And, why is the White House so quiet about foreclosuregate?
Because Washington now owns a shitload of those bad mortgages.
From Naomi Prins of Alternet:
“… the Fed now owns nearly $1.5 trillion of toxic assets that have no bid (meaning no one but the Fed wants them). They would have less of a bid if there was even more uncertainty about the loans that fill them. The Treasury is directly backing $400 billion of government-sponsored entity (GSE) securities, and is indirectly backing another $6.8 trillion. If foreclosed homes couldn’t be sold because of fraudulent paperwork or had to wait for more detailed inspections, you can imagine how difficult selling assets stuffed with faulty loans might be. If it’s tough to find a title for a foreclosed home, think how tough it is to back the related loan out of a pyramid of securities sitting on top of it.”
From the Wall Street Journal:
One of the long-shot outcomes of the current foreclosure mess could be a chaotic scenario in which people fight to get their foreclosed homes back.
Enter the Earl family in Simi Valley, Calif. Over the weekend, Jim and Danielle Earl reportedly took their nine children, ages 9-23, and a locksmith and broke into the six-bedroom house they used to call home. The move was recommended by their lawyer, according to a story on Aol’s HousingWatch.com.
Police officers were on hand when the Earls changed the locks Saturday but did not intervene, the Ventura County Star reports.
Threecrow will be happy to find out the Great Forgiveness just might be in the offing. Gonzo gives us some insight into the pus of anxiety now dribbling out of the limp dicks on Wall Street as the entire pyramid of fraudulent home mortgages come crashing down:
Why do you think that happened? Because the banks are screwed—again. By the same fucking thing as the last time—the fucking Mortgage Backed Securities!
The reason the banks are fucked again is, if they’ve been foreclosing on people they didn’t have the legal right to foreclose on, then those people have the right to get their houses back. And the people who bought those foreclosed houses from the bank might not actually own the houses they paid for.
And it won’t matter if a particular case—or even most cases—were on the up-and-up: It won’t matter if most of the foreclosures and evictions were truly because the homeowner failed to pay his mortgage. The fraud committed by the foreclosure mills casts enough doubt that now, all foreclosures come into question. Not only that, all mortgages come into question.
People still haven’t figured out what this all means—but I’ll tell you: If enough mortgage-paying homeowners realize that they may be able to get out of their mortgage loan and keep their house, scott-free? Shit, that’s basically a license to halt payments right the fuck now. That’s basically a license to tell the banks to fuck off.
What are the banks gonna do—try to foreclose and then evict you? Show me the paper, motherfucker, will be all you need to say.
This is a major, major crisis. This makes Lehman’s bankruptcy look like a spring rain, compared to this hurricane. And if this isn’t handled right—and handled right quick, in the next couple of weeks on the outside—this crisis could also spell the end of the mortgage business altogether. Of banking altogether. Hell, of civil society. What do you think happens in a country when the citizens realize they don’t need to pay their debts?
This is a hoot!
Congressman Alan Grayson requests an investigation into the rampant misconduct, foreclosure fraud, perjury and Mafia tactics by the Federal Reserve’s member banks in Florida:
October 14, 2010
Robert S. Mueller III
Director Federal Bureau of Investigation
935 Pennsylvania Ave, NW
Washington, DC 20535
Central District of Florida
400 North Tampa Street, Suite 3200
Tampa, FL 33602
Dear US Attorney Robert O’Neill and Director Mueller,
When it comes to foreclosures, there is mounting evidence of a state of rampant lawlessness in Central Florida. There are increasing signs that big banks routinely evade laws meant to protect homeowners, in many well-documented cases of ‘foreclosure fraud’. Despite the demonstrated existence, for instance, of ‘robosigners’ signing affidavits attesting to documents that they have never seen, the parties engaging in such misconduct are not being brought to justice. Big banks are mischaracterizing this as mere “technical problems,” and apologizing only where there is clear and very public evidence of harm.
It is not enough for big banks only to apologize for fraud, perjury, and even breaking and entering – when they are caught. It is time for handcuffs. Fraud does not become legal just because a big bank does it.
On September 20, 2010, after my office found evidence of systemic foreclosure fraud perpetrated by big banks and foreclosure mills, I called for a halt to illegal foreclosures.
Since then, big banks such as Bank of America, JP Morgan Chase, GMAC, PNC and others have suspended foreclosures or foreclosure sales. These banks are still claiming that the massive fraud they have perpetrated amounts to nothing more than a series of technical mistakes. This is absurd. This is deliberate, systemic fraud, and it is a crime.
To give but two of the many available examples, attached is a deposition from an ex-employee of one of the largest ‘foreclosure mills’ in the state, the Law Offices of David Stern. In it, this employee testifies under oath that it was routine for that office to falsify documents regarding military records, in order to move foreclosure cases along more quickly.
The local media has reported on the case of Nancy Jacobini; a contractor for JP Morgan Chase broke into her home after the bank mistakenly foreclosed on it. JP Morgan Chase ‘apologized’ for terrifying her. But we do not have an apology-based legal system; we have a system of laws. I am writing to ask you to enforce them.
The organized and systematic manufacturing of falsified documents to deprive people of their homes is not only a threat to the integrity of the legal system. It also aggravates and extends the weakness in the housing market. Who is going to feel comfortable buying a home if a big bank can simply take it, whether or not that bank has a right to it? Given the securitization of mortgage-backed securities, this misconduct is a threat to our securities markets as well. But fundamentally, this is a question of protecting basic property rights – if you don’t own it, then you shouldn’t try to take it. Without clear property rights, and a legal system that insists on clear proof of those rights before transferring ownership by force, the economy will fall apart.
If perpetrators of perjured affidavits and other systematic criminal activity can get off simply with civil liability — or even less, an insincere bureaucratic apology — the freedom that Americans enjoy will erode quickly in the face of lawless seizures of property. I appreciate your work on the joint Middle District of Florida’s Mortgage Fraud Initiative, and respectfully request that the efforts of your offices turn towards reining in this rampant criminality.
Member of Congress
Yves Smith explains how the Obama Administration is once again running interference for the banks in the massive mortgage fraud scandal. He’s a good little doggie!