Saturday, October 23, 2010

The foreclosure fraud story gets more interesting

The foreclosure fraud story would not be getting any traction if this was only about some poor homeowners suddenly out on the street.  No, this story gets traction because INVESTORS are feeling cheated.
Banks Sold the Same Mortgage Over and Over to Investors
By: David Dayen Tuesday October 19, 2010 10:28 am 
Apparently, Bank of America has admitted in a court filing that they sold the same mortgage loan in multiple pools to investors. In layman’s terms, say I own the FDL News Cupcake Food Truck and you come up to buy a cupcake. I sell it to you, and then I sell the same cupcake to the guy behind you, and the guy behind you. As you all wait for your order, you talk to each other and realize that you were all sold the same cupcake. So who actually owns it?
That’s directly from the court document, saying that many loans and other mortgage-related assets “have been double- and even triple-pledged to various constituencies.” It would be impossible to designate ownership in that scenario unless the trustees of the mortgage pools took back all the loans and assigned them again.
You’re talking about the same mortgage loan sold two or three times to different people. In the hustle to get as much paper out the door as possible, all kinds of fraudulent occurrences like this happened. more
You got that.  Bank of America--the very same bank that got its big start rebuilding San Francisco after the earthquake of 1906--apparently was watching The Producers when it came up with this "brilliant" scheme.

Even so--it seems like the banksters have figured out a way to feel blameless in this catastrophe.  They will simply try to shift the guilt to someone else (Otter's defense of his frat house in Animal House?)  This is a large problem when you think about it but never fear, this is 'Merika--there are still people who think the invasion of Iraq was a good idea, after all.  Apparently if you package the bullshit in a pretty enough package, some fool will buy it.
Foreclosures and Guilt: The "Home Loan Moral Hazard Scorecard"
Richard (RJ) Eskow
Consultant, Writer, Senior Fellow with The Campaign for America's Future
Posted: October 18, 2010 02:25 AM
Jamie Dimon and the other mega-bankers who derailed the economy have a new PR campaign to sell you. They're saying that families who can't pay their mortgages must bear the blame -- all the blame -- for the foreclosure crisis. That means the public should just ignore banks' widespread lawbreaking in the registering and transfer of property titles. For the bankers who would appoint themselves the nation's moral arbiters, It's always somebody else's fault.
Not that we should be surprised. After all, the Mortgage Bankers Association, which calls itself "the voice of the real estate finance industry," did a short sale on its Washington DC headquarters which left CEO John Courson uncharacteristically speechless. It seems he didn't want to talk about how he walked away from the loans he took out to buy that building. But before the cat got his tongue, Courson managed to lecture homeowners on their "legal obligation" and the terrible "message they would send" by walking away from their mortgages.
Morality and law for thee, but none for me. more
Don't Believe The Bank Lobby: Foreclosure Fraud Is Bad For Homeowners And The Economy
By Zach Carter
October 18, 2010 - 4:51pm ET
The bank lobby is spreading a host of silly myths about the foreclosure fraud outbreak in an effort to downplay the scandal and minimize concerns over potential bank losses that have emerged in the blogosphere. Housing Wire’s Paul Jackson spouts most of them in his post today. Jackson does acknowledge a host of major problems for banks that have been recently highlighted by the blogosphere, but he’s still spreading serious misinformation on foreclosure fraud and its potential effects. Banks routinely rip-off borrowers in the foreclosure process, and the blogosphere's uproar over foreclosure fraud is more than justified.
First, the agreement. Jackson agrees that there is enormous potential for investors to bring fraud cases against banks and win them. He calls them “real concerns, many hundreds of billions of dollars worth of concerns.” The blogosphere has done a terrific job highlighting this, with Felix Salmon shouldering most of the burden.
Jackson’s real critiques are pretty weak:
“‘Robo-signing’ is a procedural issue. Period . . . . Until someone can provide consistent and repeated evidence suggesting that the information contained within ‘robo-signed’ affidavits is factually incorrect — not just some of the time, but most of the time — the end result of this mess is nothing more than a very public, brand-damaging, headline-making procedural blip . . . . If false debt amounts were being pushed by banks onto the courts en masse, you can bet all the apple pie in America that every single one of us would have heard about it by now, too.” more
But the banksters aren't fooling everyone.  Their behavior is so odious, they may be losing the local shire reeve (sheriff).  This is bad because the sheriff is their "muscle."  Without their muscle, a bankster is merely a dullard with an ugly tie.
Sheriff takes hard stand against foreclosures
The sheriff for Cook County, Ill., which includes Chicago, is refusing to enforce foreclosure evictions for Bank of America, JPMorgan Chase and GMAC Mortgage/Ally Financial until they can prove those foreclosures were handled legally, CNBC is reporting.
Today's announcement by Sheriff Thomas Dart comes after GMAC and Bank of America, the country's largest mortgage servicer, announced rollbacks from foreclosure moratoriums, the news organization says.
Dart's office released a statement indicating that Bank of America, GMAC and JPMorgan Chase account for approximately a third of the 3,700 eviction orders filed with the Cook County sheriff.
"I can't possibly be expected to evict people from their homes when the banks themselves can't say for sure everything was done properly," Dart's statement read. more
And of course, if the sheriff isn't evicting, whole large options open up.  The whole world is ripe for a debtor's revolt, but the conditions are especially favorable in USA.
Up the Revolution!: Arise Ye Homeowners of America, You Have Nothing to Lose but Your Mortgages!
Tue, 10/19/2010 - 23:09 
Dave Lindorff
Investors are calling on B of A buy back $45 billion in mortgage bonds it acquired and sold after it took over Countrywide
See, that was our other bastion for retirement. All these years, Americans have been fed this comforting myth that our homes are our castles, and that the best investment we could make in life was to invest in the “American Dream” of home ownership. Then Wall Street, having already stripped the industrial base down to the concrete pads, looked around and saw this huge pile of real estate ripe for the taking. They couldn’t just steal our property outright, though. After all, we all had these deeds on file with the local county Deeds Office. 
But we all had mortgages. And they figured out a way to steal these. They created derivatives, called Mortgage Backed Securities. They took our mortgages and they chopped them up into little pieces, which they then bundled into tranches and started trading like bonds. These tranches were designed to have varying risk levels, which they accomplished by putting “good” mortgages--those that were expected to be repaid regularly--with “bad” mortgages--those likely to default. But since it’s really a guess whether any particular mortgage, good or bad, is going to default, they didn’t really put individual mortgages into individual tranches. They put them all into an electronic data base called MERS, for Mortgage Electronic Registration (sic) System, and then shifted them, or pieces of them, around as needed when they wanted to create a good tranche or a bad tranche or a mediocre tranche. 
This meant that they had to deliberately sever the chain of ownership of the repayment note formerly attached to those mortgages--because it’s the note, which is signed at a closing, that actually entitles the holder collect payments on a mortgage, or to foreclose on a defaulted property. 
Get this now: What I’m saying here is that the banking industry deliberately broke the chain of ownership on all the mortgages that have been securitized, not just on those famous subprime mortgages you’ve been hearing so much about.
In other words, if you, like most Americans who are not renters, own a home and have been dutifully paying off a mortgage, it’s almost certain that your local bank, which issued that document now in your safe deposit box and on file at your county’s Deeds Office, no longer holds the note. It has long since been lost, perhaps even tossed into some shredder, and so nobody has a clue who has a right to foreclose on your home. In fact, nobody does have that right. more

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