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Tom Adams: Ocwen’s Servicing Meltdown Proves Failure of Obama’s Mortgage Settlements

By Tom Adams, securitization professional for over 20 years and partner at Paykin, Krieg & Adams, LLP

Rather than listen to thousands of borrower complaints, housing advocates, foreclosure attorneys, market experts and, well…, us, the Obama Administration tried to paper over the many problems in the mortgage servicing market by creating the foreclosure settlement (officially the National Mortgage Settlementof 2012), as well as the earlier OCC enforcement actions against big mortgage servicers.

Now we have the disaster of Ocwen, the fifth largest servicer in the country, imploding as a result of the settlement charade. Sean Donovan, the Treasury and the Attorneys General were all told repeatedly that the servicing problems were serious and needed to be addressed. Instead, they listened to the banks and mortgage servicers themselves, who earnestly swore that they had seen the light and mended their ways.

It was widely acknowledged back in 2009 that the mortgage servicing industry business was a mess as borrower defaults and foreclosures swamped servicer capacity. In his recent memoir, former Treasury Secretary Tim Geithner acknowledged that the Administration was aware that the large mortgage servicers were unprepared for the housing crisis, lacked resource capacity, were terrible at managing loan modifications and borrower relief and were, generally, incompetent at managing distressed borrowers. When the problems of the foreclosure crisis began to bubble over in 2010, the Administration finally took action, both indirectly, through the Attorneys General settlement, and directly, through actions of the HUD.

Yet despite efforts to convince the mortgage investors, borrowers and consumer activists that real servicing reform efforts were being made, the Administration permitted the orders and settlements to be watered down and generally without meaningful change, as was documented extensively here at Naked Capitalism. Presumably, the Administration’s theory was that the banks with large servicing portfolios or the housing market (or both) were too delicate to actually withstand real regulatory reform of servicing.

Was the Administration active in encouraging banks to move the troubled servicing portfolios out to third party servicers like Ocwen? It’s possible. The liability and negative headlines that came with servicing so many distressed borrowers, which seemed justified considerably the poor job the banks were doing with the servicing, was not helping the reputation of the banks or the Administration’s efforts to shore up the banking industry and the financial economy. If so, it is shame that more thought wasn’t put into the consequences of shipping the files off and wiping their hands of responsibility.

Recent reports indicate that Ocwen had a servicing portfolio of approximately $430 billion. The massive growth in Ocwen’s portfolio was a direct result of the foreclosure settlement. After the national pact in 2012, big bank servicers were eager to exit the servicing of non-agency loans (that is, loans that were not backed by Fannie, Freddie, the FHA or the VA) and distressed loans.

In quick succession, Ocwen acquired servicing portfolios of Goldman Sachs and Morgan Stanley entities, as well as the portfolio of Rescap (a former unit of Ally Bank, formerly known as GMAC) and assorted other pools from Bank of America and Barclays. As a result of these and several other smaller acquisitions, in 2012 Ocwen’s servicing portfolio nearly tripled in size.. This worked out well for the sellers of the servicing portfolios, who were now free of the headaches of the distressed loans but, not surprisingly, it didn’t work out so well for the mortgage backed securites investors and borrowers who now had Ocwen as a servicer.

Even as Ocwen was acquiring these portfolios, it was under regulatory scrutiny for many of the same issues that would surface in 2014 to the company’s detriment. In 2011, Ocwen disclosed that the FTC was looking into its servicing practices. In 2012 the New York Department of Financial Services established a consent order with Ocwen and installed a monitor of its servicing practices. In addition, Ocwen had regulatory scrapes in the past that included the loss of its bank charter, also as a result of its servicing practices.

While Ocwen was in the process of ramping up its servicing portfolio, it was also entering into a consent decree with the CFPB and the Multistate Mortgage Committee (an aggregation of regulators from 49 states) over charges of “systemic misconduct at every stage of the mortgage servicing process”. So, even as a much smaller company, Ocwen had numerous struggles with managing its servicing portfolio and numerous prior allegations that it harmed the interests of borrowers and MBS investors. The writing was on the wall – why would it be a surprise that Ocwen would encounter even more problems after it tripled in size?

In addition, the business of servicing distressed borrowers has always had issues. The rapid growth and subsequent problems managing the basic elements of the business that Ocwen has experienced mirror what happened back in the early 2000s. In 2003, long before the financial crisis, the Federal Trade Commission took on the then-largest servicer of distressed loans, known at the time as Fairbanks Capital. I got to witness the ugly implosion close up because Fairbanks was the servicer on a significant portion of the loans in my then-employer’s portfolio (for which I had some responsibility). It feels like déjà vu putting up the list of the FTC’s complaints against Fairbanks:
The FTC alleged that, in servicing loans, Fairbanks frequently:

• failed to post consumers’ mortgage payments in a timely and proper manner, and then charged consumers late fees or additional interest for failing to make their payments “on time”;
• charged consumers for placing casualty insurance on their loans when insurance was already in place;
• assessed and collected improper or unwarranted fees, such as late fees, delinquency fees, attorneys’ fees, and other fees; and
• misrepresented the amounts consumers owed.

And also:

falsely represented the character, amount, or legal status of consumers’ debts; communicated or threatened to communicate credit information which was known or which should have been known to be false, including the failure to communicate that a debt was disputed; used false representations or deceptive means to collect or attempt to collect a debt, or to obtain information concerning a consumer; collected amounts not authorized by the agreement or permitted by law; and failed to validate debts.

As a result of the negative publicity regarding their servicing practices and various actions by the FTC, Fairbanks was severely crippled, its CEO resigned, and, ultimately, its investors sold off the company.

As the Fairbanks case illustrates, distressed mortgage servicing has a history of being a problematic business. For one thing, servicing distressed borrowers is far more labor intensive than managing a portfolio of performing borrowers. Servicing distressed borrowers involves, in varying degrees, numerous phone calls, correspondence, regulatory checks and balances, outside attorney, appraiser and broker management, real estate market assessments and liquidity management relating to servicing advances. Servicing for performing borrowers is basically payment processing. Because of the strict terms and cashflow structures of mortgage servicing contracts, however, servicers are paid the same fixed fee (0.25%-0.50% of the outstanding loan balance) for both performing and distressed borrowers (some special servicing agreements paid distressed servicers a form of incentive fee, though such fees must still fit under the servicing fee cap of the servicing agreements. In addition, the government’s HAMP program provided incentive fees for modifications and related borrower enhancements, which Ocwen aggressively pursued.

One might reasonably ask why someone would want to be in an expensive, labor-intensive business subject to capped fees? According to Ocwen, they were able to make the business work because of the extensive experience, low cost structure (which included overseas business units), efficient use of technology and artificial intelligence and effective loss mitigation strategies. However, based on numerous allegations leveled against the company, Ocwen cut corners, extracted (questionable) fees and expenses, including through above-market rate affiliates, and generally, steam-rolled the process for their own benefit and to the detriment of borrowers and MBS investors, who were actually paying for the various hidden costs of Ocwen’s servicing.

Despite its claims, Ocwen hadn’t really found a way to make servicing of distressed loans profitable as much as they had found a way to cut costs and extract fees without anyone noticing (for a while, at least). After our experience with Fairbanks, I and many other MBS investors concluded that mortgage servicing didn’t really work as a standalone business – such companies needed other sources of income to offset the high costs of servicing distressed borrowers, such as loan origination or investment in the residual interest in the mortgage assets. Without this buffer, distressed servicers would likely face conflicts and misaligned incentives when managing their portfolios of other peoples loans. Of course, the foreclosure crisis revealed that even servicers that have origination arms, owned residual interests or have other sources of income can still be overwhelmed by the costs, complexity and complications of a distressed portfolio of mortgages. Unfortunately, 7 years after the onset of the financial crisis, the mortgage market still has not resolved the many issues relating to servicers, conflicts of interest and adverse incentives. It is reasonable to assume that some of the reluctance for private capital to return to the non-agency mortgage market is due to ongoing concern about these unresolved issues in the mortgage servicing market.

Today, Ocwen is facing regulatory scrutiny from various state regulators (including New York and California most prominently), its CEO and founder, William Erby has resigned, investors are making the case that Ocwen has breached various servicing termination triggers in its servicing agreements, equity investors have lost confidence in its once high-flying stock to the tune of about a 90% decline in the past 12 months and the company is scrambling to re-structure, including by selling off portions of the portfolio it worked so hard to build. Based on my prior experience with sericers like Fairbanks, this is what it looks like when a servicer is blowing up.

Ocwen announced that it will be selling off a significant portion of its Fannie Mae and Freddie Mac servicing portfolio. This is a bit odd, since agency mortgages generally have low defaults and, therefore are easier and cheaper to service and, presumably are more profitable than seasoned distressed mortgages which make up a substantial portion of Ocwen’s remaining portfolio. It is unclear if Ocwen has begun to sell these servicing rights yet, and there is the possibility that other servicers may be somewhat reluctant to acquire loans previously serviced by Ocwen, out of concern for hidden legacy issues related to Ocwen’s problems. Nonetheless, the market for servicing rights on agency loans is relatively deep and liquid, so Ocwen should eventually be able to find buyers for this portion of the portfolio at some price.

Of greater concern to Ocwen investors, as well as MBS investors and consumers, the mortgage market is tolling a bell for the servicer. A hedge fund has sent a notice of default to an Ocwen affiliate regarding its advancing facility and notified the MBS trustees on many Ocwen serviced deals that Ocwen may be in default under those agreements. While Ocwen disputes these charges (and blames “the shorts” for trying to harm the company), hedge funds aren’t the only ones that are raising alarms about Ocwen. Fitch warned that Ocwen-serviced MBS deals face ratings downgrades due to Ocwen’s servicing problems. Also, to the extent that Ocwen has rating triggers as one of its servicing termination provisions as many MBS deals do, recent servicer rating downgrades by Fitch, Moody’s and S&P could be triggered.

Fitch notes that one of its concerns with Ocwen is that its portfolio is so large, and troubled, and there may not be anyone interested or able to step in and take over servicing for them. That’s when things will start to get ugly. It is likely that more MBS investors will raise alarms. It is also likely that Ocwen will try to fight its termination as servicer. As the battle develops, troubled borrowers will likely get neglected, which will likely lead to higher delinquencies and messy servicing files. If a successor servicer is brought in, the odds are very high that the transition to a new servicing platform will be bumpy, at best. Borrower defaults could increase and losses to MBS investors could increase, as well. Given the large size of Ocwen’s portfolio and the delicate state of so many borrowers in the portfolio, the transfer of some or all of Ocwen’s servicing portfolio will cause disruptions throughout the housing market.

As an aside, the stock prices of several other mortgage servicing companies have also been hit hard, in sympathy with Ocwen. Perhaps investors in those companies are concerned that Ocwen’s servicing was not that unique. If regulators and MBS investors (or hedge funds) are stepping up the scrutiny on distressed mortgage servicing, other servicers employing similar tactics may also be at risk. Of course, if other distressed servicers are also experiencing regulatory issues, that would make the transfer of Ocwen’s servicing portfolio that much more challenging.

Back in 2011, I asked how likely it was that “predatory servicing” would come back sometime soon if the Administration proceeded with a weak foreclosure settlement. Now, we know the answer: very likely, and in about 3 years.

The attorney generals, the OCC, HUD and the Treasury Department had the opportunity to create a meaningful reform to the problems in the servicing market and they declined to do so. The current Ocwen problems are clearly a result of the failure to act in 2012. Solutions to the problems in the mortgage servicing market have been offered from a variety of sources. Certainly, effective enforcement of existing laws in a timely manner – such as the opportunity offered by the Foreclosure Settlement of 2012 – would have been a big help. As the passage of time since the crisis suggests, the mortgage market hasn’t been able to fix itself yet.

When it comes to the housing markets, this Administration seems unable or unwilling to take the right steps to truly help it recover. In the coming months, borrowers and MBS investors in the fifth largest servicer in the country are likely to be the ones paying the price for the missteps.

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22 comments

  1. Sam Adams

    Once again we see that Obama is and his place Holder was asleep on the job. I’m not sure where this debacle will lead.

  2. ambrit

    Really good to see Ocwen finally start to fall. What’s troubling in the wider world is the problem with corrupt chain of title issues that this is going to highlight. If these “distressed” mortgages are acquired by more diligent servicers, expect to see a huge pile of “unactionable” mortgages build up as the wheat gets winnowed from the chaff.
    An ancillary issue to Ocwens troubles is the fate of the house auction businesses who are associated with the servicers. The auctioneers are so tightly associated with the servicers now that their fates are probably intertwined.

    1. Jim A

      NOBODY, either on Wall Street or Pennsylvania Ave want’s to open up the chain of title box. That’s part of the reason for the 49 state settlement in the first place. Since title is a matter of state law, the powers that be regarded getting all the state AGs to sgt Shultz (I see NOOOTHING) the lein issues. These people can’t even wrap their heads around the possible nightmare of nobody having clean title.

      1. ambrit

        Oh yes. I can see John Banner dressed in a three piece suit:
        Sgt Schultz- “But Mr. Dimon! That would be illegal! Please Mr. Dimon. Do not do this thing to me!”
        Dimon- “Come on now Schultzie! There’s nothing to worry about!”
        Sgt Schultz- “But what if Col. Obama hears about it? There will be big trouble!”
        Dimon- “Schultze, don’t worry! The Col. is in on it!”
        Sgt Schultz- “The Col is in on it? When did he become bent? This does not make sense!”
        Dimon- “Schultz! Don’t be so naïve! How do you think he became a colonel anyway? It’s how
        things get done the world over!”
        Sgt Schultz- “I do not like this world you are describing Mr. Dimon. Maybe next time we are allowed an election, I vote for the Communists.”
        Dimon- “Schultz, you are a scream!”

      2. TedWa

        The title companies have been putting in statements, exclusions, in their closing docs that basically say the borrower is responsible for any title problems beyond the title companies control. The banksters have succeeded legally in avoiding any responsibility

        1. Jim A

          So how much does it typically cost to bring a quiet title action to clean up any issues? If it truly becomes an issue, I’d wager that some states will set up “rocket dockets” to do this quickly as they did with foreclosures….

  3. LizinOregon

    When I refinanced my credit union mortgage in 2012 I was not happy to see them sell the servicing of my loan to GMAC which then changed to Ally and then to Ocwen. I have a FICO score over 800 and my mortgage is around 50% of my home value. I am not a distressed borrower, yet I vigilantly monitor everything Ocwen does with my account because I see signs that they are struggling with the most basic transactions such as posting payments promptly. A recent example is that I just received 2 1099’s for 2014, one for the interest and another for real estate taxes paid from my escrow.
    I have not trusted a loan servicer since Wells Fargo tried the forced placement of insurance scam on me over 10 years ago. I guess I am lucky that the CPA in me knows it is easier to prevent many accounting mistakes and fraudulent transactions than to clean them up after the fact so I document and monitor my account closely. But I am frustrated that I don’t have any choice in this. I totally agree with Tom Adams that these are the signs of a company that is failing and wonder what the fall-out will be. I also wonder why the investors are not putting pressure on the regulators – but that is a frequent question on this blog.

  4. Pearl

    And remember to keep on our radar screens that Ocwen (OCN) also has its publicly-held “Ocwiterations,” (HLSS) (AAMC) (ASPS) (RESI), as well as many privately-held subsidiaries, spin-offs, merger/acquisitions, closely-held vendor contracts, etc. that all help to make up the whole “Ocwen Shell Game” playing board.)

    I think Ocwen, along with its Ocwiterations (collectively) should be labeled, if not even just regarded as a true SIFI (Systemically Important Financial Institution.)

    I don’t think it is appreciated at the highest levels in government just how interconnected Ocwen is to our entire real estate market. If Ocwen truly continued this (apparent) collapse–the domino effect would likely be breathtaking. (I don’t know how much stock price should be factored in, but according to the charts at Seeking Alpha at last check today):

    (OCN) is selling today at $6.99, which is down 72.6% from 3 months ago, and down 85.4% from 1 year ago. (HLSS) is selling today at $13.68, which is down 70.9% from 3 months ago and down 83.3% from 1 year ago.
    (ASPS) is selling today at $22.43, which is down 84.4% from 1 year ago.
    (AAMC) is selling today at $13.97, which is down 30.8% from 3 months ago and down 29.3% from 1 year ago. (RESI) is selling today at $18.25, which is down 20.3% from 3 months ago and down 32.2% from 1 year ago.

    And these are the publicly-traded parts of Ocwen. (The tip of the Ocwen Iceberg, so to speak.) For example, we’ve all heard of Hubzu. Hubzu is owned by (ASPS).

    I don’t think the “Ocwen issue” is getting enough attention, and I would really like to extend my gratitude to Tom Adams for writing this piece, and to Yves for posting it here.

    P.S. Real Estate Law is so complicated, multi-dimensional (i.e. title–who, what, where, when), and (increasingly) geographically diverse, that many lawyers who practice in different fields of law seem not to understand or appreciate how little they understand or appreciate this fact. As far as President Obama is concerned–I really wish he could spend an afternoon with a certain Law Professor who, conveniently, teaches just around the corner from the White House.

    Adam Levitin….do you, by any chance, ever golf on Sundays?

    :-)

    1. neidermeyer

      Let the “OCWiterations” crash and burn , let WF burn , let BAC and Chase burn… we don’t need them and the sooner they are allowed to crash the sooner the country gets back on track. The invalid f’d up title chains need to be fixed , it cannot be ignored. I have land in a country overrun by the Japanese in WW2 , the land records and most other official records were burned/lost/destroyed … That was 70 years ago and it still is harming that country… What are we thinking… that we can burn our land records and not be badly damaged for generations…

      I want to see perp walks…

      1. Pearl

        Thanks lolair….

        Wow. I really am obsessive, aren’t I? :-)

        This should serve as notice to everyone, as well as to Ocwen:

        Never mess with an obsessive housewife.

  5. steelhead23

    Very interesting Tom. But I seem to recall that about 2-3 years ago NC, in defense of both MBS investors and mortgage borrowers ran a series of pieces on how servicers were purposely holding distressed loans precisely because they could bleed both distressed mortgagees and MBS investors by delaying foreclosures and racking up fees. Are you suggesting that while the efforts of the Obama administration were inadequate to fix these problems, the servicers abandoned this business model – or as in the case of Ocwen – died trying? Why? Have investors wised up? Have a sufficient number of fraud cases been pursued to dissuade them? Or, more ominously, is it the case that an insufficient fraction of mortgages are sailing along smartly, while a large number are delinquent, increasing servicing costs? After the bashing the industry got, it is simply impossible to feel much sympathy for them – although Ocwen’s imminent collapse seems a bit ominous.

    1. alex morfesis

      derivatives are usually for only 5 years…the derivatives in mortgage loan pool general partnerships that were capital flow guarantees were only for 5 years, at least from the dozens of prospectuses I have read along the way….some from inception and some upon breech….what seems to have been lost in the mess is what happened to the landesbank guarantees that crushed them with the 2007 BNP paribas derivatives crash that led to the illegal bailout of the Landesbanks (IKB, LB Sachsen, etc)

      mutti has done a good job of making the noise go away…I suspect, the problem at those were really the east german housing securitizations they did and not the taps via the “Rhinebridge”… that mutti does a great job diverting attention away from her own problems…no one talks about the BK of Berlin…as if it never happened in 2005-6…same old german economic engine…

      http://www.nytimes.com/2005/05/01/world/europe/01iht-mayor5.html?pagewanted=all&_r=0

      sooooo,,,,

      the change in business plan has to do with optimization of capital conversion….the derivatives tap has run dry…the contracts are not forever… so onto bigger and better victims…that was the why in the change you noticed…
      rentiers of the world unite…onto regensburg…or maybe kyffhouser…maybe the creature from the cave has awakened to fix everything…

    2. Yves Smith Post author

      Thanks for remembering our earlier coverage.

      The private label securitization market is dead, so in that sense, investors have wised up.

      Some investors have tried pursuing remedies in court. A crude generalization, but the way it has shaken out is that the monolline insurers, who had better contractual rights (they could get access to loan files) did pretty well, while other investors did poorly. And you had “get out of liability on the cheap” exercises like the $8.5 billion BofA (really Countrywide) settlement.

  6. Dave McCrae

    5TH USCA 14-51224 David McCrae v. PHH Mortgage Company, et al.

    Texas STOP Little House on the Prairie STOP Carpetbaggers STOP I’m Your HuckleBerry END

    ORAL ARGUMENT – 15 MINUTES

    Springtime in New Orleans.

    [APPELLANT]

    Good Morning!

    [WHOAMI?]

    I’m Dave McCrae. I own a little patch of land over in Texas, about 5 acres we split off Clyde’s ranch in 2001, put in our own water and electric, and took up residence. I moved to Texas in 2001 after my employer in Illinois at the time curled up and went bankrupt. I heard about it on the radio one Friday afternoon, and spent the weekend making sure everything was turned off and nothing would explode. I was invited to hang around and see how things worked out, and give our security people some comfort about where all the light switches were, and maybe get paid. It was much different work than I’m used to. I decided I was disinclined, and decided to move to Texas and do whatever people do down there to make a living.

    We sold our house in Indiana and bought the Texas place. I burned the Indiana furniture, and bought new in Texas. It was cheaper. Indiana was the second house we bought after we moved from Cleveland, our first home, and where all our kids were born. So we were relatively comfortable taking a mortgage for our third house. We’d already bought and sold two. In 2001 I was 51 years old, so I took out the mortgage for fifteen years. Most people retire about 66, and I’m like most people. We borrowed $72,500 on property valued at $100,000. Life was simple back then, and we paid 6-1/4% interest – 180 payments, no PMI, no balloons. We later found that PHH had held the mortgage for eight days, and securitized it over to FNMA. That’s another story. You’ve heard that one too.

    I’ve made my living building steel mills, power plants, foundries, refineries, stadiums, churches, and even running undersea robots hooking up oil wells down in the bottom of the ocean. Actually, that was more fun than work. I continued doing that work after we relocated our residence. I did more traveling to and from client locations. I continued to work until I was 62, when I decided to finish one client project in Mississippi and retire completely, in July 2012. I was healthy, all the kids were grown, and I decided to work on my golf game a little more aggressively. Pretty soon.

    I had known this was going to come to pass at some point. I had made quite a bundle of prepayments on my mortgage as circumstances permitted, in varying amounts and on irregular occasions, and by 2012 I had employed this strategy to advantage and reduced my principal from ~$23,000+ to about $7,558, or about 2 years eight months advanced. We had about eleven payments to go. My computer does Excel, and amortization schedules are not that complex. I was sure I was in pretty close agreement with PHH on principal. I called them up in New Jersey on their hot line to get a payoff statement.

    Basically, there are millions of people like me in Texas. There are millions of stories like mine. My story to this point is unremarkable.

    [WHY ARE WE HERE?]

    That brings us to our business here today. We are here to resolve an unusual situation, of some social timeliness, and offering some unique legal issue. I’m from Main Street. My counterparties live on Wall.

    PHH and I had our differences and we were obviously never able to work them out staisfactorily. You’ve read through our court records from Western Texas to this point, and our briefs, and I’m sure your mind is spinning with facts and issues. We’ve been at loggerheads since 2012. This is 2015. It’s a ball of confusion. I’m not going to reread everything out loud. I will take questions, and answer what I can.

    I’m embarrassed for all of us. We’ve done a terrible job in managing our own communication, and an even worse job in the lower courts sorting things out. Right now, today, since I walked in, I’ve spent more time in the same room with my counterparties discussing this issue than we’ve spent together in the past three years. BTW, there’s something wrong with that, all by itself. There ought to be a law. Maybe something like 2015 RESPA-TILA. That one’s about 1888 pages of law, 59 pages of amendments, 49 pages of interpretations, and 430 pages of public comments.

    [RUBIKS CUBE EXERCISE, Facts and Issues, interactive with panel. Solve three modified cubes.]

    Simply put, we need a jury. Somehow we skipped over that in Texas. Now we’re here in New Orleans. We need a jury. We NEED a JURY!

    [WHY DO WE FIGHT?]

    I’ve come here today as a US Citizen, representing our current Attorney General, under the qui tam system. The confused facts and issues in my case are only too representative of the current economic quagmire affecting every property owner in the United States. I would hazard a guess that half of the civil dockets in the US Courts deal with property disputes such as ours today. Subtract drugs, soon 80%. In 1989 they put Charlie Keating in jail; the legislature, Republicans and Democrats, reviewed existing law and passed a Financial Institution Regulation Reform and Enforcement Act to regulate, reform, enforce and eliminate just such future problems. Our central bankers in Chicago wrote scholarly papers on the wonders of self regulation, and proselytized our self correcting economic system to the world. In twenty years, the world was on the brink of economic collapse. We set up a Financial Crisis Inquiry Commission forthwith, and they printed a Blue Ribbon Report. It was scary. We printed more money to fix it. And more money. And more money. There was wailing and gnashing of teeth. There were sound bytes. We got a Brand New President. Some Congresspeople even lost their jobs and were replaced. Bernie Madoff had to go to jail. I think Charlie had passed. Ken Lay was in jail; he was one of the smartest guys in the room. In 2012, the legislature, Republicans and Democrats, passed the Warren Dodd Financial Regulation and Reform Act to regulate and reform this whole industry. It comprised a little less self-regulation, and a little more enforcement. We bailed out all the banks and made them whole, whoever was left. We closed up HOWMANY?. Still, people who lived in houses were just foam on the runway. We set up a Consumer Financial Protection Bureau, starting in 2014. BTW, anyone here today from that group? [LOOK AROUND] No? That’s why I’m here. I’m here today representing enforcement. I have standing in this matter. Eric (Loretta?) is indisposed. We have a Mortgage Fraud Task Force Working Group set up, and they’re tremendously busy. BTW, anyone here today from that group? [LOOK AROUND] No? That’s why I’m here. I have the time and the inclination.

    Why are my counterparties here today? [LOOK AROUND] Yes, of course they’re here. They like to be self regulated. They want to stay that way. I think they have another motion for dismissal coming up, as soon as I shut up.

    $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
    $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
    $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
    $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
    $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
    $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
    $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

    [WHO WILL WIN?]

    I’m an optimist, only due to personal preference. I expect the United States people will win this case. I think we can improve the business environment, especially in the mortgage servicing business. We’ll need your help.

    Send this case back to Texas. Order a US Attorney to get involved. He’s already on the payroll. Prepare and present this case to a jury. The cost and time is insignificant. It’s already allocated. I have the time and the inclination. I’ll join in.

    I have one house. I’ve paid for it. I’ve fought for it. My opponents own 2.7% of the houses in America. They foreclose 10,000 houses every 90 days, about 111/day, including weekends. They regulate themselves. The enforcers are having a meeting today, working out a strategy.

    We’re having a meeting too. We have a rare opportunity to make a difference. Let’s do it. Yesterday.

    [GUEST INTRO]

    Is there any other business before the court today?

    US SENATORS, OR MINIONS? You’re Invited! Bring your friends!

    STATE ATTORNEY GENERALS, OR MINIONS? You’re Invited! Bring your friends!

    SEALED COMPLAINTS* FROM OTHER STATES? You’re solicited! Bring your files!

    *NOTE- We will not be able to unseal complaints at this meeting. One, I’m not an attorney. I represent only myself, Pro Hac Vice. I represent USAG, qui tam. I can’t represent other Class members. Nevertheless, one of the issues on appeal here is the possible existence of a Class of Others Like Myself, and their future Charter. I feel strongly that we will discover such a Class after remand to District and assignment of counsel. At that time, our US Attorney will ask for complaints again, we’ll unseal the boxes and get to work. Today…laissez bon temps roulez!

    David McCrae, pro se
    Tranquility Base
    350 Cee Run
    Bertram, TX 78605
    01.512.557.0283 WorldWide
    xstek99@gmail.com
    http://www.phhmortgagemustbedestroyed.weebly.com

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