How Countrywide Created 3.5 Million Fraudulent Loans and What It Means to You

My last two articles focused on the great Securitization Swindle the banks have been perpetrating for over a decade. It was successful because the banks created such a tangled web that it was nearly impossible for everyday people, lawyers, and judges to understand what was happening. But what if they committed a comparatively straightforward fraud? Surely that would be caught and stopped, right?

In this month’s article I’m going to explain how Countrywide fraudulently created 3.5 MILLION loans at taxpayer expense with a scheme so simple it seems impossible they got away with it at all.

In 2003 Countrywide wanted to dominate the housing boom. The problem they were facing was that each state has its own licensing fees, corporate taxes, and regulatory costs that Countrywide would have had to pay in order to do business. That’s when they cooked up the scheme. Instead of becoming licensed and registered in every state, Countrywide simply made up a trade name (DBA) that they could register in every state that would slide under the radar of the regulators. They made up the innocuous name America’s Wholesale Lender and got to work.

Their scheme worked and nobody noticed that America’s Wholesale Lender wasn’t a corporation registered or licensed to do business in their state. Countrywide got cranking and created 3.5 MILLION loans across every state in the country under the DBA “America’s Wholesale Lender.”

The catch is that a DBA such as America’s Wholesale Lender is not a legal entity. It is simply a trade name. A DBA has no ability to own property, file lawsuits, or hold any security interests.

After a little while some local recorders began to notice and refused to record the loans because the lender was just a DBA, not a licensed lender in the state. At this point Countrywide decided to commit ANOTHER fraud by listing the lender on their mortgages as “America’s Wholesale Lender, a Corporation organized and existing under the laws of New York.” With this subtle but incredibly fraudulent change, Countrywide resubmitted the loans and they went through without a hitch. At this point no one realized that America’s Wholesale Lender wasn’t a registered corporation at all.

Countrywide figured that, if caught, they could avoid punishment by claiming that it was all a clerical error. Even if they couldn’t get away with that, they reasoned that the money they were saving in corporate taxes and licensing fees from all 50 states was significantly more than any monetary punishment they might receive.

After they made the loans, Countrywide never sold them to a securitized trust as they were required to do by the pooling agreements. Instead, the loans were controlled by Bank of America (BOA). As a result, BOA was collecting payments and foreclosing on loans despite the fact that it never owned or funded any of the actual loans.

In 2008 some good Samaritans tried to stop this scheme by registering the corporation “America’s Wholesale Lender, Inc a New York Corporation” (AWLI). They brought it to the attention of the US District Court that BOA was foreclosing on loans that it didn’t own, and that the loans were made by a corporation that BOA held no interest in. The District Court dismissed the case as irrelevant and BOA continued the fraud with a few upgrades.

After the creation of AWLI, Bank of America needed to find a way to make it so that AWLI could make no claims to the loans. What they did was get MERS to create an assignment on behalf of AWLI which assigned the loan to Bank of New York Mellon, Deutsche Bank, or US Bank. After these fraudulent assignments, the bank attaches them to their foreclosure proceedings to trick the court into believing it is the legal owner of the loan.

This is all made even more infuriating when you realize that all of these 3.5 MILLION fraudulent loans have been fully repaid by taxpayers in the TARP bailout and by the various insurance companies who insured the securitized trusts these loans were supposed to be a part of.

The bright side is that, if you have the right legal team on your side, these homeowners can get justice.

If you know of anyone with a loan from America’s Wholesale Lender, you need to get in contact with my office immediately at (706)-485-0162. I have spent the last 19 months building up a team of experienced attorneys and fraud examiners/forensic auditors who specialize in exposing exactly this sort of fraud.

We have a huge opportunity to help homeowners and do some great deals with multiple exit strategies by exposing this unbelievable and blatant fraud. We finally have the leverage we need to get the banks negotiating on our terms. It doesn’t matter if the homeowner has already been foreclosed on, we might be able to help.