Editor's Note: Wells Fargo has admitting massive amounts of fraud but it suffers ZERO CONSEQUENCES, as is the same for all the so-called "too big to fail banks." It's time we stopped waiting for the gubermint to do something about it because they will not. They are bought and paid for by the banks. The solution is very simple. We don't need anyone else to help us. Simply take all your money out of these banks and put it into your local community bank or credit union. Then the big banks will crash and burn as they should have a long time ago.
By Neil Garfield
The creation of fake accounts and fake services comes as no surprise to anyone who has been involved in foreclosure defense. As usual the response from Wells Fargo was a blatant lie. It wasn't 2.1 MILLION fake accounts that were opened, it is now 3.5 MILLION fake accounts and there is more to come. Oh, and another 528,000 customers of Wells Fargo also got signed up for BillPay when they didn't ask for it.
The point of all this is that Wells Fargo figured correctly that the penalty was worth the gain. By fraudulently expanding its reported portfolio of accounts and services, Wells Fargo had falsely represented a key indicator of its growth and health, causing its stock price to rise. The end result is a few million dollars in "refunds" while the increase in the stock price was worth billions.
Most people, whether they are Judges, lawyers or consumers, want to believe that the banks run on trust. But in fact, while the smaller and mid-sized banks run on trust, the large banks have made fraud a customary industry-standard practice. Let me put it this way --- it is industry standard practice to violate banking and lending laws.
Hence my admonition to avoid "admitting" anything the banks say in litigation --- even the representation that the lawyer has a client or that the plaintiff is the plaintiff. The banks correctly anticipated that judges would come to the conclusion that foreclosure defense was a scam. In order to "move their
The banks correctly anticipated that judges would come to the conclusion that foreclosure defense was a scam. In order to "move their docket" they ruled in ways that would virtually guarantee that the bank or servicer would get the foreclosure sale. Swamped by millions of foreclosures (which despite popular belief have not stopped or even slowed down) this was considered the best way to clear out the millions of foreclosures that "had to happen."
But if we start with the correct supposition that most of the documents used in collection and foreclosures are fake, then judges would return to the old style of scrutinizing the documents proffered by the banks and send the bank's lawyer packing because the chain of title did NOT match up. THAT would have cleared the dockets much faster as banks realized they would not be able to get their "get out of jail" ticket that came in the form of an official court judgment and an official forced sale of the property. The implication is that everything that preceded the foreclosure judgment and sale was indeed legal. But as we have seen, neither the judgments nor the sales should have been allowed.
It is understandable that judges would lean toward the banks. The logic of the existence of a loan and therefore the existence of a creditor certainly is more appealing than the logic of fake transactions starting with origination and continuing right up to the time of the foreclosure sale. So judges went with the easier, more logical inference that the banks could be trusted even if some of their paperwork was dubious. It may have seemed like the right thing to do, but they got it wrong.
Had judges exercised their inherent right and duty to scrutinize the documents submitted in a foreclosure action, even if the foreclosure was unopposed, there would never have been a foreclosure crisis, even if there might have been a crisis in the bond market where the nominal value of "derivatives" far exceeded their actual value. But if we ever want to truly get over this and not just think it is over because the banks pay for articles announcing the end of the foreclosure crisis, then we must start with fundamentals.
The fundamentals are that in virtually all cases where there are transfers and originations of loans, there was no actual event in the real world. The documents represent a fictional story --- and the people who paid for it are all the investors in such derivatives (worthless) and all the millions of homeowners who were trapped by fraudulent lending practices, fake representations, and appraisals. Secondarily the rest of society paid for it with entire neighborhoods crashing and in many tens of thousands of cases demolished after the alleged "bank" or "servicer" told the homeowner that they didn't qualify for a settlement (modification) or that the "investor" had rejected the modification.
The truth is that the investor never heard of the homeowner and the homeowner never heard of the investor. It was all in the province of intermediaries acting as though there was a person behind the curtain when the space was void. The Trusts are empty and no amount of "re-securitizing" into new trusts (whose existence is only suggested on paper with no property entrusted to the "Trustee") will change the fact that, as between the homeowner and the party named on the note and mortgage, nothing ever actually happened.
Thus the Wells Fargo practice of creating false accounts for their own reasons was merely the outgrowth of the creation of fake loan accounts, fake servicing, and fake foreclosures.