Bank of America appears to have improved the state of the art in the creative foreclosure procedures department. I started hearing a few months ago about a sudden and suspicious increase in the number of foreclosures Bank of America was making in its own name. BofA was in effect saying that it owned these loans and had never securitized them. That seemed questionable, since the bulk of Bank of America’s mortgages had been originated by Countrywide, and Countrywide has said in its SEC filings that it securitized 96% of them.
Well that's easy - they never transferred crap. Now, with the payments not being made, they got a rather large problem in that department..... maybe a fatal one to their "wonderful" and "ethical" bank.,
1. Either Countrywide lied in its 2003 SEC filings or the loan was never on Bank of America’s books. Which would you believe?
2. Even though Countrywide appears to have intended to convey the loan to its CWABS 2003-BC6 trust, it appears never to have completed the steps. The assignments are legally void by virtue of being out of time and by being inconsistent with conveyance chain stipulated in the PSA (which would have been from Countrywide through at least one intermediary entity to the trust. So the trust does not now own the note either.
This means the odds are awfully high that Bank of America committed multiple frauds on the court, first on the state court in the foreclosures process, and now on the Federal bankruptcy court.
Naw, they'd never do anything like that, right?
The fun here of course goes to motive. Fraud upon a bankruptcy (and state) court is no small thing. It's one thing to "robosign" something that is technically correct but expensive to process correctly.
It's quite another to claim you own something when you don't - there the motive has to be that you'd get REALLY SERIOUSLY reamed if the truth were to come out.
Like, perhaps, that you still have all those notes in your files and never transferred any of them?
Well that could be a problem. In fact, it could be a really serious problem, because in this case the MBS holders bought nothing, you were paid in full, you committed fraud upon the MBS holders, and oh, incidentally, since you're the same person on both ends of the transaction now we have really big problems because the entire "arms length" thing goes up in smoke too, and that's one of the requirements to get "holder in due course" status.
How bad could this be? It could be very bad. It could be in aggregate hundreds of billions of dollars of notes that are - surprise-surprise - really owned by Bank of America (cum-Countrywide) and the losses thereupon could land on them, instead of on the MBS holders.
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