You may be reading news about the FBI investigating insider trading and think that this is somehow an indication of action against the banksters.
Don’t delude yourself.
Madoff is not Wall Street (though it’s all a Ponzi scheme looking for new suckers at this point) and the people being targeted are by all indications low level employees.
My uncle was a Vice President on the Bond Trading desk and you know what that got him? A Corner Carrel with a view of the window. He still had to smoke on the street 20 floors below.
dday’s piece about TITLE FRAUD! is much more significant.
Deposition: Countrywide Never Sent Mortgage Notes to Trust; Mortgage-Backed Securities in Question
By: David Dayen Sunday November 21, 2010 12:01 pm
Now we have documented evidence, beyond anecdote, that Countrywide, one of the largest subprime lenders, which securitized almost all of the loans they made, never sent the notes to the trust. In a deposition provided to a US Bankruptcy Court in the District of New Jersey, Linda DeMartini, a supervisor for Bank of America Home Loans (BofA bought Countrywide in 2008), admitted that the original notes never transferred from Countrywide into the trusts.
Well, this is a multi-Trillion problem for your balance sheets because you just broke your contract with PIMCO, Blackrock, and The Federal Reserve Bank of New York (among other minor players).
The entire court document is below.
CASE FILE New Jersey Admissions in Testimony Notes Never Sent to Trusts Kemp v Country Wide This is an enormous deal. If Countrywide never gave up possession of the note, then the trust has no standing to foreclose whatsoever. It also means that investors in the MBS don’t actually have securities backed by mortgages. The “allonge” appears to be an effort to clear up this situation, and it was signed years after the fact, well past the deadline of the pooling and servicing agreement, and not even affixed to the note as required by law.
This is a deposition from one supervisor, but it could mean that all mortgage pools that Countrywide sold are suspect. That would amount to perhaps hundreds of billions of dollars in MBS. And the law appears to be air-tight on this, and not governed by the Constitution but New York trust law and the specifics of the pooling and servicing agreement.
Now, tell me again how the banks are planning to get out of this.
ditto.
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