paul l muckle v. the united states of america

8/9/2019 Paul L Muckle v. The United States of America

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Defendants


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CIVIL COMPLAINT FOR MORTGAGE FRAUD, VIOLATION OF THEFEDERAL HOME OWNERSHIP & EQUITY PROTECTION ACT, VIOLATION

OF THE FEDERAL TRUTH IN LENDING ACT, VIOLATIONS OF THERESPECTIVE STATES PREDATORY LENDING LAWS, A ND VIOLATION OF

SECTION 1 AND SECTION 4 OF THE 14 TH AMENDMENT OF THECONSTITUTION OF THE UNITED STATES OF AMERICA

CIVIL CHARGES

1. Paul L. Muckle, pro se, the plaintiff in the above entitled action, respectfully

files this complaint against the named defendants, accusing them jointly and

severally of violating the follows laws:a. Section 1 of the 14 th Amendment of the United States Constitution.

b. Section 4 of the 14 th Amendment of the United States Constitution.

c. The Federal Home Ownership and Equity Protection Act of 1994, as

amended, HOEPA. 15 U.S.C. ss. 1639, 12 C.F.R. ss.ss. 226.32 and 226.34

d. The Arkansas Home Loan Protection Act, Ark. Code Ann. ss.ss. High Cost

Home Loan 23-53-101 et seq.

e. The Cleveland Heights, OH Ordinance No. 72-2003 (PSH), Mun. Code ss.ss.

757.01 et Covered Loan seq.

f. The Colorado Consumer Equity Protection, Colo. Stat. Ann. ss.ss. Covered

Loan 5-3.5-101 et seq.

g. The Connecticut Abusive Home Loan Lending Practices Act, High Cost

Home Loan Conn. Gen. Stat. ss.ss. 36a-746 et seq.

h. The District of Columbia Home Loan Protection Act, D.C. Code ss.ss. 26-

1151.01 et seq. Covered Loan


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i. The Florida Fair Lending Act, Fla. Stat. Ann. ss.ss. 494.0078 et seq. High

Cost Home Loan

j. The Georgia Fair Lending Act, Ga. Code Ann. ss.ss. 7-6A-1 et seq. High

Cost Home Loan 6, 2003) et seq. Georgia as amended (Mar. 7, Georgia

Fair Lending Act, Ga. Code Ann. ss.ss. 7-6A-1 et seq. High Cost Home

Loan 2003 - current)

k. The Illinois High Risk Home Loan Act, Ill. Comp. Stat. tit. 815, High Risk

Home Loan ss.ss. 137/5 et seq.

l. The Indiana Home Loan Practices Act, Ind. Code Ann. ss.ss. High Cost

Home Loan. 24-9-1-1 et seq.

m. The Kansas Consumer Credit Code, Kan. Stat. Ann. ss.ss. 16a-1-101 High

Loan to Value Consumer Loan (id. et seq. ss. 16a-3-207), and Sections 16a-

1-301 and 16a-3-207 became effective High APR Consumer Loan (id. ss.

Section 16a-3-308a became effective 16a-3-308a)n. The Kentucky 2003 KY H.B. 287 - High Cost Home Loan Act, Ky. Rev.

High Cost Home Loan Stat. ss.ss. 360.100 et seq.

o. The Maine Truth in Lending, Me. Rev. Stat. tit. 9-A, ss.ss. 8-101. High Rate

High Fee Mortgage et seq.

p. The Massachusetts Part 40 and Part 32, 209 C.M.R. ss.ss. 32.00 et seq. and

High Cost Home Loan 209 C.M.R. ss.ss. 40.01 et seq. Massachusetts

Predatory Home Loan Practices Act High Cost Home Mortgage Loan

Mass. Gen. Laws ch. 183C, ss.ss. 1 et seq.


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q. The Nevada Assembly Bill No. 284, Nev. Rev. Stat. ss.ss. 598D.010 Home

Loan et seq.

r. The New Jersey New Jersey Home Ownership Security Act of 2002, N.J.

High Cost Home Loan. Rev. Stat. ss.ss. 46:10B-22 et seq.

s. The New Mexico Home Loan Protection Act, N.M. Rev. Stat. ss.ss.

High Cost Home Loan 58-21A-1 et seq.

t. The New York N.Y. Banking Law Article 6-l, High Cost Home Loan

u. The North Carolina Restrictions and Limitations on High Cost Home High

Cost Home Loan Loans, N.C. Gen. Stat. ss.ss. 24-1.1E et seq.

v. The Ohio H.B. 386 (codified in various sections of the Ohio Covered Loan

Code), Ohio Rev. Code Ann. ss.ss. 1349.25 et seq.

w. The Oklahoma Consumer Credit Code (codified in various sections

Subsection 10 Mortgage of Title 14A)

x. The South Carolina South Carolina High Cost and Consumer Home LoansHigh Cost Home Loan Act, S.C. Code Ann. ss.ss. 37-23-10 et seq.

y. The West Virginia Residential Mortgage Lender, Broker West Virginia

Mortgage Loan Act Loan and Servicer Act, W. Va. Code Ann. ss.ss. 31-17-1

et seq.

2. The complaint also accuses the defendants of:

a. Failure to protect the residents in each respective state and of every state

in the Union from unlawful dispossession and financial rip-off.


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they reside. The plaintiff is a legal derivative- citizen of the United States of

America and a resident of the state of Massachusetts.

7. Sovereign Citizenship is the birthright of all Americans, who in turn extended

this most important right to foreign-born persons through naturalization laws.

With this status, my unalienable rights of life, liberty and property couldn't be

infringed upon nor could they be transferred or sold by any other person.

8. The plaintiffs claims of s overeign citizenship, which is a right vested in him by

the United States Declaration of Independence to life, liberty, and the pursuit

of happiness, is absolute.

9. Each individual, at least so far as respects his unalienable rights, is his own

sovereign, which means that wherever the rights of the people as a whole are

being abridged, then any citizen is free to pursue claims on behalf of himself

and the collective citizens of his state and of every state in the Union, in any

federal court of law, against any enemy or entity, whether foreign or domestic, jointly and severally, to redress the violation of any law or the enforcement of

any law which directly threatens his sovereign rights; whether that violation

occurs in his respective state and/or in any other state in the Union. So long as

it affects me as a sovereign, I have a right to sue.

10. The word "sovereign" is defined in the sixth edition of Black's Law Dictionary,

published in 1990, as being "A person, body, or state in which independent

authority is vested; a chief ruler with supreme power; a king or other ruler in a

monarchy. Prior to the War for American Independence, the British king was


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the sovereign and the American people were his subjects. The war's outcome

changed all this; let us not go back down that road.

11. The sovereignty has been transferred from one man to the collective body of

the people, and he who before was a subject of the king is now a citizen of the

State. State v. Manuel, North Carolina, Vol. 20, Page 121 (1838)

12. Thus, a citizen of a state is, by the federal Constitution, made a citizen of the

United States. This means the following: A citizen of one state is to be

considered as a citizen of every other state in the Union. Butler v. Farnsworth,

Federal Cases, Vol. 4, Page 902 (1821)

13. Therefore, if any citizen of any state has evidence that any entity, whether

foreign or domestic, is engaged in any adverse action which abridges the rights

of the people, or that causes destruction to our nations economy, then that

citizen, as a sovereign, has the constitutional right and the patriotic duty to his

country to intervene to stop it; whether through an act of war or through acourt of law.

14. For purpose of elimination (because I know this will be the first line of defense

for the court and the defendants), the Federal Court, Local Rule 83.5.3 (c),

which states that a non attorney cannot act as the lawyer for anyone but

himself, is a direct violation of my 14 th Amendment rights. Let us explore this

concept by focusing on what are considered as being the rights inherent in

citizenship in America: When men entered into a state, they yielded a part of

their absolute rights, or natural liberty, for political or civil liberty, which is no


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other than natural liberty restrained by human laws, so far as is necessary and

expedient for the general advantage of the public. What this is clearly stating

is that unless the action that I am taking adversely impacts or infringes upon

the sovereign rights of another citizen in the Union, or unless my actions

adversely threatens the public interest, then no court in the land has the right

to deny my claim on the grounds of a local rule.

15. Federal Local Rule 83.5.3 (c) is a direct infringement of my constitutional right

and duty to defend my country and my fellow citizens from a clear and present

danger to our financial stability and to our national security.

16. My absolute sovereign rights to defend my country and my people in a federal

court of law is an advantage, not a disadvantage, to the public, nor does it

infringe on the rights of any other citizens if the citizens are being grossly

harmed by the action for which I, as a sovereign citizen, seek to redress.

17. In America it is unlawful to kill, but if I had information that a group of terrorists, whether foreign or domestic, were plotting to harm the people, or to

bring harm to the government of the United States of America, and I was to

kill those terrorists, would they not pin labels on my shoulder and parade me

across the airwaves? So then why is it that if I perform the same act,

nonviolently, but in a civil action in a court of law, why do they say I have no

standing to do so, and that I cannot defend anyone else?

18. This lawsuit does not seek monetary damages nor does the plaintiff require

any compensation for any service rendered in this lawsuit. A license for the


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right to practice law is an agreement to share the loot, e.g., Collective Security

for Surety. For what will they tax me if I loot no man? So then why do I need a

license to defend? This lawsuit simply seeks a CEASE AND DESIST ORDER

against thievery and dispossession, and to seek the protection of our national

security, and to protect the integrity of the overall U.S. economy. The

defendants should be my co-plaintiffs.

19. It is for the benefit of all the people that I, as a sovereign citizen, wage this

civil war against the foreign investment firms destroying our economy and

threatening our national security from within.

20. For two years now, I have been trying to bring what I know to the attention of

the appropriate authorizes, but the authorities have been derelict in their duty

to the people; therefore, under the U.S. Constitution, if the government ceases

to function effectively on behalf of the citizens, then I as a sovereign citizen

have a patriotic duty to my country to wage war against any enemy of thepeople, whether that enemy be foreign or domestic.

21. You may consider this civil action an act of war on behalf of me and of all the

people. Because the government wont go after the financial terrorists who are

terrorizing the people and destroying our country from within, then I must sue

the government to force them into action. Therefore, this action against the

government is not an act of malfeasance, but rather a war of attrition (what I

call my Jericho Wall Strategy). If the royals wont come down from off the


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dispossession and robbery of the people, but has instead engaged in acts which

not only aid and abet the perpetrators, but which violate the 14 th Amendment

to the Constitutional of the United States of America and the federal and

states Predatory Lending Acts as mentioned in paragraph one of this

complaint.

26. Under the terms of each individual mortgage contract originated in all 50

states in the United States of America within the last 5 years, the drafter of

the contract (the mortgage lender) has inserted a provision which states words

to this effect : In the case of default on the mortgage terms, if the citizen does

not cure the default within the prescribed time, the lender may use the

applicable l aw to foreclose on the consumers property and sell it, with out

further notice to consumer.

27. Under this clause in the mortgage contract, American mortgage note holders,

doing the tasks of their foreign bosses on Wall Street, are permitted by statelaw to walk into an American Court of Law (such as the housing court), and

file an ex parte complaint to obtain, without any objection and/or knowing and

intelligent assent thereof, legal rights to enter into, and to take possession of

property, and to evict that America citizen out into the street like a dog, and to

sell his/her property without first granting that citizen his/her constitutional

rights to due process; these due process rights being the rights to contest the

validity and/or fairness of the dispossession.


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28. Under the terms of the mortgage contract, the consumer has no legal rights to

contest the foreclosure of his/her property in the very same proceeding as the

lender is allowed to go and argue for the rights to dispossess.

29. This complaint states, not alleges, that all four million-plus foreclosure orders

which have been issued in any ex parte hearing in any American court of law

throughout any of the 50 states within the past five years, are all unlawful and

violate the due process rights of the citizens who are directly affected by said

foreclosures.

30. Under federal consumer protection ordinance, each individual state must enact

anti-predatory lending laws which must exceed or conform to the federal Home

Ownership & Equity Protection Act (HOEPA) unless that state chooses to

adopt the federal standards.

31. The federal Home Ownership and Equity Protection Act was enacted to fight

predatory lending and equity stealing by unscrupulous lenders. One of theissues that the HOEPA dealt with was the slick way in which lenders were

able to use the system to legally cheat unsuspecting homeowners out of their

homes.

32. Under Regulation Z of HOEPA and each individual stat es anti-predatory

lending laws, one of the practices that falls within the definition of predatory

lending happens when a lender hides words in the fine print that make it

illegal for the homeowner to take legal action against the lender. The

borrowers sign away their rights to sue the lender for any fraud, predatory


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actions or illegal actions. The only right the borrowers have is to take their

grievances to arbitration. The arbitration process is totally in the hands of the

lenders, usually conducted in secret without the borrowers having adequate

representation . Although the borrowers can usually have legal counsel, they

find it difficult to find anyone who will represent them because the lawyers are

not guaranteed payment of their fees in arbitration like they are in court.

Many arbitration cases are handled over the phone and when a small

individual is pitted against a large corporation and the proceedings are

confidential with no stenographic or written record of the facts, the borrower is

at a true disadvantage. Most arbitration decisions are binding and the

borrowers cannot appeal them.

33. Each individual s tates predatory lending law which is modeled after the

federal HOEPA, specifically using the language of the Massachusetts General

Laws 183C 13, states, Without regard to whether a borrower is actingindividually or on behalf of others similarly situated, any provision of a high

cost home mortgage loan that allows a party to require a borrower to assert

any claim or defense in a forum that is less convenient, more costly, or more

dilatory for the resolution of a dispute than a judicial forum established in the

commonwealth where the borrower may otherwise properly bring a claim or

defense or limits in any way any claim or defense the borrower may have is

unconscionable and void.


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34. Section 1 of the 14 th Amendment to the U.S. Constitution states, No State

shall make or enforce any law which shall abridge the privileges or immunities

of citizens of the United States; nor shall any State deprive any person of life,

liberty, or property, without due process of law; nor deny to any person within

its jurisdiction the equal protection of the law.

35. However, despite this forbiddance by the United States Constitution and the

federal and state predatory lending laws, lenders are still permitted to deprive

the people of their pursuit of liberty and property. Lets analyze the situation :

The law already recognized that arbitration strips consumers of their rights, in

fact this is how the law puts it: (a) The arbitration process is totally in the

hands of the lenders, (b) usually conducted in secret without the borrowers

having adequate representation. (c) Proceedings are confidential. (d) Most

arbitration decisions are binding and the borrowers cannot appeal them.

36. Now, with those recognitions by the government in mind, how is a foreign noteholder allowed to walk into an American court of law, by themselves, without

any notice to the citizen, and seek an American court order from an American

judge empowered by an American state governor, for the dispossession of a

citizen?

37. Am I the only one who sees that the lenders got slicker and bolder? Instead of

forcing the citizen into arbitration to contest the foreclosure, the lender

eliminated the whole process altogether. Instead of granting the citizen the

right to dispute the validity of the foreclosure, the lender just goes straight to a


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court of law, and demands that the American judge give them the legal rights

to dispossess the people, without the people being able to tell their side of the

story. The only time the citizen knows that they are being deprived of their

property and their rights to due process, is when they receive their copy of that

American court order granting legal rights to dispossession. By then it is

already too late; the one-sided legal order has already been issued, the matter

has already been recorded in the Countys Registry of Deeds, and the notice of

sale has already been placed in the local newspaper. The only thing thats left

is for prospective buyers to come and begin the Great Humiliation. What a

calamity! There is no appellate process, except that the citizen now has to hire

an attorney and file a separate suit which in the end would be even more costly

than arbitration.

38. What attorney will take a case where the foreclose order has already been

issued? And on what grounds would he sue? Wasnt the Dispossession Orderissued by a court of law established in the commonwealth or state, by that

state s government? Had I not been too ignorant to accept defeat, I too would

have been amongst the victims of this Great Disrespect.

39. But to add insult to injury, the foreclosure ORDERS that are signed by the

Chief Justice of the h ousing court states, If you are entitled to the benefits of

the Servicemembers Civil Relief Act as amended and you object to such

foreclosure you or your attorney should file a written appearance and answer


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in said court or you may be forever barred from claiming that said

foreclosure is invalid under said act. (See Exhibit A.)

40. So right there, in plain English, if the homeowner is not a member of the

military on active duty, then that homeowner is not entitled to contest the

validity of the foreclosure. This is a blatant violation of the equal protection

clause of the 14 th Amendment.


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Exhibit A


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41. There are parallels between what the lenders did before the predatory lending acts were

enacted, and what they are doing after those laws were enacted, and they got even bolder.

They eliminated the citizen s rights to contest the foreclosure altogether and just walk into

court boldly, without notice, and demand legal rights to deprive a citizen of their most

sacred rights to property without due process.

42. The people arent even allowed to assert any defense because according to the ORD ER

written by the court and signed by the American judge, they have no such rights unless they

are entitled to the Servicemenbers Civil Relief Act.

43. The rights to foreclose order granted by the court which allow only militaryservicemen the right to contest the validity of a foreclosure is a blatant

viola tion of the equal p rotection clause of the 14 th Amendment.

44. Should I keep back my opinion at such a time, through fear of giving offense or

on the penalties of death? No; I should consider myself guilty of treason

towards the people, and an act of disloyalty to the Majesty of Heaven who I

revere above all earthy kings.

45. Didnt most of the defendants oppose the war for which the Servicemembers

Civil Relief Act was amended? What is the difference between the soldier

fighting in a war far away from the home front, the policeman fighting crime in

our streets, the carpenter beautifying his neighborhood, or the garbage

collector keeping our cities sanitary? A rent we all serving the United States of

America? Am I the only who saw the trick? While our attention was focused on

the warfront over there , they snuck their Trojan horse in through the back

door over here . Isnt that the true concept of open warfare? You distract the


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enemy by keeping him focused on other things while you sneak in the back

door and destroy the civilians within . Its not about the soldiers; war has never

been, nor will it ever be about fighting the soldiers. A soldier will pick up arms

in a heartbeat to defend the family, but kill the family and the soldier will lay

down his arms. I mean, what more does he have to fight for? Ever since 9/11,

the goal has been to destroy the American family. Which country can bring

America to its knees militarily? But you destroy the family base, and America

would crumble like a deck of cards. We got drawn into a false war which no one

can ever win. But the real war was never about bombs and bullets; it was

always about destroying the family and enslaving them through economics.

Dead people cant spend money. The World Trade Center? Two times? It is all

about trade. W hile were on fools errands overseas, the family is being

destroyed at home. These subprime loans are the ultimate Trojan Horse. The

war was all one big distraction; all part of the big scheme. Even the bailoutswere planned.

46. Which American note holder got to keep the billions of bailout money they got?

Lets tell the people the truth as to who really got the money. The American

banks were not losing money because they were not funding the loans. The

foreign investment firms were funding the loans; the American banks would

originate the loans then transfer the title over to the foreign investor.

Therefore, it is the foreign investor who suffers the loss, and so when they give

bailouts the America n banks hand the taxpayers money right over to their


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foreign bosses, and in return for treason, these CEOs are awarded their thirty

pieces of silver which they like to call bonuses. If these banks are losing so

many billions of dollars, how is it that they are still able to pay out such huge

bonuses? It is because they are not suffering any losses; the mortgages are secured

and bonded and it was not their investment to begin with.

47. If you cannot test an enemy militarily, you use greed to bring them down economically.

Whose money has funded these subprime loans, and who holds the deeds to our properties?

Whose money has financed Ameri cas woes? It is not ours; the war made us broke,

remember?

48. That tactic reminds me of the Civil War; while the rebels went away to fight, they left their

families behind unprotected . Didnt Savannah and all of Georgia burn as a result? And

now, while they are distracted over there, the real terrorists are in our backyard stealing

our property. What can be more terrifying than losing ones family home? They did not

even have to fire a single shot or release a suitcase bomb. All they did was to march onto

Wall Street, pin blinders on the mules and hold out a carrot on a stick. Those greedy CEOs

followed that carrot to the precipice of, not theirs, but our own doom, then threw us over.

49. How much longer must the people lay down in the mud so others can safely cross over?

How much longer must the people trod on the winepress of Capitalism? They're going to

rebel! A great man once lamented, Those who dont learn from history are bound to repeat

it!

50. And this brings to mind a previous case I filed on this very same matter in Paul L. Muckle,

et. al., verses Fremont Investment & Loans, et. al. Civil action number 07-11437 . In that

case, I filed a motion for injunctive relief asking the court to issue a preliminary injunction


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violation of the U.S Constitution is bitter to the stomach. The people are in immense

danger! Over 10 million foreclosure notices expected; more than four million have already

gone out, and no one so much as even bat an eye to the fact that all those foreclosure

ORDERS violated the peoples 14 th Amendment rights. No one paid any attention. Wall

Street was not the only one drinking the punch of reckless exuberance .

52. And to add insult to injury, the predatory lending laws in each respective state, state Any

provision of a high cost home mortgage loan that allows a party to require a borrower to

assert any claim or defense in a forum that is less convenient, more costly, or more dilatory

for the resolution of a dispute than a judicial forum established in the commonwealth wherethe borrower may otherwise properly bring a claim or defense or limits in any way

any claim or defense the borrower may have is unconscionable and void.

53. According to the state and federal predatory lending act, all 4 million or so

COURT issued foreclosure orders that have been signed throughout the entire

United States of America , are unconscionable and void because it does not

even allow the homeowner the right to contest the foreclosure. So why are

lenders still allowed to enforce them and why are American sheriffs pulling up

to the homes of Americans residents with unconscionable and void eviction

orders, forcing American residents out into the streets, packing up their

belongings and, either placing them on the sidewalk, or putting them in

storage that had already been reserved.

54. I have never been to law school, and I have no training in law, so maybe Im

misinterpreting the laws. Is this gross abuse and great disrespect a figment of

my imagination?


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conform to the federal standards; no state is allowed to set a higher threshold

than the federals, however , some are exempted, and allowed to supersede the

federal law and set a lower threshold. Of the fifty states, only five sought

exemption to depart from the weaker federal law and enacted tougher laws to

protect their citizens. Massachusetts, which has the toughest predatory law in

the land, is one of five states exempted and was allowed to supersede the

federal law and set its threshold lower to five percent, making it harder for

lenders to rob consumers. Furthermore, where federal law only covered

refinanced loans, Massachusetts law covered any home loans. Massachusetts

really cared about its citizens when it enacted those tough laws in 2004.

59. Massachusetts then turned around and dropped the ball in 2005, and failed to

pick it back up in 2006. Should I keep silent for fear of giving offense? The

truth is an offense, but I commit no sin against my brother. In fact, I am my

two brother s keeper. You know the saying , If one of us crashes the bus, theywill accuse all of us of not knowing how to drive. No one paid any attention

when I whispered in private so do not be mad at me for calling you out in

public.

60. Under federal and state predatory lending laws, a high cost home mortgage

loan is normally an unlawful loan. However, it can be a lawful loan if the

lender meets certain requirements. If the origination fees of the loan exceed

the threshold set by law, the lender is required to send the consumer to

counseling so that the consumer may fully understand the terms of the high


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cost loan. All subprime loans in the nation where the interest rate is to be

adjusted more than 5 percent constitute an unlawful high cost home mortgage

loan. In this type of situation, by decree of federal and state lending laws, the

lender must then send the consumer to counseling and get a letter of

certification from the non-profit counselor stating that at the time of the

closing of the loan, the consumer fully understands the features of the

mor tgage loan. Under that same law, if the lender cannot produce said

certificate certifying that the consumer fully understands the terms of the high

cost mortgage contract, then the terms of the contract are unenforceable. They

are null and void. This means, under the TILA, if the lender cannot produce

said certificate, then the lender cannot foreclose, nor can he collect any

mortgage payment under those same terms.

61. But how can a citizen know if the origination fees have exceeded the 5%

threshold, because the lender will undoubtedly hide the fact? Well, the answeris simple; it is in your very face: if any resident has an adjustable rate

mortgage loan with a teaser rate, and the interest is to be adjusted at least 5%

from the starting rate, then the loan is an unlawful high cost home mortgage

loan. All subprime loans have an adjustable rate interest that will adjust to

6%. That 6% is added to the loan at origination and is to be adjusted by 3% in

two years and 1.5% every six months thereafter. That 6% represents an

additional 6% in fees which the thieves have stolen from the equity of the

peoples property than added on to the loan without the knowledge of the


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borrower. That 6% represents hidden fees above and beyond the 4% or so that

the borrower may be aware of, therefore most borrowers are charged at least

10% in origination fees, which is twice the amount allowed by law.

62. But how have the lenders done this and how have they been able to pull the

wool over our eyes? Its simple. They stole it and hid their crime in plain sight.

It all begins with the appraisal. For instant, on my adjustable rate mortgage

loan, I borrowed $263,920; my starting interest rate is 8.690 % to be adjusted

6% more, for an interest rate cap of 14.690%. Somehow I knew that that 6%

represented fraud, but I could not prove it until I demanded copies of my loan

origination documents and got the proof. In those documents, I discovered a

fact that made my stomach churn: The lenders were taking out secret loans, up

to more than 6% of the loan am ount from the equity in peoples property. They

did it to everybody.

63. This is how it was done: After the loan is originated, the lender has to transferthe loan to their bosses (the foreign investment firms on Wall Street). But

before the loan is to be traded on the world market, it has to be securitized and

bonded which means it has to have private mortgage insurance, bonded under

a financial guaranty insurance policy, Bankruptcy Bond, letter of credit, and

monitoring. Now it takes up to 6% of the loan amount to do all this, but

neither Wall Street nor the lender wants to foot the bill for this, so they charge

it to the borrowers account. Now, the premium for private mortgage insurance

is so high that if you added the premium to the other legally charged fees, it


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would carry the fees over the 5% threshold. In this situation, the lender would

not be able to sell the loan because it would be unlawful, so they came up with

an in-your- facesolution; they decided to steal the money and hide the fee.

64. After the lender got the appraisal report on the property, they would send the

apprais al to Review . Now, the word Review would seem normal in real

estate transactions because the lender has to make sure that the appraisal

value was supported. But this was not the case in these subprime loans

because it was not normal business practice to give an adjustable rate loan to

anyone making under $10,000 a month after taxes. I typed Review Appraisal

on the Internet and up popped a comment in which a former real estate

mortgage broker stated, Lenders had forced brokers to pressure appraisers

into reviewing appraisals to increase the value even if it was done

fraudulently. If they did not cooperate, then they would not get any business.

So I set out to prove this, and I did. I found the proof in the lenders underwriting policy.

For SG Mortgage Assets Back Securities. Series 2006 Fre-2 and 2006-OPT-2

Underwriting Policies

The level of review by the Affiliated Seller, if any, will vary depending on several factors. The depositor orthe Affiliated Seller will typically arrange for a review of a sample of the mortgage loans for conformitywith the applicable underwriting standards and to assess the likelihood of repayment of the mortgage loanfrom the various sources for such repayment, including the mortgagor, the mortgaged property, and primarymortgage insurance, if any. Such underwriting reviews will generally not be conducted with respect to anyindividual mortgage pool related to a series of securities. Such review, with respect to seasoned mortgageloans or mortgage loans that have been outstanding for more than 12 months, may also take intoconsideration the mortgagors actual payment history in assessing a mortgagors current ability to makepayments on the mortgage loan. In addition, procedures may be conducted to assess the current value of the mortgaged properties. Those procedures may consist of drive-by appraisals, automated valuationsand/or real estate brokers price opinions . The depositor or the Affiliated Seller may also consider aspecific areas housing value trends. These alternative valuation methods may not be as reliable as thetype of mortgagor financial information or appraisals that are typically obtained at origination.


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In certain instances, the LTV ratio or CLTV ratio may have been based on the appraised value as indicatedon a review appraisal conducted by the mortgage collateral seller or originator.

65. The appraisal value of my property was only the total loan amount of

$329,900. I have an 80/20 subprime loan. Twenty percent, or $65,980, went to

the piggy-back loan which means the lender can only consider the 80% or

$263,920 value to which this loan corresponds. The lender could not steal

anything out of the property, so what they did was send the appraisal to

review. The reviewer would inflate the appraisal value based on a real estate

brokers price opinions, and up to 6% above and beyond the loan amount would be

added. The lender would then steal that phantom 6% equity from the property

and turn it into cash. This cash is then used to securitized the loan and pay for

private mortgage insurance. This very same 6% theft is then credited to the

consumer saccount. The only thing is that the consumer does not have to pay it

right away since it would raise too many eyebrows, so the robbery is delayed

for two years.

66. That is why we have adjustable rate mortgages that adjust 6% above the

starting interest rate. I will prove it. Exhibit B, Lenders closing

contingencies, is a page of my loan documents. On line number 5, it clearly

states, MAX SLR CREDIT 6%. Line number 8 at the very bottom of the

document, it again states, Seller credit not to exceed 6% or closing cost.Now, to anyone, Seller would seem to refer to the selle r of the home giving

the buyer up to 6% to help pay for closing costs, but what seller would give up

6% of his money to a buyer? Furthermore, we already know that the closing


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cost cannot exceed 5%, so the 6% to which the interest rate would be adjusted

should have been the dead giveaway to the regulators had they been doing

their job. The Seller referred to here is not the seller of the property, but the

Seller on Wall Street ; the one who funds the loans and who is responsible for

securitizing them for sale on the worlds market. The investment firm is the

Seller .


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Exhibit B


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67. So there we have in plain English, the originator granting the 6% credit to the

Seller on Wall Street, for the Seller to use to securitize the loan. There is

more proof on the next document.

68. On line 5 at the very bottom of the next document, the MAX SLR CREDIT

6% is again mentioned as a closing condition.

69. At the very top, line 1, it tells of the appraisal being sent to review and states,

GAP Review Appraisal, Approve d by lender, To support a value of $329,920.

Now a question that can be raised here is, if the appraisal is already picked

and approved by the l ender, why does it need to be r eviewed again?

70. Line 10 of this document states, n/a SEE ATTACHED APPRAISAL

CONDITIONS. Now I am no rocket scientist, but if I see this phrase in a

document and the actual document it refers to is also attached, I would

interpret that to mean that it is not the document itself that is n/a (not

applicable), because it is attached. Rather it is the conditions that are stated

on the document that are not applicable. To me, this is clearly stating that the

$329,900 is not applicable; they had to increase the value. This looks like

mortgage fraud. (See Exhibit C.)


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Exhibit C


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71. Now to prove that the appraisal was inflated and that the n/a referred to on

line 10 of the preceding document was meant to throw us off, I introduce the

actual document that line 10 refers to . It states, NO CONDITIONS OF

REVIEW APPRAISAL. Now the fact that I was charged $300 for the original

appraisal and another $300 for the review a ppraisal would suggest some type

of impropriety. Furthermore, why is the lender charging me an additional $300

for its own review? (See Exhibit D.)


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Exhibit D


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72. I paid an additional $300 for that? But to sink the nail in the coffin of the issue

that all lenders were inflating the appraisal value of properties in America so

that they could fraudulently drive up the market, I will introduce documents

from different lenders to different consumers. On Exhibit E, Robin Reed is

charged $450 for appraisal fees (at the very top of this document at the second

line). But the seventh line of this same document shows that Robin is again

charged $175 for an APPRAISAL REVIEW FEE. So, like me, Robin Reed,

who had a totally different lender and broker than I, is charged two appraisal

fees. One is for r eview.


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Exhibit E


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73. So now that we see different lenders with different brokers sending appraisals

to review and charging borrowers twice, that should raise a lot of suspicion as

to the integrity of the value of the property

74. Now I introduce a page from an appraisal from a totally different lender and

broker. Here, Robert Brown had an appraisal done. According to this

document, Robert Browns house has three extra bedrooms and other rooms,

but Ive been to see Mr. Browns house; it is not outlined as the appraisal

states. The appraisal also has three extra bedrooms in the back that did not

exist; they were porches, and one of the apartments is drawn wrong to include

an extra bedroom room that does not exist at all. (See Exhibit F.)


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Exhibit F


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75. This evidence shows that different lenders were sending appraisals to

review and charging the homeowner extra. Now I will show you how they did

this and applied the fees. The evidence is on Exhibit G.

76. On Exhibit G, I discovered that the lender had secretly taken out a New Loan

on my property without my mom, Irene Wood, or my consent or knowledge.

The title of this document is NEW LOAN DISBURS EMENT. On this New

Loan Disbursement sheet, it tells a horrible tale of mortgage fraud that will

send shockwaves throughout the industry and will be felt all the way in

London, because it affects their economy too. These worthless mortgages are

attached to an index based on the London Libor; they were gambling with the

U.S. and British economy to destroy them both.

77. On this document, at the very top, it clearly states that the loan amount is

$263,920. However, if you look at the very bottom at the right side it states

that the TOTAL CREDIT given to us is $279,134.10.78. First of all, I paid all the closing cost out of my pocket in cash. It cost me

$12,092.91 which I paid before the loan was even closed.

79. So now lets break down this $279,134.10 credit that was given us, even though

we borrowed only $263,920. To get the accurate percentage you will need a

mortgage calculator, but if you do not have one, then all you have to do is

round off the percentage to the highest whole number; thats how its done.

Starting at the top of the New Loan Disbursement sheet, the FASB ORIG


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LOAN FEES are $6,279.56. Adding the $55.50 for title insurance and other

fees brings the total to $6,335.08.

80. Further down is FASB COSTS . FASB COST is the cost of securitizing the

loan. When the investor on Wall Street purchases a loan from a lender, the

investor must report the amount of money he paid for the loan and the amount

of money it took to securitize the loan for sale on Wall Street. The FASB COST

for securitization is $11,609.80.

81. PREPAID INTEREST is recorded as $1,696.41, and across from that that it

says INTEREST DUE BROKER PREMIUM PAID $3,958. But the problem

here is that I had already paid the broker $6,240 in upfront cash, so this

additional $3,958.80 is an illegal kickback under the federal RESPA. This

payment to the broker, which represents 1.5% of the loan amount, had already

been added onto the interest rate of the loan. The original interest rate was

7.19%, but the brokers illegal kickback of $3,958.80 or 1.5% was added to giveme a starting interest rate of 8.690%. This is what they did to everyone; they

charged everyone a yield spread premium or YSP (illegal kickback) and pay it

to the broker for the referral, then that 1.5% is added on to the starting

interest rate of the loan.

82. The investor puts up the money and the lender hires the local mortgage

brokers and offers them 1.5% of the loan to refer the borrower and to gather

the necessary information. The lender, who is the master broker, then pays the

local broker his cut of 1.5% ($3,958.80) and adds it to the interest rate of the


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when I began to explore further. I added the $6,279.58 plus the $55.50 to the

prepaid interest of $1,696.41 for a grand total of only $8,031.49. This did not

justify the fee so I then subtracted the actual loan amount of $263,920 from the

wired amount of $265,827.89, and I had a balance of $1,907.89. I took this

balance of $1,907.89 and added it to the grand total of $8,031.49 and I got a

grand total of $9,939.39. That is how they hide the fees; they stick them in

unusual places.

84. So there we have so far, the stealing of $9,939.36, but further down they add

the AQUISION COST of $9,939.38 to the FASB 91 Costs of $11,609.80 for a

grand total of $21,549.18. Then at the bottom on the left it says TOTAL

CREDIT = $279,134.10. But here is where they pulled the wool over the

governments eyes because they have to file these figures with the government.

If you add the $21,549.18 to the loan amount of $263,920, you will get a total

$285,469.18; therefore, that is not how they did it.85. The right side of this document states that the total amount wired to the

closing attorney was $265,827.89. Add that amount to the securitization cost

(FASB 91 COST of $11,609.80), and you get the total of $277,437.69, but the

total credit is $279,134.10; therefore, there is some money unaccounted for. It

took me a while but I finally found it hidden on another form, even though the

lender had already charged me prepaid interest of $1,696.41 and added it to

the acquisition cost, they still went and charged me the very same prepaid

interest a second time. If you add that $277,437.10 on Section B, to another


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prepaid interest amount of $1,696.41, you will get the total credit of

$279,134.10. They had double charged me for everything.

86. So now we see how they came up with the total credit of $279,134.10, lets

figure out how this factored into the 6% that would be attached to the interest

rate of the loan to make it an Adjustable Rate Mortgage loan. If you take that

$279,134.10 credit and subtract the actual loan amount of $263,920 from it,

you will have a total of $15,214.10.

87. Now this is how you get the percentage of the loan amount: Using a mortgage

calculator, divide $15,214.10 by the loan amount. $15,214.10 divided by

$263,920, is 0.06. If you use a regular calculator, you will get 5.79%, but a

mortgage calculator would round that off to the nearest whole number of 6%.

88. That 6% which the lender steals from the equity of the peoples property by

fraudulently inflating the appraisal, is used to securitize the loan for the

benefit of the foreign investor. Then to add in your face insul t to injury, theyadd that very same stolen equity as a 6% interest to the loan, and we have

ourselves a beautiful cuddly mortgage loan I like to call Gizmo; some called it

The American Dream . But Gizmo has to be fed. Little did we know that in

two years our cute little Gizmos would spawn other tiny creatures which would

turn our American Dreams into Nightmare Mortgages.

89. Americans were forced into financing our own downfall while at the same time

protecting the foreign investors from loss. This is whats been going on in our

country! (See Exhibit G.)


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Exhibit G


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90. We did not take out any new loan so why is there a New Loan

Disbursement ? The master broker (the lenders) illegal kickback of $9,939.38

plus the local broker illegal kickback of $3,958.80 is not even added in the

$15,214.10 overage. If you add those figures you would get an additional

$13,898.18, then add that figure to the 6% of $15,214.10 you will get a grand

total of $29,112.28, the percentage of that figure compare to the loan amount of

$263,920 is 11%, add that 11% to the 4% plus I was charged in upfront cash,

and I was charged over 15% in origination fees. Three times above the legal

permissible threshold, 6% of which was credited to the Seller then added to

the loan. My property was negative $29,112.28 before I even moved in. This is

whats happening in our country, and no one was pay ing any attention. I

wonder who was drinking more of the rum punch, Wall Street or the

regulators?

91. On the next document (Exhibit H) from Robin Reed, the closing attorney wasinstructed: WE ARE TO BE AT NO EXPENSE IN THIS TRANSACTION

(See Exhibit H at the bottom of the document just above where it states, Title

Insurance Requirement. )

92. They did not even want to pay to bond and securitize their own loans. Last

time I checked with Robin she was having problems with her loan.


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Exhibit H


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93. I have the files of some of the investment firms and I will discuss two. On one

portfolio, the SG Mortgage 2006 Fre-2 Series, of which my own loan is a part,

has 8,112 family homes, while the OPT-2 Series has 3,486 homes. The

appraisal type of 95% of those loans is 2. That 2 stands for Review . They

had to do this in order to keep track of which loan had an inflated appraisal.

By trying to keep track, they gave themselves away. The two list total over

500 pages of account numbers and addresses spread across the country, as

tempting as it is, I wont attach them, but I have attached two pages for

demonstration and will present the rest at the hearing. A family home in every

state of the Union is included in the lists.

loan_id MI Flag Index type Subsequent Adj Period Appraisal Type Actual BalanceNext Due Date-------------------------------------------------------------------------------------------------------------------------

1000002145 No MI Product 6 mo Libor 6 months 2426,421.67 7/1/20061000002153 No MI Product 6 mo Libor 6 months 2350,664.66 8/1/20061000002154 No MI Product 6 mo Libor 6 months 2205,081.61 7/1/20061000002160 No MI Product 6 mo Libor 6 months 2139,312.07 8/1/20061000002167 No MI Product 6 mo Libor 6 months 21000314621 No MI Product 6 mo Libor 6 months 2191,887.22 8/1/20061000314622 No MI Product 6 mo Libor 6 months 293,444.41 9/1/20061000314642 No MI Product 6 mo Libor 6 months 2467,652.25 7/1/2006

1000314650 No MI Product 6 mo Libor 6 months 2258,573.32 7/1/20061000314655 No MI Product 6 mo Libor 6 months 2256,703.70 7/1/20061000314659 No MI Product 2302,835.10 7/1/20061000314664 No MI Product 6 mo Libor 6 months 2692,000.00 7/1/20061000314667 No MI Product 2415,322.72 7/1/20061000314671 No MI Product 6 mo Libor 6 months 2595,172.81 7/1/2006


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94. The evidence shows that different lenders and property appraisers throughout

the United States were fraudulently inflating the value of real estate;

fraudulently raising the value and driving up the market, sending people

scrambling to buy and refinance; weaving the people into this Great Web of

Deceit, all the while stealing the nonexistent equity and holding out for future

payments as compensation.

95. A question that can be asked here is, If someone is fraudulently inflating the

value of real estate, fraudulent inflating the market, and sucking out what

little equity that is left in it, what would happen when it reaches a certain

peak and there is really no equity in the properties to support it and allow for

refinancing? Of course, its going to crash. The market will collapse because

they filled it up with helium then sucked it out and replaced it with carbon

monoxide. Every day the bucket goes to the well, one day the bottom will fall

out. A nd that is whats happening now ; the bottom has fallen out of thehousing market and we now have upside down mortgages.

96. Investors had a 50-state strategy in each individual mortgage portfolio. Under

normal business practices, it would be a normal thing for a mortgage portfolio

to have properties in each state; however, if there is fraud on each mortgage

loan, it means that all 50 states would suffer at once when they raise the

interest rate. This portfolio of securities and mortgage fraud is comprised of

8,112 family homes totaling almost $2 Billion, and trillions of dollars in

Securities. (See Exhibit I, 2 pages.)


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SG Mortgage Series 2006 FRE-2

AGGREGATE MORTGAGE LOAN CHARACTERISTICS

Geographic Distribution

GeographicDistribution

Number of Mortgage

Loans Principal Balance asof the Cut-off Date

% of PrincipalBalance as of the Cut-off

Date Weighted Average

Mortgage Rates Weighted Average

FICO Weighted Average

Original CLTV Alaska 3 $ 522,705 0.03 % 9.058 % 542 78.48 % Arizona 213 42,014,353 2.32 8.588 % 603 80.06 % Arkansas 4 898,906 0.05 7.760 % 638 82.59 % California 1,444 463,193,432 25.59 8.181 % 636 81.33 % Colorado 141 20,737,389 1.15 8.127 % 625 83.27 % Connecticut 148 32,445,739 1.79 8.760 % 606 78.80 % Delaware 45 7,239,430 0.40 8.812 % 600 81.35 % District of

Columbia 52 16,131,464 0.89 8.556 % 633 80.97 % Florida 1,518 287,257,635 15.87 8.560 % 620 80.72 % Georgia 299 40,535,257 2.24 8.574 % 627 83.96 % Hawaii 90 31,122,341 1.72 7.937 % 663 80.66 % Idaho 27 4,563,098 0.25 8.414 % 608 81.50 % Illinois 460 76,746,757 4.24 8.799 % 629 82.73 % Indiana 39 3,363,880 0.19 8.885 % 612 85.45 % Iowa 3 201,549 0.01 10.125 % 578 89.58 %

Kansas 8 739,067 0.04 8.750 % 616 86.52 % Kentucky 4 332,144 0.02 9.905 % 593 87.91 % Maine 11 2,027,625 0.11 8.671 % 614 80.68 % Maryland 547 127,356,226 7.04 8.412 % 623 81.69 % Massachusetts 222 52,316,066 2.89 8.465 % 633 81.14 % Michigan 143 16,834,636 0.93 9.049 % 615 83.24 % Minnesota 143 22,915,250 1.27 8.467 % 627 83.49 % Missouri 49 6,809,215 0.38 9.081 % 605 83.05 % Nebraska 4 312,159 0.02 9.357 % 572 88.12 % Nevada 114 28,271,566 1.56 8.258 % 626 80.57 % New Hampshire 33 5,483,798 0.30 8.707 % 599 78.52 %

New Jersey 479 122,800,314 6.78 8.717 % 620 80.14 % New Mexico 21 3,498,769 0.19 8.657 % 608 83.16 % New York 592 181,102,284 10.01 8.242 % 644 80.64 % North Carolina 110 12,545,251 0.69 8.775 % 606 82.28 % Ohio 90 11,263,931 0.62 8.475 % 610 85.79 % Oklahoma 9 1,201,562 0.07 8.859 % 589 82.61 %

Exhibit I, Page 1/2


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A-I-9


Geographic Distribution (continued)

Geographic Distribution(contd)

Numberof

Mortgage

Loans

Principal Balance as

of the Cut-off Date

% of PrincipalBalance as of

the Cut-off Date

Weighted AverageMortgage Rates

Weighted AverageFICO

Weighted AverageOriginal CLTV

Oregon 56 $ 9,614,073 0.53 8.321 % 624 81.68 %

Pennsylvania 139 19,506,890 1.08 9.131 % 599 80.64 %

Rhode Island 32 6,828,347 0.38 8.830 % 599 76.79 %

South Carolina 64 9,731,438 0.54 8.470 % 615 82.15 % Tennessee

38 4,571,338 0.25 8.794 % 592 82.52 % Texas

188 25,609,900 1.41 8.545 % 636 82.19 % Utah

28 5,201,483 0.29 8.362 % 615 83.78 % Vermont

7 1,278,228 0.07 8.805 % 629 83.60 % Virginia

311 74,366,783 4.11 8.481 % 627 81.21 % Washington

93 19,426,527 1.07 8.307 % 618 82.20 % West Virginia

13 1,382,150 0.08 8.119 % 612 80.17 % Wisconsin

76 9,412,599 0.52 8.839 % 619 86.21 % Wyoming

2 229,823 0.01 7.680 % 650 84.00 % Total/Weighted

Average: 8,112 $ 1,809,943,3

74 100.00 8.432 % 627 81.27 %

A-I-10

Exhibit I, Page 2/2


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97. It is indisputable that the financial crisis that the American people are

suffering from is a direct result of the gross mortgage and securities fraud

perpetrated by the investment firms on Wall Street against the people of the

United States of America.

98. So to make the point clear: They tell homeowners not to worry about the

interest rate bein g raised in two years because, Oh, the market it so hot, you

can refinance anytime before they raise your payment. This is a good deal man,

low interest rate. Take it! Take it! You can just refinance before they raise your

payment. But they had already fraudulently inflated the value of millions of

American homes, cashed out at the nonexistent equity and used it to protect

themselves from loss. Then they had the audacity to attach the 6% to the

interest rate of the loan and increase the monthly payments to compensate for

the 6% theft because they are not to be of any expense in this transaction.

The consumer cannot afford to make the increased monthly payments, so theyrun back to the broker for help to refinance out of that loan.

99. But those who had promised to help us get refinancing are nowhere to be

found; they dont even return phone calls. It was a tragic day when millions of

Americans learned that they really had upside down mortgages because their

lenders had already cashed in their equity.

100. As if the stealing of our equity was not enough, they took it further; they did

not even consider the borrowers abili ty to repay the loan when the interest

rate is adjusted to the 6%. The federal Truth In Lending Laws Regulation Z


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and all the states predatory lending laws prohibits the use of the appraisal

value of a property as the basis for repayment of the loan. Specifically, A

creditor extending mortgage credit subject to 226.32 [high cost loans] shall

not extend credit to a consumer based on the value of the consumer's collateral

without regard to the consumer's repayment ability as of origination including

the consumer's current and reasonably expected income, employment, assets

other than the collateral, current obligations, and mortgage-related

obligations.

101. However, despite this stern forbiddance by both federal and state lending

laws, investors on Wall Street were still granting homeowners loans based

strictly on the inflated value of the property. Below is an excerpt from the SG

Mortgage Fre-2 Series, which is identical to the language of the OPT-2 series.

For the past two years, I have inspected about a hundred different portfolios

with millions of American family homes, and they all have the very sameunderwriting policies. They had a central figure writing these portfolios. All

the banks were doing the very same exact thing.

SG Mortgage series 2006 Fre-2 and series 2006 OPT-2


General Standards

As described in the accompanying prospectus supplement, some mortgage loans may have been originatedunder limited documentation, stated documentation or no documentation programs that require lessdocumentation and verification than do traditional full documentation programs. Under a limiteddocumentation, stated documentation or no documentation program, minimal investigation into themortgagors credit history and income profile is undertaken by the originator and the underwriting maybe based primarily or entirely on an appraisal of the mortgaged property and the LTV ratio atorigination. The adequacy of a mortgaged property as security for repayment of the related mortgage loan will


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typically have been determined by an appraisal or an automated valuation, as described above under Loan-to-Value Ratio.

102. So right there in plain sight for the entire world to see, these investors

were blatantly violating the laws and basing their decision to grant a loan

entirely on the inflated value of the property. They were not concerned about

the borrowers income or their ability to repay, because they had the value of

the property. But it does not end there. Below are more in -your- face

violations.


General Standards

-14-

. In certain instances, the LTV ratio or CLTV ratio may have been based on the appraised value as indicated on areview appraisal conducted by the mortgage collateral seller or originator .

The underwriting standards applied by an originator typically require that the underwriting officers of theoriginator be satisfied that the value of the property being financed, as indicated by an appraisal or other acceptablevaluation method as described below, currently supports and is anticipated to support in the future the outstandingloan balance. In fact, some states where the mortgaged properties may be located have anti -deficiency lawsrequiring, in general, that lenders providing credit on single family property look solely to the property forrepayment in the event of foreclosure. See Certain Legal Aspects of Mortgage Loans and Contracts . Any of thesefactors could change nationwide or merely could affect a locality or region in which all or some of the mortgagedproperties are located. However, declining values of real estate, as experienced periodically in certain regions, orincreases in the principal balances of some mortgage loans, such as GPM Loans and negative amortization ARMloans, could cause the principal balance of some or all of these mortgage loans to exceed the value of the mortgagedproperties.

Based on the data provided in the application and certain verifications, if required, and the appraisal or other

valuation of the mortgaged property, a determination will have been made by the original lender that themortgagors monthly income would be suffic ient to enable the mortgagor to meet its monthly obligations on themortgage loan and other expenses related to the property. Examples of other expenses include property taxes, utilitycosts, standard hazard and primary mortgage insurance, maintenance fees and other levies assessed by aCooperative, if applicable, and other fixed obligations other than housing expenses including, in the case of juniormortgage loans, payments required to be made on any senior mortgage. The originators guidelines for mortga geloans will, in most cases, specify that scheduled payments on a mortgage loan during the first year of its termplus taxes and insurance, including primary mortgage insurance , and all scheduled payments on obligations thatextend beyond one year, including those mentioned above and other fixed obligations, would equal no more than
http://www.secinfo.com/$/SEC/Documents.asp?CIK=1367657&Type=EX-10http://www.secinfo.com/$/SEC/Documents.asp?CIK=1367657&Type=EX-10http://www.secinfo.com/$/SEC/Documents.asp?CIK=1367657&Type=EX-10http://www.secinfo.com/$/SEC/Documents.asp?CIK=1367657&Type=EX-10


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106. It was after receiving those documents that I realized why they called

subprime loans No Documentation Loans ; the lenders were making up their

own documents, including the income documents. I will prove it.

107. As stated before, my mom, Irene Wood, was my co-signer. She had no

employment and she is collecting social Security benefits in the amount of

around $458 per month. However, according to the Fremont Investment &

Loan Underwriting Summary document which they sent me, my mom is

employed and making $8,841, per month. It also states that my moms total

debt was $3,242, with a debt ratio of 32.670. The document is signed by the

master brokers. (See Exhibit J.)


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108. That document also clearly states that my m oms total debt is $3,242;

however, the underwriter had my moms credit report before them, and they

sent it to me. At the top of this document it clearly states that the credit report

was prepared for Fremont Investment & Loan. The credit report also clearly

states that my moms total debt was $22,175, not $3,242. (See Exhibit K.)


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Exhibit K


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109. However, it does not end there. Fremont knew that my mom was unemployed

and that she was collecting pension because they had her credit report right in

front of them that clearly states that my mom was getting a pension and that

her employment was unknown. This is page 4 of the actual credit report the

underwriter used, again you will see Fremont name on there, and the

checkmarks were made by them. Under where it says Employment

Information it clearly states Pension SEG Social and Occupation Unknown.

They sent me this credit report also, producing the proof against themselves.

Playing smart but not being clever. (See Exhibit L.)


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Exhibit L


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110. The underwriter had the credit report before them which shows that my mom

was unemployed and collecting Social Security benefits. They also knew that

her debt was $22,175, but to cover them in case someone started asking

questions, they created an employment and gave her a position as office

manager working at that position for 5 years. Then they made up an income

verification form to show that my mom is employed. They then put that form in

my moms portfolio. N ote that the form is not signed by any employer;

therefore, it was not even verified. It was never even mailed out for the

employer. (See Exhibit M.)


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Exhibit M


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111. But it does not end there; they asked us to open an account and to deposit

$6,000 in it as proof of two months reserve mortgage payments, then to call

them with the account number so they could verify it. We opened a checking

account with $7,000 then called and gave them the account number. They said

they would verify the account. Exhibit N is the Request for Verification of

Deposit that the lender attached to my moms po rtfolio. A quarter of the way

down on the left, it says that the account has a balance of $20,000. But in the

middle, it says the current balance is $19,626 with an average balance of

$18,500. On the same line it says that the account was opened on 4-1-05. The

document was signed by a customer service representative at Citizens Bank.


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Exhibit N


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112. Keeping in mind that that their verification of deposit form states that the

account was opened on 4-1-05 with a balance of $19,626 and that it was

verified by a Susan Fernandez at Citizen Bank, Exhibit O tells a different

story. Exhibit O, which is the true bank statement, clearly states that the

account was opened on 5-2-06 not 4-1-05 as stated by the underwriter. This

document also clearly states that on that day (5-1-06), we made a deposit of

$7,000, and at the close of business the balance was $6,980.

113. Compare the two documents and you will see that the account numbers are

the same. I went to Citizen Bank to investigate, and they said they never even

got the document; it was a total fabrication. What they did was probably called,

got the name of the customer service representative, and then signed her name

to the form. (See Exhibit O.)


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Exhibit O


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114. As is totally clear from those documents, it was the lenders, not the

borrowers who were creating all these falsities to qualify borrowers for a loan.

To cover themselves, during the closing lenders were slipping new loan

applications with the fraud on it into the loan documents and tricking borrows

into signing them, so if anyone asked, it would be the borrowers signature on

the fraud and the lender would get away with fraud.

115. And it was not only us that they did this too; they did it to every single

borrower who had a No documentation or limited documentation loan , and I

will prove it. There are 8,112 family homes in the SG Mortgage Fr-2 series

portfolio. Exhibit P clearly states that of that amount, 3,705 were stated

documentation and 35 limited documentation . Both of the se mean No docs

loans. But look how many borrows on this single portfolio did not have to

produce documents. N ow a question to be asked is, if they did this to Muckles

loan, what did they do to the other 8,111 loans in this portfolio, and what didthey do to the other 10 millions subprime loans? Despit e the full

documentation mentioned, all subprime loans were n o docs loans. I have a

list of over 12,000 borrowers including their account numbers and their

addresses, in all 50 states, who had a n o docs loans.


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SG Mortgage series 2006-Fre-2


Documentation Type

Documentation Type Number of Mortgage


% of PrincipalBalance as of the Cut-off

Date Weighted Average

Mortgage Rates Weighted Average

FICO Weighted Average

Original CLTV Full Documentation 4,372 $ 905,281,033 50.02 % 8.078 % 619 82.27 %Stated Documentation 3,705 893,588,200 49.37 8.791 % 636 80.21 %Limited Documentation 35 11,074,140 0.61 8.460 % 605 84.51 %

Total/Weighted Average: 8,112 $ 1,809,943,374 100.00 % 8.432 % 627 81.27 %

A-I-12

116. I also have the actual loan applications of several different borrowers,

originated by different lenders and all of the loan applications have the income

falsified. The lenders were creating their own ideal borrowers and they were

not worried about the borrowers ability to repay becau se they had already

stolen the equity out to pay for private mortgage insurance to protect them

against the loss which they knew was coming. They thought they had the

greatest plan on earth. They might have gotten away with it, too, had they notchosen my mom as a victim.

117. On exhibit Q, like every other 10 million subprime borrowers, Robin Reed is

tricked into signing a new loan application at the closing.

Exhibit P


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118. Like me, Robin was never aware that she had signed a loan application with

the space for income left blank. If you notice at the bottom of the document,

part lV Employment Information, Robin Reed has 3 years on the job. Then

right under that, it again mentions her 3 years of employment. However, in the

second space for employment history there is a space for the amount of

monthly income. One space back up you can see where the fraud came in.

Where they should have placed Robins income, they filled it in with yrs

employed in this line of work/profession, then filled it in with 3. They left the

amount of monthly income blank; therefore, Robin has no income.

119. If you notice this broker is Nationwide Equity, a totally different lender from

mine. I had Fremont. They tricked their borrowers into signing loan

applications with blank spaces so that they can go in and fix the income as

needed. (See Exhibit Q.)


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Exhibit Q


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120. Exhibit R is from another borrower, Michael Lieb. Michaels loan

application is identical to Robins. They were both tricked into signing loan

applications were the space for the monthly income was filled in so that the

income could not be placed there. Like Robin and me, they were not concerned

with the ability to repay.

121. Michaels lender is also different. The broker is Mortgage Center of

America and the lender is New Century, and the investor is Deutsche Bank.

So far I have shown three different lenders and three different mortgage

brokers, with three different investors, all committing fraud with different

borrowers. What did they do to the other 10 million borrowers? (See Exhibit

R.)


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Exhibit R


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Exhibit S


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124. Between December 31, 2009, and March 31, 2006, according to Fremont, they

had 6,067 foreclosures and bankruptcies. I do not have the figures for between

March 2006 and April 20, 2009, but it must be more than double that, as

Fremont was named one of the top five subprime lenders in the country. How

many more of the 114,929 loans originated by March 31 and the more than

16,000 originated by April 17, 2007, are in foreclosure or have been foreclosed

on? I would bet that the numbers are more than 70, 0000.

Fremont Investment & Loan

The information contained in this prospectus supplement with regard to Fremont Investment & Loan has beenprovided by Fremont Investment & Loan.

Servicing

Fremont has been servicing sub-prime mortgage loans since 1994 through its nationwide servicing operation,currently located in Ontario, California. As of March 31, 2006 , Fremont was servicing 114,929 sub-prime residentialmortgage loans with a total principal balance of approximately $23.178 billion.

Fremont Mortgage Loan Servicing Portfolio

(Combined Loans Held for Sale, Interim Serviced, Held for Investment and Securitized)

Delinquencies and Foreclosures

As of March 31, 2006 As of December 31, 2005

Numberof Loans

PrincipalBalance (inthousands)

Percentby

PrincipalBalance

Numberof Loans

PrincipalBalance (inthousands)

Percentby

PrincipalBalance

Current Loans 110,595 $ 22,388,444 96.59 % 109,896 $ 21,521,721 96.72 % Period of Delinquency

30 to 59 days 1,165 $ 251,992 1.09 % 1,407 $ 268,612 1.21 % 60+ days 1,237 143,309 0.62 % 725 85,171 0.38

Total Delinquencies 2,402 $ 395,301 1.71 % 2,132 $ 353,783 1.59 % Foreclosures/Forbearances 1,251 $ 279,595 1.21 % 1,310 $ 264,469 1.18 % Bankruptcies 398 64,336 0.28 % 547 83,521 0.38 Total Foreclosures and

Bankruptcies 1,649 $ 344,931 1.49 % 1,857 $ 347,990 1.56 % Real Estate Owned 283 49,660 0.21 % 183 $ 28,841 0.13 % Total Portfolio 114,929 $ 23,178,336 100.00 % 114,068 $ 22,252,335 100.00 %
http://www.secinfo.com/d14D5a.v4ept.htm#Dateshttp://www.secinfo.com/d14D5a.v4ept.htm#Dateshttp://www.secinfo.com/d14D5a.v4ept.htm#Dateshttp://www.secinfo.com/d14D5a.v4ept.htm#Dateshttp://www.secinfo.com/d14D5a.v4ept.htm#Dateshttp://www.secinfo.com/d14D5a.v4ept.htm#Dateshttp://www.secinfo.com/d14D5a.v4ept.htm#Dateshttp://www.secinfo.com/d14D5a.v4ept.htm#Dateshttp://www.secinfo.com/d14D5a.v4ept.htm#Dateshttp://www.secinfo.com/d14D5a.v4ept.htm#Dateshttp://www.secinfo.com/d14D5a.v4ept.htm#Dateshttp://www.secinfo.com/d14D5a.v4ept.htm#Dates


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125. Between the month of March 2008 and May 2008, SG Mortgage raised the

interest rate on 5,876 family homes in the Trust Series 2006-fre-2. Fremont,

and the top five predatory lenders originated all of these loans. All of these

loans have 6% unlawful fees attached to them. How many have inflated

income?

126. I have two documents showing the impact on family homes; one will be

submitted with the compliant and one will be submitted at the hearing. On

the document, the Series 2006 OPT-2, SG Mortgage also raised the interest

rate on 3,189 family homes for a total of 9,065 family homes on just these two

portfolios.

SG Mortgage Trust Series 2006 Fre-2


Next Rate Adjustment Date of the Adjustable-Rate Loans

Next Rate Adjustment Dateof the Adjustable-RateLoans

Number of Mortgage


% of PrincipalBalance as of

the Cut-off Date

Weighted AverageMortgage Rates

Weighted AverageFICO

Weighted AverageOriginal CLTV

March 2008 75 $ 21,875,845 1.40 % 8.230 % 637 81.56 % April 2008 1,534 425,589,205 27.24 8.283 % 625 80.51 % May 2008 3,537 910,553,898 58.27 8.317 % 624 80.04 % June 2008 730 186,096,713 11.91 8.445 % 617 80.07 % April 2009 16 4,537,874 0.29 7.890 % 636 84.80 % May 2009 37 7,129,746 0.46 7.984 % 643 78.54 % June 2009 8 1,936,761 0.12 7.413 % 613 74.13 %

April 2011 9 2,082,254 0.13 9.052 % 583 79.15 % May 2011 8 2,077,300 0.13 8.308 % 620 79.24 % June 2011 2 720,750 0.05 7.337 % 610 76.35 %

Total/WeightedAverage: 5,956 $ 1,562,600,347 100.00 % 8.318 % 624 80.19 %

A-I-19


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127. If anyone is interested in knowing why the market collapsed on September

15, 2008, all they have to do is take a look at the following documents. This is

the type of payments the investors were paying out on securities attached to

worthless promissory notes. SG Mortgage, along with several different note

holders raised the interest rates on several thousand American Family homes,

knowing that borrowers could not afford to make the increased payment

because they had falsified the income of their borrowers. From the evidence,

we see that all the subprime loans with an adjustable rate interest are

unlawful. Put those combinations together and we have a recipe for disaster.

The Swap Notional Amount with respect to each Distribution Date commencing in August 2006, is setforth below (which will be substantially the same schedule as set forth in the Interest Rate Swap Agreement). TheInterest Rate Swap Agreement will terminate immediately following the Distribution Date in July 2011, unlessterminated earlier upon the occurrence of a Swap Default, an Early Termination Event or an Additional TerminationEvent (each as defined below).

Distribution Date

Swap Notional

Amount ($) August 2006 1,776,458,000.00 September 2006 1,760,006,643.84 October 2006 1,750,946,077.95 November 2006 1,744,913,946.73 December 2006 1,718,677,124.78 January 2007 1,689,604,141.72 February 2007 1,657,701,561.88 March 2007 1,621,248,861.42 April 2007 1,582,211,157.25 May 2007 1,535,804,145.69 June 2007 1,486,588,080.95 July 2007 1,436,965,685.50 August 2007 1,388,354,070.01 September 2007 1,340,369,635.29 October 2007 1,293,848,910.86 November 2007 1,250,108,970.24 December 2007 1,203,473,143.32


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January 2008 1,155,211,328.98 February 2008 1,086,817,200.23 March 2008 1,022,652,186.11 April 2008 962,459,123.44 May 2008 905,973,035.45

June 2008 852,933,042.75 July 2008 803,203,916.10 August 2008 453,917,305.59 September 2008 427,629,086.18 October 2008 402,949,541.45 November 2008 379,753,147.03 December 2008 357,889,459.48 January 2009 345,522,433.47 February 2009 333,593,841.50 March 2009 322,082,794.74 April 2009 310,974,355.83

May 2009 300,254,140.30 June 2009 289,908,376.41 July 2009 279,924,235.92 August 2009 270,288,203.53 September 2009 260,987,905.07

October 2009 252,026,328.29November 2009 243,434,072.86December 2009 235,135,853.39January 2010 227,121,909.53February 2010 219,382,098.54

March 2010 211,907,005.75April 2010 204,687,541.28May 2010 197,714,928.56June 2010 190,980,693.70July 2010 184,476,847.50August 2010 178,195,284.59September 2010 172,128,377.42October 2010 166,268,761.48November 2010 160,609,325.89December 2010 155,143,205.04January 2011 149,863,903.32

February 2011 144,764,876.49March 2011 139,839,943.98April 2011 135,083,138.04May 2011 130,488,696.32June 2011 126,050,987.49July 2011 121,759,382.31


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throughout the U.S., knowing that the borrower could not pay, nor could they

refinance out because of the negative equity. And so the payments on the

tradable securities bounced and guess who had to step in to bail out the

crooks? The very same people who they had defrauded.

131. It was all a great big plan to destroy the U.S. economy. These foreign

investors were gambling with the U.S. economy, but they did not even give it a

chance to play out, because they had made sure that the borrower could not

pay, and they had made sure that they could not refinance out of the loan, and

they had falsely inflated the value of the collateral. The U.S Dollar deposit in

the London Libor did not stand a chance. Over 10 million fraudulent loans

with an index based on the U.S. and British economy, and now we know why

theres a global recession. They planted a Trojan Horse on the U.S . and British

economy. This was not for profit; this was simply to destroy two nations

economy so that others could control the worlds market.132. And then the bailouts. What a tragedy. That was all part of the plan. But it

does not end there. Exhibit T should send chills down the spines of everyone.

According to the next document, no one, not even the SEC who was supposed

to be keeping watch, was paying attention nor did they approve of trillions of

dollars of worthless securities attached to millions of American Family homes.

The SEC did not even so much as bat an eye. And people are wondering how

we got into this mess. (See last paragraph on Exhibit T.)


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Prospectus

Mortgage Asset-Backed Pass-Through Certificates and Asset-Backed Notes

SG Mortgage Securities, LLCDepositor

SG Mortgage Finance Corp.Sponsor

The depositor may periodically form separate trusts to issue securities in series, secured by assets of that trust.

Offered Securities The securities in a series will consist of certificates or notes representi