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“The moment the idea is submitted into society that property is not as sacred as the laws of God, and

that there is not a force of law and public justice to protect it, anarchy and tyranny commence. Property must be secured or liberty cannot exist.”
• John Adams

Bad Public Policy, Bad Actors
 The 1992 Community Reinvestment Act (CRA) required banks to make bad loans to unsuitable homebuyers in the guise of social justice.
 This contravened long-established and well-justified lending and underwriting practices  The CRA created cover for shoddy and predatory lending practices

Banks turned to Mortgage Backed Securitization to get the toxic loans off their balance sheets
 MBS is a well established capital markets instrument, well underway in the 1980s.  MBS/ABS debt can be very creditworthy if the underlying loans are properly underwritten, because only a small percentage of individual loans will default

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The Fed’s artificially low rates from the 1990s fed the housing bubble, because money became too cheap and it was easy to pile on leverage The bubble, and ability to manufacture AAA-rated MBS and Sub Prime MBS created a never-ending demand for mortgage ‘product’ to feed the machine The MBS tool became the end goal; everyone was in on the deal:
 Mortgage originators aggressively pushing product out the door by giving mortgages to unsuitable borrowers who never should have been homeowners in the first place;  Banks funding the originators through warehouse ‘financing’  Banks packaging and selling the subprime loans to MBS trusts through third party sponsors;  Rating agencies blessing the packages with strong ratings;  Bond insurers picking up premiums for insuring tranches;  Homeowners who saw their investment rise with the asset bubble;  Home flippers who used the cheap mortgages as credit cards.

But the Worst Was Yet to Come
.After 2006, suspicion arose in the capital markets that subprime mortgages, and even supposedly prime mortgages were even worse than they should be.
• ‘Liar’ and ‘No-doc’ loans were an open cultural admission that something was amiss. • Fly-by-night mortgage origination shops, many of which have disappeared. • Over-inflated appraisals and home valuations.

But, at least the underlying loans were secured by a mortgage on property.
• Weren’t they?

On top of the collapsed housing market and economy, it now appears that the chain of property ownership was broken in the course of MBS creation.
• In contravention of centuries of property rights, the deed of trust was separated from the note; the DoT was not regularly passed on from the originator through the sponsor to the MBS trust. • This means that neither borrowers nor MBS investors have the protection of clear title

State courts are beginning to wake up the contravention of property law and are refusing to allow foreclosures based on suspicious or incomplete documentation.
• The January 7 decision by the Supreme Judicial Court of Massachusetts to void home seizures by US Bancorp and Wells Fargo is a fire bell in the night.

Patterns of Behavior
Federal bank regulators are scrutinizing more than 150 lawsuits :
50 home loan-related lawsuits directed at lenders and mortgage companies

Five biggest servicers -- Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial -- currently face up to $30 billion in penalties from state attorneys general and federal agencies for wrongful foreclosures and other mortgage-related misdeeds. 67 pending class-action suits in more than 20 states that challenge foreclosures based on so-called "robo-signing"

57 additional suits in 25 states over alleged improprieties resulting from loan modifications in the Obama administration's signature foreclosure-prevention initiative, known as HAMP, and 24 lawsuits over non-HAMP modifications Investors in mortgage securities have filed 21 suits that allege misconduct and seek to force banks to buy back the loans at face value, an outcome that could cost banks hundreds of billions of dollars. The FDIC is also tracking separate suits launched by state attorneys general in Ohio, Nevada and Arizona against Ally and Bank of America.

FDIC Director of Depositor and Consumer Protection Mark Pearce's prepared remarks for a Congressional Hearing, July 7, 2011

MERS Ate Your Mortgage

The Mortgage Electronic Registration System (MERS) • Separated the Note from the Deed • Clouding Title on 60M Homes • 5-7M illegal foreclosures • Affects most home-owners • Eventually Title Companies will refuse to write policies on homes that have/had securitized mortgages • Home value will plummet • Cash only purchase • Almost impossible to restore title

MERS: Energizer Bunny for Mortgage Fraud
MBS subprime flourished when MERS went online Massive fraud would have been impossible without it Business model violates settled property law It is nothing more than a giant electronic excel spread sheet • Never a lender • No employees • No power to assign mortgages Nearly 80 million mortgages were securitized from 1997 to today

Fraud? Or a Really Bad Business Decision?
U.S. Bankruptcy Judge Robert E. Grossman “By MERS account, it took no part in the assignment of the Note in this case, but merely provided a database which allowed its members to electronically selfreport transfers of the Note,” wrote Judge Grossman. “[T]here is nothing in the record to prove that the Note in this case was transferred according to the process described above other than MERS’s representation that its computer database reflects that the Note was transferred to U.S. Bank.”

“The Court recognizes that an adverse ruling regarding MERS’s authority to assign mortgages or act on behalf of its member/lenders could have a significant impact on MERS and upon the lenders which do business with MERS throughout the United States. However, the Court must resolve the instant matter by applying the laws as they exist today. It is up to the legislative branch, if it chooses, to amend the current statutes to confer upon MERS the requisite authority to assign mortgages under its current business practices. MERS and its partners made the decision to create and operate under a business model that was designed in large part to avoid the requirements of the traditional mortgage recording process. This Court does not accept the argument that because MERS may be involved with 50% of all residential mortgages in the country, that is reason enough for this Court to turn a blind eye to the fact that this process does not comply with the law.”

MERS: In Their Own Words

MERS “Saved” its customers $2.4 Billion in property recording fees

Counties in MI and other states are suing to reclaim fees.

400 Years of Property Law Violated

When a closing occurred on sub-prime mortgage (either refinance or new purchase)

The originator recorded the mortgage in the county clerk’s office

However, when the mortgage was sold on the secondary market, all subsequent assignments were NEVER recorded

As a result, the chain of title is broken and cannot be cured on 60M80M mortgages 1997-present

Proof of Fraud is Mounting

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Legal challenges in State Supreme, Federal Bankruptcy, Appeals and Appellate Courts Home-owners are fighting foreclosure Investors are demanding accounting of the trusts Discovery process reveals fraud throughout entire mortgage and securitization process There are no mortgages to back mortgage backed securities Home values plummet Investors hold unsecured consumer debt

Foreclosures Expose the Fraud

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Original Note and Mortgage were destroyed Pretender lenders dummied up fake documents, forged by Burger King Kids to slide foreclosures thru the courts Real reason for robo-signing was to hide fraud from investors Pretender lenders do not have original documents because they have NO real interest in the property Attorneys committed fraud before the court Big Government and Big Business collude to cover-up the fraud

A Debt is Owed

How much?
– – TARP, Credit Default Swaps, Insurance have given investors a revenue stream What constitutes a default?

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The identity of the lender and borrower were hidden The ethical man recognizes a debt is owed but it is foolish to pay the wrong party – only to have clouded title at the end of the 30-year schedule How do we continue revenue stream to MBS investors? All American families and communities are affected

But to Whom?

Anarchy & Tyranny Commence

Illegal Seizure of Private Property

MBS Global Investment
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MBS collapse has profound impact on global economy Securitization is a myth. All NYS security laws were violated • There are no mortgages to back mortgage-backed securities • Investors are holding pools of unsecured debt Investors have chosen to sue banks - get all their money back Big Government has vested interest in propping up the markets, even if it means covering up massive fraud Crony Capitalists may declare an emergency that will undermine US property rights and harm home-owners TILA revision HR3808 TBTF Bailout

Constitution Based Solutions

Restore The Rule of Law

Property law is based on state law Home-owners go thru state courts


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Clear & Quiet Title Bankruptcy

Cancel all Sheriff sales, evictions of foreclosed properties NJ AG and Consumer Affairs investigate fraud hold the guilty accountable

Public Officials and State at Risk
The mortgage fraud case law, federal agency actions and abundant evidence of massive mortgage fraud have been widely publicized

NJ Tea Party Coalition has met with Congressman Scott Garrett, Bergen County Clerk, Bergen County Sheriff and NJ Attorney General and Consumer Affairs Senior Staff
As a result, public officials may be held accountable for illegal foreclosures, evictions and any subsequent consequences that affect individual or public safety

To Sum it Up

Through MERS and illusion of securitization Crony capitalists have:

Clouded title on 60M-80M properties

Illegally seized 7-10 million homes (100,000 month)

Defrauded MBS investors

Deprived counties of $2.4 billion in land recording fees

Impoverished a nation

Wrecked families and communities

Only 1 executive has been convicted and sentenced to jail

It’s Time to Act
Restore • States’ Rights • Property Rights • Rule of Law “America is a nation of laws, not men” Is true once again…