Well, if the bankers who securitized the mortgages had a priori, constructive knowledge that the mortgages they were putting into the pooling agreements were not as advertised (and we now have people stepping forward and telling of 80% non-conformance rates of sampled mortgages put into some securities), then the seller of those securities is up for SEC securities fraud, mail fraud, wire fraud just for starters at the federal level. There are likely other laws involved at the state level(s).
Ambac’s suit says over 97%. The quote by Richard Bowen is where I get the 80% from. I’ll go with his number, because “he was there,” and he’s not suing anyone - yet. Ambac is seeking a recovery, so of course they’re going to make a bold claim.
NB that the parties involved in these lawsuits are not crackpots, nor individuals. This is high-stakes stuff right here.
We have Blackrock suing BofA. Guess who is the third largest shareholder in Blackrock?
BofA.
We have the Federal Reserve Bank of NY suing BofA. But... wait a minute. Isn’t there a little bit of a conflict here? The Fed was the one stupid enough to buy the crap paper off Bear Stearns when they imploded... BofA didn’t sell it to them... so how does the FRBNY create a complaint?
It is enough to make one’s head spin. But I will tell you this for certain: The FRBNY does not engage in loony stuff. They’re playing for keeps and they’re playing for big bucks. The FRBNY sets the tone for the financial system on Wall Street. They’re the most powerful Federal Reserve Bank in the entire system.
Not to be outdone, BofA is suing a mortgage originator for peddling them crap:
http://www.reuters.com/article/idUSN2021282320101020
Now, if the plaintiffs are able to prove that the securitizing banks KNEW that the mortgages they were putting into the pool were not in conformance wit the pooling agreement, or they previously sold them into a different MBS, then the SEC has the basis for securities fraud, as do several states under their own laws.
All 50 state AG’s have opened cases looking into the situation, and the FBI is reported to be in the early stage of an investigation in foreclosure paperwork filed in courts in Florida.
If lawyers are found to have filed lies in an affidavit to a court in a judicial foreclosure state (eg, Florida), that is called “Fraud Upon the Court” and can result in the lawyer making the fraudulent affidavit losing their license to practice, as well as felony charges and any decision based upon the fraudulent filings vacated. In every state in the nation, filing a fraudulent affidavit to a court of law is at least a gross misdemeanor, and in most states it is a felony with a light sentence. Notary fraud is not seen as severely by the law, but it is still breaking a law for someone who isn’t a notary to use a notary stamp. Right there, there are 10’s of thousands of documents submitted to courts of law in the US that meet those two criteria.
Thanks for all the info.
The guy with the video really knows his stuff.
I am reluctant to claim that I know much, because I realize how complex and far reaching a lot of this is, in the long run.
The GM Volt looks good, when compared to the pile of crap created by the US banking/financial industry.
All in all American business ain’t what it used to be.