Friday, July 22, 2011




The fact that the homeowner MIGHT still have a balance due on their loan is NOT a reason for awarding money or house to anyone who wants it. — Neil Garfield
EDITORIAL ANALYSIS: Why would a “bank” falsify loan origination documents? Why would they overstate the borrower’s income without the borrower knowing it? Why would they steer the borrower into loans that they borrower was least likely to repay?
Unless you are willing to answer the real questions, you will never understand what happened to you or the country. Wells Fargo was not acting as a bank when it closed those loans. It was using its name to pretend to be THE bank when the borrower sat down at the closing table. Wells Fargo was in fact acting as an unregistered mortgage broker without disclosing it to the borrowers. Wells Fargo compensation was based solely on whether they closed the loan — i.e. got the borrower’s signature. Wells Fargo was not lending the borrower anything. Wells Fargo had no risk. It didn’t make any difference whether the borrower repaid the loan or not.
Wells Fargo was not taking an excessive risk by underwriting the loan. It took no risk because it did no underwriting or funding of the loan. Since the Fee for Wells Fargo was for the transaction in which it pretended to be the lender, and since it was under pressure to produce more borrower signatures  without regard to the risk of loss for non-payment, Wells Fargo changed the borrower’s application to reflect higher income than was true, changed the description of the borrower as to where the borrower earned money, fabricated the rest of the documents and then went to the closing table with the borrower thinking that this venerable institution was their lender.
“Yeah, but they still took the money and they still owe it,” right? My answer is how would you know whether they still owe the money and how do you know who the money should go to? Doesn’t it matter to you that houses are going to Wells Fargo when they never loaned any money on the transaction and they never purchased the obligation? Why did Wells Fargo get all those free houses? Why are they still getting free houses, based upon robo-signed documents which is only a nice way of saying they are continuing to forge and fabricate documents just as they did when the loan was originated?
The fact that the homeowner MIGHT still have a balance due on their loan is NOT a reason for awarding money or house to anyone who wants it. Is there an amount due? We don’t know — the amount is unknown because the banks won’t tell us how much they received from taxpayers, servicers, counterparties and insurers, et al. They won’t tell investors either, because the money received by the banks should have gone to investors, and THAT would clearly have reduced the amount due to those investors.
Reducing the amount due the investors means reducing the amount due from the borrowers.  So the middleman here is taking all the benefit and laying off all the losses on the investor and the borrower. It is now very obvious that this is the case.
And as for the documents, I hate to beat a dead horse. If neither the identity of the lender, the purpose of the pretender lender, nor the terms of the transaction were disclosed to the borrower there is something wrong with the loan. If the note and mortgage recite that they are evidence of an obligation to Wells Fargo when in fact Wells Fargo loaned nothing, then the note is wrong and the mortgage securing the note is fatally defective. If the note leaves out essential terms of the transaction like the fact that the real lending party that SHOULD have been named on the note received “terms” (false promises) from Wells Fargo and others that were different than the terms shown on the note, then the note is not acceptable evidence of the obligation nor a correct description of the obligation.
If the note is not evidence of the transaction and the mortgage is invalid, does that give the homeowner a free house. NO. But if the investor decides not to go after a piece of property worth a fraction of the loan, and not to pursue a homeowner who is already broke, and instead go after Wells Fargo and the other cronies who started this mess, then the homeowner could end up with his house without any mortgage or encumbrance. That doesn’t mean they got it for free. At least the homeowner has put money into the place through down-payments, improvements, furnishings, maintenance etc.
The pretender lenders put nothing into the house. Who should get a “free house? Is it Wells Fargo or the defrauded investors and homeowners?

Fed fines Wells Fargo over US subprime mortgages

(AFP) – 1 day ago
WASHINGTON — The US central bank slapped Wells Fargo with an $85 million fine on Wednesday for allegedly “deceptive” practices in selling subprime mortgages before the financial crisis.
The Federal Reserve said its fine against Wells Fargo — the second-largest US bank in terms of deposits — was the biggest penalty it has imposed on a bank for consumer-protection violations.
It was also the first action taken by a US bank regulator over unsavory sales tactics in which banks duped borrowers into taking out costly subprime loans during the US housing boom, the Fed said in a statement.
The Fed’s penalty was due to alleged actions taken between 2004 and 2008 by Wells Fargo Financial, a subsidiary of the bank which is no longer active.
“Sales personnel steered borrowers who were potentially eligible for prime interest rate loans into loans at higher, subprime interest rates, resulting in greater costs to borrowers,” the Fed said.
The employees also “falsified information about borrowers’ incomes to make it appear that the borrowers qualified for loans when they would not have qualified based on their actual incomes.”
Wells Fargo Financial’s failure to rein in its salespeople constituted “unfair or deceptive” practices, the central bank said.
San Francisco-based Wells Fargo did not admit wrongdoing, but pledged to strengthen internal controls over its lending practics.
“The alleged actions committed by a relatively small group of team members are not what we stand for at Wells Fargo,” Wells Fargo chairman and chief executive John Stumpf said in a statement.
Before the collapse of the US housing market in 2007 and 2008, lenders sold billions of dollars’ worth of risky subprime mortgages, often to poorly qualified borrowers.
The subprime mortgages were bundled into complex mortgage-backed securities which were resold to investors. A plunge in the value of such securities led to the global financial crisis in late 2008.
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