September 20, 2012
After our post as to the Lawrence Nardi deposition, and after reviewing the admissions therein and the admissions of JPMorgan Chase in the Deutsche Bank Federal litigation and other information recently uncovered, we have been receiving a multitude of inquiries as to how JPM can possibly succeed in any foreclosure case involving a WaMu originated loan, and where has the money which homeowners have been paying JPM (including monies paid to its former servicer Chase Home Finance), gone and under what authority. After reviewing this information with our banking and securitization experts, some realizations are crystal clear.
The WaMu mortgage loans were “off balance sheet” at the time of WaMu’s failure, and thus JPM could not have purchased something which was not on WaMu’s balance sheet. Nardi has testified that there is no schedule of particular mortgage loans which were purchased from the FDIC as Receiver for WaMu. Yet, after the alleged “acquisition” of whatever was sold to JPM by the FDIC, JPM directed the homeowners with WaMu originated loans to make payments to JPM. Although JPM admitted that it was only acting in the capacity of a “servicer”, JPM has never advised who they are the “servicer” for other than to amorphously state that they are the servicer for an “investor”.
Who is this investor? Is it JPM? If so, what did JPM invest? Surely it could not be the mere pittance that it paid the FDIC for whatever it purchased, and it cannot be for the mortgage loans which it did not buy. To date, the true owner(s) of the off-balance sheet WaMu mortgage loans remains unknown.
Thus, the conclusion is inescapable: the monies which homeowners have been paying to Chase Home Finance and JPM over the years through payments to CHF and JPM as a “servicer” have been are are being pocketed by JPM, even through JPM does not own the WaMu mortgage loans and cannot identify any person or entity who or which owns the loans for which JPM is allegedly collecting payments as the “servicer”.
Any wonder why JPM was so easily able to recently allocate $400M for attorneys’ fees to oppose foreclosure challenges and spend enormous amounts of money on marketing its various credit card promotions?
There is a lot more to this which is being uncovered every day, and it is more insidious than we ever could have thought possible. Take, for example, the conviction yesterday of ex-WaMu subprime lending unit Long Beach Mortgage’s sales executive John Blanford, who was found guilty of six counts of mail fraud for his involvement in a scheme to falsify loan documents. As reported, Blanford paid a loan coordinator in cash to falsify documents, provide false verification of borrowers’ employment or professional licensing status, and to turn a blind eye to fraudulent representations contained in loan applications and other documents submitted to Long Beach Mortgage, all in connection with his scheme for which he earned more than $1 million in commissions between 2003 and 2005.
As also reported, from 2003 to 2006, WaMu and its Long Beach mortgage unit increased mortgage securitizations from $4.6 billion to $29 billion. That’s a $25 BILLION increase in securitizations in 36 months. As also reported, in 2005, Long Beach was forced to repurchase $875 million of non-performing loans from investors, and an audit done in the same year (2005) found that 83 percent of the loans approved by Long Beach were fraudulent.
Now one asks: how could JPM “purchase” mortgage loans in 2008 which, statistically, had an 83% chance of being fraudulent as of 2005 (assuming the loans were even in WaMu’s portfolio as of September 25, 2008)? How could JPM purchase, in 2008, any mortgage loans which had been securitized and thus transferred to third parties from 2003 to 2006?
It goes on and on. Stay tuned.
Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com