Bank of America (hereafter BOA) is the largest criminal enterprise on earth. Every day, BOA defrauds hundreds of thousands of its customers along with innocent borrowers who have loans that are either originated or serviced through BOA or its predecessor, Countrywide Home Loans, Inc.
Despite having been fined several billion dollars by various state and federal agencies continuously over the last 4 years, BOA continues to defraud the public and abuse the court system against innocent victims that are unable to fight back. Although BOA was forced to pay billions in fines, those dollars have not trickled down to the victims who have lost their homes, had their credit destroyed, lost their jobs, lost their retirement, and lost their ability to live the American dream.
One must ask, how and why does BOA continue to defraud people when they ultimately get caught and get fined? The answer is actually quite simple.
As to how does BOA continue to defraud people, the simple fact is that BOA is trusted with peoples lives, income, retirement, homes and money because they are a bank. Along with that trust comes the ability to abuse and take advantage of that trust. When that happens, BOA knows there will ultimately be a fine, but it also knows that the profit and benefit from its fraud will always be larger than the fine. And they know they will never be criminally prosecuted. So, on a daily basis, BOA uses fraud as a common practice to make income. (Too big to fail? Too big to prosecute?)
As to why does BOA continue to defraud people, that answer is also sadly simple. It has to continue to use fraud as a daily business principle because it has committed so much fraud in the past, that it must continue to use fraud to cover up the past fraud. It is that unending cycle of deception your parents warned you about when you told your first lie…”if you tell a little lie now, your lies will get bigger and bigger to cover up the previous lies, until you lose the meaning of truth.”
That is where Bank of America is right now. It has committed so much fraud in the past that it can no longer operate without keeping secrets, breaking laws, and taking what is not theirs to take.
Because the fraud committed by Bank of America is so extensive, complex, and sophisticated, it would be impossible to outline even a small percentage of the fraud that takes place on a daily basis in this single writing. We can however, expose one small segment of BOA’s fraud that effects 3.5 million homeowners and involves approximately 10B in home loans. If you are one of those 3.5 million borrowers/homeowners, you should continue to read all of this.
Bank of America, through its predecessor, Countrywide Home Loans, Inc., originated 3.5 million loans between 2003 and 2007 that were neither funded nor owned by CHL or BOA. These loans were derived from credit lines established by the Federal Reserve to Countrywide, which were public funds. Thus, Countrywide was entrusted with approximately 10B in tax payer funds for which it was allowed to make home mortgages to the very tax payers who supplied the money being used. Yet banks are NOT allowed to loan credit.
Once those loans were funded, Countrywide was then supposed to bundle and transfer those loans as securities to Wall Street Investment Firms as securitized investments, mostly held by trusts involving billions of dollars of American mortgages. Once that was done, the money paid by the Investment Firms then should have been paid back to the Federal Reserve so that the tax payers money was returned. But Countywide never transferred those loans, and they don’t own them.
This was a fairly simple and straight forward process that allowed Countrywide to reap hundreds of millions of dollars in profits for loan and related fees by using tax payer money to originate loans that it could not otherwise make because it didn’t have sufficient resources.
That window period of 4 years mentioned earlier, 2003 to 2007 was a very important time for Countrywide. It was at that time that CHL determined it was going to dominate the mortgage business and outpace its competitors by creating a service portfolio in excess of 10 trillion dollars and capture over 40% of the home mortgage business.
Not only did Countrywide lack the funds to make that many loans, but it lacked the cash flow to pay the expenses required on a daily basis to process that many loans. So, it did 2 things, first, it went into partnership with Bank of America and immediately received a 4B credit line, and second, it initiated an aggressive loan servicing program immersed in fraud, which increased its daily cash flow by hundreds of millions of dollars.
The 4B credit line was public knowledge, so it does not need further discussion at this time. In conjunction with the 4B credit line to Countrywide, Bank of America had also become very involved in Countrywide’s home lending activity.
The fraudulent servicing program initiated at that time by Countrywide immediately impacted hundreds of thousands of borrowers whose loans were serviced by Countrywide. In fact, it was this fraudulent servicing program concocted by Countrywide that started the foreclosure nightmare that ultimately resulted in the mortgage meltdown.
Here is how Countrywide’s fraudulent servicing program worked, and what it did for Countrywide.
During the aforementioned window period, 2003 to 2007, Countrywide was servicing approximately 20 million loans. Countrywide was entrusted with administering and servicing those loans to protect both the borrowers and the investors who had ultimately funded those loans. While the investors were additionally protected by insurance policies against negligence or loss caused by Countrywide, the borrowers were the sacrificial lambs that Countrywide focused on.
Each borrower trusted Countrywide to accurately charge and pay out funds for property taxes, insurance and other legitimate expenses connected to their loans. Each borrower, in addition to making their principal and interest payment, paid additional sums within their monthly payment to cover these other expenses. It is often called an impound account.
Typically, Countrywide, as the loan servicer, would determine the annual amount necessary to pay a borrowers property taxes and insurance, divide those amounts by 12, then add that 1/12th amount to the borrowers monthly payment of principal and interest. As long as the loan servicer is competent, honest and trustworthy this arrangement benefits the borrower.
But Countrywide turned this borrower-beneficial service into one of the most fraudulent and prolific money makers of all times, which continued for 4 years.
Countrywide began fraudulently charging for expenses that were never incurred, inflating the monthly amounts it was charging borrowers for their impound accounts. Where a borrowers monthly contribution for property taxes may have been $50, Countrywide began charging $100. When the borrower questioned the increase, Countrywide threatened to foreclose. If the threat of foreclosure didn’t work, Countrywide would then threaten to ruin the borrowers credit by reporting late mortgage payments.
This process was repeated on borrowers insurance premiums and other impound expenses. Where the monthly premium may have been $25, Countrywide began charging $50. This example would be indicative of a modest mid-west home valued at $80,000. The stakes were much higher on more expensive homes located in California, Florida, New York, etc.
In many cases, the borrowers just accepted the increase in monthly payments under the belief that their taxes, insurance, or both, had actually increased. With these borrowers, Countrywide had an unobstructed path to hundreds of millions of dollars in fraudulent profits.
Other borrowers who were on a tighter budget and could not afford the increase, resisted and opposed the inflated charges by demanding an accounting and refusing to pay. Countrywide’s response was to threaten foreclosure if the amounts were not paid. This threat usually worked and vastly reduced the number of borrowers who refused to pay, and left just a small percentage of borrowers who either could not pay, or refused to pay the fraudulent charges. For those unfortunate borrowers with enough backbone to stand up to Countrywide, the result more often than not was that Countrywide filed foreclosure suits against them, ruined their credit by falsely reporting the borrowers had defaulted on their payments, and ultimately steam rolled those borrowers into poverty-riddled-oblivion through an uninterested and uncaring court system.
Initially, and for the first couple of years, the courts were basically non-existent when it came to recognizing and enforcing a borrowers rights. Not only were these borrowers being victimized by Countrywide’s enormous fraud, but they were being victimized a second time by disinterested courts who failed and refused protect these borrowers or otherwise enforce the laws and regulations that were in place to prevent such egregious corporate fraud.
Finally in 2008 and 2009 the Bankruptcy Courts began recognizing the fraud orchestrated by Countrywide (now Bank of America) which started to turn the tides on the tidal wave of fraud then being continued by BOA. As stated earlier, BOA continues to commit fraud everyday to cover up the fraud of yesterday. Since 2008, BOA has been fined billions of dollars for fraud and has been ordered to cease and desist from dozens of fraudulent business practices.
Once the Bankruptcy Courts began dissecting BOA’s loan servicing procedures, it quickly learned that there many frauds on many levels, which resulted in thousands of claims made by BOA in bankruptcy proceedings being denied. BOA was then forced to either come clean, or devise more sophisticated frauds. Unfortunately, they chose the latter. Soon BOA began the process of robo signing loan and foreclosure documents which allowed their fraudulent claims and foreclosures to proceed.
Again, this more sophisticated fraud, which involved outsourced foreclosure companies working at the direction of BOA was discovered and exposed by the Bankruptcy Courts and some very diligent attorneys. As the Bankruptcy rulings began to permeate the public domain, state courts began to recognize their duty to protect the public from this prolific predator.
Soon state court rulings against Bank of America and Countrywide began to hit the news stands which provided much needed relief for those lucky borrowers who had their cases heard by courts that actually protected their rights. For some of those monumental rulings, New York, Washington State, Massachusetts, Florida, Illinois, Kansas, and Ohio became leaders in the fight to protect borrowers from the leaner, meaner BOA fraud.
For anyone with more than a mild interest and access to Google, you can search out the hundreds of cases against Bank of America and Countrywide in the various state and federal courts that have resulted in landmark cases against BOA and protected the rights of borrowers.
With Bank of America now under significant judicial and public scrutiny, and the effect of the manycease and desist orders currently in effect against it, once again it had the opportunity to either come clean, or to continue to defraud the public and the courts with its scandalous business practices.(Source Footnote)
And once again, BOA has chosen the latter where it continues to defraud millions of borrowers and homeowners by fraudulent loan servicing and foreclosure practices.
To insulate itself from the present scrutiny it is under and the effect of the cease and desist orders now against it, BOA has brought in banking conspirators to assist it with perpetuating its elaborate frauds on borrowers.
Three of those known conspirators are Bank of New York Mellon, Deutsche Bank, and U.S. Bank, NT. Each of these banks have also been heavily fined for fraudulent practices and are actively participating in defrauding the public and the courts by participating in the fraudulent transfers of loans that do not belong to Bank of America. They make it appear that such a loan was sold by Bank of America to one of the conspirators, then that conspirator completes a foreclosure on a borrower who has been completely victimized by the process. In every case, the borrower is kept in the dark as to the true owner of his loan, which is not any of these conspirators.
An additional conspirator, Mortgage Electronic Registration System (MERS) is actively participating in this enormous fraud by acting as the party to cause the loan transfer. The inability of MERS to transfer anything of value is well settled by many state and federal courts, but the Kansas Supreme Court was the first to get it right. (See Kansas Supreme Court, Landmark National Bank, MERS, et al)
As stated earlier in this article, this writer has identified a very extensive and sophisticated fraud that was formed and perfected by Bank of America that is effecting 3.5 million borrowers. And as also previously mentioned, this fraud involves co-conspirators Bank of New York Mellon, Deutsche Bank and U.S. Bank NT. In fact, Bank of New York Mellon and BOA use the same California address as the now defunct Countrywide.
The plan started out in 2003 under Countrywide direction in anticipation of dominating the home mortgage industry. As every state has strict guidelines for mortgage lending, and requires state licencing, Countrywide sought to circumvent individual state licensing laws and corporation taxes by using a name and entity that would stay under the radar. This was one of the earliest frauds connected to this scheme and was devised to avoid taxes and licencing.
The plan began to unfold when Countrywide Home Loans, Inc. began registering the trade name Americas Wholesale Lender with the Secretary of State in each state it sought to do business. Accordingly, each respective secretary of state would show “Countrywide Home Loans, Inc. dba Americas Wholesale Lender, under the foreign corporation registration section.
The plan quickly materialized because most, if not all states, were lax in their corporate law enforcement. The name slid under the radar just as expected. Countrywide began making thousands of loans in every state under the name of Americas Wholesale Lender and successfully avoided licencing requirements and paying taxes on profits that were actually realized by Countrywide.
Countrywide encountered a major snag when observant county recorders in several states refused to record security documents (mortgages and trust deeds) that were held by a trade name or dba, ie: Americas Wholesale Lender. Trade names have no legal capacity, therefore they cannot own property, file lawsuits, or hold recorded security interests.
For a full discussion see Pagano v. Americas Wholesale Lender, 87 Conn. App. 474.
Countrywide quickly addressed the problem by committing yet another fraud, which listed the lender on their mortgages and deeds of trust as follows: “Lender is Americas Wholesale Lender, a Corporation organized and existing under the laws of New York”.
After making this minor, albeit fraudulent and scandalous change in language, Countrywide resubmitted its mortgages to the previously unwilling county clerks who accepted them without reservation because the mortgage holder was now shown to be a corporation. No one noticed that no such corporation was in existence. But that was to come.
Although Countrywide had dodged that bullet, the reality was that their fraud would be discovered at some point in the future, however they believed that the savings in corporation tax, licensing fees and recording fees would outweigh the future potential cost. They also believed that the courts would consider their fraud just a clerical error, which for many unfortunate borrowers, became true.
By 2005, many of the loans made in the name of “Americas Wholesale Lender, a New York Corporation began to default. Adding to that problem, Countrywide was bilking its borrowers
with its loan servicing fraud by inflating impound charges which increased the default ratio. Because home prices were at an all-time high in 2005 and 2006, Countrywide gladly foreclosed on any property it could because it created more profit than a current loan would. Countrywide, through its self-owned companies Land Safe Title and CT Services was now a leading foreclosure entity
By late 2006, Countrywide was beginning to have some difficulty in foreclosing on the loans that were made in the name of the non-existent corporation, Americas Wholesale Lender, a New York Corporation. The only address listed for this corporation was a P.O. Box in Plano, Texas.
Borrowers and attorneys alike smelled a rat, but they were confused as to how, and who to file suit against, related to a New York entity that didn’t appear to exist and operated only from aP.O. Box in Texas. And while this confusion persisted, Countrywide continued with their foreclosures like a speeding train on a downhill run. Nobody could stop them because it was impossible to determine who the lender was.
Finally by late 2007, Countrywide imploded due to their extensive frauds committed in the loan origination and loan servicing areas. With Bank of America standing in the shadows, it quietly stepped into the shoes of Countrywide and continued to run the business as usual. By this time the frauds were so extensive that Bank of America made the decision to continue to use fraud as their means to achieve their goals.
By this time the foreclosure rate began to soar as the value of homes began to plummet. By 2008, Countrywide was a dirty word and Bank of America was now fully in the foreclosure business. Confusion and speculation was rampant, but determined attorneys were diligent in seeking answers to questions related to lenders, loan documents, procedures in the lending areas, loan servicing, loan transfers and a variety of secrets being kept by Bank of America involving Countrywide loans made in the name of a non-existent corporation..
It was during this time that the secret was discovered… there were 3.5 million loans made in the name of Americas Wholesale Lender, a New York Corporation, (still no such corporation was in existence) and such loans were funded with taxpayer money, they were never sold to securitized trusts as required by their pooling agreement, they were being controlled by Bank of America, Bank of America was collecting payments on those loans, and Bank of America was foreclosing on those loans despite the fact that BOA did not own or fund those loans.
In an effort to stop Bank of America’s extensive fraud against innocent borrowers, concerned and responsible individuals formed the New York Corporation named America’s Wholesale Lender, Inc. a New York Corporation. (Hereafter AWLI)
Once that was done, the matter was brought to the attention to the United States District Court that Bank of America was foreclosing on loans it didn’t own and loans that were made in the name of a corporation that BOA held no interest in. The U.S. District Court dismissed the matter as irrelevant and allowed BOA to continue with its fraud. This shocking revelation can be confirmed by review of the case that was filed against Bank of America. (Currently under seal)
One immediate result of the newly formed Americas Wholesale Lender, Inc. a New York Corporation was that disgruntled borrowers now had a name, address and entity to file suit against. Based upon court records, it is estimated that over 500 suits were filed against AWLI in the first 6 months. At least another 500 suits were filed in the following 6 months. Additionally,Bankruptcy trustees were serving adversary proceedings on AWLI seeking to void mortgages held in the name of AWLI. In all, more than 2000 lawsuits were filed against AWLI related to the fraudulent loans originated by Countrywide.
Because the individuals who incorporated AWLI were sensitive to the plight of the borrowers, and they were aware of the extensive frauds being committed by BOA, the officers and directors of AWLI decided to take a non-confrontational approach with borrowers who simply sought to cancel their loans made to AWLI. If those suits did not seek monetary damages against AWLI, and simply sought to cancel the mortgage and remove the lien from their property, then AWLI decided not respond to the lawsuit and allow a default judgment to be entered in the borrowers favor. Likewise, when an adversary proceeding was filed against AWLI in a Bankruptcy Court, and the relief sought was to cancel the mortgage, again AWLI simply failed to respond which allowed the Bankruptcy Court to enter a default judgment in favor of the debtor.
Based upon court records in 22 states involving lawsuits against AWLI that went to default judgment, including bankruptcy cases, it appears that borrowers were able to cancel approximately 18.5 million dollars worth of the fraudulent loans created by Countrywide with taxpayers money. It is safe to say that Bank of America will never be able to defraud these borrowers again, nor will it be able to take their homes away.
Currently, the more sophisticated foreclosure fraud designed by BOA which includes Bank of New York Mellon, Deutsche Bank, and U.S. Bank NT is in full operation. Despite a second offer made as late as May 2012 by AWLI corporate counsel to BOA counsel to purchase AWLI and stop the fraudulent foreclosures, BOA once again refused the offer in favor of continuing their enormous fraud. Here is how the fraud is being conducted by BOA on the 3.5 million loans that BOA did not pay a single dime for. Remember these loans were not funded by Countrywide or BOA.
As the loan servicer, BOA makes its own determination that the loan is in default. It notifies the borrower that it will begin foreclosure proceedings. Because of the foreclosure fraud committed during the last 4 years by certain lenders in all 50 states, most states have enacted requirements that the foreclosing lender produce documents attached to the foreclosure documents that prove they are actually the lender.
In the case of these 3.5 million loans, the lender stated on the mortgage or deed of trust is America’s Wholesale Lender, a New York Corporation. Because BOA is not affiliated with AWLI, and because AWLI has attempted to stop BOA from committing this fraud in its name, BOA devised a fraudulent scheme where it has MERS execute an assignment that appears to be on behalf of AWLI, which assigns the loan to either Bank of New York Mellon, Deutsche Bank, or U.S. Bank NT. Once that fraudulent assignment is recorded, that conspirator bank then attaches it to the foreclosure proceedings to defraud that court into believing it is the true owner of the loan. If a borrower is unable to afford an attorney to represent him in court, he loses his home, which is what BOA counts on.
When diligent attorneys become aware of this fraud, they are usually required to hire a forensic mortgage examiner to expose the fraudulent assignment falsely made in the name of Americas Wholesale Lender, a New York Corporation to the conspirator bank. In every case where this fraud is exposed before the foreclosure is completed, the fraudulent assignment is declared void. In a landmark case decided in the Massachusetts Supreme Court, in re Eaton, is was stated that “Bank of America cannot foreclose without committing fraud” (see Amicus Brief of Marie McDonnell)
In every case where this fraud was committed to complete a foreclosure, that foreclosure is subject to being voided through appropriate legal action. Even if a borrower has lost his home to foreclosure, has been removed from that home, and now resides somewhere else, if he can afford an attorney, that attorney can most likely expose the fraud, which would make the defrauding banks and MERS liable for severe damages, including treble damages for wrongful or fraudulent foreclosure.
The Attorney General for the State of New York has recovered over 400M from Bank of America stemming from these fraudulent foreclosures. Likewise, he has whacked Bank of New York Mellon and Deutsche Bank for their involvement in this fraudulent scheme.
Under the lending laws of most states, the 3.5 million loans made in the name of Americas Wholesale Lender, a New York corporation, between 2003 and 2007 are not enforceable. The reason behind that is that in each state, a home mortgage lender must have a license to make home loans. There was no license made in the name of Americas Wholesale Lender, Inc. Also, during this time, no such corporation was in existence, therefore no valid loan could be made in the name of a non-existent lender. In all states, if a corporation is not registered with that state, it has no legal capacity to conduct business. That law applies here. Another flaw was that the Mortgage or Deed of Trust named AWLI as the lender, but in some cases the Note named an entirely different party. In those cases, neither the Note or Mortgage was enforceable.
Additionally, neither BOA or Countrywide ever funded any of the 3.5 million loans made in the name of Americas Wholesale Lender, a New York Corporation. In every case, those loans have now been fully repaid by the TARP bailout and the various insurance companies who insured the securitized trusts where the loans were to have been pooled and transferred, but no transfer was ever made. In every case on these 3.5 million loans where an assignment of that loan was made to Bank of New York Mellon, Deutsche Bank, or U.S. Bank, NT, any such assignment, in addition to being fraudulent, and made without consideration, was made after the expiration date of the pooling agreement and was made strictly as a litigation tool to cause the appearance of a proper foreclosure. It should also be noted that any such assignment will show to be made immediately prior to foreclosure notices being sent to the borrower, but usually years after the expiration date of the pooling agreement. The enforcement and collection of these loans by BOA means they are being paid twice, and of course, at tax payer’s expense.
As Bank of America escalates this loan and foreclosure fraud against unknowing homeowners, it is putting equal effort in keeping a lid on this enormous fraud. Exposure on a wide scale will not only prevent BOA from continuing to perpetuate this fraud, but it will alert homeowners connected to these 3.5 million loans of their rights to void these loans, to stop fraudulent foreclosures, and provide the ability of already victimized homeowners to seek damages against BOA, Bank of New York Mellon, Deutsche Bank and U.S. Bank, NT. It may even be possible to recover all payments made to Bank of America on these fraudulent loans.
As a result of its effort to expose this fraud, AWLI was named in a lawsuit filed against it by Bank of America for trademark infringement. Although BOA is falsely using the name of AWLI to commit fraud, BOA alleges that AWLI is the one who is using Countrywide’s trade name.
Who in their right mind would be stupid enough to align themselves with Countrywide, other thanBankofAmerica.
Hopefully this article will find its way to the 3.5 million homeowners who are paying on void loans, and will allow many other foreclosed homeowners to be made whole. In the very same court that the Countrywide trademark case is being heard, there was a case filed by the U.S. Attorney General against Bank of America and Countrywide which resulted in a consent order and a 335M fine.
Despite that court’s knowledge of Bank of America’s fraud, it has nontheless restrained AWLI from informing the public of this enormous fraud, it has restrained AWLI from informing other courts when B of A and its conspirators file a fraudulent foreclosure, which has effectively allowed B of A to continue this fraud with the apparent blessing of the U.S. Distict Court, Central District of California. The effect is that Bank of America now has an unobstructed path to fraudulently collect billions of dollars from victimized homeowners while it systematically inflicts additional strain on the housing market and our economy, under the protection of the U.S. Court.
If, after reading this, you feel as outraged as you do helpless, there are at least 2 small things you can do. You can get online and send emails to Bank of America to let them you know of their fraud, and insist that they stop. The second thing you can do is send emails to the U.S. District Court, Central District of California and demand that it stop allowing Bank of America to commit this foreclosure fraud.
You can find some of the fines and penalties levied against BOA on the following page.