Bear Stearns – The mighty great Bear who preyed upon helpless Americans has been wounded to the point of death.

By Nye Lavalle – Bear Stearns shareholder and defendant in an “unlawful” foreclosure action

Gentlemen,

As a shareholder, and for the last time probably before you each finally go away into the sunset, I am attaching the reports I sent each of you almost ten years ago. Instead of listening to me, you sued my family and spent millions trying to shut me up and attack my family and others like Jack Wright for what we knew then and what many know now, that you were and still are a corrupt company and each of you participated in furthering and concealing the corruption from shareholder and even your board.

Why we all asked would a company like Bear spend millions suing over a $100,000 loan we wanted to pay off in cash?  Why would you do the same to Jack Wright?  See, you didn’t own the notes; you cooked your books; you were involved in a form of money laundering called “note laundering” where you took all those bogus notes that you knew were liar loans or where due diligence and QA showed brokers committed fraud (like the loan officer in my folk’s loan).

EMC took the loans for a nanosecond, never ever possessing them and then transferring them from one conduit to another off shore securitization to another so that when it all blew up, the “holder” could claim as holder in due course that they knew nothing of the fraud?  Somehow, I think “holder in due course” defenses is going to be the defense du jour in your industry over the coming years…

Other reasons you created this “Opaque” market (that you were one of the leaders in developing in the early 90s according to old SEC filings) was so that no one could trail who owned the note, which is the actual “paper” asset and negotiable instrument, if in fact it is negotiable (I don’t think ARMS qualify).  You then sliced and diced and leveraged these notes and double, tripled and even multi-pledged notes the same note and sold notes that had been paid off or refinanced?

Bottom-line, borrowers don’t know who owns their notes; investors don’t know what notes they own; and you and your counter-parties are all left to figure this Cluster F++k out!  I wonder what the Chinese are now thinking about each of you all after that nice investment?  I mean, taking me, my family and a host of Americans, but the Chinese?  Boy, I’d go hiding in the Amazon if it were me.

So, I now ask, as a shareholder and beneficiary of a Pew trust that holds BSC stock, to please forward the attached reports to your outside directors for investigation.  Perhaps Mark Cymrot of Baker Hostetler may be a good choice since he and I, while not always agreeing, worked fairly well together and respectfully during his independent counsel investigation of Fannie Mae that the board and SRC authorized after my reports to them.

At least Fannie, with some support of OFHEO has made some changes, but not nearly enough.  Mark is familiar with the reports already and my findings.  There would not be such a steep learning curve that would cost shareholders their precious few dollars left in BSC stock.

Have Mr. Dimon do the same and I have asked Michael Cho at JPMC, who was asked by William Harrison a couple of years to investigate my claims in an in-house investigation, to do the same.  You see, after our meetings with investigators in Chicago, JPMC put a clamp on it and did not change policies.  Now, I have loan docs and evidence in our possession that Ginnie Mae may have been defrauded.  At best case, there are many notes, mortgages, and deeds that have not been properly booked, endorsed, transferred or assigned as I have alleged for years.

Please preserve all Fidelity documents and histories and do not let them back out controversial servicing transactions.  Also, an analysis and reconciliation of the investor reports against the the servicing histories will show you what is and is not on your books or the books of any of the off balance sheet entities of various sorts and gestations in the Caymans, Bermuda, or Gurney Islands.

There is more, but I’d rather communicate to whatever independent counsel I think your board must now hire.  You see, for years, you all called me a kook and tried, with others, to paint me as one.  However, now, as everyone and many judges know, ALL I said and reported and put into affidavits and court records [read Dallas] are true!  The practices exposed are now being championed by the U.S. Trustee’s office here in Atlanta, Federal judges [in and out of bankruptcy] state judges, AGs, DOJ, and regulators.  I even hear some of my colleagues have had their lives threatened too!  The FBI and SEC are all over this now and a new Democratic administration will not turn the other cheek anymore. Republican appointed judges will also be concerned about those who have cost them their home values, and lost in pensions as well as their stock portfolios.

Remember the annual meeting several years ago…  Mr. Greenberg stated to me that there was no validity to my claims and that outside counsel had said so to the outside directors. Somehow, after a  plethora of outings, court rulings, reports, and investigations, it looks like I was at least 95% accurate which is my going rate over the years.

I have spoken to a couple of your directors over the years and they claimed ignorance of Bear and EMC’s mortgage operations, claiming that that was a “very small piece of your business model” and they didn’t think there was any exposure.  Obviously the millions of pages of docs in my possession and hundreds of hours of tapes say something different!

Evidence in my possession, shows that each of you, your company, your agents, and partners have continued to undertake various attacks on my family and I (I think you know what I am talking about and please keep all of your docs and e-mails protected please)  The break-ins, death threats, lawsuits, interference with our trusts with your soon to be savior, Jaime D and his gang of crooks are worthy of a John Grisham novel!

Was is all worth it?  Some of you could face jail when all is out!  How did you each sleep at night taking the homes of people who didn’t owe you any money?  How about the many suicides of poor people taken advantage of you while you slept in your penthouse suits in Manhattan and bungalows in the Hamptons.  How do men like you look at a mirror in the morning?

All my family wanted to do was pay your slimy organization what was legally owed.  Instead, you spent millions and approved millions in legal attacks against my family, to conceal and cover your frauds, lies, deception, and criminal acts!

So no excuses now, I want an independent counsel investigation of each of your acts and that of Bear and EMC and if not, whoever may be so unlucky to assume your crooked carcass, will be asked to do so and Jaime’s link in all of this further explored since Mr. William Harrison launched an investigation after my report to him.  I want you to do the same as he and Fannie and Freddie have.  Don’t pull another Ace or Killinger who ignored my warnings and reports.

See now, how accurate i was and still am!  Look at all the new state and Federal court decisions that back up my claims years ago to each of you that you ignored.  Do a google search on “predatory servicing” or “predatory mortgage servicing” that I coined in the attached reports.  No hits then, now thousands and it has become the moniker for companies like EMC, Fairbanks, Litton, Ocwen et al.  You should really listen to the tape about that one with Chris.  Listen to my tapes… you would think I was Nostradamus!

I don’t do this to pay myself on the back, but after all my family and I have been put through by you clowns, can you give me my day in the sun?  The mighty great Bear who preyed upon helpless Americans has been wounded to the point of death, with the vulture hovering around its rotting carcass ready to split and eat all of the leftovers!  It’s a great day for me, especially after your recent antics with those in Florida and Atlanta that still don’t know that I have trailed all to you and your agents!

So, what are we to do now?  If you’re afraid of talking to me since I may tape your calls and expose even more, perhaps you can talk to one of my or my family’s lawyers and tell them what should happen now?  I still want Jack Wright made whole, my family made whole, our trusts made whole, and a pool created for EMC victims.  I don’t want anything for me, except for public appologies to my family and I, and my name back.  We can work on that so it doesn’t make you look too bad!

I also want a new set of best practices and supervision of those practices with a new independent outside advisory committee that I will participate in.  If you think these are reasonable solutions, then let me know or e-mail one of our lawyers in New York, johnklotz@johnklotz.com.  He’s a cagey old fart like some of you, but he’s an honest one!

I’ll be awaiting contact from someone or I guess I’ll be at the annual meeting to ask you all, hold a press conference, and produce the tapes where Chris was so complimentary of how thorough I was in my research and said you all would never change your practices since it would cost you hundreds of millions.  Well today, it did cost you all hundreds of millions and even billions!

Come on, you’re all cooked now, let’s smoke a peace pipe and start to make lemonade of the nationwide farm of lemons you have harvested all these years and fix this mess so that it doesn’t hurt another American; family; hurt our nation; harm our pension funds; and ruin our financial markets.

I think some of you can live on $10 million or so.  I think that’s fair.  Let’s get it done, once and for all.  Come on, how about it?  Peace time?  Or, do you go in the bunkers and hide while all the bombs blow up around you?

As a pretty good PR guy, doing some positive  things now and singing a few mea culpas may even help your tarnished images.  I can show you how to do. So, friend or foe?  The choice is each yours!

Tagged as: Bear Sterns, Home Loan News, nye lavalle, Predatory Servicing