Ask the Expert: Wrongful Foreclosures: Mortgage Underwriting Standards

Experts Corner: Another FDIC Bank Failure

American Marine Bank

News of another FDIC member bank falling under the FDIC control was published late this week. The “Emerald City” is the latest to be welcomed back to join the party! Characteristic of the FDIC bulletins that we have come to be familiar with in 2008 and 2009, we are told if you had a loan with American Marine Bank, the friends and family members at the FDIC want you to continue to make your payments as usual.

Our question is to whom? Who is the holder in due course?The purpose of this analysis and discussion of the FDIC are subject to the various parties’ who have interest in your loan. It’s about their representations, conduct and decisions made while enforcing a foreclosure. Making a bad decision or employing conduct viewed to be deceptive will cause any transaction or enforcement of a right to a security to be rendered voidable.

Furthermore the asset may suffer from malfeasance and willful error and omissions causing the loan to be valued far below its market value due to serious impairment. Successfully demonstrating in court the reasons why your loan has become so seriously impaired that the real security, a deed of trust or mortgage, will fall into a judicial abyss and subject the true holder in due course to lose its rights to in a recovery of the asset in a foreclosure. In other words the right to accelerate and foreclose becomes lost to the transaction

Your loan was likely sold after it originated. A sale of the asset versus a government backed insurance guaranty is the single most controversial component of the subprime lenders dilemma.

A bonifide sale and transfer must be evidenced which differentiates the private label loans from the GSE or Fannie Mae and Freddie Mac class of loans delivered to Wall Street.

In a true sale the lender who sold it is lost to the privileges and rights to the asset forever. So I guess the question is not so much about a foreclosure due to a breach and delinquent obligation. This discussion is for us to understand to “whom” you owe the money and what right do they have to enforce the obligation and right to foreclose? Lawful Transfers

A “transfer” is the “streets” vernacular for booking a sale of a loan or pool of loans. The transfer of an asset by the lender to a less than arms investor is routinely conducted solely for accounting purposes. None the less it’s a sale that is forever entered in to the books.

The purpose of this analysis and discussion of the FDIC are subject to the various parties’ representations and decision making that may cause the asset to become so impaired that the real security, a deed of trust or mortgage becomes lost to the transaction. My last sale as a trader was a transfer of a bulk pool of “toxic waste” was back in 2001. The loans acquired and sold under my direction were never really that bad as we had one of the lowest delinquency rates in the region for sub prime assets sold and serviced. What I do know or at least remember from my days of bulk whole loan trading was from selling to the same major market leaders who are in trouble today.

Let’s back up for a moment to consider how accountants arrive at a specific value. A valuation is necessary for a foreclosure to take place just as it is for the original loan to be sold. A sale involves a contract and the essential elements f the law amongst the two parties. The first is consideration (money) and the second is the intent of the parties for lawful exchange and or transfer.

Consideration is required for transferring any good or service amongst one party to another, including a sale of a bulk pool of mortgage loan receivables.

If a mortgage is valued at par then you typically measure its worth at the combined cost to date or basis in the asset. A true and more accurate valuation is based upon the market and what one will pay assuming demand. It’s the true inherent value of a gallon of milk that will force someone to go elsewhere or not to drink milk at all. The same rationale holds true for an asset such as a closed mortgage receivable subject to its ability to attract a fair price in an open market. A mark to market value is entered by an accountant prior to sale if the owner is seeking to value the worth of the assets it holds.

Estimating value based on the future worth of an asset is something that continues to attract criticism whereby a historical valuation is entered based on a discounted future value. A presumption of value is calculated in a variety of ways sometimes using an internal rate of return offset by depreciation. In the mortgage industry I call this type of valuation complete lunacy. And this is where things get interesting with taking a look back at the cause of the mess we are now in.

Generally Accepted Accounting Principals aka “GAAP” allows us a standard to apply a historical value on a loan which is necessary for estimating consistency as with the life of a loan. The terms of the note say 30 years but we know that homeowners rarely keep a loan to term. Valuations use variables such as prepayment velocity or life based on a traditional or historic early payoff.

The CPR is the measurement of prepayment speed determine from reversion (sale of a home) refinance or the opposite end of the spectrum which is delinquency and default. Mortgages originated over the last decade were attributed an estimated holding time or CPR of say 60 months. Other things that influence price and for understanding the lenders desire to become fixated with the sub prime mortgage sector are subject to ethical scrutiny. I am referring to extreme maximum leverage used to buy loans and the introduction of something called accounting practices such as derecongnition. The latter is suspect, according to many accountants, as it offer no real value to a transfer and subject to entering a “gain on sale.”

The "streets" ability to substantiate its reporting methods. The Expert Witness must have among other things a legal understanding and verifiable accounting practices background. So figure an offshore investor will take a coupon of 1% at twice the current alternative which was a US Treasury. So I guess a WAC of 8% would yield on $100,000 certificate up to $800,000 in capital investment. Or is that $100,000 yielding 8 separate $100,000 certificates?

What ever it is its six of one and half a dozen of the other. It makes me want to run to the Hampton's and buy the biggest home they can offer. It makes me want to find the worse of the worse credit and put them into a loan.....any loan.

The problem with this madness conducted under the great GWB (and side kick “Don't call me Cheney call me "Dick”) administration is the regulatory absence for the bubble Wall Street elite would eventually pop.

The money raised was at a huge multiple and was causing CDO product to suffer from heavy demand internationally in a market that had long exceeded capacity. ( . . . .It makes me cringe and recall the old Keystone Kops silent flicks; remember the morons running around that said nothing and were always trying to help while and causing even more chaos …..Anyway!

I cannot pinpoint of fully grasp the role of the FDIC here but fear we may have an accounting play that shows the bank lines were actually used as “paid in capital” . It’s called derecongnition under GAAP and FASB accounting pronouncements for isolating the source and use of funds.

Will this help your arguments to save your home? YOU BET IT WILL! The big question is where the logic here is and why would the bank regulators let this happen? These Pretender Lenders were not pretenders at all. I call them “Tender Lenders” who tendered a note like currency instead of parking it in a vault like the asset it is. Therefore when tendered the check is electronically debited (hmm) and treated like a cancelled check.

The lost note is not a coat lost by a child at school. It’s lost to the payee who failed to deliver to the payor that check evidencing a debit stamped paid in full.

Hey, Barney just a minute . . . Hey, Wilma I’m home!!!!! So lets say these guys raised volumes of cash at huge multiples and did so with FDIC capitalization or tax payer insured capital contributions into a “NewCo” or De novo or S*P* E*.

If so, I feel the SPE is more like an STD and its all absolute "Bull Crepes". Where did these guys put all the capitalization anyway from money and stock…Huh? Especially with all these stringent FDIC risk weight capital set aside requirements. It’s a regulatory capital priority and basic fiscal mandate enforced by the OTS.

I got to know, where did they "Deposit" the money and stock ...do you know? I am referring to the "Deposits by the Wall Street “Depositors” you see. Deposited, Depositor, Depository, Restroom, tell me Wendy! Where’s the beef! Howard, who goofed I must known, who goofed!

Hey! ....wait a minute!!!....D*E*P*O*S*I*T*O*R*S! Yikes…OMG! How much more can we take!

So back to the failure of another institution, one of Americas and Pacific Northwest’s finest! American Marine Bank. So who do we bring an action against now? FDIC say’s “for all questions regarding “new” loans and the lending policies of the new successor call Columbia State Bank, and to please contact your branch office.

They continue that shares of American Marine Bank were owned by its holding company, AMB Financial Services Corporation, Bainbridge Island, WA. The holding company was not included in the closing of the bank or the resulting receivership. So if you are a shareholder of AMB Financial Services Corporation, please do not contact or file a claim with the Receiver. You may contact AMB Financial Services Corporation directly for information. How convenient is that….a BK waiting to happen.

The FDIC claims it does offer a reference guide to deposit brokers acting as agents for their investor clientele. This web site outlines the FDIC's policies and procedures that must be followed by deposit brokers when filing for pass-through insurance coverage on custodial accounts deposited in a failed FDIC Insured Institution. Wait a minute here now just slow down. FDIC makes no mention of a lender consumer grievance, and tells us to call the broke parent of the bank. Now are these loans in question considered FDIC troubled assets? Okay, we cannot help you with a predator loan but we will be back to foreclose on you?

My heart is pounding right now and I cannot take anymore folks…..really! But on a more serious note, consider the following. A bad notary signature, broken promise by a “Tender Lender” or forged MERS document is not the argument to bet the house on (no pun intended) It won’t get you to the promised land so can the need for an audit. It won’t get you to the Promised Land, so here is my advice!

SAVE YOUR MONEY! . . . UNLESS YOU WANT TO BORE THE HELL OUT OF A JUDGE AND GET THROWN OUT OF COURT.

It’s time to step up or step down!

By "Toxic Waste Guru" (LOL)

M.Soliman

expert.witness@live.com

REQUIREMENTS OF THE APPLICABLE CUSTODIAN .

(ii) If Custodian determines that the documents in the MortgageFilefor a Delivered Mortgage Loan conform in all respects with Section3(b)(i),and unless otherwise notified by Buyer in accordance with Section3(b)(i),Custodian shall include such Mortgage Loan in the CustodialMortgage LoanSchedule issued to Buyer.

If the documents required in any Mortgagedonot conform (except as otherwise notified in Section 3(b)(i)),Custodianshall not include such Mortgage Loan in any Custodial Mortgage LoanSchedule. Custodian shall notify Sellers and Buyer of any documentsthatare missing, incomplete on their face or patently inconsistent andof anyMortgage Loans that do not satisfy the criteria listed above.Sellers shallpromptly deposit such missing documents with Custodian or completeorcorrect the documents as required by Section 3(a) or remove therelatedMortgage File from the Request for Certification.

On or prior tothePurchase Date and as a condition to purchase, except with respectto aWet-Ink Mortgage Loan, Custodian shall deliver to the Buyer anelectronicCustodial Mortgage Loan Schedule to the effect that the Custodianhasreceived the Mortgage File for each Purchased Mortgage Loan on theMortgageLoan Schedule and as to each Mortgage File, specifying any documendelivered and any original document that has not been received, andverifying the items listed in this Section 3(b).(c) As required by Section 3(a), Custodian shall deliver to Buyer,nolater than 3:00 p.m. Eastern Time on the related Purchase Date(provided, thatthe

Custodian has timely received the items required in Section2(b) herein),electronically or via facsimile, followed, if requested in writingby Buyer, byovernight courier, a Custodial Mortgage Loan Schedule havingappended thereto aschedule of all Mortgage Loans with respect to which Custodian hascompleted theprocedures set forth in Sections 3(a) and 3(b)(i) hereof andcertify that it isholding each related Mortgage File for the benefit of Buyer inaccordance withthe terms hereof.

Pleading (Not for Use) Lenders egregious, ongoing and far reaching fraudulent schemes

COMPLAINT ---------------------------------------------------- INTRODUCTION COME NOW THE PLAINTIFF, IN THIS MATTER AND CASE that arises out of Defendants' egregious and ongoing and far reaching fraudulent schemes for improper use of of Plaintiff's identity, negligent and/or intentional misrepresentation of appraised fair market value upon which Plaintiff was contractually bound to rely and factually entitled to rely, fraud in the inducement, fraud in the execution, usury, and breaches of contractual and ﬁduciary obligations as Mortgagee or "Trustee" on the Deed of Trust. Claims further cite the "Mortgage Brokers," "Loan Originators," "Loan Seller","Mortgage Aggregator," "Trustee of Pooled Assets", "Trustee or ofﬁcers of Structured Investment Vehicle", "Investment Banker", "Trustee of Special Purpose Vehicle/Issuer of Certiﬁcates of 'Asset-backed Certiﬁcates'", "Seller of 'Asset-Backed' Certiﬁcates (shares or bonds)," "Special Servicer" and Trustee, respectively, of certain mortgage loans pooled together in a trust fund. 2. The participants in the securitization scheme described herein have devised business plans to reap millions of dollars in proﬁts at the expense of Plaintiff and other investors in certain trust funds 3. In addition to seeking compensatory, consequential and other damages, Plaintiff seeks declaratory relief as to what (if any) party, entity or individual or group thereof is the owner of the promissory note executed at the time of the loan closing, and whether the Deed of Trust (Mortgage) secures any obligation of the Plaintiff, and A Mandatory Injunction requiring reconveyance of the subject property to the Plaintiff or, in the alternative a Final Judgment granting Plaintiff Quiet Title in the subject property. FACTS SUMMARY OF THE FACTS OF THIS CASE 4. Plaintiff is the nominal payor on the subject promissory Note. The Loan Seller is a ﬁnancial institution that was paid a fee to pose as a residential mortgage lender, when in fact the source of loan funds and the actual lender (Investors in Certiﬁcates) and underwriter (Mortgage Aggregator and Investment Banker) were other parties whose identities and receipt of fees and proﬁts were withheld from Plaintiff at Closing and despite numerous requests continue to be withheld from Plaintiff by the Defendants contrary to the requirements of Federal Law and applicable State Law. 5. Unknown to Plaintiff, the Loan Seller, acting as principal in its relationships with the "independent appraiser" of the property and the mortgage broker and mortgage originator, induced the Plaintiff into a transaction that did not and could not meet normal underwritingstandards for a residential mortgage. The Loan Seller posed as a conventional mortgage lender thus leading Plaintiff to reasonably believe that the Loan Seller, the mortgage broker, and the loan originator had an interest in the success( repayment of the loan) of the transaction that Plaintiff was induced to believe was being executed at the time of the "closing" of the subject loan transaction. 6. In fact, the Loan Seller, mortgage broker, appraiser, loan originator, title agent, escrow agent and Trustee on the Deed of Trust, had no ﬁnancial stake (i.e., liability) in the transaction andno interest other than obtaining Plaintiff's signature on a "loan" that could never be repaid, contrary to representations and assurances from the conspiring participants in this fraudulent scheme. In fact, the "Appraisal" was intentionally and knowingly inﬂated along with other loan data to justify the closing of the "loan transaction." 7. Plaintiff relied upon the due diligence of the apparent "Lender" (i.e., actually the Loan Seller) in executing the and accepting the closing documents. In fact, no "lender" was involved in the closing in the sense of an entity performing due diligence and evaluation pursuant to national standards for underwriting and evaluating risk of loaning money in a residential loan closing. 8. Thus no bank or other ﬁnancial institution actually performing under the standards, rules and regulations governing such institutions was the "lender" which is the basis for Plaintiff's cause of action for usury, to wit: that the inﬂated appraisal added an undisclosed cost to the loan which when added to the other terms, disclosed and undisclosed, and amortized over the real expected life of the "loan" exceeds the limits set by the State legislature for usury and is not subject to exemption because the presence of a ﬁnancial institution in the transaction was a ruse in which the form of the transaction covered over and mislead the Plaintiff as to the real parties in interest and the fees generated by the production of the subject "loan transaction." Their purpose was solely to collect fees, rebates, kickbacks and proﬁts that were never disclosed to Plaintiff and have only recently been discovered by Plaintiff through consultation with experts in securitization of residential mortgage loans, and diligent research including the ﬁlings of some parties with the Securities and exchange Commission which disclose the normal manner of operating this fraudulent scheme. 10. Plaintiff has repeatedly requested and demanded compliance with Qualiﬁed Written Requests under Real Estate Settlement Procedures Act, the Truth in Lending Act, and other applicable state and Federal Statutes which the Defendants have either ignored or refused to acknowledge or refused to resolve, copies of which demands are attached hereto as Exhibits and incorporated herein. 11. Plaintiff's Counsel and other professionals hired by Plaintiff have conducted interviews with witnesses and have personally observed the practices and facts alleged herein. Besides theobvious theft of identity which lies at the core of the pattern of conduct deﬁning the Defendants' illegal and fraudulent scheme, it is observably obvious that the property was appraised improperly, never veriﬁed despite "stringent" underwriting standards imposed by Government Sponsored Entities (interim investors) with which the Defendants purported to comply (and did not) to wit: the appraisal report attached hereto and incorporated herein clearly shows the fair market value of the site (without improvements) quadrupling in less than 24 months and then returning to original value within 6 months after the closing of the "loan" transaction. 12. Further, no less than three legal persons apparently claim to have performed the appraisal only two of which are shown to have received compensation and one of which is already admitted as merely being a pass-through vehicle of Quicken Loans by which Quicken Loans could claim, but not earn, additional undisclosed fees. Upon information and believe Defendant (name) may have performed the only review for appraisal services although the appraisal report was apparently produced by Defendant Cornerstone for a fee of $450 onto which the stamped signature of Defendant Quintero appears. Quintero does not claim to be an employee of Cornerstone and is believed by Plaintiff to be an "independent contractor". The settlement statement also reports an appraisal fee to Defendant TSI, which is a vehicle through which Quicken Loans improperly charges borrowers undisclosed fees and does not perform any work whatsoever. 13.The Loan Seller was named as the Payee on the subject promissory note and the beneﬁciary under the mortgage terms allegedly securing the performance under the subject note. The "Trustee" was named as the Trustee on the Deed of Trust executed at the time of the alleged"closing" of the "loan transaction." In accordance with State law, the Deed and terms of security were recorded in the county records. 4.Notwithstanding the above, and without the knowledge of the Plaintiff, the Loan Seller had entered into Assignment and Assumption Agreements with one or more parties and Pooling and Service Agreements with one or more parties including but not limited to the mortgage aggregator prior to or contemporaneously with the "Closing" of the subject "loan transaction." 14.1. Under the terms of these agreements, the Loan Seller received a sum of money, usually on receiving an application for a loan equal to the gross amount of the loan sought by Plaintiff plus a fee of 2.5% or more which was allocated to the subject loan transaction. 15.Contrary to the documents presented before and during the "closing" of the "loan transaction" the Loan Seller was neither the source of funding nor the "Lender." 15.1. Thus at the time of recording, the source of funding and the "Lender" was a different entity than the nominal mortgagee or beneﬁciary under the deed of trust and was neither named nor disclosed in any fashion. 15.2. The security for the "loan" thus secured an obligation that had been paid in full by a third party. Said third party(ies) was acting as a ﬁnancial institution or "Lender" without even having been chartered or registered to do so despite regulations to the contrary from laws and rules of State or Federal authorities and/or agencies. 16.Some form of documentation represented by the Loan Seller to the Mortgage Aggregator was presented before or contemporaneously with the "closing" of the loan" transaction. In some cases the documentation included actual copies of the documents presented at "Closing." 16.1. In most cases it consisted of either forged blank notes or vague descriptions of the content of the notes that were placed into the pool of assets that would be "securitized." 16.2. Plaintiff has discovered numerous cases in which the "loan closing" either did not take place at all or included documentation substantially different than the original offer and acceptance and substantially different than what could have been reported to the Mortgage Aggregator prior to the "closing." Plaintiff has discovered numerous cases in which foreclosure has proceeded despite the fact that no loan closing was ever consummated, no papers were ever signed, or the loans were properly rescinded properly under law. 17.Plaintiff does not know what version of documentation was presented to the MortgageAggregator and if the Mortgage Aggregator took one or more varying descriptions of the alleged "loan documents" into more than one pool of assets which was eventually sold for the purpose of securitizing the assets of the pool which included the subject loan transactioneither once or more than once. Plaintiff has requested such information numerous times onlyto be met with complete silence and deﬁance or obfuscation from the Defendants. 18.There is no assignment of the subject mortgage in the county records, but there is a non-recorded Pooling and Services" Agreement and a non-recorded Assignment and Assumption Agreement which appears to substitute the Trustee over the pooled assets for the nominal Trustee in the Deed of Trust. 18.1. The powers of this second Trustee were in turn transferred to either a Trustee for a Special Investment Vehicle (which performed the accounting and reporting of the pool assets) or to an investment bank Collateral Debt Obligation manager whose department performed the accounting and reporting of the pool assets. 18.2. The reporting of the pool assets consisted principally of descriptions of the notes "signed" by borrowers and limited descriptions of the general terms of the note suchthat the note appeared to be more valuable than the initial terms of payment by the "borrower." 19.The note from the subject "loan transaction" was eventually allocated into a new corporation (Special Purpose Vehicle) formed for the express purpose of holding the pooled assets under certain terms. 19.1. The terms included the allocation of payments from one note to pay any deﬁciency in payment of another note in unrelated "loan transactions" contrary to the terms of each such note which required payments to be allocated to the principal, interest, escrowand fees associated with only that speciﬁc "loan transaction." 19.2. Whether such "deﬁciency" was caused by the difference between the higher general terms of description of the note or the lower actual payment requirements from the"borrower" is not known, despite numerous requests for accounting and the refusal of Defendants to provide any such information. 0.The Investment Banking ﬁrm arranged through payment for a false inﬂated appraisal of thecertiﬁcates and/or issuer of the certiﬁcates that would be sold to investors in much the sameway as it had procured the false appraisal of the property that "secured" the "loan transaction." In addition, insurance was purchased from proceeds of this transaction, creditdefault swaps were purchased from proceeds of this transaction, the investors investmentswere "oversold" to create a reserve pool from which the SPV could pay deﬁciencies in payments, and the SPV created cross-collateralization agreements and overcollateralization of the pool assets to assure payments to the investors, thus creating co-obligors on the payment stream due from the Plaintiff on the subject "loan transaction." 1.The pool assets, including the Plaintiff's subject "loan transaction " were pledged completelyto the owners of the "asset-backed securities." All the certiﬁcates were then transferred to aSeller who in turn sold the certiﬁcates in varying denominations, each of which had slightlydifferent terms depending upon which segment of the pool (tranche) secured the investment. 2. If there is a holder in due course of the Plaintiff's note arising from the subject "loantransaction" it is the investors who purchased said securities (certiﬁcates). Some of saidsecurities are held by the original purchaser thereof, others were sold at weekly auctionmarkets, others were paid by re-sales of property that was "secured", others were paid fromprepayments, others were paid by sale at full or partial price to the investment bank thatoriginated the entire transaction, some of which might be held by the Federal Reserve as non-recourse collateral, and others might have been paid by one or more of the insurance, creditdefault swaps, cross guarantees or cross collateralization of the segment of the pool thatsecured the relevant investor who owned certiﬁcates backed by a pool of assets that includedthe subject "loan transaction." 3. It is doubtful that any of the Defendants have any knowledge or have made any effort todetermine whether the putative holders in due course have been paid in whole or in part. Itcan only be said with certainty that these Defendants seek to enforce loan documents for which they have already been paid in full plus illegal fees for participating in an illegal scheme. These Defendants seek to add insult to injury by demanding ownership of the property in addition to the receipt of payment in full long before any delinquency or default even allegedly occurred. 4. In order for these Defendants to maintain legal standing in connection with the subject loan transaction they are required to show the entire chain of title of the note and the entire chainof title of the mortgage. They have refused to do this despite numerous requests, leading PLaintiff to concluded that the Defendants cannot produce such evidence of a complete chain of title or are intentionally withholding the information that would show breaks in such chain. 5.Plaintiff is left in the position of being in an adversary roceeding with ghosts. While these Defendants have informally offered or considered providing indemniﬁcation for any third party claims, the fact remains that any relief awarded these defendants, any standing allowed to these defendants would expose the Plaintiff to multiple claims and suits from an unknown number of parties and entities that all claim, possibly correctly, to the holders in due course.Any grant of ac certiﬁcate of title to an entity other than Plaintiff or the nominal mortgagee creates an incurable defect in title. 26.There is no recording of any document in the county records which predates the Defendants' attempt to initiate foreclosure and/or eviction or which would authorize them to proceed. Signiﬁcance of REMIC 27.Mortgage backed Securities (MBS) Certiﬁcates are "pass through Certiﬁcates," where the Trust has elected to be treated as a Real Estate Mortgage Investment Conduit ("REMIC") to enjoy the tax exempt status allowed under 15 U.S.C. §§806A-G. 27.1. REMIC regulations impose very strict limitations as to the nature of the investments aREMIC trust may make (i.e. "permitted investments") and transactions which it maynot undertake (i.e. "prohibited transactions"). 27.2. Any violation of REMIC regulations has signiﬁcant tax implications for the Trust, as well as all Certiﬁcate holders. For example, any income realized by the Trust from a "prohibited transaction" is taxed at 100%. 27.2.1. The REMIC regulations also provide that any entity that causes the REMIC regulations to be violated is liable to the Trust and the Certiﬁcate holders for the entire amount of the tax. 27.3. Only income from "qualiﬁed mortgages" and permitted investments" may enter a REMIC trust. 27.4. A "qualiﬁed mortgage" is an obligation (i.e. mortgage) which is principally secured by an interest in real property which (1) was transferred to the Trust on the startup date,(2) was purchased by the REMIC Trust within 3 months after the startup date or (3)any qualiﬁed replacement mortgage. 27.5. Permitted investments are limited to: 27.5.1. Cash Flow Investments (i.e. temporary investment where the Trust holds money it has received from qualiﬁed mortgages pending distribution to the Certiﬁcateholders); 27.5.2. Qualiﬁed Reserve Assets (i.e. any intangible property which is held forinvestment and is part of a reasonably required reserve to provide for fullpayment of expenses of the REMIC or amounts due on regular interests in theevent of defaults on qualiﬁed mortgages or lower than expected returns on cashﬂow investments. 27.5.2.1. These investments are for very deﬁned purposes and are to be passive innature. They must be "reasonably required." 27.5.3. Liquidation Proceeds from "foreclosed property" which is acquired in connection with the default or imminent default of a "qualiﬁed mortgage" held by the Trust. 28. In order to maintain the REMIC status, the Trustee and the Servicers must ensure that the REMIC receives no income from any asset that is not a "Quailed Mortgage" or a "Permitted Investment." 26 U.S.C. § 806F(a)(2)(B). 28.1. Prohibited Transactions include the disposition of a qualiﬁed mortgage (except where the disposition is "incident to" the foreclosure, default, or imminent default of the mortgage); or the receipt of any income from an asset that is not a Qualiﬁed Mortgageor a Permitted Investment. 26 U.S.C. § 860F(a)(2)(B). 28.2. Prohibited Transactions are taxed in an amount 100% of the REMIC's net income from such prohibited transaction. 26 U.S.C. § 860F(a)(1). 28.3. Contributions of any "property" – e.g., cash, mortgages, etc. – made to the REMIC areaxed at 100% of the contribution, except for the four following exceptions: 28.3.1. Contributions to facilitate a "clean up call" (i.e. the redemption of a class of 28.3.2. regular interest, when by reason of prior payments with respect to those interests 28.3.3. the administrative costs associated with servicing that class outweigh the beneﬁts 28.3.4. of maintaining the class). Reg. § 1.860G-2(j)(1). 28.3.5. Any cash payment in the nature of a guarantee, such as payments to the REMIC Any violation of REMIC regulations will defeat the privileged tax status and will subject the REMIC to 100% taxation, plus penalties and interest. These taxes and penalties are ultimately borne by the Certiﬁcate holders. under a surety bond, letter of credit or insurance policy. 28.3.6. Any cash contribution during the three month period after the start-up day; and Any cash contribution to a qualiﬁed reserve fund made by a holder of a residual interest. On a monthly basis, the Investment Banking ﬁrm and/or its agents, servants or employees compiled, individually and in concert, oversaw and approved all the information contained in the Distribution Reports and electronically sent same to certain parties. 29.1. Based upon research performed by experts on behalf of the Plaintiff. the data regarding the number of bankruptcies, aggregate Special Servicing Fees, and aggregate Trust Fund Expenses was routinely incomplete, false, and/or misleading. 29.2. Further said report intentionally obfuscated the illegal allocation of payments, the failure to disclose payments, and the effect on the alleged obligation of the Plaintiff, to wit: despite numerous insurance products, credit default swaps, cross collateralization, over collateralization and polling at multiple levels, money received by some or all of these Defendants under the pretense of it being a "Mortgage Payment" was in fact retained, reserved, applied to non-performing loans to make them appear as though they were performing loans, or paid as fees to the enterprise Defendants described in this complaint. 29.3. Based upon the failure of the Defendants to respond, Plaintiff has every reason to believe that the party receiving the payments (Amtrust Bank) is neither the holder in due course of the note nor the owner of any rights under the mortgage provisions of the deed of trust. 29.3.1. Further, Plaintiff has every reason to believe that her payments are not being forwarded to the holder in due course of the note nor to any other authorized party. 29.3.2. Accordingly Plaintiff is in jeopardy, to wit: the true holder in due course and potentially dozens or even thousands of third parties could come forward claiming an unsatisﬁed interest in the promissory note and may or may not be subject to Plaintiffs various afﬁrmative defenses and counterclaims. "transaction." for example, if the toxic waste paper wold under cover of Plaintiffʼs credit rating and identity was sold at an investment return of 6% and the mortgage note carried a principal balance of $300,000, the enterprise Defendants sold the "investment" certiﬁcates on that "loan" for approximately $740,000 and thus received $440,000 in illegal, fraudulent and undisclosed "proﬁts" or "fees" in a $300,000 mortgage transaction.29.3.8.4. Thus the economics of mortgage origination changed, to wit: the worse the loan, the more money the enterprise defendants made as long as there were enough people, like Plaintiff, whose identify was used to hide the high volume ( and high proﬁt) of toxic waste loans. 29.3.8.5. It was thus in the ﬁnancial interest of the enterprise Defendants to create unrealistic and false market expectations, deceiving the public as a whole in speciﬁed geographical areas of the country that were identiﬁed by these enterprise Defendants as targets. 29.3.8.6. Since these illegal proﬁts were not disclosed, the Plaintiff is entitled to an accounting and a pro rate share of the proﬁts obtained by the illegal, improper and undisclosed use of her name, credit rating and identity. 29.3.8.7. Based upon the opinion of Plaintiffʼs experts, Plaintiffʼs share of said proﬁts would be in excess of $1 million. 30. The Distribution Reports are supposed to accurately reﬂect the "ﬁnancial health of the trust," and provide Certiﬁcate holders,with important data such as the number of loans in bankruptcy, the aggregate amount of special servicing fees, and the aggregate amounts of trust fund expenses. Each and every one of these categories is essential for to assess its proﬁt and loss potential in the REMIC entity. Furthermore, this data is used by bond rating agencies to assess the value of the Certiﬁcates. 31. Based upon the ﬁlings and information of the Plaintiff it appears that no accurate accounting has ever been presented to anyone and that therefore the identity and status of any putative holder in due course is completely shrouded in secrecy enforced by these Defendants, their agents, servants and employees. 31.1. Unreported repurchases of certiﬁcates or classes of certiﬁcates would and did result in a proﬁt to the REMIC that went unreported, and which was not credited to Borrowers where the repurchase was, as was usually the case, the far less than the original investment. 31.2. While the Plaintiff would never have entered into a transaction in which the true nature of this scheme was revealed, any proﬁts, refunds, rebates, fees, points, costs or other income or gain should be credited on some basis to said borrowers including Plaintiff herein. GENERAL ALLEGATIONS 32. The end result of the false and misleading representations and material omissions of Defendants as to the true nature of the mortgage loan actually being processed, which said Defendants had actual knowledge was in direct conﬂict with the original Uniform Residential Loan Application, early TIL, and Plaintiff' stated intentions and directions to said Defendants at the time of original application for the loan, fraudulently caused Plaintiff to execute predatory loan documents. 33. At no time whatsoever did Defendants ever advise Plaintiff (nor, as far as Plaintiff can determine, any "investor" in certiﬁcates of mortgage-backed securities) that: 33.1. the mortgage loan being processed was not in their best interest; 33.2. the terms of the mortgage loan being processed were less favorable than the ﬁxed-rate loan which Defendants previously advised Plaintiff that they qualiﬁed for; 33.3. that the mortgage loan was an inter-temporal transaction (transaction where terms, risks, or provisions at the commencement of the transaction differ at a later time) on which Plaintiff was providing cover for Defendants' illegal activities. 33.4. that Plaintiff would likely be placed in a position of default, foreclosure, and deﬁciency judgment regardless of whether she met her loan obligations once the true lender or true holder(s) in due course appeared; 33.5. that the originating "lender", that being Defendant Capital Mortgagebanc and/or Amtrust Bank and/or undisclosed third parties, had no intention of retaining ownership interest in the mortgage loan or fully servicing same and in fact may have and probable had already pre-sold the loan, prior to closing, to a third party mortgage aggregator pursuant to previously executed documentation (Assumption and assignment Agreement, Pooling Services Agreement, etc. all executed prior to Plaintiff's "loan Closing." 33.6. that the mortgage loan was actually intended to be repeatedly sold and assigned to multiple third parties, including one or more mortgage aggregators and investment bankers (including but not limited to Defendants DOES 1-10), for the ultimate purpose of bundling the Plaintiff' mortgage with hundreds or perhaps thousands of others as part of a companion, support, or other tranche in connection with the creation of a REMIC security known as a Collateralized Mortgage Obligation ("CMO"), also known as a "mortgage-backed security" to be sold by a securities ﬁrm (and which in fact ended up as collateral for Asset-Backed Securities Certiﬁcates, created the same year as the closing); 33.7. that the mortgage instrument and Promissory Note may be sold, transferred, or assigned separately to separate third parties so that the later "holder" of the Promissory Note may not be in privity with or have the legal right to foreclose in the event of default; 33.8. that in connection with the multiple downline resale and assignment of the mortgage and Promissory Note that assignees or purchasers of the Note may make "pay-downs" against the Note which may effect the true amount owed by the Plaintiff on the Note; 33.9. that a successive assignee or purchaser of the Note and Mortgage may not, upon assignment or purchase, unilaterally impose property insurance requirements different from those imposed as a condition of the original loan (also known as prohibition against increased forced-placed coverage) without the Plaintiff' prior notice and consent; 34.As a result of the closing and in connection therewith, Defendants placed the Plaintiff into a pool of a sub-prime adjustable rate mortgage programs, with Defendants intentionally misleading Plaintiff and the other borrowers and engaging in material omissions by failing to disclose to Plaintiff and other borrowers the fact that the nature of the mortgage loan applications had been materially changed without Plaintiff's knowledge or consent, and that Plaintiff was being placed into a pool where the usual loan was an adjustable rate mortgage program despite borrowers not being fully qualiﬁed for such a program. 35.Prior to the closing, Defendant Capital Mortgagebanc and/or Amtrust Bank and/or undisclosed third parties failed to provide to Plaintiff the preliminary disclosures required by the Truth-In- Lending Act pursuant to 12 CFR (also known as and referred to herein as "Regulation Z) sec. 226.17 and 18, and failed to provide the preliminary disclosures required by the Real Estate Settlement Procedures Act ("RESPA") pursuant to 24 FR sec. 3500.6 and 35007, otherwise known as the GFE. 36.Defendant Capital Mortgagebanc and/or Amtrust Bank and/or undisclosed third parties also intentionally failed and/or refused to provide Plaintiff with various disclosures which would indicate to the Plaintiff that the consumer credit contract entered into was void, illegal, and predatory in nature due in part to the fact that the ﬁnal TIL showed a "ﬁxed rate" schedule of payments, but did not provide the proper disclosures of the actual contractually-due amounts and rates. 37.Defendants failed and/or refused to provide a HUD-1 Settlement Statement at the closing which reﬂected the true cost of the consumer credit transaction. As Defendants failed to provide an accurate GFE or Itemization of Amount Financed ("IOAF"), there was no disclosure of a Yield Spread Premium ("YSP", which is required to be disclosed by the Truth-In-Lending Act) and thus no disclosure of the true cost of the loan. 38.As a direct and proximate result of these failures to disclose as required by the Truth-In– Lending Act, Defendant MOTION received a YSP in a substantial amount of without preliminary disclosure, which is a per se violation of 12 CFR sec. 226.4(a), 226.17 and 18(d) d (c)(1)(iii). The YSP raised the interest rate which was completely unknown to or approved by the Plaintiff, as they did not received the required GFE or IOAF. 39. In addition, the completely undisclosed YSP was not disclosed by Defendant in their broker contract, which contract was blank in the area as to fees to be paid to Defendant. This is an illegal kickback in violation of 12 USC sec. 2607 as well as State law which gives rise to all damages claims for all combined broker fees, costs, and attorneys' fees. 40.The Amount Financed within the TIL is also understated which is a material violation of 12 CFR sec. 226.17 and 18, in addition to 15 USC sec. 1602(u), as the Amount Financed must be completely accurate with no tolerance. 41.Defendants were under numerous legal obligations as ﬁduciaries and had the responsibility or overseeing the purported loan consummation to insure that the consummation was legal, proper, and that Plaintiff received all legally required disclosures pursuant to the Truth-In- Lending Act and RESPA both before and after the closing. 42.Plaintiff, not being in the consumer lending, mortgage broker, or residential loan business, reasonably relied upon the Defendants to insure that the consumer credit transaction was legal, proper, and complied with all applicable laws, rules, and Regulations. 43.At all times relevant hereto, Defendants regularly extended or offered to extend consumer credit for which a ﬁnance charge is or may be imposed or which, by written agreement, is payable in more than four (4) installments and was initially payable to the person the subject of the transaction, rendering Defendants "creditors" within the meaning of the Truth-In-Lending Act, 15 U.S.C. sec. 1602(f) and Regulation Z sec. 226.2 (a)(17). 44.At the closing of the subject "loan transaction", Plaintiff executed Promissory Notes and Security Agreements in favor of Defendants as aforesaid. These transactions, designated by Defendants as a Loan, extended consumer credit which was subject to a ﬁnance charge and which was initially payable to the Defendants. 45.As part of the consumer credit transaction the subject of the closing, Defendants retained a security interest in the subject property which was Plaintiff' principal residential dwelling. 46.Defendants engaged in a pattern and practice of defrauding Plaintiff in that, during the entire life of the mortgage loan, Defendants failed to properly credit payments made; incorrectly calculated interest on the accounts; and have failed to accurately debit fees. At all times material, 47.Defendants had actual knowledge that the Plaintiff' accounts were not accurate but that Plaintiff would make further payments based on Defendants' inaccurate accounts. 48.Plaintiff made payments based on the improper, inaccurate, and fraudulent representations as to Plaintiff' accounts. 49.As a direct and proximate result of the actions of the Defendants set forth above, Plaintiff overpaid in interest. 50.Defendants also utilized amounts known to the Defendants to be inaccurate to determine the amount allegedly due and owing for purposes of foreclosure. 51.Defendants' violations were all material in nature under the Truth-In-Lending Act. 52.Said violations, in addition to the fact that Plaintiff did not properly receive Notices of Right to Cancel, constitute violations of 15 USC sec. 1635(a) and (b) and 12 CFR sec. 226.23(b), and are thus a legal basis for and legally extend Plaintiff' right to exercise the remedy of rescission. 53.Defendants assigned or attempted to assign the Note and mortgage to parties who did not take these instruments in good faith or without notice that the instruments were invalid or that Plaintiff had a claim in recoupment. Pursuant to ORC sec. 1303.32(A)(2)(b)(c) and (f), Defendants are not a holder indue course and is thus liable to Plaintiff, individually, jointly and severally. 54. On information and belief and given that the consumer credit transaction was an inter- temporal transaction with multiple assignments as part of an aggregation and the creation of a REMIC tranche itself a part of a predetermined and identiﬁable CMO, all Defendants shared in the illegal proceeds of the transaction; conspired with each other to defraud the Plaintiff out of the proceeds of the loan; acted in concert to wrongfully deprive the Plaintiff of their residence; acted in concert and conspiracy to essentially steal the Plaintiff' home and/or convert the Plaintiff' home without providing Plaintiff reasonably equivalent value in exchange; and conducted an illegal enterprise within the meaning of the RICO statute. 55. On information and belief and given the volume of residential loan transactions solicited and processed by the Defendants, the Defendants have engaged in two or more instances of racketeering activity involving different victims but utilizing the same method, means, mode, operation, and enterprise with the same intended result. Claims for Relief COUNT I: VIOLATIONS OF HOME OWNERSHIP EQUITY PROTECTION ACT 56. Plaintiff reafﬁrm and reallege the above paragraphs 1-52 hereinabove as if set forth more fully hereinbelow. 57. In 1994, Congress enacted the Home Ownership Equity Protection Act ("HOEPA") which is codiﬁed at 15 USC sec. 1639 et seq. with the intention of protecting homeowners from predatory lending practices targeted at vulnerable consumers. HOEPA requires lenders to make certain deﬁned disclosures and prohibits certain terms from being included in home loans. In the event of noncompliance, HOEPA imposes civil liability for rescission and statutory and actual damages. 58. Plaintiff are "consumers" and each Defendant is a "creditor" as deﬁned by HOEPA. In the mortgage loan transaction at issue here, Plaintiff were required to pay excessive fees, expenses, and costs which exceeded more than 10% of the amount ﬁnanced. 59. Pursuant to HOEPA and speciﬁcally 15 USC sec. 1639(a)(1), each Defendant is required to make certain disclosures to the Plaintiff which are to be made conspicuously and in writing no later than three (3) days prior to the closing. 60. In the transaction at issue, Defendants were required to make the following disclosure to Plaintiff by no later than three (3) days prior to said closing: 60.1. "You are not required to complete this agreement merely because you have received these disclosures or have signed a loan application. If you obtain this loan, the lender will have a mortgage on your home. You could lose your home and any money you have put into it, if you do not meet your obligation under the loan." 61.Defendants violated HOEPA by numerous acts and material omissions, including but not limited to: 61.1. (a) failing to make the foregoing disclosure in a conspicuous fashion; 61.2. (b) engaging in a pattern and practice of extending credit to Plaintiff without regard to their ability to repay in violation of 15 USC sec. 1639(h). 62.By virtue of the Defendants' multiple violations of HOEPA, Plaintiff have a legal right to rescind the consumer credit transaction the subject of this action pursuant to 15 USC sec. 1635. This Complaint is to be construed, for these purposes, as formal and public notice of Plaintiff's Notice of Rescission of the mortgage and note. 63.Defendants further violated HOEPA by failing to make additional disclosures, including but not limited to Plaintiff not receiving the required disclosure of the right to rescind the transaction; 64. the failure of Defendants to provide an accurate TIL disclosure; and the amount ﬁnanced being understated. 65.As a direct consequence of and in connection with Plaintiff' legal and lawful exercise of their right of rescission, the true "lender" is required, within twenty (20) days of this Notice of Rescission, to: 65.1. (a) desist from making any claims for ﬁnance charges in the transaction; 65.2. (b) return all monies paid by Plaintiff in connection with the transaction to the Plaintiff; 65.3. (c) satisfy all security interests, including mortgages, which were acquired in the transaction. 66.Upon the true "lenders" full performance of its obligations under HOEPA, Plaintiff shall tender all sums to which the true lender is entitled. 67. Based on Defendants' HOEPA violations, each of the Defendants is liable to the Plaintiff for the following, which Plaintiff demand as relief: 67.1. (a) rescission of the mortgage loan transactions; 67.2. (b) termination of the mortgage and security interest in the property the subject of the mortgage loan documents created in the transaction; 67.3. (c) return of any money or property paid by the Plaintiff including all payments made in connection with the transactions; 67.4. (d) an amount of money equal to twice the ﬁnance charge in connection with the transactions; 67.5. (e) relinquishment of the right to retain any proceeds; and 67.6. (f) actual damages in an amount to be determined at trial, including 67.7. attorneys' fees. COUNT II: VIOLATIONS OF REAL ESTATE SETTLEMENT PROCEDURES ACT 68. Plaintiff reafﬁrm and reallege paragraphs 1-52 above herein as if speciﬁcally set forth more fully hereinbelow. 69. As mortgage lenders, Defendants are subject to the provisions of the Real Estate Settlement Procedures Act ("RESPA"), 12 USC sec. 2601 et seq. 70. In violation of 12 USC sec. 2607 and in connection with the mortgage loan to Plaintiff, Defendants accepted charges for the rendering of real estate services which were in fact charges for other than services actually performed. 71. As a result of the Defendants' violations of RESPA, Defendants are liable to Plaintiff in an amount equal to three (3) times the amount of charges paid by Plaintiff for "settlement services" pursuant to 12 USC sec. 2607 (d)(2). COUNT III: VIOLATIONS OF FEDERAL TRUTH-IN-LENDING ACT 72. Plaintiff reaffirm and realleges paragraphs 1-52 above hereinabove as if set forth more fully herein below. 73. Defendants failed to include and disclose certain charges in the ﬁnance charge shown on the TIL statement, which charges were imposed on Plaintiff incident to the extension of credit to the Plaintiff and were required to be disclosed pursuant to 15 USC sec. 1605 and Regulation Z 74. sec. 226.4, thus resulting in an improper disclosure of ﬁnance charges in violation of 15 USC sec. 1601 et seq., Regulation Z sec. 226.18(d). Such undisclosed charges include a sum dentiﬁed on the Settlement Statement listing the amount ﬁnanced which is different from the sum listed on the original Note. 75. By calculating the annual percentage rate ("APR") based upon improperly calculated and disclosed amounts, Defendants are in violation of 15 USC sec. 1601 et seq., Regulation Z sec. 226.18(c), 18(d), and 22. 76. Defendants' failure to provide the required disclosures provides Plaintiff with the right to rescind the transaction, and Plaintiff, through this public Complaint which is intended to be construed, for purposes of this claim, as a formal Notice of Rescission, hereby elect to rescind the transaction. COUNT IV: VIOLATION OF FAIR CREDIT REPORTING ACT 77. Plaintiff reafﬁrm and reallege paragraphs 1-52 above as if set forth more fully hereinbelow. 78. At all times material, Defendants qualiﬁed as a provider of information to the Credit Reporting Agencies, including but not limited to Experian, Equifax, and TransUnion, under the Federal Fair Credit Reporting Act. 65. Defendants wrongfully, improperly, and illegally reported negative information as to the Plaintiff to one or more Credit Reporting Agencies, resulting in Plaintiff having negative information on their credit reports and the lowering of their FICO scores. 78.1. The negative information included but was not limited to an excessive amount of debt into which Plaintiff was tricked and deceived into signing. 78.2. Notwithstanding the above, Plaintiff has paid each and every payment on time from the time of the loan closing through the present. 79.Pursuant to 15 USC sec. 1681(s)(2)(b), Plaintiff are entitled to maintain a private cause of action against Defendants for an award of damages in an amount to be proven at the time of trial for all violations of the Fair Credit Reporting Act which caused actual damages to Plaintiff, including emotional distress and humiliation. 80.Plaintiff are entitled to recover damages from Defendants for negligent non-compliance with the Fair Credit Reporting Act pursuant to 15 USC sec. 1681(o). 81.Plaintiff are also entitled to an award of punitive damages against Defendants for their willful noncompliance with the Fair Credit Reporting Act pursuant to 15 USC sec. 1681(n)(a)(2) in an amount to be proven at time of trial. COUNT VII: FRAUDULENT MISREPRESENTATION 82.Plaintiff reafﬁrm and reallege paragraphs 1-52 above as if set forth more fully hereinbelow. 83.Defendants knowingly and intentionally concealed material information from Plaintiff which is required by Federal Statutes and Regulations to be disclosed to the Plaintiff both before and at the closing. 84.Defendants also materially misrepresented material information to the Plaintiff with full knowledge by Defendants that their afﬁrmative representations were false, fraudulent, and misrepresented the truth at the time said representations were made. 85.Under the circumstances, the material omissions and material misrepresentations of the Defendants were malicious. 86.Plaintiff, not being an investment banker, securities dealer, mortgage lender, mortgage broker, or mortgage lender, reasonably relied upon the representations of the Defendants in agreeing to execute the mortgage loan documents. 87.Had Plaintiff known of the falsity of Defendants' representations, Plaintiff would not have entered into the transactions the subject of this action. 88.As a direct and proximate cause of the Defendants' material omissions and material misrepresentations, Plaintiff have suffered damages. COUNT VIII: BREACH OF FIDUCIARY DUTY 89. Plaintiff reafﬁrm and reallege paragraphs 1-52 above as if set forth more fully hereinbelow. 90. Defendants, by their actions in contracting to provide mortgage loan services and a loan program to Plaintiff which was not only to be best suited to the Plaintiff given their income and expenses but by which Plaintiff would also be able to satisfy their obligations without risk of losing their home, were "ﬁduciaries" in which Plaintiff reposed trust and conﬁdence, especially given that Plaintiff were not and are not investment bankers, securities dealers, mortgage lenders, mortgage brokers, or mortgage lenders. 91. Defendants breached their ﬁduciary duties to the Plaintiff by fraudulently inducing Plaintiff to enter into a mortgage transaction which was contrary to the Plaintiff's stated intentions; contrary to the Plaintiff's interests; and contrary to the Plaintiff's preservation of their home 92. As a direct and proximate result of the Defendants' breaches of their ﬁduciary duties, Plaintiff have suffered damages. 93. Under the totality of the circumstances, the Defendants' actions were willful, wanton, intentional, and with a callous and reckless disregard for the rights of the Plaintiff justifying an award of not only actual compensatory but also exemplary punitive damages to serve as a deterrent not only as to future conduct of the named Defendants herein, but also to other persons or entities with similar inclinations. COUNT IX: UNJUST ENRICHMENT 94. Plaintiff reallege and reafﬁrm paragraphs 1-52 above as if set forth more fully hereinbelow. 95. Defendants had an implied contract with the Plaintiff to ensure that Plaintiff understood all fees which would be paid to the Defendants to obtain credit on Plaintiff' behalf and to not charge any fees which were not related to the settlement of the loan and without fulldisclosure to Plaintiff. 96.Defendants cannot, in good conscience and equity, retain the beneﬁts from their actions ofcharging a higher interest rate, fees. rebates, kickbacks, proﬁts (including but not limited tofrom resale of mortgages and notes using Plaintiff's identity, credit score and reputationwithout consent, right, justiﬁcation or excuse as part of an illegal enterprise scheme) andgains and YSP fee unrelated to the settlement services provided at closing. 97. Defendants have been unjustly enriched at the expense of the Plaintiff, and maintenance of the enrichment would be contrary to the rules and principles of equity. 97.1. Defendants have also been additionally enriched through the receipt of PAYMENT from third parties including but not limited to investors, insurers, and other borrowers, the United States Department of the Treasury, the United States Federal Reserve, and Bank of America, N.A. 98. Plaintiff thus demands restitution from the Defendants in the form of actual damages, exemplary damages, and attorneys' fees. COUNT X: CIVIL CONSPIRACY 99.Plaintiff reafﬁrm and reallege paragraphs 1-52 above as if set forth more fully hereinbelow. 100.In connection with the application for and consummation of the mortgage loan the subject of this action, Defendants agreed, between and among themselves, to engage in actions and a course of conduct designed to further an illegal act or accomplish a legal act by unlawful means, and to commit one or more overt acts in furtherance of the conspiracy to defraud the Plaintiff. 101.Defendants agreed between and among themselves to engage in the conspiracy to defraudfor the common purpose of accruing economic gains for themselves at the expense of anddetriment to the Plaintiff. 102. The actions of the Defendants were committed intentionally, willfully, wantonly, and withreckless disregard for the rights of the Plaintiff. 103. As a direct and proximate result of the actions of the Defendants in combination resulting infraud and breaches of ﬁduciary duties, Plaintiff have suffered damages. 104. Plaintiff thus demand an award of actual, compensatory, and punitive damages. COUNT XI: CIVIL RICO 105.Plaintiff reafﬁrm and reallege paragraphs 1-52 above as set forth more fully hereinbelow. 106.Defendants are "persons" as deﬁned by ORC sec. 2923.31(G). 107.The conspiracy the subject of this action has existed from date of application to the present, with the injuries and damages resulting therefrom being continuing. 108.Defendants' actions and use of multiple corporate entities, multiple parties, and concerted and predetermined acts and conduct speciﬁcally designed to defraud Plaintiff constitutes an"enterprise", with the aim and objective of the enterprise being to perpetrate a fraud upon thePlaintiff through the use of intentional nondisclosure, material misrepresentation, andcreation of fraudulent loan documents. 109.Each of the Defendants is an "enterprise Defendant". 110.As a direct and proximate result of the actions of the Defendants, Plaintiff have and continue to suffer damages. COMPLAINT TO QUIET TITLE TO REAL PROPERTY 111. Plaintiff reafﬁrm and reallege paragraphs 1-52 above as set forth more fully hereinbelow. 112. Plaintiff has sent or has caused to be sent authorized Qualiﬁed Written Requests to the only known Defendants which the said Defendants have failed and refused to answer despite acknowledging receipt thereof and despite demands from counsel, a copy of which is attached hereto and made a part hereof as speciﬁcally as if set forth at length hereat. 113. Plaintiff has sent or has caused to be sent notice of her intent to rescind the subject loan transaction but has only sent those notices to the only entities that have been disclosed. Hence, without this action, neither the rescission nor the reconveyance which the Plaintiff is entitled to ﬁle (as attorney in fact for the originating lender) and will ﬁle contemporaneously with this complaint, gives Plaintiff full and clear title to the property. 114.The real party in interest on the lender side may be the owner of the asset backed security issued by the SPV, the insurer through some claim of equitable interest, or the Federal government through the United States Department of the Treasury or the Federal Reserve. The security is a "securitized" bond deriving its value from the underlying mortgages of which the subject mortgage is one. Thus Plaintiff is entitled to quiet title against Defendants, clearing title of the purported subject mortgage encumbrance. 115. Plaintiff is ignorant of the true names and capacities of defendants sued herein as DOES inclusive, and therefore sues these defendants by such ﬁctitious names. Plaintiff will amend this complaint to allege their true names and capacities when ascertained. 116. Plaintiff is informed and believes and thereon alleges that, at all times herein mentioned,each of the defendants sued herein was the agent and employee of each of the remainingdefendants and was at all times acting within the purpose and scope of such agency and employment. 117. Plaintiff is informed and believes and thereupon alleges that and each of the Defendantsclaim or might claim an interest in the property adverse to plaintiff herein. However, the claim of said Defendants is without any right whatsoever, and said Defendant have no legal or equitable right, claim, or interest in said property. 118. Plaintiff therefore seeks a declaration that the title to the subject property is vested in plaintiff alone and that the defendants herein, and each of them, be declared to have no estate,right, title or interest in the subject property and that said defendants and each of them, beforever enjoined from asserting any estate, right, title or interest in the subject property adverse to plaintiff herein. 119. WHEREFORE, in this Count, plaintiff prays this Court will enter judgment against defendants and each of them, as follows: 119.1. For an order compelling said Defendant, and each of them, to transfer or release legal title and alleged encumbrances thereon and possession of the subject property to Plaintiff herein; 119.2. For a declaration and determination that Plaintiff is the rightful holder of title to the property and that Defendant herein, and each of them, be declared to have no estate, right, title or interest in said property; 119.3. For a judgment forever enjoining said defendants, and each of them, from claiming any estate, right, title or interest in the subject property; 119.4. For costs of suit herein incurred; 119.5. For such other and further relief as the court may deem proper USURY and FRAUD 119.6. Plaintiff reafﬁrm and reallege the above paragraphs 1-52 hereinabove as if set forthmore fully hereinbelow. The subject loan, note, and mortgage was structured so as tocreate the appearance of a higher value of the real property than the actual fair market value. 119.7. Plaintiff is informed and believes and thereon alleges that, at all times herein mentioned, each of the defendants sued herein was the agent and employee of each of the remaining defendants and was at all times acting within the purpose and scope of such agency and employment.119.8. Defendants disguised the transaction to create the appearance of the lender being a properly chartered and registered financial institution authorized to do business and to enter into the subject transaction when in fact the real party in interest was not disclosed to Plaintiff, as aforesaid, and neither were the various fees, rebates, refunds, kickbacks, profits and gains of the various parties who participated in this unlawful scheme. 119.9.Said real party in interest, i.e., the source of funding for the loan and the person to whom the note was transmitted or eventually "assigned" was neither a financial institution nor an entity or person authorized, chartered or registered to do business in this State nor to act as banking, lending or other financial institution anywhere else. 119.10. As such, this fraudulent scheme, (which was in actuality a plan to trick the Plaintiffinto signing what would become a negotiable security used to sell unregulatedsecurities under fraudulent and changed terms from the original note) was in fact asham to use Plaintiff's interest in the real property to collect interest in excess of thelegal rate. 119.11. The transaction involved a loan of money pursuant to a written agreement, and assuch, subject to the rate limitation set forth under state and federal law. The "formula rate" referenced in those laws was exceeded by a factor in excess of 10 contrary to the applicable law and contrary to the requirements for disclosure under TILA and HOEPA. 119.12. Under Applicable law, the interest charged on this usurious mortgage prevents any collection or enforcement of principal or interest of the note, voids any security interest thereon, and entitles the Plaintiff to recovery of all money or value paid to Defendants, plus treble damages, interest, and attorney fees. 119.13. Under Applicable Law Plaintiff are also entitled and demand a permanent injunction be entered against the Defendants (a) preventing them from taking any action or making any report in furtherance of collection on this alleged debt which was usurious, as aforesaid (b) requiring the records custodian of the county in which the alleged mortgage and other instruments are recorded to remove same from the record, (c) allowing the ﬁling of said order in the ofﬁce of the clerk of the property records where the subject property, "Loan transaction" and any other documents relating to this transaction are located and (d) dissolving any lis pendens or notice of pendency relating to the Defendants purported claim. RELIEF SOUGHT WHEREFORE, having set forth numerous legally sufﬁcient causes of actions against the Defendants, Plaintiff pray for the entry of Final Judgment against all Defendants jointly and severally in an amount not yet quantiﬁed but to be proven at trial and such other amounts to be proven at trial, and for costs and attorneys' fees; that the Court ﬁnd that the ransactions thesubject of this action are illegal and are deemed void; that the foreclosure which was instituted be deemed and declared illegal and void and that further proceedings in connection with the foreclosure be enjoined; and for any other and further relief which is just and proper. DEMAND FOR JURY TRIAL Plaintiff demand trial by jury of all matters so triable as a matter of right. Respectfully submitted, _____________________________ Plaintiff _____________________________ ATTORNEY NAME BAR NUMBER Pro Hac Vice, Counsel to Plaintiff ATTORNEY ADDRESS PHONE Fax: VERIFICATION I, am the Plaintiff in the above-entitled action. I have read the foregoingand know the contents thereof. The same is true of my own knowledge, except as to those matters which are therein alleged on information and belief, and as to those matters, I believe it to be true. I declare under penalty of perjury that the foregoing is true and correct and that this declaration was executed at Phoenix, Arizona. **Only a licensed attorney can represent your rights - Call your local state bar - This site is informational only ** Not licensed to practice law.

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In a securitization the origination of eligible mortgage loans and the transferring of the assets for real consideration mandate accrual accounting applying a gain on sale.

Accounting for sales and lawful transfers must occur as an open market transaction that is bid and priced at FMV.

Lender as a seller then forever loses its controlling interest in the assets to the bonefide sale under an arm’s length transaction.

Therefore the subject loan is sold into a pool transferring the asset to investors who capitalized the investment under a tax exemption.

Investors own a pass through fractionalized interest held in trust.

The asset was thus, sold away by the lender and beneficiary acting now as the successors and assigns.

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"WON " California Superior Court Aurora Home Loan v. S. Corbett Contra / "WON" The Superior Court of Oregon Josephine County WA MU v. Chancey / WON First Franklin Vs Spicer No CA/ WON GMAC Vs Fanning $20,000 Cash Settlement/ WON Lopez Vs SPS $25,000 Cash Offer to settle /Duetsche Bank Vs Russell/Lender resigned Los Angel. CA /WON Lender (sealed) Vs Wuensche Wisconsin / Recent **Appellate Ct overturns dismissal/trial set—

Mailto: expert.witness@live.com

WHY IS SOLIMAN A HARDLINER AGAINST LENDERS - .HE WAS ONE OF THEM!

The Other Real Estate Crisis Newsweek Voices - Daniel Gross ...
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Ask the Expert: Will Obama plan holds off a foreclosure

In a securitization the origination of eligible mortgage loans and the transferring of the assets for real consideration mandate accrual accounting applying a gain on sale.

Accounting for sales and lawful transfers must occur as an open market transaction that is bid and priced at FMV. Lender as a seller then forever loses its controlling interest in the assets to the bonefide sale under an arm’s length transaction.

Therefore the subject loan is sold into a pool transferring the asset to investors who capitalized the investment under a tax exemption.

Investors own a pass through fractionalized interest held in trust.

The asset was thus, sold away by the lender and beneficiary acting now as the successors and assigns.

CitiGroup executives claiming the high-risk securities were deemed safe

CitiGroup right hand man Rubin claim they learned belatedly that Citi had $43 billion in high-risk securities on its books. Both were testifying at a hearing by the panel investigating the roots of the financial crisis.

Citibank's losses reached nearly $30 billion as the registrant borrowers defaulted on certain portions of collateralized debt obligations, or CDOs. These two high ranking CitiGroup executives both gave testimony claiming the high-risk securities were deemed safe (according to statements made and given in the April government hearing).

The issues were not discussed at any of those meetings before September 2007 said Rubin.

A $43 billion position orchestrated by Citigroup's was a significant exposure to risk. This was the message sent by chairman of the Financial Crisis Inquiry Commission, Phil Angelides as told to Rubin and Prince.

Rubin, a former Treasury secretary undr Clinton insisted: "There isn't a way ... that you're going to know what's in those (bank) position books" "You really are depending on the people who are there to tell you."
Rubin and Prince said the Citi executives who piled up the risky securities on the bank's books thought, as did others on Wall Street, that they were safe from default.

Claims are supported by their understanding the securities had received triple AAA ratings from credit rating agencies

Talk abouot incriminating. Prince began his testimony "Let me start by saying I'm sorry," Prince said. He is "deeply sorry for the failure of Citigroup's management, starting with him, to foresee the crisis that wreaked devastation on the U.S. economy and ordinary Americans. Rubin said "We all bear responsibility for not recognizing this, and I deeply regret that."

Analysts and Critics have said Rubin, with his vast experience on Wall Street and as Treasury chief in the Clinton administration, should have picked up on the warning signs of the crisis and taken a more active role in preventing Citigroup's debacle.
"Those losses were a substantial cause of the bank's
Prince said he wasn't aware of decisions being made on the bank's trading desks to keep on its books the "super senior" CDOs. Still, he says, given that they were widely perceived as having a low risk of default, "it is hard for me to fault the traders who made the decisions."

"Regrettably, we were not able to prevent the losses that occurred, but it was not a result of management or board inattention or a lack of proper reporting of information," Prince said. He said multiple meetings were held to inform board members of developing problems and to solicit their advice. Citigroup is being examined as a case study because it was heavily involved in each stage of the process.

The bank was a major subprime lender through its subsidiary CitiFinancial. Other divisions of Citigroup pooled those loans and loans purchased from other mortgage companies and sold the income streams to investors.

When Citigroup announced the estimated losses of up to $11 billion in November 2007, Prince resigned and Rubin stepped in as chairman, helping Citi raise billions in capital to shore up its sinking finances.

COUNTRYWIDE HOME LOANS INC

DEPOSITOR: CWALT, Inc. is a limited purpose finance subsidiary ofCountrywide Financial Corporation.
4500 Park Granada,Calabasas, California 91302,
(818) 225-3000.

SELLER - Countrywide Home Loans, Inc. will be the seller of a portion of the mortgage loans. The remainder of the mortgage loans will be sold directly to the depositor by one or more special purpose entities that were established by Countrywide Financial Corporation or one of its subsidiaries, which, in turn, acquired those mortgage loans directly from Countrywide Home Loans, Inc.

MASTER SERVICER - Countrywide Home Loans Servicing LP

TRUSTEE- The Bank of New York

SUMMARY OF EVENTS

(1) The trustee, if the servicer is the seller, or the servicer will promptly notify the relevant seller of any breach of any representation or warranty made by it in respect of a mortgage loan that materially and adversely affects the interests of the security holders in the mortgage loan.

The master servicer will make cash advances with respect to delinquent payments of principal and interest on the mortgage loans to the extent the master servicer reasonably believes that the cash advances can be repaid from future payments on the mortgage loans. These cash advances are only intended to maintain a regular flow of scheduled interest and principal payments on the certificates and are not intended to guarantee or insure against losses.

The depositor, CWALT, Inc., will purchase the mortgage loans in the mortgage pool from Seller’s Countrywide Home Loans, Inc. and one or more other affiliated with Countrywide Financial Corporation.

(each of which is referred to in this prospectus supplement as a “Seller” and together they are referred to as the sellers)

pursuant to a pooling and servicing agreement, dated as of October 1, 2005, among the sellers, Countrywide Home Loans Servicing LP, as master servicer, the depositor and The Bank of New York, as trustee, and will cause themortgage loans to be assigned to the trustee for the benefit of the holders of the certificates.

In this prospectus supplement, the mortgage loans in loan group 1 and loan group 2 are referred to as the "GROUP 1 MORTGAGE LOANS" and the “GROUP 2 MORTGAGE LOANS", respectively, and together they are referred to as the“MORTGAGE LOANS".

Under the pooling and servicing agreement, Countrywide Home Loans will make certain representations, warranties and covenants to the depositor relating to, among other things, the due execution and enforceability of the pooling and
servicing agreement and certain characteristics of the Mortgage Loans.

In addition, each of the sellers will represent and warrant that, prior to the sale of the related Mortgage Loans to the depositor, the applicable seller had good title to the Mortgage Loans sold by it. Subject to the limitations described in the next sentence and under "-- Assignment of the Mortgage Loans," Countrywide Home Loans (or the related seller, in the case of the representation regarding good title) will be obligated to repurchase or substitute a similar mortgage loan for any Mortgage Loan as to which there exists deficient documentation or as to which there has been an uncured breach of any representation or warranty relating to the characteristics of the Mortgage Loans that materially and adversely affects the interests of the certificateholders in that Mortgage Loan.Countrywide Home Loans will represent and warrant to the depositor in the pooling and servicing agreement.

ASK THE EXPERT: WHAT IS LOAN MODIFICATION HELL

People are confused by the lenders lack of willingness to fulfill promises and why they appear sincere and then stall. Modification offers and terms for qualifying these loss leader offers are NOT genuine or even POSSIBLE.

I cannot tell you how many clients have seen leave our effort and forego our strategy and testimony after buying into lenders misrepresentations. These clients have also pursued counsel and were never heard from again. Their lawyers likewise believed they could compel a lender into a modification.

NO ONE CAN OFFER A LOAN MODIFCATION OTHER THAN A LENDER. THE PARTIES YOU’RE SPEAKING TO ARE NOT A LENDER BUT PARTIES REPREPSENTING THE SELLER OF YUR LOAN.

I can only professionally opine and remain steadfast to the primary most damaging argument available to consumers over all other arguments.

ARGUMENT: According to GAAP accounting rule FAS 140 and revised 140-3 under FASB pronouncements you will find a crippling lender reporting requirement. FAS 140 cause the lender as a seller who transfers your loan into a securitization to FOREVER lose all control of the asset.

A sellers lack of adherence to the rules for FAS 140 are undeniable whereby a registrant is required to publish its assets acquired and annual earnings in public records for the year the loan is sold .

Lenders cannot grasp the fact that an accounting rule is enforceable whereby they see the sale provision for reporting as merely an accounting necessity. It’s an accounting requirement that no doubt MANDATES seller adherence solely for derecongnition regardless of the circumstances.

And by that I mean that derecongnition may be the single greatest financial error in US history to have ever occurred.

M.Soliman
Witness to Counsel
Tel. 213-880-6288
Mail to:"expert.witness@live.com"

Ask the Expert

TRUSTEES DEED UPON SALE 1) the grantee herein was the foreclosing beneficiary. 2) The amount of the unpaid debt was..... $2,020,589.63 3) The amount paid by the grantee was ....$1,096,500.00 4) The documentary transfer tax is .......... $0 Item 1) states the parties bringing the foreclosure are in possession of the rights of a holder in due course and selling to themselves the property. We will show this not to be the case. Item 2) can they verify the balance and how the breakdown of interest and fees are distributed? It is likely the numbers do not add and constitute grounds to rescind the sale. Item 3) how can the lender, who sold the loan into a bulk pooled asset and for due consideration upon which it has lost its rights to the asset, bring a foreclosure? It cannot! Only by first repurchasing the asset is the party foreclosing in a position first. Loans sold that were securitized into a closed end fund for which many layers of stock certificates were issued is an indication foreclosure is an impossible proposition. What stands out to me most of all is a claim of bid rigging and manipulation of a trustees sale for which a borrowers right to tender is removed. Where the trustee’s deed transfers by credit bid, the tender of the full debt is not appropriate. Credit bids are distinguished from purchase money bids. California Civil Code 2924h (b) provides: (b) At the trustee’s sale the trustee shall have the right (1) to require every bidder to show evidence of the bidder’s ability to deposit with the trustee the full amount of his or her final bid in cash, a cashier’s check drawn on a state or national bank, a check drawn by a state or federal credit union, or a check drawn by a state or federal savings and loan association, savings association, or savings bank specified in Section 5102 of the Financial Code Stay tuned

Tuesday, October 07, 2008

Mortgage Underwriting Standards

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Experts Corner: Another FDIC Bank Failure

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THIS IS NOT TO BE CONSTRUED AS LEGAL ADVICE!!

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Foreclosures fell month-over-month but are still up nearly 20% compared with a year ago. Plus, Las Vegas wasn't the worst-hit city in November.

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