They Want to Steal the Home of Every American

You don’t really own anything you can’t carry on your back at a dead run. We live under a feudal system of land ownership based on English law. All land in England is owned by the Queen; you are simple given a “fee simple TITLE” which the Queen still has rights of taxation, police power and eminent domain. We mostly use the same system here in the US. You walk away from the bonds of feudalism by giving up your “debt millionaire status” by walking away from your mortgage through “no deficiency laws” set up in several states. Or through allodial title in some states. There is no such thing as home ‘ownership’. Even if a person has completely paid off their house or condo, they must stay enslaved to the government because of the property taxes and fees. - Ken Thomas, Living The Dream: What Do You Own – Really?, EndoftheAmericanDream.com, June 8, 2010

Hacker Group Releases Bank of America Employee Correspondence

March 11, 2011

Reuters - Anonymous, a hacker group sympathetic to WikiLeaks, released on Monday emails that it obtained from someone who said he is a former Bank of America Corp employee.

In the emails dating from November 2010, people that appear to be employees of a Balboa Insurance, a Bank of America insurance unit, discuss removing documents from loan files for a group of insured properties.

Neither the emails nor correspondence released by Anonymous indicate the reason behind the electronic record keeping discussion.

A representative of Anonymous told Reuters on Sunday the documents relate to the issue of whether Bank of America has improperly foreclosed on homes. The representative added that he had not seen the documents, but he has been briefed on their contents.

Consumer groups have accused major U.S. lenders of foreclosing on many homes without having proper documentation in place.

A BofA spokesman said on Sunday the documents were clerical and administrative documents stolen by a former Balboa Insurance employee, and were not related to foreclosures.

"We are confident that his extravagant assertions are untrue," the spokesman said.

The group's email release also includes correspondence between Anonymous and the former employee, in which the former employee described the bank as a "cult" and said the company is now intent on destroying his career.

"I'm well known throughout Bank of America," the former employee said in one email. "They saw to that when they showed everyone my picture and labeled me as a terrorist."

The documents are available at bankofamericasuck.com/, a website that was working intermittently early on Monday morning.

Bank of America Leak Exposes Alleged Force-Placed Insurance Fraud

March 19, 2011

SeekingAlpha.com - OperationLeakS has now released the first batch of Bank of America (BAC) fraud documents. What has been disseminated so far consists mostly of emails between the hacker group Anonymous and a former employee at Balboa Insurance Co. which was acquired by BofA with its acquisition of Countrywide.

Operation #BlackMonday

One thing to clear up about these documents is that they are NOT the same documents held by Wikileaks. The documents just released by OperationLeakS Anonymous are mostly very recent emails and have nothing to do with the executive hard drive held by Wikileaks. In fact, the Anonymous leaker says he would love to see what Wikileaks has and says he could probably get "all the dirt" within a week of gaining access to it.

So, what do the latest leaked emails reveal? The most obvious thing is that Balboa/BofA employees were allegedly engaged in trying to hide original loan documents by erasing Document Tracking Numbers from scanned documents. See here.

But the Balboa employee also appears to have information that would blow the lid off a number of alleged Force-Placed Insurance scams that are highly questionable, probably illegal and most likely would expose companies like Bank of America to more suits by mortgage-backed securities investors.

When someone holds a mortgage, they are required to have adequate insurance for the property. But if they stop making the payments on their insurance policy, the lender may purchase insurance on the property on behalf of the borrower (to protect the lender) and are then allowed to charge the mortgage holder for that insurance. This is called Force-Placed Insurance and usually it costs a great deal more than ordinary homeowners insurance because of the greater risks involved. The forced insurance, it should be noted, protects the lender, but not the borrower. This is standard practice in the mortgage industry, but sometimes things get a little murky. In fact, they sometimes get downright dirty.

In many cases, when homeowners begin missing payments on their mortgage, servicers will stop forwarding insurance payments (which have been held in escrow) to the insurance company on behalf of the borrower. This has occurred even when the borrower has paid enough into escrow to cover the insurance payment. Nonetheless, this automatically kicks in the Force-Placed Insurance process. The servicer will then purchase the insurance and charge the homeowner for it. The insurance so purchased is always several times more costly than ordinary insurance, thus putting even more stress on the delinquent borrower, often driving them even more quickly into foreclosure. American Banker discusses these problems here and here.

Moreover, there are many instances in which the force-placed insurance companies (like Balboa) have actually back-dated the insurance by up to nine months and then charged the homeowner for insurance they didn't actually have and for which no claims will ever be filed because the covered period is in the past. These sorts of practices may explain the unexplained charges that show up on mortgages for people who have missed a payment or two, but then are unable to understand why their outstanding balance is more than their original mortgage. (There may be other explanations, but the force-placed insurance scam seems a likely candidate.)

It gets worse when you consider that many of these same insurance companies are known to give kickbacks to the servicer, or the servicing bank as the case may be, thereby incentivizing delinquencies (e.g. through HAMP), which can entail the lapse of homeowners insurance. 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:

Click to enlarge

It isn't clear what kind of "system glitch" the employee is referring to, but presumably it is a glitch related to lapsed insurance payments. If it is the case that Balboa/BofA was knowingly allowing servicing errors to occur, so that they could then force-place insurance policies on borrowers, then that in itself could be a huge blow to BofA -- in addition to the perhaps related issue of allegedly trying to erase DTNs on scanned documents.

More analysis to follow. Stay tuned.