Kentucky files RICO suit against .....everybody...in mortgage fiasco

[dixiegrrrrl]

(x-posted by request, from Economy forum.)

btw..this is a class action suit which names homeowners in EVERY State.

RICO is Federal.

And I mean everybody.
The 5 big Banks, Mortgage trusts, mortgage brokers, the DOCX company that retroactively makes the "overdue"
legal filings,...everybody.

This is HUGE.
It instantly will affect every single MBS Trust in the country, if not the world,
because entities all over the world are shareholders in these Mortgage Bond Trusts,
this is where TONS of money was invested in the last 5-9 years.

And now it has been revealed that these trusts are acting illegally, which means they now owe HUGE amounts of taxes to the state and Fed governments, governments which would have a hard time resisting the need to collect.

I have 2 links here.
The first is to Denninger's report in which he just outlines the problem, and the significance of the problem.
( It will affect EVERY home sold in the last 5 or more years, and every home on the market now, for one thing)
On his page, he links to the full lawsuit, a delicious read chock-full of details).
http://market-ticker.org/akcs-www?post=168144

The 2nd link is to a very nice read on how and why Mortgage Bond Trusts were created, which created the housing bubble, and why the collapse of the funds ( esp. at this point in time) is going to severely damage the economy.
Those of us who are going to be affected by the oncoming fallout ( anyone who owns/wants to buy a home)
really should understand the issue.

http://www.scribd.com/doc/23757019/The-Giant-Pool-of-Money-How-They-Transfered-the-Wealth

[Roland99]

1. This could finally be what brings the entire house of cards crashing down.

57. Additionally, and important to the issues presented with this particular action, is the fact that in order to keep its tax status and to fund the "Trust" and legally collect money from investors, who bought into the REMIC, the "Trustee" or the more properly named, Custodian of the REMIC, had to have possession of ALL the original blue ink Promissory Notes and original allonges and assignments of the Notes, showing a complete paper chain of title.

58. Most importantly for this action, the "Trustee"/Custodian MUST have the mortgages recorded in the investors name as the beneficiaries of a MBS in the year the MBS "closed." Every mortgage in the MBS should have been publicly recorded in the Kentucky County where the property was located with a mortgage in the name similar to "2006 ABC REMIC Trust on behalf of the beneficiaries of the 2006 ABC REMIC Trust." The mortgages in the referenced example would all have had to been publicly recorded in the year 2006.

59. As previously pointed out, the ¡°Trusts¡± were never set up or registered as Trusts. The Promissory Notes were never obtained and the mortgages never obtained or recorded.

60. The "Trust" engaged in a plethora of "prohibited activities" and sold the investors certificates and Bonds with phantom mortgage backed assets. There are now nationwide, numerous Class actions filed by the beneficiaries (the owners/investors) of the "Trusts" against the entities who sold the investments as REMICS based on a bogus prospectus.

[hedgehog]

2. I suffer from an unfortunate condition by which whenever I try to

follow one of these things, my eyes glaze over. (I still haven't made it entirely through the explanation of the difference between term insurance policies and, uh, the other kind.)

But, does this story connected in any way with the story about bank executives who reviewed (HA!) and then signed 8000 foreclosures a day on a regular basis?

I mean, I know it's not the same story, I'm just suggesting this is a different face of the mother of all frauds.

[Roland99]

5. Kinda similar but kinda not

This is about the packaging up of mortgages into Mortgage-Backed Securities by a REMIC ( http://en.wikipedia.org/wiki/Real_Estate_Mortgage_Investment_Conduit ) and then getting people to invest in the REMIC under the guise that they have all these assets that will make money over time.

However, the MBSes were not properly recorded, the Trust itself was never properly created and the Trust never had the original note to begin with. In other words, they were selling an empty bottle.

Now, they are running the risk of having all income taxed at 100% retroactively back to 2006.

This, imo, should be bigger than the JPMorgan silver manipulation scandal
http://www.nypost.com/p/news/business/feds_probing_jpmorgan_trades_in_gZzMvWBqOJpB55M7Rh9vwM
http://www.zerohedge.com/forum/gold-and-silver-manipulation

[hedgehog]

7. Thanks for the explanation. Just when I thought I'd heard everything!

[Roland99]

8. I shudder to think of what else is still unknown at this point.

[Nuclear Unicorn]

12. I'm trying to see if I'm following this right...

...the company was selling securities based on mortgage notes that the company did not own?

That sounds like outright fraud on the level of selling the Brooklyn bridge.

Just out of curiosity: COULD the securities have made money IF the company owned the notes?

[Roland99]

14. Well, sure

as long as the underlying mortgages were sound and weren't largely made up of over-appraised houses and/or under-incomed borrowers.

[Nuclear Unicorn]

16. OK, just checking. I'm still on the side that says derivatives are a bad idea

Real bad but I was just curious.

Thanks for the reply.

[dixiegrrrrl]

17. The securities DID make money.

Since nobody seemed to have noticed or cared that the process by which the securities were formed was illegal.
Everyone involved made LOTS of money.
Now one of the legal questions is:
who has to pay what money back to who, including HUGE amounts of state and Federal taxes, since illegal =loss of
protected tax status, among other things.
That is just ONE of the many many legal questions involved.
The basic legal question is: who, if anyone, owns the title to your mortgage, or the mortgage before YOU bought your house, and who, IF ANYONE, can legally collect those mortgage payments some of us are making.?
Not to mention WHO, if anyone, has a legal standing to foreclose?

[notesdev]

6. It's called "being human"

These things are designed to make your eyes glaze over, getting people to sign contracts they didn't fully read is the bread and butter of the financial industry.

[howaboutme]

3. Just perhaps there is a legal entity in the USA not under their thumb

"Their thumb" meaning the Powers That Be and the wealthy and powerful interests that control the politicians and the serfs, and that were most definitely behind the move to create the bubble, the securitization and repackaging and selling of mortgage paper, the falsified credit ratings, the fraudulent practices used to create and encourage the mortgages, the policies of fraudulent insurance on property not owned where speculation ruled, creation of financial gimmicks intended not to provide capital but gambling winnings for financiers, and it goes on, billions upon billions of ill gotten gains by financiers.

Thank God for Kentucky, state's rights and state independence on these matters. It would never happen in DC or NY as there are too many conflicted, entrenched interests and cronies.

We needed aggressive prosecutions on this mammoth tragedy of corruption and all we've seen from our neutered government are pompous grandstanding by politicians in Congressional hearings.







http://www.youtube.com/watch?v=acLW1vFO-2Q

[elleng]

4. Kentucky WHO? The State, by the Attorney General CONWAY???

[JohnnyLib2]

9. Looks to me like a class action suit filed by a firm in Lexington, KY.

(I'm not an attorney)

Can't see at this point where Conway would come into it.

[JohnnyLib2]

10. --deleted, reposted--

[elleng]

13. Got it. so OP that KENTUCKY has sued is incorrect,

tho some Kentuckians have sued.

(I am an attorney!)

[dixiegrrrrl]

15. Aha....an important point, lemme see if I have time to correct that.

Urrrghh...out of editing time.
Your point is valid, thanks for the heads up.


Headline should have been "RICO suit filed..etc".

Not to detract from the important implication of ths story.

[JohnnyLib2]

11. Is the heading misleading?

This seems to be a class action lawsuit, filed on behalf of 4 couples by a law firm in Lexington, KY.

Since the attorney general, Conway, is a D senatorial candidate---it's a sensitive area.