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Attention Eric Holder - Anonymous Indicates Widespread Insurance Fraud; Bank Of America Owns A Force Placed Insurance Subsidiary; Other Banks Earn Commissions

The pieces of the puzzle are starting to fall into place.

This is a racket - Grand theft insurance fraud by any other name.  

As we wrote earlier this week:

It also becomes clear that the interests of the servicer and the insurance company are aligned against the interests of both homeowners and investors. This is because servicers in many cases are reimbursed for the insurance they purchase on behalf of borrowers out of the proceeds of foreclosure sales, foreclosures which they helped bring about through overly expensive force-place insurance policies. That is, the servicers get paid before investors and by over-charging for the insurance in the first place the servicers are able to extract even more money from the investors they are supposed to be working for.

Where the situation gets really interesting is when a bank like BofA actually owns the insurance company, as in the case of Balboa. In this email, the Balboa employee appears to be saying that errors in tracking of mortgages were common, but that he had more incentive to blame outsourced clerical workers for errors, thereby reducing the fee Balboa paid to the other company for handling the paperwork, than he had incentive for actually preventing such errors in the first place:

Attention Eric Holder: Remove your head from Bank of America's ass.


Susie Madrak ties it all together.

Source - Crooks & Liars

Remember when I wrote last month about a Philadelphia music promoter who sued Wells Fargo -- and won the right to auction off their property?  I couldn't figure out why Wells Fargo was forcing this replacement-value insurance policy on the guy.

It took a couple of days after the Anonymous leak for the contents to sink in, but I finally connected the dots.  Rodgers was more than a victim of bank abuse -- this was systematic outright fraud throughout the mortgage and banking industry.  It wasn't just Wells Fargo.

Here's what Jeff Horwitz points out in the November 2010 issue of American Banker:

  • Bank of America Corp. owns a force-placed insurance subsidiary, and most other major servicers receive commissions or reinsurance fees on the very same policies they purchase on investors' and borrowers' behalf.

So if it's accurate, the Anonymous leak is the smoking gun in this mess.  Because it indicates from Bank of America's own internal documents that this was intentional fraud for profit, and explains just why mortgage companies were dragging out the foreclosure process - and refusing modifications.  They were making so much more money on the re-insurance policies, it didn't pay to modify.

Continue reading...


More detail on this video is here...

Man Forecloses On Bank - And Wins



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Reader Comments (13)

Holy shit.
Mar 19, 2011 at 2:24 PM | Unregistered CommenterCheyenne
yep...this is smoking, stinking, outright fraud...can't be denied...sometimes they are random placements of the insurance...jsut to see if the homeowner is paying attention...and if he doesn't complain, the insurance sticks...often at 3-5X the cost of normal insurance...it's a racket.

And it should spark an investigation...
Mar 19, 2011 at 2:36 PM | Registered CommenterDailyBail
Mar 19, 2011 at 3:16 PM | Registered CommenterDailyBail
Obama has started his own war in Libya by firing $110,000,000 worth of Tomahawk cruise missiles. Obama should be given a Nobel economics prize to go with his peace prize.

Way to go Barry Obama!!!
Mar 19, 2011 at 4:28 PM | Unregistered CommenterHenry K.
What do you think...Is a five nation coalition broad?
Mar 19, 2011 at 5:12 PM | Unregistered CommenterHenry K.

Jerry Cope

New HUGE slick confirmed. 25 miles SOuth of Grand Isle. 12 X 100 miles. Skimming operations begun days ago. Pics coming soon. Exact source location is Matterhorn MC243
Mar 19, 2011 at 5:34 PM | Registered CommenterDailyBail
YOUTUBE IT...Obama Nominee Crumbles Trying To Defend WH Budget Deception

Oh my!
Mar 19, 2011 at 5:50 PM | Unregistered CommenterHenry K.
I really believe that most Congress members and Presidential Administration people for at least the last 20 years have been actively involved in the evolution of this evolving fraud ether as investors, enablers, ( legislators removing laws and regulations that would have prevented the fraud, along with regulators and enforcment people who never saw any evidence of criminal activity) or Senators and Representatives flat out selling their votes in Congress to the crooks on Wall Street.
I think if Holder were to do a thorough Justice Department investigation, a bunch of present and past Senators, representatives, Administration Officials, and government regulators would end up sitting in jail with the Wall Street Crooks.

I bet no matter what evidence is exposed it will be ignored. They don't give a damn what we think because they know we can't do a damn thing about it. The law is what they say it is, and the law says Wall Street fraud is legal.
Mar 19, 2011 at 6:54 PM | Unregistered CommenterSagebrush
More and more legislatures, both state and federal, are limiting, through budget reductions, the ability of government agencies to enforce existing laws and regulations. They're doing this by cutting the funds to investigate and prosecute fraud. The IRS has had a significant budget cut. The SEC is in disarray, and underfunded. This laudably motivated budget hacking has the unfortunate side-effect of giving more power to the largest corporate fraudsters, who can afford to marshal large teams of lawyers whenever challenged. It's expensive to regulate and enforce exiting laws. Underfunding the regulators, investigators, law enforcement, and prosecutors is a bit like sending out a platoon of soldiers with no bullets. It's short-sighted and counter productive.
Mar 19, 2011 at 9:21 PM | Unregistered CommenterJay C. Davis
I'm generally "PISSED OFF" at the fraud we call government.


THE CONSTITUTION, Place it aside for a few minutes & read it's mother, "THE DECLARATION OF INDEPENDENCE".
Mar 20, 2011 at 2:25 AM | Unregistered CommenterTR
Interesting. So many people all uptight about the fraud, yet they will do nothing to help a fellow American attempting to stand up against it and expose it. They will frauction my home tomorrow. I have made video after video about it, no one gives a damn. If any of you want to stop the fraud, you have to go to the auctions and stop them. Your politicians are not going to save you. This is me:
Since then, they say they need 60 days to find the papers, and so they delayed the auction 2 weeks. No senator or congressman at the state or federal level will intervene, nor will the Sheriff. Nor will my neighbors, everyone believes I am a deadbeat. That is what the TV told them...
Mar 20, 2011 at 10:00 AM | Unregistered CommenterClaire
CBI seeks Anderson's extradition



The Central Bureau of Investigation (CBI) on Tuesday moved a petition in the court seeking extradition of former Union Carbide Corporation chairman Warren Anderson in the Bhopal gas tragedy case.
Mar 22, 2011 at 8:46 AM | Unregistered Commenterjohn
In my case, an appeal to the office of the Florida CEO, then Alex Sink, was enough for the fraudulent insurance fees to be dropped--a mere $600. But I explained back then that THIS IS FRAUD, and that an investigation should ensue. That was 2005. It obviously didn't.
Mar 22, 2011 at 11:25 AM | Unregistered CommenterWil Martindale

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