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In reply to the discussion: STOCK MARKET WATCH -- Thursday, 19 January 2012 [View all]Demeter
(85,373 posts)94. Class Action Lawsuit Alleges JP Morgan Engaged in Systematic Document Fabrication to Move Mortgage
Class Action Lawsuit Alleges JP Morgan Engaged in Systematic Document Fabrication to Move Mortgage Losses from Its Books into Mortgage Backed Securities
http://www.nakedcapitalism.com/2012/01/class-action-lawsuit-alleges-jp-morgan-engaged-in-systematic-document-fabrication-to-move-mortgage-losses-from-its-books-into-mortgage-backed-securities.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29
To our knowledge, the suit filed by Ernest Michael Bakenie against JP Morgan is the first to accuse a major bank of widespread, systematic residential mortgage documentation and fraud. I dont have a copy of the filing and am relying on the summary in Courtroom News Service (hat tip Jesse via reader Scott) but it is a doozy. (The case is described as a class action, but has yet to obtain class certification by the court).
Weve reported repeatedly of widespread evidence of grotesque procedural abuses as servicers and foreclosure mill lawyers try to cover up for the fact that in many cases, mortgage notes were not transferred properly to securitization trusts, and the rigid way these deals were structured makes it impossible to remedy those failures at this juncture. Absent creating a time machine, the only fix is to fabricate documents that make it appear than things were done correctly. Weve seen (as in in person) obvious forgeries submitted to the court (signatures obviously Photoshop shrunk to fit) and servicer personnel caught perjuring themselves, yet judges are remarkably unwilling to issue a ruling that hinges on finding that the plaintiff filed phony documents.
If this case moves forward, that reticence may change. Note that this case, which covers only the Central District of California, alleges that Chase engaged in over 7000 filings of motions of relief of stay in bankruptcy court using fabricated documents. Remember that filing for bankruptcy puts a stay or hold, on all creditor claims. They all go wait while the court determines which creditors get what from the under water borrower. A motion for relief of stay by a mortgage lender is tantamount to saying, Judge, let me grab the house. Motions for relief of stay are typically a costly nuisance for bankruptcy lawyers. It wastes the borrowers scarce money to shoo them away (and some plaintiffs lawyers will take advantage of inexperienced bankruptcy lawyers by getting them to sign a waiver in return for dropping the motion for relief of stay that looks innocuous but has a paragraph in it changes the burden of proof from the bank to the borrower, which almost always puts them at a fatal disadvantage and results in the loss of the home).
The other critical document discussed in this case is a proof of claim. Bankruptcy court is all about establishing whether the parties that want a pound of flesh from the borrower are really entitled to it. They are required to submit a proof of claim to substantiate their demand. Bankruptcy judges spend a considerable amount of time assessing the validity of these claims.The case asserts that fabricating documents was very helpful to JP Morgan, enabling it to file successful proofs of claim and motions for relief of stay 95% of the time....MORE
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Demeter
Jan 2012
#7
Speaking of the skunk, I just meandered over to Automatic Earth and found this.
Fuddnik
Jan 2012
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Yeah. What would be the corresponding statistics for the States? The Skunk, you see,
Ghost Dog
Jan 2012
#19
Well, ZH has a tendency to go way over the top, on occasion. The 'soundbite' is based on
Ghost Dog
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I don't really "understand" any of it, Tansy - but I don't think it matters
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Not as far back as our reptile brains. Just a hundred and fifty years of Western social progress,
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Obama's "tax-policy", the new puppet-in-waiting and the collapsed UBS business model.
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Jan 2012
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