Crisis: Clouded at the Core

An Analytical Report by Mildred Wilkins, Foreclosure Intervention Specialist and former Fannie Mae Broker-Specialist

Foreword
I would have made this shorter if I could have explained what you need to understand in fewer words. I honestly didn’t believe that I could so I have written what I feel compelled to share. It’s long but developed in such a way as to provide an adequate background, lead you to factual information and give you a professional analysis of the broader picture.

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Crisis: Clouded at the Core
Background
We have been assaulted with revelations, facts, anecdotes, bankster PR and media spin for more than three (3) months now with the fraud involved associated with the foreclosure problem in America. We’ve had congressional hearings, interesting legal decisions and the promise of a riveting expose from Wikileaks founder Julian Assange against one of America’s largest banks. If he can manage to keep himself alive long enough to deliver we could have revelations which will make the stuff of the past few months kids play by comparison. Thus far the startling revelations have come so fast that all of us are waiting for the other shoe (or next unbelievable TRUTH to be revealed) that we have been left with barely enough time to breathe, certainly little time to analyze anything before there is another incredible revelation. Judge refuses to let public into his court room. More research, follow-up, corrective action. Wash, rinse, repeat. I’ve jokingly (only kindda) told friends I can hardly sleep for six hours straight anymore because I don’t dare not check in with updates from my most reliable sources to see what’s the latest incredulous revelation. If you miss www.4closurefraud.org for more than 6 hours you will be seriously behind in your foreclosure reading. My personal favorites are 4closurefraud.org, LivingLies weblog and Mortgage Implodometer. Only Living Lies provides lengthy analysis or opinion pieces on what all the ‘facts’ mean or could mean. We now have a fulltime job trying to absorb the enormity of the ‘facts’, ‘incidents’, ‘life stories’, ‘personal tragedies’, ‘court decisions’ and ‘sworn testimony’ which continues to unfold. It has been difficult to focus on anything other than uncovering the activities of the banksters which are now clearly systemic, anti-consumer and frequently illegal. Indeed, I have had numerous professionals ask me “why are the banks doing this?” “Why are they trying to foreclose while pretending that they really don’t want to foreclose?” Understanding the issue (and consequently the answer) requires a broad understanding of what I have called for years ‘the BANK GAME’. Almost no consumers and very few professionals have spent any time analyzing the entire banking process—why would you? You only need to know so much to open a checking and/or savings account and get your debit card. You need to know a little bit more to get a mortgage and they happily provide you with the information and lead you through the process. They get your financial information (or as we now know, make some up for you if your true information does not work for them) and presto/chango, you became a happy homeowner. You learned a bit more if you needed to refinance (this could be dicey if you tried in the past 5 years) but the truth is that they were more than accommodating if there was in any way possible to ‘make it work’. Almost nobody would

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Crisis: Clouded at the Core
have called dealing with your bank ‘a game’. They were your bank, there to serve you and meet your financial needs. They told you that and you believed them. In reality, it IS a game. Perhaps it didn’t start out that way but about 20 years ago (at least 20 years ago) the consumer’s relationship with the bank shifted. No longer was the consumer the most important part of the equation and their needs paramount but the needs of the institution became paramount and the consumer became a necessary pawn in the BANK GAME. You have been drawn into the GAME without your knowledge or permission. You are impacted whether or not you know it and are now faced with external behaviors such as their foreclosure practices which seem suspect. If you never knew there was a game you would also be unaware of the existence of game rules which details all the activities associated with playing the game. In fact there are TWO rule books, the official one and the one they actually use. The official BANK GAME rule book have rules/stipulations which cover every conceivable activity which a bank might be required to perform but I will only focus on the mortgage related rules since the bank serves other functions. The rules cover areas such as: 1. The loan application process 2. The recording and transferring of your mortgage and note (or deed of trust) 3. On-going responsibility for keeping up with and recording title transfers (for several good reasons) 4. Steps for conversion of mortgages into securities 5. Loan servicing requirements, including responsibilities to the consumer who took out the loan 6. Guidelines for reporting to the government and Wall Street revalent information about the loan, the borrowers and other information, as required 7. Responsibility of processing foreclosure—when a default could not be cured by any other method—as a part of loan servicing All of these activities which were entrusted to lenders are governed by a multiplicity of federal laws, federal regulations (not the same as federal laws) legislative recommendations (totally different than laws or regulations AND totally unenforceable (HAMP for instance) state laws, basic contract law and assorted other considerations. When you factor in employee cost and the time needed for them to cross reference all of the above and still make a profit which would allow them to pay billions of dollars in bonuses—off YOUR money—they had no choice (from their prospective) but to cut corners. It was also imperative that they get really creative in creating new revenue streams.

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Crisis: Clouded at the Core
The necessity to make the most money possible meant there had to be a 2nd set of rules, the ones they operated by on a daily basis while giving lip service (and the finger) to the official rule book. Everything which has been uncovered is evidence of the existence of the 2 nd set of rules and the norm for our biggest banks. Many readers are still trying to grasp HOW things got off track and WHY have the banks been willing to go to such extreme measures to deny actions which have clearly been uncovered as systemic. What does it means other than they are lying? Let’s discuss the HOW part first The creation of MERS in 1995/96 (Mortgage Electronic Registery Service) allowed members organizations to save billions of dollars. They avoided the time-consuming and hugely expensive cost of paying pesky recording fees to undeserving local recorders’ offices. The MERS members (initially included most of the big players you would expect and perhaps a few which will surprise you. Fannie Mae and Countrywide Financial, J.P. Morgan Chase, Bear Stearns, HUD, Freddie Mac, Bank of America, Merrill Lynch, Lehman Brothers, Wells Fargo, Wachovia, Option One, Ginnie Mae, Norwest Mortgage, Allied Group Mortgage Company, and ALTA (the American Land Title Association) were among club members who have changed the way the world views titles of real property. This newly created ‘club’ had a solution which would work better for them than the cumbersome and expensive requirement under which they had been operating for more than a couple of centuries. Eventually, almost all banking entities in our country saw the wisdom of joining the MERS club). They unilaterally created and agreed to a ‘new’ rule which was to bystep the universal requirement under state law to record ALL mortgage/deed/deed of trust/assignments and sales as a way to guarantee that there was a clear chain of title for all property in the country thereby protecting both the current and any future land owner from claims against the property for which they were paying or had paid. The banksters (and other MERS club members) decided it was sufficient for their purposes to use an electronic format to record who was holding your mortgage at any given time. They were not concerned with violation of the New York trust law which stated notes had to accompany (as in “go with” “be stuck to” with a staple machine or chewing gum or something) the mortgages (YOUR MORTGAGE) as described in the trust document. Because ALTA (American Land Title Association) was a MERS club member, their cooperation in the creation and utilization of mortgages in blank (like a BEARER check) meant this mortgage could be passed around (or recorded like it had been) when in fact the actual document was sitting in Countrywide’s vault all the time.

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Crisis: Clouded at the Core
There is no disputing that billions was saved in recording fees and valid lawsuits are surfacing which allege as much. The billions saved by MERS club members are the exact same billions which were NOT paid to local municipalities across the country. A possible secondary benefit to not recording the transfer each time a mortgage (minus it’s note) was transferred has been reported as allowing the sale of the same mortgage/collateral to multiple institutions. Shocking I know but the evidence grows stronger every day. There is credence to this based on an ever increasing number of reported cases in recent months/days where multiple banks have filed foreclosure against the same house. How could this be unless it was sold to multiple parties? How could the details, loan number etc be in their system so they had enough information to begin foreclosure unless they had been sold the mortgage? (or a piece thereof). Personally, I believe that it will ultimately be revealed that mortgages’ being sold to multiple investors has been a common practice since MERS came into existence. I mention it now as part of the background because the lack of validity for American real estate has been undermined by numerous unethical and illegal practices. The loss of integrity for titles in the United States is already complete. American land titles are clouded at the core.

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MERS Roles in the Foreclosure Epidemic and Lack of Standing By George Beckus Esquire; the Golick Law Firm, January 1, 2010 Found at Florida Foreclosure Lawyer M.E.R.S.—It’s Not a Planet-available at www.4closurefraud.org MERS Scandal Exposed & Explained; Nov 3, 2009, courtesy of Joe Bisogno of Loan Compliance Advisory Group

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This report will discuss the HOW and why it is important to your life-TODAY-and the implications for your personal real estate related decisions. This report is an analysis of facts. It will include references to facts which are covered in great detail in other places on the web. For legal documentation including revelant lawsuits, sworn depositions, etc. I have not uncovered another website which gets material as quickly as www.4closurefraud.org nor another which has such a comprehensive inventory of leading stories and legal documentation worth your reading time. There are a number of sources which I read multiple times per day. It is important that you likewise select resources on whom you can rely to give you fact based information during this volatile time in the history of our once great country.

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Crisis: Clouded at the Core
This report was written by . . . A consumer Advocate-Writer-Educator-Researcher-Analyzer—A student of “the BANK GAME” What makes me think I am competent to provide an analysis of such a complex subject? The answer is a decade of being immersed in fighting as a consumer advocate to help address unfair housing issues, beginning with predatory lending. I have made the study of real estate my life since the late 80’s. I became a fulltime REALTOR in January of 1993, a Fannie Mae BrokerSpecialist in 1999 and a consumer advocate in 2002 railing against the internal processes at Fannie and HUD which were leading to increased foreclosures and ever increasing losses to government insurance pools. I’ve studied appraising and real estate law, read many thousands of pages of federal regulations related to loan servicing, taken classes and extensive training on loss mitigation. I’ve taken training designed for loan servicers from both HUD and Fannie Mae to find out what servicers are suppose to do and then compared that to what they do. “Such a tangled web we weave, when first we practice to deceive.” -Sir Walter Scott I became a trainer, teaching housing professionals what the laws and regulations say should occur and how it is frequently ignored to the detriment of their clients. I became a writer of articles and courses related to foreclosure intervention for both consumers and professionals. As a national trainer since 2005 I have gained the benefit of the experiences of thousands of attendees from across the country on what is being done by lenders across the United States, rather than a small sampling in a given geographic location. My focus has always been the broader picture (the elephant). My goal has been to first understand, find weaknesses which could be used for consumer benefit and then share that information as broadly as possible. Rather than marvel at his awesome trunk, I’ve questioned why does he appear to favor his left rear foot. What is the reason behind the action? Analyzing is what I do with the goal of first understanding, then sharing that knowledge so that you can benefit without reading 6-8 hours per day, volumes of material which make your head hurt. Since foreclosure intervention training is what I do professionally, it is an investment in my calling to know both the WHAT and the WHY. Earlier this year I shifted from primarily training real estate professionals to be better prepared to help consumers in default to looking for opportunities to educate consumers directly about the challenges they face in housing. My goal is to impart broader knowledge in a format which
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Crisis: Clouded at the Core
is easy to digest, with the intent to empower the public with sufficient knowledge to implement recourse. Now that you know certain facts, since you are frustrated with currents behaviors which have been revealed, do you know what those facts mean to you personally? The title issue this report addresses affects everyone—even if you don’t own a house. Whether you are paying on a home, paid off a home, rent a home—the cloud on titles in this country will forever change real estate transactions. Questions…questions…..questions… 1. What is the significance of the revelations related to the foreclosure crisis in the broad scope of things? In your life? 2. What conclusions might you draw? And what actions are warranted on your part? 3. If you are in default, can the consequences be minimized? Avoided altogether? 4. Are there legal options available to you? Do you know them? Might pro se work for you? 5. Does failure on the lenders’ part to follow applicable laws provide an opportunity (weakness) which strengthens your position? 6. Have you gathered the facts you need to support your desired outcome? Massive Cover-Up Necessary to try to Hide the Cloud on Titles Robo-signers. Lost note affadavits. Rocket dockets. Foreclosure Mills. Documentation ‘production’ plants. Stalled loan modifications. Outright lies about why modifications have not been occurring. Trickeration to get consumers to default so foreclosure would be possible. Perhaps even an Interpol arrest warrant for Wikileaks founder Julian Assange—not because he disseminated thousands of pages of government documents but because he promised to divulge thousands of page of bank documents. American banksters are desperately seeking ways to continue the massive cover-up of a reality which is almost too much to comprehend—they have taken actions, beginning with the creation of MERS—which have completely undermined the ownership of real property in the United States. No one whose mortgage has been securitized since 1995 can be certain of the validity of their deed. No one. Read that again, if you need to. Then read these supporting articles: a. “Bofa Mortgage Mess Deepens on Promissory Note Issue” Bloomberg b. Foreclosure Fraud, “Bofa Dissolves Its Own Lawyers Argument in

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Crisis: Clouded at the Core
Fumbled Mortgage Case” c. “A Full In-depth Report on Fraudulent Mortgage Assignment” by Todd Ruger—Herald Tribune d. “Will the MERS Exam be a Whitewash” Nov 18, 2010 Wall Street Journal Blog e. Numerous other stories and articles at www.4closurefraud.org THE REST OF THE STORY Now read the rest of this report to understand WHY title is clouded and why financial institutions have gone to such lengths to keep YOU, the general public from understanding the implications of their actions which have been exposed since September of this year. What’s At Stake? Everything. Literally. E-V-E-R-Y title in the United States. E-V-E-R-Y bank in the United States. E-V-E-R-Y retirement account which invested in mortgage backed securities. Property values will plummet to depths none of us even want to think about. Put back requests for most of the mortgages sold to investors in the past fifteen (15) are possible once the full import of the revelations such as the sworn statement of Linda DiMartini, a supervisor and operational team leader for the Litigation Department Of BAC Home Loan Servicing, testified in the foreclosure case of John T. Kemp that it was “customary for Countrywide to maintain possession of the original note and related documents.” This bombshell revelation totally changes the landscape with regard to both consumer challenges to the legal standing of plaintiff’s in foreclosure lawsuits across the country as well as creates some strong evidence for investors who are preparing and submitting put-back requests at a speed only slightly slower than they bought the ‘hot potato’ mortgage backed- securities in the first place. There is no longer a plausible defense for why you can’t produce a note since we have been told that as a standard practice, most lenders keep the original notes which should have been placed in trusts in their position just as Countrywide has testified.

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Crisis: Clouded at the Core
The systemic risk that has been tentatively mentioned in recent congressional hearings is already a reality. The possible (and probable) collapse of more than one of our largest institutions is imminent. I am sorry to say it does not matter how you feel about this statement or whether you agree. An analysis of the available facts clearly point to an unavoidable day of reckoning. None of our largest US banks are solvent enough to: a. Cover put-backs at epic numbers for misrepresentations of ‘warranties and representations” b. Manage the holding costs of foreclosures delayed—for years-due to their inability to prove ”legal standing” to foreclose c. Manage without the excessive fees for foreclosing d. Manage without the insurance payments once the foreclosure has been completed e. Manage without the revenue stream from force-placed insurance from their affiliated insurance company and other ‘tacked-on’ services which they utilized f. Manage to pay all the recording fees which are legally due to recording offices across the country moving forward –they certainly cannot afford the billions they have already avoided paying which are still due g. Cover the cost of maintenance on millions of already foreclosed properties once municipalities start to use current laws to force the lender (not the former owner) to cover the cost of upkeep. h. Retain loans which are unsecured on their books with no true recourse to either demand payment or foreclose i. Afford the onslaught of class action lawsuits for wrongful foreclosure with astronomical legal costs and ultimate damage awards j. Bear the brunt of the coming rebellion which will lead many ‘former’ law abiding citizens into strategic default because there is no other reasonable recourse By Any Means Necessary The mortgage mess, housing crisis, bankster screw-up—whatever you choose to call it—is – at it’s core, an outward manifestation of the BIG Cover-up. The biggest cover-up our nation has been subjected to in our history. At the core, all the revelations related to wrongful foreclosures hinge on the need to cover up the fact that most of the titles in the United States are ‘clouded’, as in, NOT clear. No clear, traceable link from one entity to the next to the next. Certainly any mortgage which was…  Registered with MERS, and/or  Sold as a security

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Crisis: Clouded at the Core
must necessarily be suspect as clouded because of how they were transferred based on recently revealed bank practices. IF those titles are clouded, can we trust the lenders who created the ‘cloud’ through their failure to follow legal procedures were handling other titles appropriately? Really? You wanna bet your house on that? Didn’t think so. Be patient and ready to let soak in the gravity of our national issue. We are a nation facing the total unraveling of property transfers—both past (wrongful foreclosures) as well as any pending or future transactions. Unless and until we understand this reality, then demand a halt to unlawful practices while simultaneously resisting the bankster PR to continue in denial, we delay the difficult task of restructuring our entire financial and property rights system. It will be an overwhelming task and will take years. The sooner we get started the better for all parties but the banks. A collapse of the American financial structure, as we know it, is not likely to be averted, at this point. There is still the choice of a strategic collapse with some safe guards in place while we work on the mess (perhaps government management of financial institutions (I know, that is scary too). The other choice is to let nature continue to take it course without strategic intervention because to do so we would first have to acknowledge that we have allowed our banks to govern themselves for too long and they did what any self respecting two year old would have done—tore up everything and blamed his brother—totally forgetting that he was an only child. Americans are being forced to become educated about the intracities of real estate transactions in this country. The foreclosure problem five years ago was largely viewed as “someone else’s” problem, “not an issue here”, “that’s tied to lower income folks” and numerous other illusionary expressions which all reflected a lack of understanding that we are all tied together as a nation by the strength (or weakness) of our real estate market. When I taught (FIS) Foreclosure Intervention Specialist training in the spring of 2006 in Denver the classroom was filled with approximately 75 REALTORS. They wanted to learn how to effectively do short sales as a way to make more sales (I was teaching it as a way to help consumers avoid foreclosure). Many of them signed up so they could get the Continuing education credit and wanted to have another certification they could flaunt. Most did not agree that Colorado was facing a serious foreclosure problem. Fast forward to November of 2006 when I returned to provide the same 5 day series again and now there is national recognition that Colorado is leading the country in foreclosures. Attendees are much more in tune than the first group since they now are starting to see the impact among family, friends and even some of the attendees themselves. Same story in Charleston, SC as late as the fall of 2009, the illusion among real estate professionals that ”we are a high income/high property

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Crisis: Clouded at the Core
value area therefore we are somewhat immune to the foreclosure mess”. Total lack of recognition that the crisis was knocking on all the windows and the back door.

“External” Title Issues
Almost all title issues used to be of the external variety and included such things as:            a mechanic’s lien against the former owner which was not released a contractor’s lien, against the former owner which was not released homeowners’ association dues Liens related to a divorce settlement Heirs of former owner who have exerted a claim A failure to transfer all interest in the real estate (such as mineral rights) A previous deed was improperly written or signed The property address misspelled in the deed conveying the title A deed which has been signed but not properly recorded Liens from a local taxing entity, IRS or other entity Numerous other, similar claims which create a ‘cloud’ on the title you hold

A title company search would typically reveal the issue and the title company would take the appropriate actions to correct it. The fact that the public records would allow anyone to research any existing claims greatly minimized the possibility of unresolved title issues remaining on the deed once you bought it. Since you also purchased an expanded title policy as ‘insurance’ against anything which had not been revealed during the search, you could be assured that there were not likely to ever be any challenges which could not be easily rectified. Transactions between individuals required the transfer of: a. Clear title, backed by a title search of the public aforementioned ‘public’ records b. Presentation of a general warranty deed (as evidence that clear title had been passed) c. An owner’s title policy which warranted that in the event there had been an event in the past which created a challenge upon the validity of the title, then the title company would do whatever was necessary to clear up such dispute, at no cost to the purchaser d. Utilized the services of a title company closer who handled the transaction details of the formal closing as a disinterested 3rd party, who had no contractual relationship with any of the parties to the transaction. *
*(FIS) Foreclosure Intervention Specialist is a registered trademark which belongs to Mildred Wilkin

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Crisis: Clouded at the Core
“Internal” Title Issues
Our current challenge is the chaos which has been created by internal title issues. Real estate is continually evolving which, of course, means there will be lots of changes. Changes are necessary in the world and we embrace those which are positive and move our industries forward and make our lives better. But every now and then some segment or industry will take a GIANT step into the abyss with some well-crafted but totally cockymammy idea which throws us into a tailspin. The creation of MERS (Mortgage Electronic Registry Services) was just such a GIANT step. Internal title issues which have undermined the entire backbone of property rights in this country is a massive, destructive, unintended consequence of MERS. While MERS was created to make the tasks for MERS club members:  Easier  Faster  More self contained  profitable MERS allowed the partners to:      Push mortgages into trusts at break neck speed Create and sell securities in previously unimaginable volumes Avoid billions of dollars in recording fees, which by law, should have been paid to YOUR local municipality ( for frivolous things like schools, police and fire trucks) Make money so fast they couldn’t keep count Make mortgage transfers so fast sometimes they forgot who they thought had it

Unfortunately, moving mortgages at breakneck speed, via a computer program no less, without ever taking the time to move the physical note (remember that little document which says you have the right to the collateral (the HOUSE) in the event payments are not made). A little piece of paper with serious power (if you have it). You have no legal standing to foreclose or otherwise force payment of the obligation if you don’t possess the orginal note TOGETHER with the mortgage. The harsh reality is that without the note travelling with the mortgage (as in attached to it, by staple, bubble gum, we don’t care what, just as long as they remain travelling partners) the holder of the mortgage essentially has 50% of 0. You can pass the mortgage around as much as you want but it is totally unenforceable without the accompanying note. Yes, an obligation is owed, but to whom? Worse yet, the enforcement power is, by law, within the note, which somebody left at home. And worst of all, law says you can’t remarry them later

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Crisis: Clouded at the Core
and it will be okay. Once divorced, they are divorced, permanently. None of this,” let us give it one more chance stuff “that we Americans are famous for. It appears that the members of the MERS club were so busy counting their dollar bills that they overlooked the need for a serious assessment of the downside of their actions. We may discover as the months continue that in fact they were warned by one of their rank (I can’t believe that NOBODY thought of possible problems) and they chose to ignore the warning under the illusion that they owned Washington and Wall Street and would therefore be able to talk/posture/bs their way out of any eventual problems. Besides, investors would be holding all the stuff and they were protected since they sold loans as soon as they found a warm body willing to sign on the dotted line. This was a monumental miscalculation on the part of banks but we and they are only discovering this fact now. Our banks created an internal issue for which they must assume total responsibility. This title issue, or the need to cover up the lack of clear title, is the true cause of robo-signing affidavits, and the subsequent revelations since mid –September.

Beginning to End
Lest you forget (or you were not aware) most of our big lenders have their retail loan division which is separate from their loan servicing division. They created liar loans and untold other kinds of crazy financial products but sold them immediately thereby ending their risk of loss should there be a default. We are talking about loans so clearly destined for default that any under-writer could have projected a likely default, even if they just started work in underwriting yesterday. It has been widely documented that there was rampant fraud in appraisals, documentation of debt to income rations and other tell-tell signs that all was not well with the loan from day one. All the more reason to get it out of your possession as quickly as possible. Lots of loans were needed to fuel the securities demand—demand which was created by the folks who then went out and got the mortgages which were the necessary ingredient to amass billions of dollars in income and allows millions of dollars in bonuses. Never mind: a. b. c. d. the laws we need to break/ignore the folks who will find out in a little while that they couldn’t afford the loan the folks we promised they could refinance when we know they can’t the requirements for mortgages to be part of a trust under NY law
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Crisis: Clouded at the Core
e. the possibility that this may not work because, well because, we are the bank… So mass marketing, cajoling, misrepresentation and outright fraud coupled with government promotion of home ownership all worked to the advantage of the financial institutions who controlled the game and the gullible consumers both rich and poor (but mostly in between) who had never heard of the BANK GAME, consequently, did not know that they were necessary pawns in this fascinating pasttime. Seriously, I challenge you to view this as a game of chess between a Olympic chess champion and yourself. Do you have even a tiny chance? (I do not want to hear from the four folk who read this who are chess champions, I mean the rest of the people). Holding on to loans once they were generated would have been foolhardy, especially since you know when you have something which is a piece of crap. So transfer at or immediately after closing became and remains the norm. Let’s Take a Look At Servicing (one of the tasks outlined in the BANK GAME) Dispense with the risk, but holding on to servicing. Now that was another story. And another large income stream. Servicing offered lenders a golden opportunity to literally clean up financially. With no real oversight. I am quite aware that there are several federal agencies who have the responsibility for oversight. I make no apology for the statement that banks were not being overseen because the facts as revealed and the protracted length of time during which the fraudulent practices which have brought us to this time in history continued clearly demonstrate a lack of real oversight. Our reality is ample evidence that our regulatory agencies have some ‘splaining to do’. Servicing by the ‘Unofficial” rule book Lenders created servicing divisions and engaged in contracts with the investors who ‘supposedly’ owned the mortgages to handle all the mundane tasks for them for a fee. There were contracts in place and federal and state laws which were required to be followed, under the terms of the contracts, but who cares about contracts. IF YOU ARE A BANK …You can do whatever works for you, make up your own rules as you go along and after awhile almost everyone believe what you say is accurate because, well, because you said so, and you are the bank. Your representatives carry themselves with a sense of authority (sometimes confused with entitlement) and when you combine banker and attorney it’s a tough contest for which of them can give a better performance for righteous indignation when questioned. The world would tilt if you mentioned a point of law which they were violating and they would quickly tell you “no borrower has been defaulted on who wasn’t behind on their mortgage”. If you don’t believe them, please take some time to read:

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Crisis: Clouded at the Core
a. “Marshall Watson Attempting to Foreclose on VA woman RE a Port St Lucie home she sold in 1994” story at www.4closurefraud.org b. “75 year old San Jose Woman Reclaims Illegally Foreclosed Property from WAMU” also from www.4closurefraud.org c. “Facing Holiday Eviction, Group Protest Bank” d. Plus numerous other stories at www.4closurefraud.org and other website The lender’s servicing obligations included everything from:     collecting payments to handling transfers of assignments, recording such transfers according to local laws (oopsie) collecting payments, handling workouts when needed (according to the directions of that specific guarantor—if it is not too much trouble)  processing foreclosure, (when needed, following all applicable laws—if it is not too much trouble) The filing of the lost note affidavits as well as other falsified documents was needed to fulfill the lenders’ contractual obligation to complete foreclosure (in the absence of the real documents) Most of us are familiar with the mandate to just get the job done. So implementing strategies such as robo-signers, foreclosure mills, the use of non-attorneys to perform legal work, and numerous other actions were all a direct consequence of the need to complete servicing as required. If you misplaced a note or two (or left them somewhere on purpose because that served your purposes at the time and now you can’t admit that you have them) there are numerous document production mills which can get you what you need. Sworn testimony of Nationwide Title Servicing employees available at www.4closurefraud.org Other documentation at the same site Direct Impact of Title Uncertainty Those consumers who have or are facing foreclosure are directly impacted by the actions of lenders, the inclusion of their mortgage in mortgage-backed securities and the ensuing uncertainty of who is the true holder of your mortgage and note. The question is not “do you owe a mortgage on your home?” The true questions are 1. Who is the rightful holder of your mortgage and note? 2. Who has the authority to grant a workout or make a modification to your loan? 3. Who has been receiving payments? (not who you paid them to but who received them)

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Crisis: Clouded at the Core
4. Who has an accurate accounting of how much you have paid? 5. Whom should you turn to for an accurate accounting of any costs you are obligated to pay under the terms of your mortgage agreement? 6. Who should be the decision maker in any dispute you may have about something such as force-placed insurance which you have asserted was erroneously placed on your mortgage at costs sometimes as high as 8-10 times the customary amount? 7. Who has the true authority to make a decision on a modification—lenders have been quoted in sworn statements as deny they have the ability to do that based on investor instructions, yet I have read servicing rights granted by investors which grant authority to lenders to make modifications (both interest rate as well as principal reduction) *Note 1 below 8. Who has the final authority to make decisions on acceptable short sales? Lenders claim their hands are tied, again, because the investors have to tell them what to do. See *Note 2 below 9. Who has the right to foreclose if you are not able to pay? Who has legal standing? 10. Who will bear the ultimate loss on your obligation if it remains unpaid? All these questions (and more) will track back to ‘the holder in due course of your mortgage and note”. Not one or the other, but the 2 documents as a cohesive unit, married at your loan closing and inseparable as a legitimately enforceable document. Each carrying 50% of 0 value; but together worth 100% value. _______________________________________________________________ *Note 1-HAMP has not worked because lenders have used the fact that the general public is unaware that they have the authority under most servicing rights to make whatever modifications are needed to maintain the loan as a performing loan. Additionally, HAMP solicited voluntary compliance from financial institutions, did not require adherence to recommendations as a condition of the bailouts and essentially they were granted permission to do what they do, which is, whatever they want to do. * Note 2—Few consumers and almost none of the professionals whom I have taught in the past 7-8 years were aware that there are clear guidelines set out as federal regulations which govern servicing on all government backed loans, FHA, VA, USDA. There regulations were put into place decades ago to protect consumers from craziness like we have been experiencing. The regulations are a matter of public record, they are nonetheless somewhat difficult to find and you would have to know they existed in the first place. The guidelines for just FHA are contained in many thousands of pages of documents called Mortgage Letters. They are all

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Crisis: Clouded at the Core
available at www.HUD.gov. Short sale requirements, modification stipulations, requirements on both the borrower and the lender are readily available on line. Check the other government websites for their guidelines as well. Fannie, Freddie and Farmer are a little bit different since they were quasi-government until they had to be bailed out by the government two years ago and became actual governmental entitites. Their guidelines for how your loan should be serviced are also available on line. Private mortgage insurers are PRIVATE and consequently, their guidelines cannot be viewed online. Direct Impact of a Note which cannot be located… Or the Official Holder cannot be identified Borrowers who are current:  Have payments been credited to the CORRECT holder of your mortgage?  If payments have not been credited to the correct holder in due course, what is the actual status of your mortgage?  If your note remained in the possession of your original lender, who has since been swallowed by another institution (or died of natural causes), your note can NOT legally be transferred to catch up with your mortgage which has been transferred multiple times. Your mortgage obligation remains but is now unsecured and whom you owe is in the million dollar question  When your mortgage is paid off, can you know, with certainty, that the true holder, was, in fact, PAID?  Since Nationwide Title Servicing employees testified in sworn testimony on November 4, 2010 that they robo-signed both assignments and satisfactions of mortgage—without verifying anything—has your mortgage been properly released? While the foreclosure crisis has drawn attention to the ambiquity of ‘who’s holding the note’ the essential issue is equally critical for ALL homeowners and must be addressed as we continue to move through the crisis. In point of fact, I would be more concerned if I was current or had a paid off home that I had a clear title or was paying the correct holder of my note than if I was about to lose my home to foreclosure. If you are sitting on the sidelines and blaming the ‘deadbeats’ you might want to check you title since your mortgage/note have been handled by the same robo-signers, document procurement companies and the same entities who are not wrongfully foreclosing on homes across the country.

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Crisis: Clouded at the Core
Chain of Title—More Important Than Ever Securitization on steroids—accomplished with the implementation of MERS—has scrambled the chain of title for mortgages which have been securitized via that system during the past 15 years. At the heart of the “show me the note” foreclosure defense is the legal issue of who is in possession of the note which: 1. Grants ‘standing’ to the person who can demonstrate they have custody of the note 2. Demonstrates who is the ‘real party of interest’ or has an enforceable claim 3. Allows the person who has been identified in #1 and #2 to pursue a foreclosure once a default has occurred. “Produce the Note Act of 2009” It is extremely frustrating as a consumer advocate to watch what has happened in this country with unchecked foreclosures based on fraudulent or missing documents, legal counsel operating with total disregard for the legal system and a legislative system only now beginning to show any interest in listening to the complaints which have been raised by both legal defense counsel and individual consumers for several years now. Congresswoman Marcy Kaptur, a Democrat from Ohio gets it. But Marcy did not jump on the band wagon AFTER the robo-signing was exposed. Marcy drafted and sponsored the “Produce the Note Act of 2009” in February of 2009. I have studied the document and believe it would have prevented more than a million people from losing their homes had it been passed and implemented last year when it was presented. It went nowhere which is a strong testament to who is being supported and protected by the majority of our elected officials. I strongly urge you to google the document, study it and push to have it re-introduced in the next session of Congress. It’s already written (very well I might add) so they can just brush the dust off and change the year. It would put an instant and complete halt to fraudulent foreclosures by pretender lenders who are not in possession of the note. While this would not address the cloud on the titles already scrambled, it would go a long way toward marking a turning point in our battle to stop the bleeding. Lenders have been successful in operating the BANK GAME with their preferred way of doing things partly because  almost nobody knew there are official rules they were obligated to follow  they were quick to yell “ we are being regulated”  they managed to get legislation passed which increased their control over themselves

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Crisis: Clouded at the Core
 consumers were not desperate enough to attempt legal action until banksters became so flagrant in their deeds that the public conscious said ‘no more’  the public bought into their “God complex”  they created a model for operation which became their industry standard and only retired bankers rat them out about all the crazy, fraudulent, underhanded stuff they do  consumers felt powerless to fight back even when they knew the bank was wrong because they felt guilty about being in their situation  because the internet had not made it possible for so many from across the entire country to compare notes about what they were experiencing  because it is hard for even me and the small circle of seasoned consumer advocates whom I talk with who have been aware of the issues for years to get our heads around the magnitude of the greed, willingness to swear to known lies, disavow long term employees (Countrywide/Bank of America in the Matter of Kemp v. Countrywide Home Loans, Inc. 08-02448, U.S. Bankruptcy Court for the District of New Jersey, Cambridge)  The lack of regard for the laws of our country and a willingness to compromise the same at the most fundamental level is almost too much to comprehend. And yet, the facts are indisputable. The magnitude cannot be overlooked. American banks created a whole new rule book, quietly agreed among themselves to ignore any law or right which interfered with the goals of maximizing profits at every conceivable opportunity. They have all played by their rules with the ultimate cost to be financial upheaval around the world. Our investors in foreign countries will not soon forget the castrophe which we are about to bring down on their heads as well.

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Crisis: Clouded at the Core
Indirect impact of Title Uncertainty
Consumers who have already paid off a mortgage which was securitized during the past fifteen (15) years cannot rest easy either. There is a major question of whether the CORRECT holder of the mortgage and note was in fact paid off? Was the release of mortgage signed by one of the robo-signers who worked for Nationwide Title Services (or other similar entities) who have testified in sworn affidavits (see www.4closurefraud.org) that they did not check or cross – check anything when they signed off on release of mortgages, they just signed where their name appeared. For those of you who are current on your mortgage, I suggest you research how to submit a comprehensive qualified written request and get one in the mail asking for verification of a number of things related to your mortgage, including a record of all payments made-since the inception of the loan- and copy of assignment trail for both your mortgage and note. The general public is already experiencing a growing uneasiness with the viability of real estate in many regards. The most notable aspects are probably the fragility of the value of properties, uncertainty of availability of mortgage money for new purchases, significant concern about the liquidity of our banks (even without a clear understanding of the issues revealed and examined in this report). We can, we must—unite to get and stayed informed about what is happening and how our world is being changed. It is not just a trite statement, it is imperative that we take action in any way possible to enhance the protection of the laws which are the foundation of our country, the rights of each and every one of us because to do less diminishes the rights of all of us. We can ill afford to keep mouthing the rectoric of the banksters that everyone getting foreclosed upon deserves it. That is patently not true. There can be no excuse for failure to follow the laws of our great country and to join together in immediately demanding that our elected officials:  Insist on strict adherence to all laws, especially those related to real property and foreclosure in this country  Immediately become proactive in establishing a planned resolution for the clouded titles which currently number in the billions  Make some plan of acceptable restitution for those who have been wrongfully foreclosed  Mandate the cessation of all foreclosure action , in every state, until such time as lenders can demonstrate, at a minimum, legal standing to foreclose and documentation of the amounts owed

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Crisis: Clouded at the Core
 Mandate that lenders/guarantors be held accountable for the maintenance of the buildings (former homes) which they have foreclosed on so that they do not become not only eyesores but havens for criminal activities in our communities around the country  Mandate that lenders follow the HAMP and HAFA guidelines with a sincere effort to avoid foreclosure, rather than a token effort to use as bankster PR  Mandate lenders immediately resume the legal practice of recording all assignments, mortgage transfers and satisfactions of mortgages in local record offices  Penalize lenders severely for any fraudulent documents which have been filed in their names and refuse to let them ‘clean them up and re-submit’  Mandate compliance with all medication and/or settlement hearings which are applicable as a chance for a face-to-face meeting with lenders to resolve the issues.  Create legislation which will dictate that letters related to a mortgage default must contain a name and a number to call a person (not the current practice of sending out unsigned letters, with no phone number at all or a non-working number.  Utilize the oversight authority already in place and institute any additional oversight where there are gaps in the current structure  Other suggestions which were covered in testimony before the Senate/House during the last half of November An informed populace can increase the chances that our leaders will be—can be --forced to address this crisis with determination and resolve. Real estate professionals should join with consumers and the ranks of the consumer advocates who are calling for systemic changes which are needed to safeguard the right to home ownership for future generations.

*Watch for “Buyer Beware: REO is Risky Business” @ MildredWilkins scribd.com This expose should be released by 12/15/2010 and will address the impact of title issues on purchasing REO properties. If you bought an REO within the past few years or you are anticipating doing so, you really need to avail yourself of this informative report.

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Crisis: Clouded at the Core
From the desk of Mildred Wilkins . . . Dear Reader:

We are experiencing an economic tsunami. I believe that history will record the period of 20112012 as witnessing the GREATEST financial crash of our history. Yes, surpassing even the crash of 1929. I, along with an ever growing crowd of economists, analysts and informed legal minds see no other possibility – given the reality of the title crisis which can no longer be denied. This report has covered accurately and in detail our reality. You should choose your reaction to that reality. Your pension fund, should you be lucky enough to have one of those, has investments in mortgage-backed securities. Your lending institution ( if it is anything other than a credit union or a very small local bank) is highly likely to fail during the next two years. Do you have a contingency plan? Are you prepared to continue to educate yourself about the impact of national and international news, lending practices and related hearings and legislation (attempted as well as passed and implemented) on your every day well being? I grew up in an abusive household and denial was the dominant tool of survival. We, as Americans, have chosen denial for many years because we believed, as I believed as a child, that those charged with our well-being would make decisions which safe guarded us, kept our homes secure, our future intact. The American public has behaved as children, choosing denial over the harsh reality. Our protectors have plundered and pillaged and left us destitute. We can no longer afford denial. Survival requires that we accept our reality, halt destructive practices and implement new methods which will serve to restore our core systems in the places where they have become non-functional. I have spent my entire adult life committing to uncovering truth and attempting to share it so the consequences of denial could be avoided. Armed with ACTUAL facts, accompanied by an explanation which clarifies the most likely outcome and its impact, we are prepared with what is needed to make informed decisions about our lives. Study this report; study the materials at 4closurefraud.org and other strong websites with an analytical mind. Go beyond the what (specific behaviors being reported) to the why. What does the discussed revelation mean in the broader context of law, home ownership, your finances? Analyze—not surf, read the what—study the why. Make your future personal, housing and financial plans based on an expanded awareness that national and international news—on a daily basis—is shaping YOUR future. Share when you have the opportunity. Together, we can make a difference. “Knowledge can be empowering”

Mildred Wilkins 22
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