Gretchen Morgenson of the New York Times reports on an ugly bit of mortgage market history: that Fannie Mae was told in 2006 to address the derelict behavior of its servicers and foreclosure mills yet chose to do pretty much nothing about it.
Morgenson tells the story of one Nye Lavalle, a Florida businessman who stumbled into the mortgage mess by accident. He sought to pay off a mortgage on a house he owned, and discovered that the payoff amount was inflated by $18,000 due to bogus late charges and force placed insurance. He refused to pay and the bank would not reverse the charges. The bank added more fees to the loan as Lavalle entered into a protracted court battle, which he ultimately lost.
Morgenson does not say exactly when Lavalle lost his fight or started his mission of investigating bad foreclosure and servicing practices, but by 1996 (!) he had already found evidence of the sort of chicanery that has been revealed as common, if not endemic as of 2004: apparent forged signatures, across a range of servicers: Banc One, Bear Stearns, Countrywide Financial, Freddie Mac, JPMorgan, Washington Mutual. Most ignored him, a few brushed off his charges. In 2003, he had created a compendium of abuses at Freddie and tried getting the attention of management. It did, sort of. They hired an outside law firm to investigate, which issued a detailed report which despite taking a rather dismissive tone towards Lavalle in its early pages, corroborated many of this charges, and recommended that the GSE take some corrective measures and it was firm on some basic issues:
“It is axiomatic that the practice of submitting false pleadings and affidavits is unlawful,” said the report…“With his complaint, Mr. Lavalle has identified an issue that Fannie Mae needs to address promptly.”
The Times indicates it does not know whether the report went to the board or its regulator, OFHEO, but the comment from the officialdom was not encouraging:
James B. Lockhart III, who headed that regulator in 2006, said he did not recall reading the report. “I probably did not see it as back then foreclosures were not a very big deal,” he said.
Notice the attitude, which seems to be at the root of why we got here. Abuses were seen as OK as long as they affected only a few, powerless people. There was no apparent concern that this was an unambiguous legal abuse, and that it might be a symptom of other, even more serious problems. Why would you create false documents unless there was a problem with the real ones?
Notice how the spokesman shifts the issue. The stance taken is that the borrower is presumed to be in trouble due to an inability to pay, when Lavalle, a wealthy man, discovered significant, false charges, including late fees when he had always been current. Even he was not able to prevail when he tried challenging the servicer.
The report, while confirming Lavalle’s reading of the law and finding even more extensive abuses by foreclosure mills than he cited (he fingered only the now-shuttered Stern law firm in Florida; they found similar problems in Connecticut, Georgia, New York, Illinois, Louisiana, Kentucky and Ohio) disagreed with him on the consequences. He thought foreclosures could be unwound, they pooh poohed the idea (narrowly, that is correct: the legal system is set up to treat sales out of bankruptcy and foreclosures as final, but wronged borrowers in certain states could conceivably recover under “wrongful foreclosure” statues, which provide for damages as a multiple of the value of the house). The Times flagged this comment:
“Courts are unlikely to unwind foreclosures unless borrowers can demonstrate that the foreclosure would not have gone forward with the correct pleadings, which is a difficult burden for most borrowers to meet,” the report said. “Nevertheless, the issues Mr. Lavalle raises should be addressed promptly in order to mitigate the risk of exposure to lawsuits and some degree of liability.”
Translation: you really aren’t at risk here, but it would be kinda nice if you cleaned this up.
Even in the wake of the robosigning scandal, it appears Fannie’s attitude has not changed, although it tries to claim it took matters seriously:
A spokesman for Fannie Mae said in a statement last week that the company quickly addressed several issues that were raised in the 2006 report and that it took action on other issues associated with foreclosures in 2010. “We want to prevent foreclosure whenever possible, but when foreclosures cannot be avoided they must move forward in a timely, appropriate fashion,” he said.
The “they must move forward in a timely, appropriate manner” (notice the lack of agency?) is a might makes right statement: Fannie will foreclose when it, in its imperial wisdom, thinks a foreclosure is warranted.
My perception is that attitude is widely shared in the servicing industry. As I wrote longer form last fall, after speaking at a conference, members of the industry rejected, with obvious hostility, the notion that there was something wrong with how they conducted their business. And as long as the industry is so steadfast in its denial, from the low to apparently the senior levels, I fear nothing will change absent major changes in personnel.
Update: It turns out that Carrick Mollencamp and Nick Timaros of the Wall Street Journal had a story on the Fannie internal investigation in March of 2011. It appears the Journal also was able to get a copy (the tone of the article suggests a full reading) but did not put it on line as Morgenson did. And it highlighted this tidbit:
Fannie officials also told investigators that the company had opted against performing regular reviews of its foreclosure attorneys because the company’s lawyers felt the firm would be better insulated from responsibility for misconduct. The report said the approach was under review at the time.
This sort of conduct has become endemic in the mortgage industrial complex, and is all too common in Corporate America generally. Rather than trying to do things right, and fix problems when they occur, the priority now is to make sure someone else is the bagholder. No wonder this country is falling apart.
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“And as long as the industry is so steadfast in its denial, from the low to apparently the senior levels, I fear nothing will change absent major changes in personnel.”
How about some criminal prosecutions? Would that be enough to force the mofos to reconsider? Or must justice be reach by some other means?
Interesting, there’s still a lot of water to go under the bridge with the US housing market. As Bernanke noted in the whitepaper he did on the housing market for congress, there is ample scope for improving efficiency in the US housing market… getting rid of the excessive paperwork and going electronic would be good, but in a low jobs environment would be politically tough to do. I think it’s still likely that Bernanke will take matters into his own hands with a QE program targeted at juicing up the housing market…
Okay, and we want to juice up the housing market because . . . . uh . . . we like asset inflation? . . . wait, um . . . oh yeah . . . incomes are so strong all us middle class types are eager to throw 40% of ours at a mortgage? . . . no . . . it’s that after 30 years of wage stagnation our homes are the only pension we have left so they better inflate . . . or . . . hold on, now . . . its that so many of us are in these shitty time bomb loans that, implicitly, we thought we might re-fi after 3 years on inflation equity . . . or, well, geez, under rampant inflation SOMEONE makes money, especially when it’s an isolated asset, preferably a necessity like say, my HOUSE, or my FOOD, or my MEDICINE, or my EDUCATION so . . .
Like Bernanke keeps saying, we just iron out the kinks, get a little more efficient (layoffs are a good place to start) . . . pretty soon that ol’ rentier state the USA will get rollin’ again. Right. Yippee.
If I am reading this correctly, no matter why the foreclosure happens, (we all know fraud does not exist anyway, right…Your Honor?) the burden of proof always fall upon the borrower.
Must be nice to work in the US financial industry: the government has your back if you blow up, you can fraud at will as long as you’re big enough, and bonuses are aplenty regardless of performance.
What’s not to like?
I thought the best quote in Morgenson’s story today was this, from Nye Lavalle:
“From my own personal experience and 20 years of research and investigation, nothing — and I mean nothing — that a bank, lender, loan servicer or their lawyer says or puts on paper can be trusted and accepted as true.”
http://www.nytimes.com/2012/02/05/business/mortgage-tornado-warning-unheeded.html?_r=1&ref=business
It was NOT what the grey lady chose for its “quote of the day” feature.
This seems like an accurate description of reality. I don’t see any Attorneys General acting with integrity. I don’t see any of the agency lawyers or private firms acting with integrity. The attorneys admit he’s right on the law but keep coming up with bullshit reasons to make this truth go away.
The only attorneys acting with integrity are those in the bankruptcy bar and related practices. These attorneys help average people and of course the rules are written to treat bankruptcy attorneys like second class lawyers (if a lawyer represents a bank he can advise the bank on legal actions to keep as much money as possible before bankruptcy–an attorney representing a ‘consumer’ is literally not allowed to give their clients all honest, legal and accurate advise that can help them save money!–there’s literally a double standard for the rich and the average people!).
I think of it in these words; When dealing with a bank it safest to operate with a presumption of falsity.
It really pisses me off that the focus is primarily on robo-signing. Servicer-driven foreclosures, which Yves has written about, are a huge problem. Yet they get very little attention. Force-placed insurance is often a premeditated tactic to send borrowers over the edge and into foreclosure.
Has anyone else noticed that the mainstream media has replaced the word “fraud” with “wrongdoing” when it comes to the illegal tactics of banks/services?
“Has anyone else noticed that the mainstream media has replaced the word “fraud” with “wrongdoing” when it comes to the illegal tactics of banks/services?”
Also have replaced the word “fraud” with “abuse.”
As in, the bankrobber agreed to return 5% of the money without pleading guilty to cash withdrawal abuse.
It’s the way of USA!USA! for the 1% – change language to suit your purpose.
The real quotation is longer and more nuanced, but many years ago I read what was supposed to be a quotation from Confucius’s essay on The Rectification of Words. Apparently in studying what were then the Classics (i.e. in 500 B.C.) he became aware that language changes and he wanted to urge people to go back to the “right” way of using words. He wrote, “If the correct words are not used, then what is said is not what is meant, and the people will stand about in helpless confusion.” Do you suppose the 0.1% see that “helpless confusion” as desirable?
Absent Cold War pressures to balance labor and capital, US soft power reigns supreme:
“From my own personal experience and 20 years of research and investigation, nothing — and I mean nothing — that a bank, lender, loan servicer or their lawyer says or puts on paper can be trusted and accepted as true,” Mr. Lavalle said.
Meanwhile President Hopela Jesus Whoopla Magic Moses Underpants held a fund-raising event and dispatched another carrier group to….
“US soft power reigns supreme” Off topic, but no, it doesnt. We have 11 aircraft carriers for a big stick reason, regardless of the neo-liberal knife twist.
(Embarrassment at the UN is the latest fail.)
On topic, what is never done at the Old Grey Witch (featuring David “Bunco Credulity” Brooks) is actual investigative reporting. Now Lois Lane has that vacuous FORBIAN slant all over her favorite GSE punchin’ bag, but there are Inc. lines ya’ cain’t cross. The New Joke Times cheerleads ‘Murican hard power, as did Bummer during the SOTU. So while we’re all subject to scanning by Soft Power Chertoff here, houses are lost, people are destroyed by pen or explosives – world ’round. When you can’t even fool the riff raff, the gig is up.
‘That is where the robo-signing came in. Foreclosure defense attorneys armed with the tools of discovery have discovered that robo-signing — involving falsified signatures assigning mortgages back to the trusts allegedly owning them — occurred not just occasionally or randomly but in virtually every case.’ – Ellen Brown
Yves, please contact me at mortgagefrauds@aol.com to help clarify some points in your blog. See http://www.msfraud.org/Articles/predbear.pdf and http://www.scribd.com/doc/13625416/AAMA-Report
The 2006 report said Mr. Lavalle at times came across as over the top, that he was, in its words, “partial to extreme analogies that undermine his credibility.” – from NY Times Article
That’s pretty funny. Don’t worry Mr. Lavalle, it happens to me too.
It’s a sign of intelligence, creativity and righteous passion.
Glad you’re taking it too these psychopaths. They deserve it, along with some orange jumpsuits, or at least house arrest followed by community service of some kind, like untangling fraud-by-fraud the two-thousand ton hairball of toxic injustice they’ve sewn into a choking lump in the throat of America. Oops there’s another extreme analogy! See what I mean. :)
I love your fight! Amazing story. If the Attorney Generals in the U.S. had one tenth the integrity and fight you have the mortgage market would be totally different.
Thanks for standing up to the bullies and criminals. I can’t imagine how frustrating it was for you to discover the supposed authorities are actually working with the perps to avoid justice. Talk about a decade long maze you went through!
Stay safe.
Also, re the papers. Since your language is a bit extreme, according to the NYTimes, I wonder if you’ve ever received a threat of suit based on defamation.
For instance, I would think Bear Stearns and the other entities you name would be worried that their conduct is described as fraudulent, etc. Surely most financial institutions would sue if wrongly accused of fraudulent activity.
Right?
The arrogance, dismissal and contempt go way beyond foreclosures and the finance sector. Health insurance companies are notoriously dismissive of their customers; don’t pay for services they agreed to pay for and cancellation of insurances. State governments enact laws that clearly violate the constitution and large segments of their population essentially for financial gains.
The list is endless and the two political parties condone every violation on the list.
YVES, only connect the dots with Bush & Banking at http://www.youtube.com:
“Germany, Underground Reich, And the Current Financial Crisis” (johndcqr on May 16, 2011);
“Bush Family Funded Adolf Hitler” (SpiritualWarfare22 on Nov 7, 2010) with commentary by Investigative Journalist John Buchanan, w/ ref. to the Dickstein Committee findings in 1934 re the plot to overthrow the U.S. government by (Nazi-affiliated) bankers and industrialists, which Gen. Butler exposed.
“Nazi America: A Secret History (Part Two)” (Jillium0 on Apr 30, 2007), w/ref to the Dickstein Committee a newspaper article: “IS THE GERMAN-AMERICAN BUND AMERICAN? was the subject last Sunday in New York that inspired heated arguments between Fritz Kuhn, leader of the pronazi movement, and Rep. Samuel Dickstein, the bund’s arch enemy.” The narrator says that Fritz Kuhn was Hitler’s choice for leader of the American Nazi party, as it transitioned in 1936 from the NAME: “Friends of the New Germany” to the “German American Bund” [German American Business League]. Connect Yorkville, NY German stronghold from 1920’s with York, PA, where “NOBILITY and Analogous Traditional Elites…” was published by the “TFP” in 1993;
“For the Record #305: The Boorman Organization – Part 2 of 6” (SpitfireList on Mar 20, 2010), re the “Nazi Capital Flight Program” – w/ ref. to WSJ article on April 28, 1997 by Greg Steinmetz: “Nazi Money Trail Heats Up After Fifty Years” – NB Bormann plan drawn up in Strasbourg, Alsace: now HQ of The European Union (France-Germany industrial-to-financial Nexus). Just two names of fronts in USA were ConAgra, and American Bosch Corp. in MA. The complete list of American facilitators is given in this Series (1-6).
“Hitler’s Deal with the Zionists” (DerHanebuDrei on Nov 20, 2009) — a report from live Channel 5 News on April 22, 1984, from Deborah Norville and Rich Samuels, re book by son of Holocaust survivors: “THE TRANSFER AGREEMENT: The Untold Story of the Secret Pact Between the Third Reich & Jewish Palestine”;
and ask yourself, “Are we going to bomb Iran?” And why?
The chickens are coming home to roost, and it’s time to tell all.
Mortgage abuse, fraud and poor underwriting and escalating home prices weren’t created overnight and didn’t suddely begin in 2004. The path unfortunately started much earlier.
I didn’t mean to imply that, I’m referring to general impressions as conveyed in the media.
When I first started learning about this (via attorneys associated with Max Gardner, well before the robosigning scandal broke) the common view was that the document mess was a result of all the frenzied activity of the bubble (and remember, most foreclosures, which is what these attorneys were focused on, were from financings done in the bubble).
Then snippets in press stories indicated it started earlier, meaning the impetus might have come from the refi boom of 2002-3.
Then evidence emerged of defective practices in the late 1990s. I’ve written about this in earlier posts.
Now we have Lavalle saying it started even earlier than that.
Look, Tom Adams sat in on a ton of closings, Maybe his deals were better selected, but it used to be that there was evidence that people were serious about procedures (as in a closing being held up because a box with notes hadn’t arrived and pretty senior people from the custodian being at the closing) at least through the early 2000s. So you tell me.
Think of the innumerable land frauds during previous land booms, especially connected with mining claims, where forgery was common, and there were endless lawsuits. And mining claims fraud, and water rights fraud, and so on.
And it can be very different on the ground in smaller deals than in big deals involving senior people from custodians.
The American Way is that misrepresentation, forgery and fraud are nothing is they happen on the way to MAKE MONEY FAST. As long as house prices were going up and up and up and every astute speculator was getting tax-free work-free risk-free capital gains, nobody wanted to look at how the sausage was being made.
Quoting again the famous American Historian Gingrich:
http://classwebs.SPEA.Indiana.edu/bakerr/v600/a_new_look_at_environmental_poli.htm>
«If you have a society where almost every middle class person routinely fudges the law, that’s telling us something. We have laws that matter – murder, rape, and we have laws that don’t matter. Speed limits are an example. Why would you think that a regulatory, process-oriented bureaucratic model would work?
The first thing that every good American says each morning is “What’s the angle?” “How can I get around it?” “What does my lawyer think?” “There must be a loophole!” Then he proceeds to work the angle, and the bureaucracy spends its time chasing that and writing new regs to stop him. America is the most incentive-driven society on the planet.»
Has anyone noticed that the tone and timbre of the comments here and elsewhere has become much more vocal and strident ?
Not sure if it means anything but hopefully public opinion has changed and we are beginning to see a sea change.
Occupy MERS, Fannie and Freddie anyone ?
«This sort of conduct has become endemic in the mortgage industrial complex, and is all too common in Corporate America generally. Rather than trying to do things right, and fix problems when they occur, the priority now is to make sure someone else is the bagholder. No wonder this country is falling apart.»
The last phrase is wholly ridiculous. The country is falling apart only for the bottomost 80%. The 20%, and especially the 1% and even more so 0.1% are having a very good time indeed.
Making sure someone else is the bagholder has always been the American Way. This is not entirely unobvious: Jim Rogers in an interview stated as a matter of course that up to the 19th century there was no rule of law in the USA (for the rich). Think about apex laws, about hereditary peanut farming monopolies.
The country is falling apart (slowly) for the bottomost 80% because it is has run out of redskinned (or darkskinned) Indians, so it is becoming more “European”.
What Europeans have been amazed for the past 2 centuries about America is two things: the productivity and innotivativeness of the Yankee Industrial System (not just Fordism), and the vastness of resources available to for extraction once the redskinned illegal immigrant squatters had been cleared out.
The Yankee Industrial System has been taken on by others (notably the Japanese) and improved upon (and large parts of it were dependent on cheap resources, at least in the USA itself), and the country has simply run out of cheap new resources to extract.
As long as people could just go west, take some land, clear away the redskin illegal immigrants squatting on it, and mine it (via agriculture for example), America was the land of opportunity. There was a huge stream of goodies from the Black Hills dotted around the country, and in part because of the threat of Communist and the need to keep the home front happy during the Cold War the 20% and 1% were sharing some of those goodies with the 80%.
Except for the Yankee Industrial System the USA economy was largely about “mining”, rent from resource extraction.
Now the USA 1% has realized that the savings and pensions of the bottomost 80% are the new frontier, and the 80% are the new Indians and their savings and pensions and lifestyles are the new Black Hills to be mined. The unions are the new tribes to be reduced and broken. And they have been.
You’ve apparently never spent any real time in a third world country. The fate of those at the top is not as separate from those on the bottom as you depict.
Do you want to have to live with bodyguards and snipers on the roof of your home, which is pretty standard in Mexico City (and this was 30 years ago, before the drug business became one of the dominant industries). Oh and you can’t escape deteriorations in public health. Superbugs hit the rich and poor.
And as I’ve written here and elsewhere. even the rich in highly unequal societies have LOWER life expectancies than people in much less wealthy but more equal societies. Highly unequal societies are characterized by weak social bonds and high status anxiety, and it turns out those have a direct impact on longevity. There is a lot of solid public health research on this topic.
So the rich getting more cash and prizes is actually to their detriment.
In reading the NYT article, the family that was directly victimized was the Pew Family who are well known in Philadelphia as the heirs to the oil fortune of Sunoco. Mr. Lavelle, who personally launched the investigation on behalf of the wealthy, if set upon relatives, had a bottomless pit of money, education and connections, to resolve whatever was owed. Still, with documented evidence assembled in a manner that any normally functioning bank that was not engaged in out right thievery would recognize as a legitimate claim against them for mistakes and even fraud, even a wealthy, organized response to the bank’s illegal/mistaken charges, fees, forced hazard insurance etc. did not relent.
If the force of the Pew Family Trust could not make a simple case for a $100k mortgage in 1988, what chance do average middle class homeowners have in today’s neo-liberal deregulated environment? It is an example of the systemic nature of capitalism in all of its financialized glory, making money out of real estate not by selling the real estate but rather by reducing the documentation of property rights itself into a commodity that can then be exchanged, fined, sued for legal fees, attached with insurance policies, and finally, foreclosed upon in a hall of mirrors composed of the fictitious representations broken free from the simple hard copy of recorded mortgage deeds, written mortgage notes, and the original mortgage note rendered as a satisfied note and returned to the homeowner, as documentation as satisfied paid in full.
The documentation of property rights, held by public courthouses, as deeds to properties, the real estate title, and the documentation of property rights, held by banks in the form of loans, the mortgage notes agreed to by homeowners to repay the loans in full, are also recorded as liens, 1st, 2nd etc by the same public courthouses that hold the record of ownership. The rights of real estate and of capital converge and are recorded at the same public authority for a reason: so people’s rights can be enforced by open and accessible records. This is a legal arrangement and part of the political structure of the social order of the these things of the public, res publica, the republic. Without out this political arrangement, we become something different, a private holding, a kingdom where the rule of law is transformed into management policy, to which there is no recourse, legal or otherwise, as the Pew family found out, and as we have all found out in millions of instances.
Homeowners, you must get the original note you signed at the closing table. Without it rendered as satisfied, paid in full, in your hands alone, anyone in possession of this contract can present it as the owner, with the rights to payment and redress for cure of breaching the agreement. You want the original note presented if you are sued for foreclosure, and if it was sold, in addition the original note you want the assignment agreement from the original party to whoever it was transferred to.
If you own a home, your name is recorded on the deed at the courthouse, if you have a mortgage, that is recorded at the courthouse as a lien, against your deed/title AND to remove the lien against your property, you MUST produce the satisfaction piece, the paid in full note that you signed to get the mortgage. It is held by the bank, just like a title to a car is held. It is released to you marked satisfied, paid in full and you take it to the courthouse where these are recorded and have it removed from the records. Without doing that, every time the title to your property is searched, any liens recorded will appear ON the title report.
MERS in attempting to create efficiencies for the mortgage securitization process has created externalities in the form OF toxic assets, fraud, financial abuse of consumers, clouding the chain of title of real estate for residential homeowners and the dispossession of millions of people from the biggest asset they ever purchased, representing the lion share of the material benefits of a lifetime of working. Capitalism has forgotten that the state already operates as a business, in that it has kept good records, publicly transparent, it enforces financial property rights on an equal basis as real estate property rights. Yet, it is not enough, the commodification of real estate rights into easily manipulated financial contracts shows the clash of distinct forms of wealth, one based on the land, real estate, and the other, essentially a social fiction written out as a loan. Like corporations are people, contracts as property is displacing real estate, and subordinating it into second class status, like a non voting class of stock.
Bravo! Paul, this is a great lesson a high school kid can understand. Make an educational game out of it and sell it to every school system in the nation.
Would someone please replace that revolving door at Fannie Mae?
http://eon.businesswire.com/news/eon/20101103005678/en/Fannie-Mae/Mortgage-Banking/Foreclosure
http://www.mccallaraymer.com/index.php?option=com_content&view=article&id=239:susan-reid&catid=53:attorneys-compliance
Pearl, thanks. This grifter daisy chain is a racket for co-conspirators. RICO is the remedy.
If Lavalle had proof of falsification, why did he not contact oversight authorities, like the Federal Trade Commission or even the FBI?
My question being this: If one has proof of fraud, why is it impossible to prosecute? Or, even, bring a individual suit against the fraud perpetrator?
Something has gone wrong and I figure it is the lassitude of oversight agencies and criminal prosecutors. These agencies were probably neutered long ago – quite possibly during the LeadHead Administration.
Fannie and Freddie Top Management walked away with million dollar bonuses for driving both institutions into the ground. Anyone see a court suit against any one of them?
Nope … and if we are not careful there is a statute of limitations that the prosecutors will be running into.
It’s not his job to prosecute. He did more than probably anyone else and he was merely a concerned citizen.
All we needed was a few prosecutors with integrity and fight like Mr. Lavalle and this would be a much different mortgage market.
Instead, the Attorneys General of the U.S. are complicit in these crimes. Complicit. They are actually aiding and abetting the criminals abscond from justice.
The attorneys know crimes were committed. Read the article! They admit he’s right but have a million excuses for why these laws can’t be enforced (but if you’re black or poor you will be punished differently).
Lavalle simply embarrassed them by raising a ruckus and throwing the evidence on their laps. They didn’t want to see the evidence because they knew their real bosses aren’t the American people but these very same white collar criminals they should be prosecuting.
Schneiderman and Holder will go on to make millions, if they haven’t already. They have zero interest in prosecuting the worst criminals in generations. They would rather target relatively powerless people like internet pirates and young black men.
Lafayette, the closed system daisy chain runs through Justice unto the high heaven of the Supreme Court.
Hats off to Nye Lavalle. Glad to see the mainstream media has finally begun to touch on the issues presented by the fatally flawed “GSE Business Model”. It’s about time as it has been going on since 1996 in my personal experience. (See letter below)
Monday, January 15, 2001
FROM: Richard F. Davet
Via Facsimile 1-212-702-1364 & Regular US Mail
Vincent A. Mai
AEA Investors, Inc.
65 East 55th Street
New York, NY. 10022
RE: YOUR POSITION AS DIRECTOR & CHAIRMAN MEMBER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS OF THE FEDERAL NATIONAL MORTGAGE ASSOCIATION
Dear Mr. Mai:
Ms. Iris Aberbach, Assistant Corporate Secretary of Fannie Mae, has advised me that the Audit Committee was meeting during the month of November,2000 outside the presence of management, to specifically address the issues that I have brought before the Audit Committee. Ms. Aberbach has recently advised me that there was “no outcome” of the meeting relevant to the issues I have brought before you and the other Audit Committee members
I am gravely concerned with the apparent collusion between debt collector Nationsbanc Mortgage Corp. and the Management of Fannie Mae with respect to the issues presented in the Criminal Affidavit filed in my litigation with Nationesbanc (Nationsbanc Mortgage Corp. vs. Richard Davet, et al, Cuyahoga County Common Pleas Court Case No 304224), a copy of which I am enclosing.
It is apparent that in 1999, Fannie Mae sold my mortgage and note (copy attached) in an attempt to cover-up the fact that Nationsbanc did not have standing to sue in 1996 and that Fannie Mae “Guidelines” were ignored by both Fannie Mae Management and Nationsbanc Mortgage Corp. relevant to my mortgage. Fannie Mae Management engaged in this cover-up when they knew or should have known that they were compounding the criminal acts of their debt collector, Nationsbanc Mortgage Corp. Fannie Mae Management knew or should have known that any attempt to cover-up the shortcomings in adherence to Fannie Mae “Guidelines” presents grave concerns with respect to safety and soundness issues.
Page 2
Monday, January 15, 2001
Vincent A. Mai
As you well know, as a member of the Audit Committee (as well as other members of the Audit Committee), and pursuant to your fiduciary duties to shareholders and stakeholders, it is imperative that you reveal to shareholders and stakeholders the vast potential liability of such conduct and the consequential effects of that liability to shareholders and stakeholders.
I will date my file seven (7) days for your response. Specifically, as to what action the Audit Committee has taken to protect shareholders and stakeholders from the immense potential liability presented as a result of the conduct of Fannie Mae Management and its service providers in ignoring the Guidelines set down by the Federal National Mortgage Association.
I trust that you will timely respond in accordance with the responsible performance of your duties as an independent director and member of the Audit Committee of the Board of Directors of the Federal National Mortgage Association.
Thank you for your anticipated cooperation.
Cordially,
TRANSMITTED ELECTRONICALLY WITHOUT SIGNATURE
Richard F. Davet
RFD/cc
Cc: Eli J. Segal, Member of the Audit Committee of Fannie Mae
Ann Mc Laughlin, Member of the Audit Committee of Fannie Mae
Thomas P. Gerrity, Member of the Audit Committee of Fannie Mae
Mr. Ken Russell, KPMG, LLP
Ms. Iris Aberbach
Mr. Armando Falcon Jr.
Dr. Alan Greenspan
John D. Hawke
Members of the House Banking Committee
Members of the Senate Banking Committee
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The very same ‘liar loans’ used during the real estate heyday are used exactly the same way in purchasing a car if your credit is above 620 beacon score,
On top of that, dealers regularly falsify equipment and alter important financial facts like rent or income in order to get that car loan approved.
We sent an undercover etam into both dealerships and the staffed event super sale (key mailers) industry, and what we found was the ‘norm’ was simply stunning.
We even uncovered how car dealers falsify their payment ot employees, creating a system where the employee is also defrauded, yet has no real way to verify their own true income based on the car dealers pay plan provided them.
The staffed event super sale industry is the ugliest of lies car dealers expose their customers to, and every aspect of that ‘key mailer’ liquidation sale is fraudulent and despicable.
Review our findings at http://www.CarLoanFraud.com
Its a true behind the scenes look inot the ugliest of sales industries