Bond investors balk at Pimco, Bank of America talks

Investors may be seeking to derail negotiations between powerful bondholders and Bank of America Corp. that could cripple the leverage that others have in demanding payback for faulty mortgage loans, said William Frey, president of Greenwich Financial Services.

The investors would be picking a fight with Pacific Investment Management Co., the Federal Reserve Bank of New York and other huge players in the market for residential mortgage-backed securities.

The Pimco group, led by Houston law firm Gibbs & Bruns, said in December it opened a dialogue with Bank of America over its demands, which include compensation from lenders that misrepresented the quality of loans as they were packaged into bonds for sale to investors. It seemed to be a turn for those investors who had been taking litigious steps, while the bank also appeared to soften from its stance to fight.

The worry is that a settlement would be a harmful precedent for other investors, including a larger group organized by Dallas laywer Talcott Franklin. DebtWire first reported that investors were gearing up to fight a potential "sweetheart" deal between Bank of America and the Pimco group, which also includes BlackRock Inc and Freddie Mac.

The rising concern parallels the growing tension between investors and the banking community that originated and is servicing risky privately-issued mortgages at the core of the financial crisis.

Investors have been emboldened to pursue longstanding claims in recent months, aided by trustees who had previously been roadblocks to such efforts, Kathy Patrick, a lawyer with Gibbs & Bruns, said at a meeting of the American Securitization Forum earlier this month. U.S. mortgage finance giants Fannie Mae and Freddie Mac have won billions of dollars from banks, including Bank of America, for selling faulty loans into government-backed mortgage bond programs.

There are no faulty loans, no corrupt ‘bankster’, no crooked lawyers, no fraud, forgery and perjury there are only ‘Dead Beats’.

Arguing with a wall again, Kartographer? Nobody said that there were no "faulty" loans or corrupt bankers: there are as many corrupt bankers as corrupt cartographers.

But don't let me stop you: by all means, continue arguing with a wall. I am just wondering when you will post something that expresses anger at the dead beats, at the spoiled whining people that did no save for 20 years, that depleted the equity in their houses to remodel kitchens and buy cars, and who now whine that they have no equity in their houses?

You are fair person, aren't you? You point out, frequently and correctly, that there are dishonest people in the banks. You must also point out, then, that there were thousands of nurses, quitting their $100,000-plus jobs to flip condos in Miami. Have you aver expressed anger at their contribution to this crisis?

Let me guess: probably not. Like a good socialist, you stand on the side of "folks" against big business and especially banks, don't you?

I am going to post this because so many people have besmirched and twisted my position in regards to the on going Mortgage Crises/Fraud that I honestly feel I need to at least try and set the record straight.

First I have never in any way made a claim that everyone should get a free house. I have post a good number of times that if you aren’t paying you mortgage that you should make arrangements to surrender the property and then do your best to learn for the experience, take your lumps and move on. I believe that you do have a moral responsibility to keep your word.

Now that said I also believe that you have certain legal rights and protections grant to you under the law. No one can fault you for exercising your rights. You might not agree with the law and that’s fine. If you feel strongly about it work to get the law change, but until then the law is what it is.

Now one of the basic tenets of the law is that when you bring a matter before the court you must show the court that you have standing in the matter that the case before the court pertains to you and your interests and you truly affected by the matter at hand, and there must be a case or controversy that can be resolved by legal action.

In the matter of asking the court to issue a foreclosure order the court requires that you present certifiable evidence that you and you alone have legal claim to the note on the property in question. It would seem that this is a reasonable and logical requirement to insure that any judge is made to the proper and legal own of the note. To bring a suit before the court knowingly without such is in itself a waste of the Court’s time, to come before the Court with documents of proof that have been fabricated is Clearly Fraud on the Court and no matter what the causes or the facts in the case is not and can not ever be acceptable behavior if we are to maintain the Rule of Law.

Now if despite what I believe is a moral requirement that if you have failed to make your mortgage payments and that you should be prepared to surrender the property in question you should choose to request a hearing I may not agree with you, but it is your legal right one I would not care to deny you or prevent you from exercising.

Now should someone request such a hearing and during the course of which the court discovers that the note holder failed to do their due diligence and file the proper paperwork and then chooses to deny their claim which results in them losing their investment that is how the Rule of Law works, you either follow the rules or run the good chance of losing. Even more serious should the Court actions be should the note hold be found to have used fraudulent, forged and/or perjured documents to make their claim. To me bring a case before the Court with such documents should carry a very heavy penalty and not just that the case be discharged with prejudice.

I have to say the thing that bothers me the most with those I like to call ‘Dead Beat Beaters’ is that they many claim against the ‘Dead Beats’ is what they are doing is morally wrong and I do agree with that. But it isn’t legally wrong. In a prefect world people would own up to the responsibilities and except their consequences, but this is far from a prefect world. But it isn’t a prefect world and people have legal rights which I hope that no one would deny them simple because they didn’t agree with the law. Denying people their rights under the law simple because you don’t agree with the law is just plain wrong. If its bad law get it changed, but don’t ignore it. People get off everyday legally from things which they shouldn’t by using their legal rights. The systems is not prefect, but its the best one we got and I wouldn’t trade it for anything else.

My second point goes back to the ‘Dead Beat Beaters’ claim that what the ‘Dead Beats’ are doing is immoral to which I agree, but the same people when ask if something that Banks/Mortgage are doing is morally questionable will reply: Banks are in business to make money and morals have nothing to do with it. Its seems that any behavior no matter how immoral and/or even illegal is acceptable as long as the Banks are making money for their shareholders. It seems to me that there is clearly a double standard they hold the borrower to a high moral standard while holding the lender to no standards at all as long as they are making their shareholders money.

My next point is the way in which the ‘Dead Beat Beaters’ grow agitated to the point of derangement over the actions of the ‘Dead Beats’. Yes there are plenty of people who should be, need to be foreclosed on. They got themselves in over their heads a now need to ‘pay the piper’, but over all what they have done is that they have failed to meet the requirements of a civil contract. Thats it, that’s all they have done. Yes some are fighting what is a fair a reasonable result of their failure to abide by that contract, but that is after all their legal right. You might not agree with their choice, but you must respect the law that allows them to do so, to do otherwise would be to deny the Rule of Law.

Now lets look at what many of the Banks/Lenders and their lawyers have done, they have committed perjury, forged documents, (to the point of which many many notaries have been forced to take the Fifth Amendment) and then they have knowingly submitted those documents to the Court and there by did or attempted to perpetrate Fraud on the Court, showing complete disregard for the Rule of Law. And worse yet, they didn’t do this just once or twice but hundreds possible thousands of times.

Any reasonable person should be able to see which of these two actions is the more dangerous to the Republic, for without the Rule of Law the Republic can not stand!

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