Comments on: Why the perp walk for Tannin and Cioffi?

By: Darryl Hutchinson, Los Angeles, CA

Darryl Hutchinson, Los Angeles, CA — Tue, 18 Aug 2009 02:01:13 +0000

FEDERAL CIVIL CASE SUMMARY
Mortgage Recovery Service Center of Los Angeles acting through Oscar Contreras and Raychelle Phillips ( herein Plaintiffs), commence two multi million dollar consumer protection enforcement action in July 2009, against ARUROA LOAN SERVICE, ARGENT MORTGAGE COMPANY, LLC and EAST HILLS MORTGAGE; Deutsche Bank National Trust Company, OCWEN Loan Servicing, LLC, Smart Group Housing & Finance and First NLC Financial services, LLC (herein after defendants) and its employee’s (collectively), claiming that defendants, in originating and servicing certain “subprime” mortgage loans in 2006 in California, acted unfairly and deceptively by falsifying income and assets statements on a loan application in violation of title 28 USCA 1014 Loan and credit applications, 28 USCA 1343 Fraud by wire, 28 USCA 1956 Laundering of monetary, 15 USCA 45 (a) Power to Prohibit Unfair Practices and title 18 USCA 1951 & 1961 Racketeering Act.
Based on the loan documents issued, it is concluded that Mortgage Recovery Service Center of Los Angeles has established a likelihood of success on the merits of their claim that in originating home mortgage loans with four characteristics that made it almost certain the borrower would not be able to make the necessary loan payments, leading to default and then foreclosure, defendants have committed an unfair act or practice within the meaning of title 15 USCA 45 (a) Power to Prohibit Unfair Practices.
1. Background. (1) Defendants are an industrial bank chartered by the State of California. Between January and August of 2006, Defendants originated among others, two loans to California residents secured by mortgages on owner-occupied homes. Of these loans originated during that time period, each of them remain active and continue to be owned or serviced by defendants.(2) Each of these loans in California were subprime.(3) Because subprime borrowers present a greater risk to the lenders, the process of qualifying these subprime loan are typically not processed through the fraud mechanisms used to report suspiciously fraudulent loans for conventional or prime mortgages.(4) After funding the loan, defendants generally sold it on the secondary market, which largely insulated defendants from losses arising from borrower default.(5) Defendants General Corporations, Annual Report (Form 10-K) 1, 6 (Mar. 6, 2006).
In originating loans, Defendants did not interact directly with the Plaintiffs in the falsifying of income and assets documentation; rather, Defendants acting in concert with each other would select a mortgage product for Plaintiffs, communicate with each others account executive to request a selected product and provide the Plaintiffs loan application with the false income, assets and credit report. When approved by defendants underwriting department, the loan would proceed to closing and the Defendants would receive a broker’s fee and lenders would secure yield spreads.
Defendants subprime mortgage professionals provided a number of different features to cater to subprime borrowers. A large majority of Defendants subprime loans were supplied with factious check stubs, W-2’s, bank statements and or employment verifications, which bore an appearance of qualifying features thereby justifying the considerably higher mortgage payment for a period of what was generally a thirty year loan.
(6) Thus, Plaintiffs monthly mortgage payments would start out higher than that which could be reasonably afforded. To determine loan qualification, Defendants generally required that borrowers to have a debt-to-income ratio of less than or equal to fifty per cent — that is, that the borrowers’ monthly debt obligations, including the applied-for mortgage, not exceed one-half their income. However, in calculating the debt-to-income ratio, Defendants considered only the monthly payment required for qualifying the plaintiffs, not the payment that could actually be required of the plaintiffs.
(7) As an additional feature to attract subprime borrowers, who typically had little or no savings, Defendants offered loans with no down payments. Instead of a down payment, Defendants would seed a new or existing bank account to reflect required reserve amounts needed to better qualify plaintiffs, resulting in a desired “loan-to-value ratio” approaching as much as one hundred per cent. Most such financing was accomplished through the provision of a first mortgage providing eighty per cent financing and an additional “piggy-back loan” providing twenty per cent.
(8) As of the time Mortgage Recovery Service Center of Los Angeles initiated these cases in 2009, each of the loans were in default. (9) An analysis by Mortgage Recovery Service Center of Los Angeles shows that these loans indicated that all were ARM loans with substantially higher payments than could be afforded by plaintiffs, and that they both had a 90% loan-to-value ratio.
Darryl Hutchinson/Mortgage Fraud Specialist
Mortgage Recovery Service Center of Los Angeles
P.O. BOX 470697
Los Angeles, CA 90047
Contact NO: 1-310-957-7079
mrscofla@aol.com

By: Bing

Bing — Mon, 23 Jun 2008 14:06:39 +0000

You know what? I end up agreeing with you guys. White collar crime IS a crime and people should know it. I just sort of find myself feeling weird about show trials, which is what this is — justice by PR. I also can’t help it. As one President said, I am not a crook… but I just kind of put myself in their place and feel squelchy about it. Maybe it’s because I sometimes wear the same kinds of clothes…

By: anonymous

anonymous — Sun, 22 Jun 2008 17:21:52 +0000

If they really wanted to flee, why would they wait at home for the FBI to come and get them? I could see that if they were on the run, then “catching” them would be an actual accomplishment deserving the perp walk. But they just waited at home…

By: bill, Mechanicsburg, Pennsylvania

bill, Mechanicsburg, Pennsylvania — Sun, 22 Jun 2008 01:42:06 +0000

It was done to make the point that white collar criminals are criminals. Should others have had the same treatment? Of course. Does their lack of similar treatment mean that these fellows should have gotten a pass? Absolutely not.

By: Ken, Staten Island, NY

Ken, Staten Island, NY — Sat, 21 Jun 2008 22:11:04 +0000

The perp walk is to remind people that white collar crime is still a crime and people are hurt. Would the writer be so ticked if it were a couple of guys who robbed a store? Then he’d probably be asking why there wasn’t a perp walk. These may be the type of guys he wouldn’t mind sitting down with at a BBQ with the wife and kids, but the fact of the matter is these are criminals with morals no greater than any mugger and with as little concern for the people they’ve hurt. Don’t cry for them. They’re still slime.

By: sawyerspeaks

sawyerspeaks — Sat, 21 Jun 2008 21:03:23 +0000

They had to walk. Who can afford to drive?

– http://www.sawyerspeaks.wordpress.com

By: Jack Hammond Canada

Jack Hammond Canada — Sat, 21 Jun 2008 17:19:05 +0000

If this happened anywhere else in the world it would be declared a commie show trial, but when it happens in the states its called a perp walk.
Makes everybody feel good especially prosecutors who crave attention and recognition. Fishermen do the same thing “look what I caught”.
Guilty or not is immaterial, remember O.J., we all need the TV time for such things to replace boring shows.

What this world needs is good old fashioned public whippings and hangings, of course,we must have a pre-event warning to keep small children from being adversely affected.

By: Matt, Manassas, VA

Matt, Manassas, VA — Sat, 21 Jun 2008 13:08:31 +0000

The perp walk was fantastic. I loved seeing it. Great entertainment. I laughed, I cheered. They deserve it.

It was necessary because the lack of oversight by government entities (‘inattention’, I believe you called it) allowed these people to…deceive people out of their money and cause a market scandal. It wouldn’t have been necessary if they had conducted their business according to any standard of ethics. Call it poetic justice.

By: Bob Shelby Twp. Mi.

Bob Shelby Twp. Mi. — Sat, 21 Jun 2008 02:10:14 +0000

Rudolph Guiliani is credited with patenting the “PERP WALK”.

The “BING BLOG” mentioned white collar crime went unchecked for some reason or other for decades.

My guess is that an attemp is being made to publicly embarass those implicated in white collar crime.

In order to contain criminals hiding behind a code of ethics, Crucifix, or a Star of David, New York decided that public embarassment will be used to expose the ledgerdemain to his victims. Eliot Spitzer was Attorney General when the “PREP WALK” was patented.

Remember, “AUBU GRAIB PRISON” and “GUANTONOMO BAY”? One reaps what one sows!

Rule books keep honest people out of trouble.

Those who skirt the rule book face a prosecutor who also skirts the rule book. “TIT FOR TAT”. “AN EYE FOR AN EYE” etc. etc..

By: Ivan, Washington, DC

Ivan, Washington, DC — Fri, 20 Jun 2008 20:38:13 +0000

Stainless steel bracelets are the perfect accessories to go with their sacrificial robes as these Wall Street “virgins” are marched to the edge of the volcano. The only question remains: Will the gawds of public opinion be appeased or will they demand even more videotaped sacrifices?

Frankly, I say split them open and read their entrails.

By: Matt, St. Paul, MN

Matt, St. Paul, MN — Fri, 20 Jun 2008 18:48:45 +0000

Enron was worse.

By: T, Jvile, FL

T, Jvile, FL — Fri, 20 Jun 2008 16:55:43 +0000

While it was highly unlikely that Tannin and Cioffi would make a break for it, it’s not outside the realm of possibility that guys like that would. Just look at that Israel guy who is apparently on the lamb in an RV.

What’s probably the best reason for the perp walk, I think relates to your blog several weeks ago (“Absolutely no power also corrupts” or something to that effect). The prosecutor makes Tannin and Cioffi do the perp walk… because he can.