plaintiffs' injury would be irreparable because they might be unable to reacquire it. Plaintiffs' remedy at law, damages, would be inadequate. On the other hand, defendants would not suffer a high degree of harm if a preliminary injunction were ordered. While they would not be able to sell the property immediately and would incur litigation costs, when balanced against plaintiffs' potential loss, defendants' harm was outweighed.
The court issued a preliminary injunction enjoining defendants from selling the property while the lawsuit was pending.


Federal Bankruptcy Court

In re Salazar, No. 10-17456 (Bankr. S.D. Cal. Apr. 12, 2011) Chap. 13
Margaret M. Mann, U.S. Bankruptcy Judge, San Diego, CA
Francisco J. Aldana, attorney for Eleazar Salazar
600 B Street, Suite 2130, San Diego, California 92101
Cal Civil Code 2932.5 applies to Deeds of Trust as well as mortgages. It requires that if the foreclosing beneficiary has acquired its claim by assignment, it must record its assignment of the Deed of Trust before the trustee's sale.
MERS was not the beneficiary at the time of the foreclosure, even if it was initially the nominal beneficiary under the DOT. The DOT does not grant MERS any authority apart from a nominal role. MERS is not an extra-judicial commercial alternative to California's exhaustive nonjudicial foreclosure law (Civil Code sections 2020-2955). This Court joins the courts in other states that rejected MERS' offer of an alternative to the public recording system (citing In re Agard, below)
"The Court rejects the claim that MERS' limited role in the DOT provides it carte blanche authority over the nonjudicial foreclosure process."


In re Agard, No. 10-77338, 2011 Bankr. LEXIS 488, at *58-*59 (Bankr. E.D.N.Y. Feb. 10, 2011) Chap. 7
Robert E. Grossman, U.S. Bankruptcy Judge, Central Islip, NY
George Bassias, Astoria, NY, attorney for Ferrel Agard
21-83 Steinway, Astoria, NY 11105
gbassias@yahoo.com
The membership rules of Mortgage Electronic Registration Systems, or MERS, don't make it an agent of the banks that own the mortgages. "MERS's theory that it can act as a 'common agent' for undisclosed principals is not supported by the law," Grossman wrote. "MERS did not have authority, as 'nominee' or agent, to assign the mortgage absent a showing that it was given specific written directions by its principal."
"MERS and its partners made the decision to create and operate under a business model that was designed in large part to avoid the requirements of the traditional mortgage-recording process," Grossman wrote. "The court does not accept the argument that because MERS may be involved with 50 percent of all residential mortgages in the country, that is reason enough for this court to turn a blind eye to the fact that this process does not comply with the law."
"Without more, this court finds that MERS's 'nominee' status and the rights bestowed upon MERS within the mortgage itself, are insufficient to empower MERS to effectuate a valid assignment of mortgage," the judge wrote. "MERS's position that it can be both the mortgagee and an agent of the mortgagee is absurd, at best."
Grossman said parties coming to him to seek to lift the automatic ban on legal claims in cases involving MERS will have to show they own both the mortgage and the note.
MERS appealed Judge Grossman's order on March 8, 2011.


In re: Hwang, 396 B.R. 757 (2008), Case No. 08-15337 Chapter 7
Samuel L. Bufford, U.S. Bankruptcy Judge, Los Angeles
Robert K. Lee, attorney for Kang Jin Hwang
As the servicer on Hwang's promissory note, IndyMac was entitled to enforce the secured note under California law, but it must also satisfy the procedural requirements of federal law to obtain relief from the automatic stay in a Chapter 7 bankruptcy proceeding. These requirements include joining the owner of the note, because the owner of the note is the real party in interest under Rule 17, and it is also a required party under Rule 19. IndyMac failed to join the owner of the note, so its motion for relief from the automatic stay was denied.
Reversed on July 21, 2010. District Court Judge Philip Gutierrez reversed the Judge Bufford's determination that IndyMac is not the real party in interest under Rule 17 and that Rule 19 requires the owner of the Note to join the Motion.

In re: Vargas, Case No. 08-17036 Chapter 7
Samuel L. Bufford, U.S. Bankruptcy Judge, Los Angeles
Marcus Gomez, attorney for Raymond Vargas

In re: Walker, Case No. 10-21656 Chapter 11
Ronald H. Sargis, Judge, U.S. Bankruptcy Court, Sacramento
Mitchell L. Abdallah, attorney for Rickie Walker
MERS assigned the Deed of Trust for Debtor's property to Citibank, which filed a secured claim. Debtor objected to the claim. Judge Sargis ruled that the promissory note and the Deed of Trust are inseparable. An assignment of the note carries the mortgage with it, while an assignment of the Deed of Trust alone is a nullity. MERS was not the owner of the note, so it could not transfer the note or the beneficial interest in the Deed of Trust. The bankruptcy court disallowed Citibank's claim because it could not establish that it was the owner of the promissory note.

Washington Mutual Inc. Bankruptcy, Case No. 08-12229 Chapter 11
Mary F. Walrath, Judge, U.S. Bankruptcy Court, Delaware
The Washington Mutual, Inc. Chapter 11 Voluntary Bankruptcy Petition was filed by WaMu on September 26, 2008 in Deleware. The filing fee was $1,039. As of the end of February 2012, 11,050 documents had been filed.


California State Court

Mabry v. Aurora Loan Services
185 Cal.App.4th 208, 110 Cal. Rptr. 3d 201 (4th Dist. June 2, 2010)
California Court of Appeal, 4th District, Division 3
California Supreme Court, Petition for Review denied August 18, 2010.
Moses S. Hall, attorney for Terry and Michael Mabry
The Mabrys sued to enjoin a trustee's sale of their home, alleging that Aurora's notice of default did not include a declaration required by Cal. Civil Code §2923.5, and that the bank did not explore alternatives to foreclosure with the borrowers. The trial court refused to stop the sale. The Mabrys filed a Petition for a Writ of Mandate and the Court of Appeal granted a stay to enjoin the sale. Oral argument was heard in Santa Ana on May 18, 2010.
Aurora argued that a borrower cannot sue a lender that fails to contact the borrower to discuss alternatives to foreclosure before filing a notice of default, as required by §2923.5, because §2923.5 does not explicitly give homeowners a "private right of action." Aurora also argued that a declaration under penalty of perjury is not required because a trustee, who ordinarily files the notice of default, could not have personal knowledge of a bank's attempts to contact the borrower. Nobody mentioned that the trustee is not authorized by the statute to make the declaration. §2923.5 states that a notice of default "shall include a declaration from the mortgagee, beneficiary, or authorized agent that it has contacted the borrower..."
The Court of Appeal ruled that a borrower has a private right of action under § 2923.5 and is not required to tender the full amount of the mortgage as a prerequisite to filing suit, since that would defeat the purpose of the statute. Under the court's narrow construction of the statute, §2923.5 merely adds a procedural step in the foreclosure process. Since the statute is not substantive, it is not preempted by federal law. The declaration specified in §2923.5 does not have to be signed under penalty of perjury. The borrower's remedy is limited to getting a postponement of a foreclosure while the lender files a new notice of default that complies with §2923.5. If the lender ignores the statute and makes no attempt to contact the borrower before selling the property, the violation does not cloud the title acquired by a third party purchaser at the foreclosure sale. Therefore §2923.5 claims must be raised in court before the sale. It is a question of fact for the trial court to determine whether the lender actually attempted to contact the borrower before filing a notice of default. If the lender takes the property at the foreclosure sale, its title is not clouded by its failure to comply with the statute. Finally, the case is not suitable for class action treatment if the lender asserts that it attempted to comply with the statute because each borrower will present "highly-individuated facts."
In a petition for review to the California Supreme Court, the Mabrys noted that more than 100 federal district court opinions have considered §2923.5 and an overwhelming majority have rejected a private right of action under the statute. The petition for review was denied.
After the case was remanded to the trial court, Mabry's motion for preliminary injunction was granted. The trial court found that the Notice of Default contained the form language required by the statute, i.e. that the lender contacted the borrower, tried with due diligence to contact the borrower, etc. However, the declaration on the Notice of Default was not made under panalty of perjury, and therefore had no evidentiary value to show whether the defendant satisfied §2923.5


Lange v. JP Morgan Chase, Washington Mutual, Alta Community Investment, and Seaside Capital Fund
California Court of Appeal, 2nd District   Case #B233670
Roger Senders, trial attorney
Douglas Gillies, appellate attorney for Susan Lange
Susan Lange was paying Chase $6384 per month to stay in her home under a trial loan modification agreement when she came home to find a Notice to Quit posted on her front door. Without giving notice to Susan, Chase had conducted a Trustee's Sale. The property was purchased by Alta Community Investment, founded by Todd Kaufman, and Seaside Capital Fund, owned by Luke McCarthy. However, Todd Kaufman was not your typical bona fide purchaser of distressed properties. He had designed and managed WaMu's securitization division. He left WaMu during the mortgage meltdown and founded Alta Community Investment so he could buy and sell distressed houses.
Two days later, Lange received a knock on the door from Nancy Mura, who was sent to Lange's home to persuade the residents to move immediately. Mura told Lange that if she didn't get out right away, Luke McCarthy would pay her a visit and he would be "very unpleasant" if he had to come. "He never loses these things."
The trial court sustained demurrers filed by Chase, Alta, and Seaside. Susan Lange appealed. The California Court of Appeal affirmed, stating, "Alta and Seaside sent someone to her door asking her to vacate after the foreclosure sale, but this is not extreme and outrageous."
Susan Lange's hearing in the Cal.
Court of Appeal on 12/12/2012 (31 min.)



Herrera v. Deutsche Bank
California Court of Appeal, 196 Cal.App.4th 1366, 3rd District (May 31, 2011)
Herrera was originally an unpublished opinion, but after receiving a request from the public, the Court ordered on June 28, 2011, that the opinion would be published in part.
A trial court errs in taking judicial notice of disputed facts contained within recorded documents.
A matter ordinarily is subject to judicial notice only if the matter is reasonably beyond dispute. "Taking judicial notice of a document is not the same as accepting the truth of its contents or accepting a particular interpretation of its meaning." Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374. While courts take judicial notice of public records, they do not take notice of the truth of matters stated therein. Love v. Wolf (1964) 226 Cal.App.2d 378, 403. "When judicial notice is taken of a document . . . the truthfulness and proper interpretation of the document are disputable." StorMedia, Inc. v. Superior Court (1999) 20 Cal.4th 449, 457, fn. 9.
In Herrera, the Substitution of Trustee recited that Deutsche Bank "is the present beneficiary under" the 2003 deed of trust. This fact was hearsay and disputed. Therefore, the trial court could not take judicial notice of it. Poseidon Development, Inc. v. Woodland Lane Estates, (2007) 152 Cal.App.4th 1106. Nor would taking judicial notice of the Assignment of Deed of Trust establish that the Deutsche Bank was the beneficiary under the deed of trust. A recitation that JPMorgan Chase Bank is the successor in interest to Long Beach Mortgage Company, through Washington Mutual, is hearsay. Plaintiffs disputed the truthfulness of the contents of all of the recorded documents.
A supporting declaration must be made on personal knowledge and "show affirmatively that the affiant is competent to testify to the matters stated." Code Civ. Proc., § 437c, subd. (d). Deborah Brignac's declaration did not affirmatively show that she can competently testify that the bank is the beneficiary under the deed of trust. At most, her declaration shows she can testify as to what the Assignment of Deed of Trust "indicates." The factual contents of the assignment were hearsay and defendants offered no exception to the hearsay rule to make these factual matters admissible.
At oral argument, defendants contended that the recorded documents were actually business records and admissible under the business record exception. However, Brignac did not provide any information in her declaration establishing that the sources of the information and the manner and time of preparation would indicate trustworthiness. (Evid. Code, § 1271 (d).
A declaration that the Substitution of Trustee by Deutsch Bank made CRC trustee would require admissible evidence that the bank was the beneficiary under the 2003 deed of trust and thus had the authority to substitute the trustee. Because defendants failed to present facts to establish that the bank was beneficiary and CRC was trustee under the 2003 deed of trust, and therefore had authority to conduct the foreclosure sale, triable issues of material fact remain.

Gillies v. California Reconveyance Co. and JPMorgan Chase (Gillies 1)
California Court of Appeal, Case # B224995, 2nd District, Division 6
Douglas Gillies, Appellant in pro per
Gillies sued on November 25, 2009, to enjoin a trustee's sale, alleging that CRC's Notice of Default (NOD) did not include a declaration required by Cal. Civil Code §2923.5, the NOD mailed to the homeowner was not a copy of the recorded NOD, and the Notice of Default was not recorded in the County Recorder's Office. Defendants filed a Demurrer and attached a recorded NOD in which the name of the trustor was misspelled. The trial court sustained the demurrer without leave to amend and the case was dismissed. Gillies appealed.
The Court of Appeal affirmed the trial court's demurrer, and wrote, "Gillies points out that the notice of default misspells his first name Dougles, instead of the correct Douglas. But no reasonable person would be confused by such a minor error. Gillies last name is spelled correctly and the notice contains the street address of the property as well as the assessor's parcel number."
Gillies filed a second lawsuit against CRC on July 13, 2011 (Gillies 2).

Gillies v. California Reconveyance Co. (Gillies II)
California Court of Appeal, Case # B237562, 2nd District, Division 6
Douglas Gillies, Plaintiff in pro per
Gillies sued CRC a second time to enjoin a trustee's sale, alleging that the Deed of Trust did not correctly state the name of trustor, as required by Cal. Civil Code §2924, and that CRC did not attempt to contact the borrower to explore alternatives to foreclosure before filing the Notice of Default. The court granted a Temporary Restraining Order to stop the sale but declined to issue a preliminary injunction.
CRC filed a Motion to Strike the Complaint on the grounds of res judicata and collateral estoppel. Gillies opposed the motion arguing that res judicata does not apply because the Complaint alleges new facts and new theories and the earlier dismissal following a demurrer was not a judgment on the merits. When Judge de Bellefeuille dismissed the complaint in Gillies II, she suggested that it should be resolved by the court of appeal.
Plaintiff filed an appeal on November 16, 2011, Case # B237562. The Second Appellate District, Div. 6, ruled in an unpublished opinion that the action was barred by the doctrine res judicata.

Gillies filed a third lawsuit against Chase in Federal District Court on December 5, 2012 (Gillies 3) alleging that Chase could not identify the Lender and was therefore not authorized to commence foreclosure. Chase's wholly owned subsidiary, CRC, had recorded a Deed of Trust that did not correctly state the name of trustor, followed by a Notice of Default and three Notices of Trustee's Sale. A spelling discrepancy is a clerical error. CRC's remedy could be found in the Adjustable Rate Note, which states in Paragraph 12 that in the event of a clerical error, "I agree, upon notice from the Note Holder, to reexecute any Loan Documents that are necessary to correct any such Errors." The Note Holder can request that the Trustor amend the Deed of Trust to correct a clerical error. Chase and CRC did not follow this simple remedy because they cannot identify or located the Note Holder.

Cabalu v. Mission Bishop Real Estate
Superior Court of California, Alameda County
Brian A. Angelini, attorney for Cecil and Natividad Cabalu

Davies v. NDEX West, Case No. INC 090697
Randall White, Judge, Superior Court of California, Riverside County
Brian W. Davies, in pro per

Edstrom v. NDEX West, Wells Fargo Bank , Case No. 20100314
Superior Court of California, Eldorado County
Richard Hall, attorney for Daniel and Teri Anne Edstrom
A 61-page complaint with 29 causes of action to enjoin a trustee's sale of plaintiffs' residence, requesting a judicial sale instead of a non-judicial sale, declaratory relief, compensatory damages including emotional and mental distress, punitive damages, attorneys' fees, and rescission.
Moreno v. Ameriquest
Superior Court of California, Contra Costa County
Thomas Spielbauer, attorney for Gloria and Carlos Moreno
Complaint for declaratory relief and fraud against lender for misrepresenting the terms of the loan, promising fixed rate with one small step after two years both orally and in the Truth In Lending Statement. Loan was actually variable rate with negative amortization. Morenos would have qualified for fixed rate 5% for 30 years, but instead received an exploding 7% ARM. Notary rushed plaintiffs through signing of documents with little explanation. Complaint requests a declaration the note is invalid, unconscionable and unenforceable and the Notice of Trustees Sale is invalid.

Other State Courts

Niday v. GMAC, Case No. CV10020001
Oregon Court of Appeals
July 18, 2012
Jeff Barnes, attorney for Rebecca Niday
In sum, we conclude that the "beneficiary" of a trust deed for purposes of the OTDA is the person named or otherwise designated in the trust deed as the person to whom the secured obligation is owed--in this case, the original lender. We further conclude that, because there is evidence that the beneficiary assigned its interest in the trust deed without recording that assignment, there is a genuine issue of material fact on this summary judgment record as to whether ORS 86.735(1), a predicate to nonjudicial foreclosure, has been satisfied. We emphasize, however, that our holding concerns only the requirements for nonjudicial foreclosure. Cf. ORS 86.710 (beneficiary of the trust deed retains the option of judicial foreclosure). And the import of our holding is this: A beneficiary that uses MERS to avoid publicly recording assignments of a trust deed cannot avail itself of a nonjudicial foreclosure process that requires that very thing--publicly recorded assignments.
  • Opinion decided 7/18/2012 that if evidence indicates the beneficiary assigned its interest through MERS without recording the transfer, nonjudicial foreclosure is not available.

JPMorgan Chase Bank v. George, Case No. 10865/06
Arthur M. Schack, Supreme Court Judge, Kings County, New York
Edward Roberts, attorney for Gertrude George

Florida Judge tosses foreclosure lawsuit

Homeowners dispute who owns mortgage by Steve Patterson
St. Augustine Record
June 15, 2010
Changing stories about who owns a mortgage and seemingly fresh evidence from a long-closed bank led a judge to throw out a foreclosure lawsuit. It's the second time in as many months that Circuit Judge J. Michael Traynor has dismissed with prejudice a foreclosure case where homeowners disputed who owns the mortgage. Lawyers representing New York-based M&T Bank gave three separate accounts of the ownership, with documentation that kept changing.
"The court has been misled by the plaintiff from the beginning," the judge wrote in his order. He added that documents filed by M&T's lawyers seemed to contradict each other and "have changed as needed to benefit the plaintiff."
The latest account was that Wells Fargo owned the note, and M&T was a servicer, a company paid to handle payments and other responsibilities tied to a mortgage. To believe that, the judge wrote, the "plaintiff is asking the court to ignore the documents filed in the first two complaints." He added that Wells Fargo can still sue on its own, if it has evidence that it owns the mortgage.
More and more foreclosure cases are being argued on shaky evidence, said James Kowalski, a Jacksonville attorney who represented homeowners Lisa and Larry Smith in the fight over their oceanfront home. "I think it's very representative of what the banks and their lawyers are currently doing in court," Kowalski said.
He said lawyers bringing the lawsuits are often pressed by their clients to close the cases quickly. But it's up to lawyers to present solid evidence and arguments. "We are supposed to be better than that," Kowalski said. "We are supposed to be officers of the court."

Exhibits

Department of Treasury and FDIC Report on WaMu, 4/16/2010
The Offices of Inspector General for Department of the Treasury and Federal Deposit Insurance Corporation released its evaluation of the regulatory oversight of Washington Mutual on April 16. The table of contents tells the story. WaMu pursued a high-risk lending strategy which included systematic underwriting weaknesses. They didn't care if borrowers could pay back their loans. WaMu did not have adequate controls in place to manage its reckless "high-risk" strategy. OTS examiners found weaknesses in WaMu's strategy, operations, and asset portfolio but looked the other way.

OCC Advisory Letters
How could the regulators allow this breakdown to happen? Was it really fraud when banks arranged loans for homeowners who would inevitably go into defrault, sold them to Wall Street to be bundled into securities, then purchased insurance so that the bank would collect the unpaid balances when the borrowers lost their homes? Did anybody really know that repealing Glass-Steagall and permitting Wall Street banks to get under the covers with Main Street banks would cause so many borrowers to lose their homes? The Glass-Steagall Act, enacted in 1933, barred any institution from acting as any combination of an investment bank, a commercial bank, and an insurance company. It was repealed in 1999, and the repercussions have been immense.
The Office of the Comptroller of the Currency (OCC) issued Advisory Letter 2000-7 only months after Glass-Steagall was repealed. It warned regulators to be on the lookout for indications of predatory or abusive lending practices, including Collateral or Equity Stripping - loans made in reliance on the liquidation value of the borrower's home or other collateral, rather than the borrower's independent ability to repay, with the possible or intended result of foreclosure or the need to refinance under duress. Proving fraud is a painstaking process. Getting inside the mind of a crook requires a careful foundation, and admissable evidence is not always easy to obtain. Many courts will take judicial notice of official acts of the legislative, executive, and judicial departments of the United States and of any state of the United States. See Cal Evidence Code Sec. 452(c).
Here is a set of smoking guns in the form of a series of Advisory Letters issued by OCC:
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Saturday, August 10, 2013

JP Morgan,Chase,Washington Mutual , Long Beach Mortgage What they have in common

No Jamie, your not responsible for anything that goes wrong. The housing collapse, the fraud committed with Washington Mutual  and Long Beach mortgages, YOU had in your possession, Your employees even stated , yes, in writing to the VT AG and the OCC and a lawyer, Yes, we own both loans, and sent copies of both the mortgage and the note and the HUD paperwork. A year later , suddenly, whoops, we don't own the first, but we do have the second, and were gonna write the second one off as paid and satisfied . So , how did you also have in hand BOTH a year earlier? How was it also, it showed up in a private hedge funds hands a year and a half later, when after 7 years only you were able to show proof of both notes? How many other people who had Washington Mutual  and Long Beach notes did you fraud this way?

You SIR need to go to jail with no pass. Instead of throwing your employees under the bus, how about being a man, and taking responsibility for your wrong doings for a change? I forgot, your no man, your a coward. Your karma will come ..its a matter of time. Your no different than Bernie Madoff .. except your fraud has gone global, and he paid for his crimes and you run from it.

Two former JPMorgan Chase employees are expected to be arrested for their role in the so-called "London Whale" scandal that lost the bank roughly $6.2 billion last year, The New York Times reports. The arrest of the employees, Javier Martin-Artajo and Julien Grout, will reportedly take place in London.
Not among those expected to be charged is the London Whale himself, one Bruno Iksil, who built up the massive positions in the derivatives market that eventually cost the bank billions, according to a Reuters report published Thursday. According to a later report, Iksil will have to play a key role in any arrests related to the scandal.
On Thursday, Reuters reported that JPMorgan, the largest bank in the country by assets, was close to a settlement with the Securities and Exchange Commission over the scandal in which the bank would admit fault, a relative rarity on Wall Street.
The Federal Bureau of Investigation and federal prosecutors are separately investigating whether company employees underrepresented the scandal's potential fallout to investors in a 2012 meeting, according to a separate New York Times report.
The company's chief executive officer, Jamie Dimon, early on described the scandal as a "tempest in a teapot," an opinion he later described as "dead wrong," according to the Wall Street Journal. But Dimon has maintained that he did not purposefully deceive anyone with his initial comments. "There was no hiding, there was no lying, there was no bullshitting, period," he said of the scandal In June.
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Friday, August 9, 2013

HOW THE SCAM WAS PLAYED


LET ME EXPLAIN SOMETHING I AM LEARNING ABOUT DEUTSCHE BANK, LOOK FOR YOUR ORIGINAL LOAN , FOR EXAMPLE:
IF YOUR ORIGINAL LOAN WAS SAY FROM AMERICAN HOME, BUT YOU REFINANCED THE HOME WITH WASHINGTON MUTUAL, WHO BOUGHT THE LOAN, LOOK FOR YOUR LOAN FROM THE ORIGINAL ORIGINATOR WHICH WOULD BE AMERICAN HOME. THIS IS HOW THE PONZI SCAM WAS PLAYED FORWARD. EVEN IF LETS SAY :
THE ORIGINAL WAS SOLD TO AMERICAN HOME, WHICH WAMU REFINANCED , AND THAN SOLD TO DEUTSCHE BANK, STILL LOOK BACK TO THE ORIGINATOR OF THE LOAN , WHICH IS AMERICAN HOME. THIS IS WHY PEOPLE CAN'T FIND THEIR HOMES INFO ON THE SEC SITE , START FROM THE BEGINNING AND FOLLOW IT.


Certificates in the Deutsche Alt-
A Securities Mortgage Loan Trust 2006-AR5 and/or the Deutsche Alt-B Securities Mortgage
Loan Trust 2006-AB4 between May 1, 2006 through May 30, 2007, inc
.
The table below sets forth the specific tranches, by CUSIP number, of Certificates in each
Trust
TABLE A
TRANCHE
CUSIP
1.
DBALT 2006-AR5 IA1< This is the TRANCHE INFO
25150NAA2 <THIS IS THE CUSIP NUMBER
2.
DBALT 2006-AR5 IA2
25150NAB0
3.
DBALT 2006-AR5 IA3
25150NAC8
4.
DBALT 2006-AR5 IA4
25150NAD6
5.
DBALT 2006-AR5 IM1
25150NAE4
6.
DBALT 2006-AR5 IM2
25150NAF1
7.
DBALT 2006-AR5 IM3
25150NAG9
8.
DBALT 2006-AR5 IM4
25150NAH7
9.
DBALT 2006-AR5 IM5
25150NAJ3
10.
DBALT 2006-AR5 IM6
25150NAK0
11.
DBALT 2006-AR5 IM7
25150NAL8
12.
DBALT 2006-AR5 IM8
25150NAM6
13.
DBALT 2006-AR5 IM9
25150NAN4
14.
DBALT 2006-AR5 IM10
25150NAP9
15.
DBALT 2006-AR5 II1A
25150NAT1
16.
DBALT 2006-AR5 IIM
25150NAZ7
17.
DBALT 2006-AR5 IIB1
25150NBA1
18.
DBALT 2006-AR5 IIB2
25150NBB9
19.
DBALT 2006-AR5 IIPO
25150NAW4
20.
DBALT 2006-AR5 IIX2
25150NAY0
21.
DBALT 2006-AR5 II2A
25150NAU8
22.
DBALT 2006-AR5 IIX1
25150NAX2
23.
DBALT 2006-AR5 II3A
25150NAV6
TRANCHE
CUSIP
27.
DBALT 2006-AB4 A1C
251513AT4
28.
DBALT 2006-AB4 A2
251513AU1
29.
DBALT 2006-AB4 A3
251513AV9
30.
DBALT 2006-AB4 A3A1
251513AW7
31.
DBALT 2006-AB4 A3A2
251513AX5
32.
DBALT 2006-AB4 A4A
251513AY3
33.
DBALT 2006-AB4 A4B
251513AZ0
34.
DBALT 2006-AB4 A4C
251513BA4
35.
DBALT 2006-AB4 A5
251513BB2
36.
DBALT 2006-AB4 A6A1
251513BC0
37.
DBALT 2006-AB4 A6A2
251513BD8
38.
DBALT 2006-AB4 A7
251513BE6
39.
DBALT 2006-AB4 M1
251513AA5
40.
DBALT 2006-AB4 M2
251513AB3
41.
DBALT 2006-AB4 M3
251513AC1
42.
DBALT 2006-AB4 M4
251513AD9
43.
DBALT 2006-AB4 M5
251513AE7
44.
DBALT 2006-AB4 M6
251513AF4
45.
DBALT 2006-AB4 M7
251513AG2
46.
DBALT 2006-AB4 M8
251513AH0
47.
DBALT 2006-AB4 M9
251513AJ6
48.
DBALT 2006-AB4 M10
251513AK3
49.
DBALT 2006-AB4 M11
251513AL1
24.
DBALT 2006-AB4 A1A
251513AQ0
50. DBALT 2006-AB4 M12
251513AM9
25.
DBALT 2006-AB4 A1B1
251513AR8
51. DBALT 2006-AB4 M13
251513AN7
26.
DBALT 2006-AB4 A1B2
251513AS6
52. DBALT 2006-AB4 M14
251513AP2


HERE IS ALSO THE LISTING OF 1105 FILLINGS - THAT WERE DEUSTSCHE BANK- DB STRUCTURED PRODUCTS- ACE-DBALT-MORTGAGEIT
http://regab.db.com/

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Tuesday, July 30, 2013

A CASE OF FRAUD


Case 1:12-cv-04761-JSR Document 39 Filed 02/04/13 Page 1 of 46
DEXIA SA/NV, et al.,
Plaintiffs,
v.
BEAR STEARNS & CO., INC, et al.,
Defendants
JPM, CHASE, WASHINGTON MUTUAL, DB STRUCTURED PRODUCTS, DEUTSCHE BANKS, LONG BEACH MORTGAGE,
http://sdnyblog.com/wp-content/uploads/2013/04/12-Civ.-04761-2013.02.04-Opposition-to-Motion-for-Summary-Judgment.pdf


THIS STORY GOES WITH THE ABOVE


JPMorgan Hid Reports of Defective Loans Before Sales

JPMorgan Chase & Co. overrode an independent analysis of home loan portfolios by buying and selling defective loans to create a sanitized version of the pool, which was then securitized and sold, a court was told.
FSA Asset Management LLC, which bought the residential mortgage-backed securities that later collapsed in value, and its parent Franco-Belgian bank Dexia SA filed hundreds of e- mails and transcripts of employee interviews in federal court in Manhattan on Feb. 4, urging a judge not to throw out their lawsuit over the collateralized securities.
JPMorgan received reports from independent mortgage loan underwriters showing that 20 percent to 80 percent of the loans in samples used for testing didn’t meet the underwriting guidelines, including fraudulent home appraisals or missing documentation, FSA Asset Management, or FSAM, said in the filing.
“Rather than disclose these known defects to FSAM, defendants bought and sold massive quantities of defective loans,” FSAM said. “Defendants secretly overrode the independent loan underwriters’ determinations, creating a final, sanitized version.”
FSAM failed to expressly assign fraud claims related to the securities to Dexia, so the bank isn’t allowed to sue under New York law, JPMorgan said in a Jan. 21 filing, urging the judge to throw out the lawsuit without a trial.
FSAM also can’t sue because it had recovered the full purchase price of the securities it bought so it suffered no harm, JPMorgan said.
The plaintiffs purchased more than $1.6 billion of residential mortgage-backed securities in 51 offerings between 2005 and 2007, according to an amended statement of claim filed in New York State court in May. The purchases were made from JPMorgan and two banks the New York-based lender acquired during the 2007 credit crisis, Bear Stearns and Washington Mutual.
“Defendants rehash the well-worn ‘don’t blame us, blame the financial crisis’ defense, which numerous courts have rejected,” Dexia said.
The case is Dexia SA v. Bear Stearns & Co. 12-cv-04761. U.S. District Court Southern District of New York (Manhattan).

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Monday, July 29, 2013

Junk mortgages under the microscope

Ita time the sec and the feds take another look at junk bonds with hedge funds

A close-up of one deal shows how subprime mortgages went bad, says Fortune's Allan Sloan.


(Fortune Magazine) -- It's getting hard to wrap your brain around subprime mortgages, Wall Street's fancy name for junk home loans. There's so much subprime stuff floating around - more than $1.5 trillion of loans, maybe $200 billion of losses, thousands of families facing foreclosure, umpteen politicians yapping - that it's like the federal budget: It's just too big to be understandable.
So let's reduce this macro story to human scale. Meet GSAMP Trust 2006-S3, a $494 million drop in the junk-mortgage bucket, part of the more than half-a-trillion dollars of mortgage-backed securities issued last year. We found this issue by asking mortgage mavens to pick the worst deal they knew of that had been floated by a top-tier firm - and this one's pretty bad.
foreclosure.03.jpg
So many homes are up for sale that prices are falling, and holders of mortgage-backed securities are getting hurt.
newspaper_headlines.03.jpg


It was sold by Goldman Sachs (Charts, Fortune 500) - GSAMP originally stood for Goldman Sachs Alternative Mortgage Products but now has become a name itself, like AT&T and 3M.
This issue, which is backed by ultra-risky second-mortgage loans, contains all the elements that facilitated the housing bubble and bust. It's got speculators searching for quick gains in hot housing markets; it's got loans that seem to have been made with little or no serious analysis by lenders; and finally, it's got Wall Street, which churned out mortgage "product" because buyers wanted it. As they say on the Street, "When the ducks quack, feed them."
Alas, almost everyone involved in this duck-feeding deal has had a foul experience. Less than 18 months after the issue was floated, a sixth of the borrowers had already defaulted on their loans. Investors who paid face value for these securities - they were looking for slightly more interest than they'd get on equivalent bonds - have suffered heavy losses.
Investors to Fed: Thanks for nothing
That's because their securities have either defaulted (for a 100% loss) or been downgraded by credit-rating agencies, which has depressed the securities' market prices. (Check out one of these jewels on a Bloomberg machine, and the price chart looks like something falling off a cliff.)
Even Goldman may have lost money on GSAMP - but being Goldman, the firm has more than covered its losses by betting successfully that the price of junk mortgages would drop. Of course, Goldman knew a lot about this market: GSAMP was just one of 83 mortgage-backed issues totaling $44.5 billion that Goldman sold last year.
Now let's take it from the top.
In the spring of 2006, Goldman assembled 8,274 second-mortgage loans originated by Fremont Investment & Loan, Long Beach Mortgage Co., and assorted other players. More than a third of the loans were in California, then a hot market. It was a run-of-the-mill deal, one of the 916 residential mortgage-backed issues totaling $592 billion that were sold last year.
The average equity that the second-mortgage borrowers had in their homes was 0.71%. (No, that's not a misprint - the average loan-to-value of the issue's borrowers was 99.29%.)
It gets even hinkier. Some 58% of the loans were no-documentation or low-documentation. This means that although 98% of the borrowers said they were occupying the homes they were borrowing on - "owner-occupied" loans are considered less risky than loans to speculators - no one knows if that was true. And no one knows whether borrowers' incomes or assets bore any serious relationship to what they told the mortgage lenders.
You can see why borrowers lined up for the loans, even though they carried high interest rates. If you took out one of these second mortgages and a typical 80% first mortgage, you got to buy a house with essentially none of your own money at risk. If house prices rose, you'd have a profit. If house prices fell and you couldn't make your mortgage payments, you'd get to walk away with nothing (or almost nothing) out of pocket. It was go-go finance, very 21st century.
Goldman acquired these second-mortgage loans and put them together as GSAMP Trust 2006-S3. To transform them into securities it could sell to investors, it divided them into tranches - which is French for "slices," in case you're interested.
There are trillions of dollars of mortgage-backed securities in the world for the same reason that Tyson Foods offers you chicken pieces rather than insisting you buy an entire bird. Tyson can slice a chicken into breasts, legs, thighs, giblets - and Lord knows what else - and get more for the pieces than it gets for a whole chicken. Customers are happy, because they get only the pieces they want.
Similarly, Wall Street carves mortgages into tranches because it can get more for the pieces than it would get for whole mortgages. Mortgages have maturities that are unpredictable, and they require all that messy maintenance like collecting the monthly payments, making sure real estate taxes are paid, chasing slow-pay and no-pay borrowers, and sending out annual statements of interest and taxes paid. Securities are simpler to deal with and can be customized.
Someone wants a safe, relatively low-interest, short-term security? Fine, we'll give him a nice AAA-rated slice that gets repaid quickly and is very unlikely to default. Someone wants a risky piece with a potentially very rich yield, an indefinite maturity, and no credit rating at all? One unrated X tranche coming right up. Interested in legs, thighs, giblets, the heart? The butcher - excuse us, the investment banker - gives customers what they want.
In this case, Goldman sliced the $494 million of second mortgages into 13 separate tranches. The $336 million of top tranches - named cleverly A-1, A-2, and A-3 - carried the lowest interest rates and the least risk. The $123 million of intermediate tranches - M (for mezzanine) 1 through 7 - are next in line to get paid and carry progressively higher interest rates.
Finally, Goldman sold two non-investment-grade tranches. The first, B-1 ($13 million), went to the Luxembourg-based UBS (Charts) Absolute Return fund, which is aimed at non-U.S. investors and thus spread GSAMP's problems beyond our borders. The second, B-2 ($8 million), went to the Morgan Keegan Select High Income fund. (Like most of this article, this information is based on our reading of various public filings; UBS and Morgan Keegan both declined to comment.)
Welcome to Bailout City!
Goldman wouldn't say, but it appears to have kept the 13th piece, the X tranche, which had a face value of $14 million (and would have been worth much more had things gone as projected), as its fee for putting the deal together. Goldman may have had money at risk in some of the other tranches, but there's no way to know without Goldman's cooperation, which wasn't forthcoming.
How is a buyer of securities like these supposed to know how safe they are? There are two options. The first is to do what we did: Read the 315-page prospectus, related documents, and other public records with a jaundiced eye and try to see how things can go wrong.
The second is to rely on the underwriter and the credit-rating agencies - Moody's and Standard & Poor's. That, of course, is what nearly everyone does.
In any event, it's impossible for investors to conduct an independent analysis of the borrowers' credit quality even if they choose to invest the time, money, and effort to do so. That's because Goldman, like other assemblers of mortgage-backed deals, doesn't tell investors who the borrowers are.
One Goldman filing lists more than 1,000 pages of individual loans - but they're by code number and zip code, not name and address.
Even though the individual loans in GSAMP looked like financial toxic waste, 68% of the issue, or $336 million, was rated AAA by both agencies - as secure as U.S. Treasury bonds. Another $123 million, 25% of the issue, was rated investment grade, at levels from AA to BBB--.
Thus, a total of 93% was rated investment grade. That's despite the fact that this issue is backed by second mortgages of dubious quality on homes in which the borrowers (most of whose income and financial assertions weren't vetted by anyone) had less than 1% equity and on which GSAMP couldn't effectively foreclose.
It's all in the math
How does toxic waste get distilled into spring water? Watch. It's all in the math - and the assumptions about how borrowers will behave.
These loans, which are fixed-rate, carried an average interest rate of 10.51%. After paying the people who collected the payments and handled all the other paperwork, the GSAMP Trust had ten percentage points left. However, the interest on the securities that GSAMP issued ran to only about 7%. (We say "about" because some of the tranches are floating-rate rather than fixed-rate.)
The difference between GSAMP's interest income and interest expense was projected at 2.85% a year. That spread was supposed to provide a cushion to offset defaults by borrowers. In addition, the aforementioned X piece didn't get fixed monthly payments and thus provided another bit of protection for the 12 tranches ranked above it.
Remember that we're dealing with securities, not actual loans. Thus losses aren't shared equally by all of GSAMP's investors. Any loan losses would first hit the X tranche. Then, if X were wiped out, the losses would work their way up the food chain tranche by tranche: B-2, B-1, M-7, and so on.
The $241 million A-1 tranche, 60% of which has already been repaid, was designed to be supersafe and quick-paying. It gets first dibs on principal paydowns from regular monthly payments, refinancings, and borrowers paying off their loans because they're selling their homes. Then, after A-1 is paid in full, it's the turn of A-2 and A-3, and so on down the line.
Moody's projected in a public analysis of the issue that less than 10% of the loans would ultimately default. S&P, which gave the securities the same ratings that Moody's did, almost certainly reached a similar conclusion but hasn't filed a public analysis and wouldn't share its numbers with us. As long as housing prices kept rising, it all looked copacetic.
Goldman peddled the securities in late April 2006. In a matter of months the mathematical models used to assemble and market this issue - and the models that Moody's and S&P used to rate it - proved to be horribly flawed. That's because the models were based on recent performances of junk-mortgage borrowers, who hadn't defaulted much until last year thanks to the housing bubble.
The fallout
Through the end of 2005, if you couldn't make your mortgage payments, you could generally get out from under by selling the house at a profit or refinancing it. But in 2006 we hit an inflection point. House prices began stagnating or falling in many markets. Instead of HPA - industry shorthand for house-price appreciation - we had HPD: house-price depreciation.
Interest rates on mortgages stopped falling. Way too late, as usual, regulators and lenders began imposing higher credit standards. If you had borrowed 99%-plus of the purchase price (as the average GSAMP borrower did) and couldn't make your payments, couldn't refinance, and couldn't sell at a profit, it was over. Lights out.
As a second-mortgage holder, GSAMP couldn't foreclose on deadbeats unless the first-mortgage holder also foreclosed. That's because to foreclose on a second mortgage, you have to repay the first mortgage in full, and there was no money set aside to do that. So if a borrower decided to keep on paying the first mortgage but not the second, the holder of the second would get bagged.
If the holder of the first mortgage foreclosed, there was likely to be little or nothing left for GSAMP, the second-mortgage holder. Indeed, the monthly reports issued by Deutsche Bank (Charts), the issue's trustee, indicate that GSAMP has recovered almost nothing on its foreclosed loans.
By February 2007, Moody's and S&P began downgrading the issue. Both agencies dropped the top-rated tranches all the way to BBB from their original AAA, depressing the securities' market price substantially.
In March, less than a year after the issue was sold, GSAMP began defaulting on its obligations. By the end of September, 18% of the loans had defaulted, according to Deutsche Bank.
As a result, the X tranche, both B tranches, and the four bottom M tranches have been wiped out, and M-3 is being chewed up like a frame house with termites. At this point, there's no way to know whether any of the A tranches will ultimately be impaired.
"[In hindsight,] I think we would not have rated it" had Moody's realized what was going on in the junk-mortgage market, says Nicolas Weill, the firm's chief credit officer for structured finance. Low credit scores and high loan-to-value ratios were taken into account in Moody's original analysis, of course, but the firm now thinks there were things it didn't know about.
Two small lessons from the market turmoil
Weill doesn't lay blame on any particular party, although in a Sept. 25 special report posted on Moody's website, he called for "additional third-party oversight that reviews the accuracy of the information provided by borrowers, appraisers, and brokers to originators" when it comes to junk issues. Or, as he calls them, "non-prime."
S&P, by contrast, says that it considers both its original rating and subsequent downward revisions correct. "We used the best information available at the time," says Vickie Tillman, S&P's chief rating officer.
If you read documents that Goldman filed with the SEC in connection with this offering, you discover that they warn about pretty much everything we've discussed so far and some things we haven't: the impact of falling house prices, the difficulty of foreclosing, the possible changes in credit ratings, the fact that more than half the mortgages were in California, Florida, and New York, all of which were overheated markets.
It's all disclosed. In capital letters. So no buyer - and this is aimed at sophisticated investors - can say he wasn't warned.
Goldman said it made money in the third quarter by shorting an index of mortgage-backed securities. That prompted Fortune to ask the firm to explain to us how it had managed to come out ahead while so many of its mortgage-backed customers were getting stomped.
Goldman's profits came from hedging the mortgage securities it keeps in inventory in order to make trading markets. It said in a recent SEC filing, "Although we recognized significant losses on our non-prime mortgage loans and securities, those losses were more than offset by gains on short mortgage positions."
As we interpret this - the firm declined to elaborate - Goldman made more on its hedges than it lost on its inventory because junk mortgages fell even more sharply than Goldman thought they would.
What is there to take away from our course in Junk Mortgages 101? Two things. First, you have to pay at least some attention to all those "risk factors" that issuers forever warn you about - especially when you're dealing with a whole new thing like junk mortgages issued en masse instead of by specialists.
Second, when you rely on the underwriter and the rating agencies to do all your homework for you, you don't have safety. You have only the illusion of safety.
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Was your Wamu or any loan bought by DB Structured Products in 2006?

Was your Wamu or any loan bought by DB Structured Products in 2006? Ace securities was what they dumped them in. Heres your link to maybe find your note on the Sec Edgar site

http://www.securitization.net/pdf/DBRS/2007/210414_ACE_Securities_29Jan07.pdf


Wells Fargo was master servicer
http://www.sec.gov/Archives/edgar/data/1412888/000105640408000833/dal07003_35-3.txt


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How Goldman will sink the ships

Investors Lost, Goldman Won on WaMu Deal 

 

Washington Mutual Inc. and its Long Beach Mortgage Co. subprime-lending unit rang up one of the worst failures in U.S. history. Left in the wake were billions of dollars of soured loans and questionable lending practices.
But when times were better, the two companies had a powerful partner on Wall Street: Goldman Sachs Group Inc. GS -1.31%

Beached

  • May 10, 2007: Goldman and WaMu underwrite bonds backed by $532.6 million in mortgages.
  • May 16, 2007: WaMu unit says $49.3 million in loans are worthless.
  • May 17, 2007: 'Good news,' Goldman trader writes in an email, 'we make $5mm' because the firm shorted the bonds.
Recently released emails and other documents, including securities filings, show how Goldman, considered one of Wall Street's most elite banks, built its mortgage business by closely working with lenders such as Washington Mutual and Long Beach, two firms that "polluted the financial system" with souring loans, according to a Senate review of Washington Mutual on April 13.
"Long Beach…was not a responsible lender," Sen. Carl Levin (D., Mich.), chairman of the Senate Permanent Subcommittee on Investigations, said in his opening remarks April 13. "Its loans and mortgage-backed securities were among the worst performing of the subprime industry."
Goldman declined to discuss its business with Washington Mutual or the communications in the emails released by the Senate panel.
Goldman was one of several Wall Street firms that helped sell bonds backed by Washington Mutual loans. Over the weekend, the Senate subcommittee released internal Goldman emails, including one showing that the firm made a $5 million trading profit by betting against securities Goldman sold in a Long Beach bond offering that lost money for its investors, raising a potential conflict with its clients. On Tuesday, the panel plans to question Goldman executives in a separate hearing.

The emails and others like them highlight "the importance of transparency, the importance of things being in the open, the importance of it being known who is in a position to benefit from what," senior White House adviser Lawrence Summers said Sunday on CBS's "Face the Nation."
Much has been written about Washington Mutual's failure. In September 2008, the Seattle lender was forced to sell itself to J.P. Morgan Chase & Co. JPM -0.87% at the height of the crisis in the largest-ever U.S. bank failure. But there has been less scrutiny of the ties between Washington Mutual and Goldman, which emerged stronger than rivals after the mortgage market's collapse.
J.P. Morgan said the Washington Mutual loans and securities being investigated were issued before J.P. Morgan's purchase of Washington Mutual. A lawyer for former Washington Mutual Chief Executive Kerry Killinger couldn't be reached.
At times, executives at Washington Mutual discussed seeking out Goldman for its reputation for excellence, according to Washington Mutual emails. But Washington Mutual executives also were wary of their partner because of concerns about how the Wall Street firm traded.
"We always need to worry a little about Goldman because we need them more than they need us and the firm is run by traders," a Washington Mutual executive wrote in an email released by the Senate panel in its probe of the lender.
Long Beach was founded in 1979 as Long Beach Savings & Loan by Roland Arnall, a Los Angeles developer who got his start in business in Los Angeles selling flowers on a Los Angeles street corner. A unit called Long Beach Financial Corp., based in Orange, Calif., was sold to Washington Mutual in 1999.
Aided by mortgage brokers who channeled loans to Long Beach, Washington
Mutual and Long Beach ended up bundling subprime home loans into $77 billion worth of securities, according to the Senate inquiry.

Some Long Beach bonds were ultimately used to allow Wall Street firms and hedge funds to bet against the U.S. mortgage market. Long Beach bonds were among those underpinning subprime-mortgage indexes—assembled by Goldman and other Wall Street firms—that allowed those firms and hedge funds to bet against the housing industry, according to data provided by Markit Group Ltd., which helps run the indexes.
The Long Beach loans ended up being among the worst performing in the indexes, according to a Nomura Holdings report. Separately, some Long Beach bonds also underpinned the Abacus 2007-AC1 debt pool now at the center of a Securities and Exchange Commission securities-fraud case against Goldman, which the firm is fighting.
By 2005, Long Beach was in trouble. According to the Senate report released April 13, Long Beach had to buy back $875 million of nonperforming loans from investors. Problems persisted.
Behind one sale of Long Beach securities was Goldman. In 2006, Goldman teamed with a Washington Mutual unit to sell a debt pool called Long Beach Mortgage Loan Trust 2006-A. Both firms agreed to buy some of the securities with the intention of reselling them or making a secondary market for them, according to a prospectus for them. Of the $496 million deal, Goldman was expected to purchase about $322 million of the securities with the intention of reselling them.
Washington Mutual executives appeared troubled by loans at Long Beach.
In an April 2006 email, a Washington Mutual executive told Mr. Killinger that
Long Beach's "delinquencies are up 140% and foreclosures close to 70% ... It is ugly."
By early 2007, Goldman bankers also were growing anxious about their business dealings with Washington Mutual and Long Beach, according to emails released as part of the Senate investigation into Washington Mutual.
A Goldman banker raised questions about the performance of Long Beach loans that were "performing dramatically worse" than other similar deals in 2006. "As you can imagine, this creates extreme pressure, both economic and reputational, on both organizations," the Goldman banker said.
In May 2007, Goldman executives were discussing problems facing the debt deal it had helped underwrite called Long Beach Mortgage Loan Trust 2006-A, according to emails released by the Senate panel.
Among the Senate documents is an email from a Goldman executive to Michael Swenson, then a Goldman managing director in the firm's mortgage group, about the 2006-A bond deal. In an 8 a.m. email, Goldman executives circulated a securities report that showed loans inside the pool had soured.
Six minutes later, a Goldman executive wrote, "bad news…(the price decline in the bonds) costs us about 2.5 mm," adding, "good news…we make $5mm" on a derivatives bet against the bonds.
The Senate panel, in a statement over the weekend, said the email showed how the soured Long Beach bonds "would bring [Goldman] $5 million from a bet it had placed against the very securities it had assembled and sold."
Mr. Swenson declined to comment through a Goldman spokesman. He is among the Goldman executives set to appear at Tuesday's hearing. A Goldman spokesman said in a statement: "It's our standard, prudent practice to hedge exposures."
Despite the close relationship between Washington Mutual and Goldman, Washington Mutual wondered which side Goldman was on. In October 2007, Mr. Killinger wrote in an email about a situation with Goldman: "I don't trust Goldy on this. They are smart, but this is swimming with the sharks. They were shorting mortgages big time."
  This is the link to SEC info
http://www.sec.gov/Archives/edgar/data/1355515/000127727706000388/form8kpsa20063.htm

http://www.sec.gov/Archives/edgar/data/1119605/000127727706000409/fwptermsheet_longbeach2006a.pdf
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