http://iamfacingforeclosure.com/blog/2009/12/01/anatomy-of-a-government-abetteded-fraud-why-indymaconewest-always-forecloses/

When OneWest took over Indymac, the FDIC and OneWest executed a “Shared-Loss Agreement” covering the sale. This Agreement covered the terms of what the FDIC would reimburse OneWest for any losses from foreclosure on a property. It is at this point that the details get very confusing, so I shall try to simplify the terms. Some of the major details are:

* OneWest would purchase all first mortgages at 70% of the current balance
* OneWest would purchase Line of Equity Loans at 58% of the current balance.
* In the event of foreclosure, the FDIC would cover from 80%-95% of losses, using the original loan amount, and not the current balance.

How does this translate to the “Real World”? Let us take a hypothetical situation. A homeowner has just lost his home in default. OneWest sells the property. Here are the details of the transaction:

* The original loan amount was $500,000. Missed payments and other foreclosure costs bring the amount up to $550,000. At 70%, OneWest bought the loan for $385,000
* The home is located in Stockton, CA, so its current value is likely about $185,000 and OneWest sells the home for that amount. Total loss for OneWest is $200,000. But this is not how FDIC determines the loss.
* ‘FDIC takes the $500,000 and subtracts the $185,000 Purchase Price. Total loss according to the FDIC is $315,000. If the FDIC is covering “ONLY” 80% of the loss, then the FDIC would reimburse OneWest to the tune of $252,000.
* Add the $252,000 to the Purchase Price of $185,000, and you have One West recovering $437,000 for an “investment” of $385,000. Therefore, OneWest makes $52,000 in additional income above the actual Purchase Price loan amount after the FDIC reimbursement.

At this point, it becomes readily apparent why OneWest Bank has no intention of conducting loan modifications. Any modification means that OneWest would lose out on all this additional profit.

Note: It is not readily apparent as to whether this agreement applies to loans that IndyMac made and Securitized but still Services today. However, I believe that the Agreement does apply to Securitized loans. In that event, OneWest would make even more money through foreclosure because OneWest would keep the “excess” and not pay it to the investor!

http://minnesotaindependent.com/policies

The tangled bundled mortgage tranches are rarely owned by a single local “bank”. The real fraud occurred with the help of the banks lending out free money to make up front fees and passing the garbage to sucker investors like pension funds. And
that triggered the economic meltdown of unregulated credit default swaps. And that put you out of a real job and onto a
non-paying MN Indy gig.

This is just the lowering of housing values that were too high and the little guys trying to get a couple crumbs doing it.

Glad to be distracted by this terrible fraud when the AIG scandal and the continued unregulated hundreds of trillions in CDS is still there and involving local heavies like USB and
Wells Fargo. Meanwhile most of the tragedy is that people will
lose their houses and the “investors” will not renegotiate
the loans so people come up with these small time scams to do
it for them.