Clearer picture of current financial crisis.

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We Might be in deep trouble with the real estate market. On second thought, YEH we are in deep trouble. 
Since I first wrote this article several months ago the situation has changed as has my knowledge level on the subject of mortgage backed securities. I wanted to update the article so it was more reflective of the current state of the housing market and the economy.

Search Amazon.com for Real Estate Finance & Investments + Excel templates CD-ROM (Real Estate Finance and Investments)


I am not talking about a minor slow down or continued stagnation. We might be in for a continuation of the disaster that is occurring in certain cities around the country. Regardless of how the government and the National Association of realtors try to spin the current situation into something less that dreadful, there is no demand for real estate at the moment nor is demand likely to increase in the near future.
more on real estate crisis


I am having a hard time connecting the dots as to where the buyers, who will swoop in and buy all of this now affordable real estate, are hiding. The real estate market is not supported by first time home buyers. It never had been and never will be and the more the government tried to bring new home owners into the market to increase the historical average of home ownership, standards for qualification had to be relaxed. The balance of the market was lost when people were enticed to by homes without proper means or knowledge.

CURRENTLY I WOULD HAVE TO DISAGREE WITH WHAT I PREVIOUSL ASSUMMED.   SINCE THEN I HAVE RESEARCHED EXTENSIVELY ON THE REAL ESTATE CRISIS AND IT IS CLEAR TO ME THAT DEFAULTING SUB PRIME MORTGAGES WERE NOT THE CAUSE OF THE FINANCIAL MELT DOWN

However, this should not have been enough to completely wipe out the housing market and lead to a crash of up to 65% in many areas. How could a small number of foreclosures known as the “sub prime” problem derail the entire national housing market? It couldn’t and it never had in the past 70 years.  Those sub prime loans were refinanced or defaulted fairly soon after the recession started.

The sub prime excuse was just a way for the banks to deflect the spotlight from them so they could make a few more billion dollars, bilk the government for more bailout funds, and take giant bonuses. The housing market was heading into free fall and they (TBTFB) were well aware if the government wouldn’t step in and help them out, most of the major banks would have gone the way of Lehman Brothers. Yves smith summarized the issue very well October 31 2010 on her blog and in a New York Times op-ed story. Here is a quote from one of her responses to a comment submitted to her blog Naked Capitalism

Yves Smith says:


October 31, 2010 at 5:30 am


Jojo,


With all due respect, you are falling for the bank narrative on this one.


Yes, many subprime borrowers got in over their head. But the big resets on subprime were in 2007 and were pretty much over by late 2008. Most of those people have already been foreclosed upon, save where the banks have been dragging their feet.


Yves continues educating the commenter:


“You miss the fact that a lot of foreclosures in the past and now are due to servicer errors, plus normal credit losses, the biggie being job loss or hours reductions. This is not a simple “prudent v. imprudent” story.


When banks owned loans, they would ALWAYS restructure the loan of a viable borrower. Always. This is sound lender loss reduction behavior. Lew Ranieri, the father of mortgage backed securities, was clearly upset when he spoke at the Milken conference in 2008 about servicers using the MBS contracts as an excuse not to do mods. In his day, it was done as a matter of course because it reduced investor losses and hence was good business.’
End quote.

  I would also like to add that we don’t know people had gotten in over their heads. We have no record of how many people have avoided foreclosure or default over the past 40 years by selling their home. We can reasonably say that the CDS system substantially added to the housing decline. The effect of the prolonged and dramatic price decline took away the safety valve of selling a home to fend off foreclosure. Even if we had a reasonable real estate market with typically more stable appraisal values, thousands of people could have sold out with a minimal loss or breaking even. This would have accomplished 3 important things for the economy.

1. The banks would have cleared a potential toxic asset from the books.

2. It would have increased money supply by erasing a non- performing or poorly performing asset. Banks would have been in better financial positions with less risk of insolvency.

3. The homeowner would have been able to get out from under their debt if they had lost a job or had been transferred without having major credit score problems. They could have done their own reset until work picked up and they could then buy or rent.

The percentage of price decline has been severe enough to devastate the economy. The additional knockout punch has been the depth and length of this recession. We are now wiping people out completely as the banks bobbed and weaved their way out of the fight unscathed. Many very hard working Americans have faithfully taken their life savings to pay for their underwater mortgage for the past few years because they believed the government and the bankers, who were making claims it was just a sub prime issue housing prices would remain stable.. So now we are moving into year 3, year 4 and likely years 5 and 6 of this meltdown with millions of people still out work and now out of life savings, not because they were in over their head but because the banking system wiped out our economy.

more Books and aritcles





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Swindled and brainwashed by the banks again

 

The Banks and the federal government were very wise in their implementation of the onerous psychological strategy used to “lock” the moral burden into place on American citizen that says under no circumstance is one to walk away from their debt obligation on a mortgage. The collusion of banks, government and the media tirelessly worked to place the fear of shame and chastisement on to any homeowner who dare consider strategic default or otherwise.

We could argue that this was in the best interest of the country but really it was just in the best interest of the banks and money lenders. Although, the system worked rather well as long as the federal and state governments were able to keep a handle on the rate of inflation.

If the money supply was kept at a reasonable level the economy would have its normal ups and downs but there would be no unreasonable appreciation or depreciation in real estate prices. The exception would be the few boom and bust areas that have had extreme pricing fluctuations over the years. The best examples would be California, Florida and the Texas gulf coast that was up and down with the boom and bust of the oil exploration.

As long as we had a federal reserve that was not overly influenced by the Banking system itself, it was likely that this method of economic stabilization could go on indefinitely. It would serve as a future method of taking pressure off of the “social security black box” as well as calm American’s fears of the devastation of another “great depression”. People were convinced to work hard, buy a home, pay 3 to 4 times what it was worth in interest and then recover about ½ of what they paid overall when they sold their home upon retirement.

The Banks were getting fat and the government was getting a reasonable calm and non-revolutionary population that was content with these terms. People came to believe that paying your mortgage was an honor and a privilege. Defaulting on a mortgage, unless you were in extreme distress was extremely taboo.

Over time paying down a mortgage looks reasonably good if you stayed in your home for 10 or 15 years. The ability to pay the same as you would for rent while having the boost of pride people felt as “homeowners” seemed to make this a workable arrangement even though the banks benefited far greater in terms of return than did individual owners.

The banks used this manipulation to continually lower their capital requirements as both the banks and the government came to rely and the “moral and ethical” home owner. Over time, many people came to believe that increase or at least the stability in the real estate market was a normal part of the capitalist system. However, all the misleading information and manipulation lead to a false sense of security, undue pressure on families in times of crisis and extreme tolerance of risk that was taken by allowing banks to become under capitalized.

Slowly but surely the big banks and the Wall Street elite came to realize that this stable and consistent market could lead to some ridiculous wealth if it could be exploited. It would just take a few of the right players to get into office at the right time. We began to see the creation of the “greatest real estate depression” in history as we moved into the 21st century.

A number of factors would eventually lead to repeated mistakes by the Federal Reserve that would drastically increase the money supply. Interest rates were kept far too low for far too long as growth and expansion of the economy became the North Star guiding fed policy.

After we suffered the tragic events of September 11, 2001 our reliance on excessively low interest rates strengthened. It was more circumstance than deviance that prodded the reserve chairman to opt to keep interest rates at “hot” levels. As patriots many of us could argue little with this strategy that was one way of boosting “morale” of the country. It was as if we made a pact with the devil at times of vulnerability. Politics has over taken common sense at the Federal Reserve and within a few years the “nuclear” housing race was in full effect.

I was extremely puzzled by the flow of money into the economy at such low interest rates. My opinion in discussions with friends was that the government had painted themselves into a corner with such low rates. It was promoting the unsustainable rise in home values. Wages and income were not keeping pace with the extremely quick rise in real estate cost.

The fed and to big to fail banks become the new “batman and robin”

But have no fear the big banks would come to the rescue. They would only need a little help from congress and they would help the fed kick the can down the road a few more years. They had the solution to letting the fed keep up with its rope a dope tactics a few more years, or at least long enough for the players to get out of Washington.

What was the Answer? : Exotic mortgage products based on the assumption that real estate will never lose value or significant value in the first 7 years of a mortgage.

Business Opportunities Handbook

The seven year time frame is critical because banks realized that the average home owner would move or refinance at least once within the first 7 years of the mortgage. So the method of amortization used was to have nearly 100% of the payments on the mortgage be put towards the interest balance of the loan.

Banks still defending perjury and fraud as acceptable

Banks told not to fix a fraud wsj

-Thank our founding fathers for the states ability to enforce certain laws that the federal government chooses to ignore.  Well , except for what pushes forward the administrations agenda ---oh yeh Az sued by federal government because they were trying to enforce policy that the Obama thought would negatively effect the democratic party.  Obama will show that he is even more tone deaf to the realities of the banking fiasco if he dares to sue the states to keep them from enforcing laws and regulation against the banks.  --

bold and italics added

("The banks are committing fraud on the court, essentially perjury, and then saying 'Whoops! You caught me! Here's some different evidence and use that instead,' " Mr. Cordray said in an interview Friday. "I know a lot of judges are not going to take kindly to that."



Wells Fargo Chief Financial Officer Howard Atkins said in an Oct. 20 television interview that he was "confident with our policies and controls" related to foreclosures and that "the person at Wells who signs a foreclosure file is the same person as the person who reviews the file and it is not always done that way in the industry.")

----of course Wells was doing all the right things and would never doing anything that was considered fraud and Atkins says "confident with our policies and controls" but one week later after back lash from AGs and attorneys did a flip flop on Oct 28, 2010--


(But on Oct. 28, Wells announced it was resubmitting affidavits for 55,000 pending foreclosures, suggesting that some of the paperwork might be flawed. In March, a Wells Fargo employee named Xee Moua said in a sworn deposition in a Florida foreclosure case that she signed between 300 and 500 foreclosure documents a day, without reviewing the numbers on the loan files for accuracy.


Bank of America declined to comment. A Wells Fargo spokeswoman said Friday the company intends to cooperate with Mr. Cordray's inquiries and doesn't "believe that any of these instances led to foreclosures which should not have otherwise occurred." She added that Wells Fargo has "chosen to submit supplemental affidavits out of an abundance of caution.")

----The banks have reached the pinnacle of arrogance and narcissism.  We all know that banks to do nothing in the abundance of caution unless they are on the verge of being busted!  I hope the judges are all willing to hold the banks accountable for their creation of DTFMS (destined to fail mortgage system) know ing they were seens as TBTFB (too big to fail bank) that is allowed to pass their loses on to the tax payer.  Of course they get to keep the profits they have claimed over the past several years and we get sold down the river.  ---
-----my comments
(  )  from article

Treasury says possibility of lower housing prices at congressional hearing

The treasury seemed to be the first in the administration to try send out a test balloon before the public actually finds out the truth about the banks their part in "foreclosuregate".  The Bush and Obama administrations, the banks and the main stream media have all had a hand in trying to hide the real causes of the housing meltdown.  It seems like many people are getting a little nervous now thousands of fraudulent transactions have been put in the spotlight. 
The full article can be found at this link:

http://www.nytimes.com/2010/10/28/business/28housing.html?_r=1&ref=todayspaper

--Revelations about paperwork shortcuts and so-called robo-signed affidavits, as well as the likelihood of protracted legal battles by homeowners and inquiries by state and federal officials, will hinder foreclosure proceedings and discourage prospective buyers, a Treasury Department official said.
“Together, these two factors may exert downward pressure on overall housing prices both in the short and long run,” said the official, Phyllis R. Caldwell, chief of the home ownership preservation office at the Treasury"---
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It is become more and more clear that they government and the banks were on a mission to change the rules to favor the financial institutions regardless of the law.  It has been going on for a few years now.  The banks have been in total control of policy since the Tarp.  The banks set up a scenario that struck fear into congress, who were willing to do anything to keep the banks on their side or to buy votes. 

The banks fooled them all into giving up billions of dollars that was supposed to save the world banking system and our country from the 2nd great depression.  All that really happened with the billions of dollars was to keep the banks functioning.  It actually took a few accounting tricks, billions of dollars and the media unwilling to out the banks,  to give the an appearance of solvency for the financial institutions.

There is still little direct talk of holding the banks accountable for the mess they have created and now added to by their lack of honesty.  They all wanted to push the foreclosures through as quickly as they could and try to get housing values back up.  They seemed to think that it was ok to break the law as long as it would turn the economy around.  It might have been true if they hadn't created a system that was destined to collapse. 

Maybe the  too big to fail banks will be held accountable for their behavior now that people are seeing the gravity of the situation. 
Pocket Quicken V2.0 for Palm Os 2.0 Or Higher (DVD Style Box)

Everyone is afraid of the truth about foreclosure gate

So few people are seeing through the line that everything is ok and that signing documents illegally and committing fraud is ok as long as it is going to bring about a more speedy recovery. 
Banks and Politics in America from the Revolution to the Civil War
Well breaking the law has not worked for the anyone and the recovery seems to be a long way off in the distance.  The actual fraud by the banks is now causing a slower recovery because it was allowed to go on for 3 years while the banks got the house in order.  They bilked the tax payer to remain solvent, granted they were solvent only because of accounting rule changes misconception that mortgages would bounce back 100% to previous levels within 2 years. 

Didn't happen!  The lowest interest rates in years did little to help the banks so they were allowed to play pretend owner so they could foreclose.  It seems to me that not only are the title companies involved in this but the local municipalities have gone along with the process as well. 

I question how else could all of the documents be changed into Mers when no evidence of ownership was actually produced by the banks?   Someone had to let it go with a wink and a nod or at least by just neglecting the facts. 
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I always assumed proof of ownership was the most important item when making changes to the title chain or assigning notes to the trust? 

Ping the lawyers all you want but if they weren't digging into this, it is likely there would be no checks and balances to what the banks are allowed to do in the name of recovery. 

Lack of housing recovery changes the game for the big players like Pimco. Home owners still likely left to take the fall.

http://www.creditslips.org/creditslips/2010/10/faulty-foreclosures.html
Here's a real disconnect in the faulty foreclosure story: The story on credit slips blog.  Adam Levitin Questions the credibility of the B of A foreclosure review.  He asks the question but we all know the answer.  Bank of America making a test run at the steam rolling process.  They could not have reviewed the documents without another robo reviewer. 
They continue, with the federal governments blessing, to keep trying to push the issues regarding the foreclosure process under the rug.  The mainstream media is still in the tank for B of A and the too big to fail banks as they fall for the Administration's facade that they will be tough on any law breaking bankers. 

What amazes me is that many people still misunderstand the main issues that has just come into play this fall.  The fact that the housing industry has failed to respond to the ridiculously low mortgage rates really has put the issue of  forclosuregate in the forefront. 
Self-Efficacy: The Exercise of Control
Regardless every one's opinion that we need to get to the bottom of this so lets railroad anyone left in there home strategy, the housing market failed to respond to the low interest rates, which has put much of the world on notice that these "fraudulent" procedures are not getting prices back up. 

The only reason the game has changed is because the big money people, they Wall Street Elite, the oligarchy and the like, stand to lose major dollars now on their securities investments.  Everyone was happy with dumping this on the home owner if it would mean investors would be made whole or at least it would lead to a speedy recovery.  Now with the likes of Pimco starting to recognize that being a team player with the fed is not going to save them money this time around. 

Of course the homeowner is the afterthought.  Even Phil's stock world has taken the stance that is in more agreement with the banks than it is with the people.

 Power Therapy: Maximizing Health Through Self-Efficacy
Phil gives his opinion in this article that addresses the extreme. 

"I am sorry but that is complete nonsense. It will mean delays and legal expenses to figure out who has the right to foreclose, but it sure as hell does not mean borrowers own their house free and clear"
the full story can be read here:

http://www.philstockworld.com/2010/10/20/pimco-blackrock-ny-fed-seek-to-force-bofa-to-repurchase-47-billion-in-soured-mortgages-viral-nonsense-on-show-me-the-note-and-foreclosuregate/

Fox News fall in Line on Foreclosure Gate

October 24, 2010
After watching interview from the Huckabee show on Fox news.  They had a guest on that was spinning the foreclosure gate as all fault of homeowners and nothing to do with the banking system.  I responded in an email. 


 I think it is time for someone to state the truth about the mortgage mess in the mainstream media. The guest you had on tonight was still trying to blame homeowners for this mess. He is wrong and way off base. The entire meltdown is because of the pooling of mortgages and selling them as securities and insuring the loans 3 and 4 times over against default with the credit default swaps when if a note failed 4 or 5 companies would need to get paid.

Foreclosures are a normal part of the process. People will always have issues that come up but typically they could sell their home and walk away breaking even or being in the whole a small amount if they lose there job etc.

The beginning of this mess was labeled sub prime so everyone would fall for it and let the banks get deeper in the whole until they could get a handout by holding a gun the head of congress. If the banks would have no securitized all the mortgages they would have been able to deal with the foreclosures as they arose but they knew they had collected insurance and if the tranches started going bad they would have to pay out far more than they had in their coffers. They were al insolvent and should have been bankrupt. They avoided the issues until they could milk the system more by putting up the smokescreen of sub prime when they were trying to cover up their fault in creating a situation that would only work if all the parts worked perfectly. IE no defaults. They knew it wouldn't work but they were paid already and did not care what happened to the country. That is why the market dried up because people knew the banks and the rating agencies lied and they were no longer going to buy mortgages as securitize because the cat was out of the bag. The banks created a system guaranteed to fail but they were able to collect their fees and let everything else be paid by the taxpayer. It is ridiculous that people are still trying to blame a small amount of foreclosures 3 years ago as the cause of the meltdown. It is absurd and I wish you would get a handle on it and put the truth out there......The system of MBS and CDS was created by Wall Street and the bankers. It brought the country to its knees.
How To Save Your Home & Credit, Stay Payment Free & Get Cash Out Legally From Mortgage Foreclosure

How is the homeowner’s fault???? Those who has been in their house throughout the recession trying to survive, trying to make payments only to have the banks again break the law, and falsify documents. ON top of that if the banks would have been let to fail, the mortgages would have been sold for pennies on the dollar those new owners would be negotiating work out to keep people in their homes. The banks now have purchased thousands of mortgages for pennies on the dollar, with government help mind you, and they are trying to collect full price again by expecting people to pay for a mortgage that is worth twice as much as the property value. Why are the homeowners the only ones that are being held accountable? The banks gave the loans and accepted the appraisals. Why are they not being held accountable too???? They got bailed out and screwed the tax payer and now they are breaking the law and not one talking head on fox news is speaking up and defending the little guy. The banks have fleeced America and the government and the media has let them get away with it. The guest you had on tonight was full of it. He said that we needed to get to a bottom.....yeh are we needing a bottom so badly that it is ok for the banks to break the rule of law? Then talking out of the other side of their mouth expecting to hold homeowners accountable for their underwater mortgage. Come on Mike I thought you were smarter than to have someone come on your show that was so uninformed. You are giving forum to more media hype and untruths.

The reason more people have walked from homes is first because of jobs and 2nd because the banks killed the market with MBS. The market crashed and people realized they were not going to get any help from the government like the banks did so they made a business decision to walk.
Mortgage Wars: How You Can Fight Fraud and Reverse Foreclosure
This is in no way the fault of a small percentage of sub prime foreclosures. I heard another anchor echoing some other dither that sounded the same earlier today.

I have been a big fox news fan but now I can see many of the people there are as myopic as people on MSNBC, just with a different agenda and perspective.

The Ascent of Money: A Financial History of the World

More evidence that Wall Street took down the mortgage industry

Check out the link below and it will take you to foreclosure defense nationwide website.  They have uncovered more interesting facts about the insuring of loans multiple times and for setting up a system that has caused this entire crisis. 
http://foreclosuredefensenationwide.com/?p=301

More on crisis here

http://www.blogger.com/post-edit.g?blogID=6612879521122863090&postID=1574223768390721081

foreclosure gate is catching up to the banks

The Foreclosure Survival Guide: Keep Your House or Walk Away With Money in Your Pocket

Great research done over at foreclsouredefensenationwide.com. They are digging deeper into the underhanded tactics of the large Wall Street banks.



This is from http://foreclosuredefensenationwide.com/?p=299



“A sample of what our researchers are finding: loans which were assigned to multiple tranches within one securitized mortgage loan trust; the assignment of the loan to different trusts; the division of the loan into parts across tranches, and more. What this means to foreclosure defense discovery is nothing short of monumental.

If a loan is assigned to different tranches and/or different trusts, with each tranche or trust having its own series of credit enhancements and insurances, this means the possibility of multiple levels of insurance for the same loan, which goes to prove what we have been arguing for years: that upon securitization, the mortgage loans were insured with multiple layers of insurance so that when the loan went into default, those in the placement chain could reap untold profits by having the same risk paid over and over and over again through multiple claims or reserves. Anyone who read through the SEC v. Goldman Sachs lawsuit knows this.

As such, any foreclosure defense should now hammer, hard, on ALL available credit enhancements, insurances, tranche assignments, and all agreements relating thereto. We will make a prediction here: that very soon, there are going to be a series of cases where it is revealed, in discovery, that mortgage loans were paid 2, 3, 4, or more times on default and that the foreclosing party is simply trying to get paid a 5th or more time by stealing the borrower’s house under false pretenses and with material omissions and improper objections as to discovery related to setoffs (which objections we predict will be overruled once the judiciary is educated as to these matters).”

Finally evidence comes out revealing what was obviously going on within the banking system. I couldn’t believe the government was giving so much money to the banks while they were collecting on their insurance. Two years ago I complained about the banks trying to get paid two 3 and four times over for the same mortgage. Multiple parties were being paid on insurance claims, then the fed paid them off again and in the case of bank takeovers, the purchasing banks was once again getting control (or so they say) control of the assets of the failing bank at pennies on the dollar. In turn the new mortgage holder is attempting to collect again by claiming they are owed the full amount of the original mortgage or they will repo property. It is crazy. We all paid the banks insurance claims as tax payers to the likes of Goldman sacks, bank of America, along with others.

The Foreclosure Survival Guide: Keep Your House or Walk Away With Money in Your Pocket

It is any wonder the system was collapsing when the big banks were trying to suck 4 or 5 times the amount of return on a mortgage that was above and beyond the typical interest payments? For what?



It was for a few big paychecks and the distinction of knowing the banking system collapsed the real estate industry for many years.



They acted with reckless arrogance and extreme disregard for future outcomes. They continue to act with arrogance and bravado as they try to blame the few foreclosures that occurred as the nuclear bomb that devastated the housing industry.



How convenient that they forget it was their system of multiple payouts and securitization, excess issuance of insurance that far exceeded their capital, and acceptance of inflated appraisals, that was the root cause of the crisis. Don’t forget that there has been over 90% and typically over 95% of all mortgages continue to get paid and remain current.
Anyone who can honestly say that 5 % or less of foreclosures could be responsible for the meltdown of the entire housing market is greatly uninformed or extremely delusional. But this would go right along with the delusional politicians and government that is allowing the banking system rule the country.

The latest story by the banks is that they were just over whelmed by the massive number of foreclosures so it was ok for them to break the law. It was also ok to not follow proper rules of law while steam rolling borrowers. Is there a difference in the outcome based on there intentions? I don't think so. Why then are they going to be investigated to find out their motive and reasons for their shoddy procedural work?

Learn about structured finance here

Structured Finance and Collateralized Debt Obligations: New Developments in Cash and Synthetic Securitization (Wiley Finance)

This not just a few clerical mistakes. The banks were willing to falsify documents, give misleading and fraudulent statements, forge signatures and use robo signers to sign documents without even reading them or inspecting their validity.

When is it going to stop? When are people going to stop believing this rhetoric from the banks and start holding them accountable for their fraudulent activity?

How can you give them a free pass again? The banks, with all the money from the government, the ability to access more funds at nearly zero percent interest whenever they were in need of cash, have been given a free pass since the beginning of this crisis.
I am sure a lot of people would like to be able use the excuse that they were overwhelmed by their work load or their increasing debt load but they would still be held accountable if they broke the law. The corporations are getting off easy here and the individual is the one who is suffering the most. The corporations are shafting the individual while the government endorses it.
Accounting and Finance for Non-Specialists

Barney Frank doesn't remember his own lies about housing industry

Liberalism is a Mental Disorder: Savage Solutions

I heard a great piece on the radio yesterday that had Barney Frank talking out of both sides of his mouth.  I know hearing him talk out of both sides of his mouth  will come as no surprise but it did reveal a monumental flip flop. 
It was on the Michel Savage Show. http://www.michaelsavage.wnd.com/
They  played his comments during the housing boom and then played some of his more recent comments regarding who was at fault for the current collapse of housing. 

It was just like clock work with him first saying that there was little risk of major losses in real estate and that he would continue to push for more and more home ownership through programs and policy.  He was really a major player in the attempt to push home ownership in the United States over 70%.  For years he would push his agenda and what he thought that it was best for the government to insure more loans on more and more borrowers with less and less resources with less strict rules on qualification standards.

Now he is say that he never thought promoting home ownership was a good idea.  He went on to say that he was totally against any home affordability programs and that the government should have been involved in creating affordable rental property for lower income citizens. 

I was a complete 180 degree turn around from what his original position was a few years ago.  If he would have said after seeing what happened recently I have changed my position I could accept his flip flop.  However, trying to lie about it, or having that bad of a memory that you can remember what your own policies are then I think you should not be in congress decided the fate of millions of Americans.

The Enemy Within: Saving America from the Liberal Assault on Our Churches, Schools, and Military

Banks throw up test flare with foreclosure halt

We have seen the strategic move by the banks to halt foreclosures for one week.  The did it under the umbrella of doing the right thing, reviewing documents and signatures in order to follow the law. 
The reality is that it was nothing more than a test run to see how much out cry would come from politicians, the white house, and the public. 

The banks wanted to know if they could get away with bending the laws or even disregarding it all together.  It evidently appears that the White House and the politicians have become more interested in speeding through the real estate disaster rather than protecting homeowners against fraudulent practices of the banking industry. 

It will not be a major surprise to see the banks calling for more government backing or bailouts after the elections when they know the politicians will be less concerned with the what voters would think about being manipulated by the major banks one more time.  We are in the middle of the greatest manipulation of the economy ever and the banks have strong arm the government to its knees.  The politicians nor the President has any intention of holding the banks to the law.  That horse left the barn a long time ago. 

Housing crisis still misunderstood

Mortgage-Backed Securities: Products, Structuring, and Analytical Techniques (Frank J. Fabozzi Series)

I have continually read references to homeowners who maybe defaulted.  Many people still do not understand the extent and origins of this housing collapse.  I have heard people called liars and deadbeats among other things.  It is a very simplistic answer for a much more complicated situation. 
There is  plenty of blame to go around. 

The so called "Deadbeats" didn't cause the massive meltdown in the industry. The majority of people that took loans were hard working people that were capable of paying their bills. The media and the self righteous like to blame the home owner when the reality is that the homeowner is the least to blame for drastic drop in values. In a reasonable stable or flat market anyone who ever has trouble with a mortgage has always had the opportunity to sell. This has been true in general for most areas of the country except for a few boom bust areas.


The banks are far more to blame for the outcome. You can see now they are at the heart of the issue as the they take get buy back requests for bad loans. The real estate issue started about 3 years ago and just now everyone is getting their act together to make things right? The banks new the longer they delayed that they may be able to have successfully moved the mortgages down the line. We are seeing rates of foreclosure pushing toward the rates experienced in the great depression. There is no way that is the result of foreclosures.

If 95% of people are paying their notes and the system still had a meltdown is a clear indicator it was not the individual foreclosure that was the wrench in the wheel. It was the mortgage backed securities market that went into deep freeze because of the way the loans had been packaged and sold. The ratings were misleading and possibly fraudulent. 



If such a small percentage of defaults can nearly bring collapse to the world wide system it is more reflective of of the defects in the Mortgage back security market.

watch for under the table bank bailout after election

  

You can already here the spinning of the bank spokespeople as they once again collude with politicians to try and buy votes in the upcoming election.  After Obama vetoed bill that would have given the banks a free pass out of the mortgage fraud quagmire, White House staff was already laying the ground work for another change of the rules to allow banks to steam roll borrowers.  They are already working out a deal with a wink and a nod that will lead to another outrageous effort to change the rules of the game in favor of the banks.  It should not be any surprise though because the banks have always gotten what they want in the long run.  The perfect example was when banks were allowed to move to mark to model to keep them from being insolvent at the beginning of the crisis.  The were allowed to "pretend" they were not bankrupt because they no longer had to mark their assets to market.  The banks are getting over on everyone. Read more here:   http://financialfactstoday.blogspot.com/2009/03/mark-to-market-changes.html


Here is an example from the Wapo:
“We believe freezing foreclosures for all banks in all states, whether we have reason to believe them to be in error or not, is simply not the prudent step to take in this fragile housing market,” he said. )--
The full article is
http://www.washingtonpost.com/wp-dyn/content/article/2010/10/10/AR2010101003300.html?hpid=topnews


--(The Obama administration does not support a nationwide moratorium on foreclosures at this time, Federal Housing Administration Commissioner David Stevens said Sunday in an e-mail response to questions.

This is like saying that we know the suspect has murdered two people but if we try to bring all criminals to justice it will clog up the legal system.  Therefore, we will not prosecuter the known offenders. 

If the documents are believed to be in error how can the government say that halting foreclosures is not warranted?  It is getting more clear by the day that this moratorium is a stunt to garner votes for a few politicians who have leaned toward the banks side of the page.  We can be certain that the banks will be calling in the favor as soon as the election poles close. 

It is an outrage that it was just swept under the rug and no one has called Stevens on his remarks.


The banks are stalling for time until after the election and then they will be back on the assault against borrowers.  They will continue to try and shame and blame homeowners who have the courage to stand up to the banks and demand the banks be accountable for there own portion of the massive drop in collateral value. 
Anyone who  thinks the banks should be able to get away with what they are doing whether it is legal or illegal has fallen off the deep end.  The above quote already reveals that the administration know something is wrong.

 The problem is they don't have the stones to put an end to the fraudulent activity by the banks.

Everyone is free to negotiate with the banks.

Everyone is free to negotiate with the banks.
Everyone is free to negotiate with the banks and the banks know that they are up against the wall with the massive drop in home values. There are people that are willing to walk away from their homes if the mortgage is twice the value of the property. It is a business decision. The banks, bankers and the press have tried to create a smoke screen with homeowners in order to keep the upper hand.


The smartest thing to do is to go right to the bank and negotiate your loan and terms if your collateral value drops 60 %. Why are people trying to hard to take freedom of choice away from a borrower? The banks have gotten their bailout and now they want to move on and start over leaving the homeowners in their wake. It makes perfect sense for the banks. They have not had to suffer any consequences of their self created securitized system.
The reason we are seeing so many more defaults is that the banks have dug in their heals, refusing to take any responsibility for this crisis. They will continue to blame the home owner until home owners stand up and fight back.
If you have a mortgage worth 500,000 and a home value of 250,000 you have a major problem. I understand that some people have fallen for the moral argument that is based on honesty and truth. However, there is no honesty in truth in sacrificing your future, or the future of your children, in order to say you “kept your word.”
The system has always been manipulated to the banker’s advantage. The old rules of keeping your word and following through to pay your debts to the local banker do not apply anymore. Back when you had one banker to go to that knew of you and your family, we all can understand the moral issues of walking away from your responsibility. But at the same time the banker also had the moral responsibility to consider changing situations of borrowers and be willing to make adjustments to loan terms when necessary. It was a two way street and it worked well for a long time because we knew where the note was held and bankers had to consider making a business decision to keep collecting payments, even if they were less, so cash flow remained.



Our system today has been taken away from the people and put into the hands of Wall Street. They took over the mortgage system because they saw a way to exploit it. The made billions while American’s were left powerless. At one time knowing your banker was a given. Today people are treated as a number to be used, exploited and discarded after the commissions have been made by the fat cats.



All people want is a fair shot at negotiating their contract. The situation, with so many underwater borrowers, is the anchor we will never be able to raise if the banks continue to exploit the government and borrowers.

Blaming homeowners of course, Bankers still take no responsibility

This is from an online article in msnbc online today that was originated by By Joe Rauch

at  Reuters
 
"If you didn't pay your mortgage, you shouldn't be in your house. Period. People are getting upset about something that's just procedural," said Walter Todd, portfolio manager at Greenwood Capital Associates.



Some said the issue is one of personal responsibility for one's own debts. 
.."Everyone's responsible for following the law. If we all don't have to pay our mortgage, should we just stop paying taxes, too?" said Anton Schutz, president of Mendon Capital Advisers. "Your mortgage didn't get to a robo-signer by accident, it's because you're not paying."
They created a system of
Here is a perfect  example of why the bankers that are running the system have screwed it up so badly. They created a system of

black hole securities that were meant to pay Wall Street first  and then pay the  credit default swaps next,  They created an MBS market that could not properly deal with a typical number of defaults.  The system created by Wall Street, for Wall Street and for the politicians was set up for collapse after an average number of defaults.  They didn't deal with the defaults early on because they didn't know who the owned the paper  or who would be paid by the sale of collateral.  They wanted to wash their hands of the business once they received there huge payments for disguising and selling marginal quality mortgages as AAA paper. 

They   actually put  millions of Americans back to work.  The problem is that these were the people set to retire and they didn't want to work anymore.  Many people who were counting on their home as a nest egg, have had to continue working or go back to work.  The collapse of the housing market was not because there were foreclosures.  There are always foreclosures for any number of reasons. 

 The banks can usually deal with them, negotiate with the borrower if possible or take the home back.  They can take the homes and usually sell them at a discount but they are made whole in most cases by the payouts from the mortgage insurance.  The banks rarely if ever lose when it comes to foreclosure.  They are covered by the insurance, they have already collected a few years worth of payments that are nearly 100% interest and they get to write off the balance of the mortgage and costs of the foreclosure for tax purposes. 

For Wall Street to be blaming the entire meltdown on homeowners is absurd.  It just shows that the bankers have become truly myopic and even more self interested. 

There are always foreclosures.
Why did the bankers create a system that would collapse completely if defaults occurred? 
Why were they so misguided? 

 The only reason is because it was easy picking for them.  The pillaged everything else they could away from the common man and the last frontier was real estate.  Since the Great Depression real estate has been a way for people to save for retirement while lining the bankers pockets with interest payments. The entire idea of amortization was really just to make the banks richer while disguising the fact that people will end up paying 3 or more times the value of the original mortgage by the time it is paid in full.  They realized they could pick a number of years that would make it seem tolerable to home owners.  Then they figured out how often people tended to move, which at one time was every 7 years, so they could make sure nearly 100% of the first 7 year's of payments would go to interest.  If the loan was paid back after 6 years, the bank make 6 years of full interest payments.  In any other venture this would be called a scam. 

But since it is the banks and Wall Street, they get bailed out with tax payer money that was to be used to help remove the bad mortgages from the banks so they could start lending again.  Oops.  The banks have hoarded all of that money and are now lobbying to be allowed to commit fraud to help their cause.  The trillions of dollars wasn't enough, now they want to disregard the law so they can make more profits.  We need our politicians to grow a new set and step up and say no. 

The spin is about to begin regarding Bank Fraud

From the WSJ
-----"We're seeing a mess and we're seeing a process that takes anywhere from nine months on the short end to two or three years," said Peter Murphy, president of Tampa, Fla.-based Home Encounter LLC a realty firm.
He says that in the last week, as the documents issue unfolded, he saw 15% of all foreclosure-sales listings of bank-owned homes yanked from the market. "I would expect that if we didn't have the judicial process, we'd be either right at the bottom, or we'd be bumping along the bottom getting ready to recover."------------


So what is good for the housing market is to have a glut of homes that have bee foreclosed all hitting the market so we can have more sales? This guy is full of it if he thinks they would be near the bottom in Florida if the would have sped up the process. Who does he think is going to buy all the homes????? Possibly all the people that aren't working? California doesn't seem to be in the building frenzy during boom times that FL AZ and NV had gotten into where builders were building way too many homes....and there are far more densely populated than Florida also.
The spin campaign to cover up the banks fraudulent activity has begun by the powers that be, including the Obama administration. Once again the banks are calling the bluff of the American people and the government just as they did when the Tarp bailout was signed. 

Congress will let banks committ fraud after election

Yves here. This development reveals how this battle is likely to play out. Now that judges in some states are starting to take these dubious, potentially fraudulent measures seriously, the next line of attack is to get the more bought and paid for Federal government to intercede on behalf of the banks. As the e-mail by the Ohio Secretary shows, this is a state versus Federal rights issue. And the problem is that these solutions will be depicted as “efficient,” just as securitizations and other “innovations” were.


Please go to Naked Capitalism and check out Yves commentary on banking fraud and foreclosures.  If you want to learn what really is happening at the banks and how they are abusing their authority or lack thereof, to steamroll through the repossesion process in order claim property without legal title. 
Yves nails it again in his blog when covering the subject of Mers, chain of title and deceptive bank practices as these institutions claim to be acting out of a need for efficency rather than follow the law. 
From Naked Capitalism
----"And while efficiency in theory is a good thing, it must always be kept secondary to the overall integrity of the system; otherwise, you run the risk of breakdown. Using dubious arguments to overturn well settled law to get the banking industry out of a monster mess it created is a Faustian bargain. It makes it abundantly clear what is really at stake here, which is the rule of law. Banks that were quick to defend unjustifiable pay deals by invoking “sanctity of contract” have no inhibition about ignoring their own contracts to pad their bottom line, and ultimately, the wallets of top executives. "
Rather than deal with the considerable consequences of these abuses, the banks are prepared to bulldoze well settled state laws to give them an easy way out. And I’m not basing my view on this story alone; I had a conversation yesterday with a Congressional staffer who matter-of-factly said (but with little understanding of the underlying issues) that Congress would intervene on behalf of the industry, via its authority over national banks.
          The result is that we institutionalize kleptocracy while keeping largely gutted forms of due process as theater. The powers that be hope that the broad public will remain unaware of what is really at work."--------   

This is what is going on in our country and has bee since the Tarp program or scam, whichever you prefer, was passed.  The banks created an enormous mess with the CDOs and MBS as they chopped up mortgages while the tried to figure out a way to make them trading vehicles to be exploited by the street.  It could have been helpful but not without some oversight or at least a proper chain of title so when these housing issues started banks could have taken action on the small number of loans in default.  Instead they didn't know who had the rights to the paper or if they did know they might have had 30 people claiming and invested interest and they had no idea what to do.  I truly think they still have no idea what to do and will soon be holding a gun to the head of congress as the demand to be helped out again.  I would not be surprised if they wanted more money or more assurances from the government to protect the banks against their own idiotic behavior that they will claim zero responsibility.  Maybe this time congress won't run away scared and whimpering as they did when they were completely gutted--(a better term might possible be reamed,) -----by the threatening banks.  The congress of cowards and bank lovers.   It is abundantly clear that politicians can still be bought with a few dollars.

Blaming the Process for the Foreclosure Fraud Mess

Here is a quote that was in the Wall Street Journal over the weekend. It was the beginning of the spin to let the banks off the hook again. The administration took up the cause as well on Sunday as they tried to brush the banking fraud under the rug. It seems the White House may just have been interested in halting foreclosures long enough to get some easy votes. If this weekend's rhetoric was any indication of this administration's direction, we can expect they will be in bed with the banks again by the end of the year. Maybe they can all have another summit at the white house so they can all dry hump each other and look contrite for the dog and pony show after. It is ridiculous. The banks have turned the administration and government into puppets. They all need to look in the mirror and check themselves out because they will find that they are all missing their b and ends in alls. Everyone has become patsy to the banks because they are afraid to stand up to these financial bullies and stare them down. Money rules politics and as much as Obama tries to fake us out by chastising the banks, he has not the will nor the fortitude to step up for the taxpayer. He is beholden to the banks worse than any republican and will never be a true leader like Ronald Regan. The Obama is running scared just like the Bush Administration and congress were when the banks put the gun to their head and demanded a bailout. (of course the banks claim the didn't need it) but they all are likely just as close to the edge now with little ability to fix this situation without going bankrupt. We will soon see more rule changes in regards to accounting, legal paperwork and transparency as the administrations begins to worry more about re election that re direction and they will proceed to try and placate the fat cats with cash: namely the big banks who control the country. -----"We're seeing a mess and we're seeing a process that takes anywhere from nine months on the short end to two or three years," said Peter Murphy, president of Tampa, Fla.-based Home Encounter LLC a realty firm. He says that in the last week, as the documents issue unfolded, he saw 15% of all foreclosure-sales listings of bank-owned homes yanked from the market. "I would expect that if we didn't have the judicial process, we'd be either right at the bottom, or we'd be bumping along the bottom getting ready to recover."------------ So what is good for the housing market is to have a glut of homes that have bee foreclosed all hitting the market so we can have more sales? This guy is full of it if he thinks they would be near the bottom in Florida if the would have sped up the process. Who does he think is going to buy all the homes????? Possibly all the people that aren't working? California doesn't seem to be in the building frenzy during boom times that FL AZ and NV had gotten into where builders were building way too many homes....and there are far more densely populated than Florida also. The spin campaign to cover up the banks fraudulent activity has begun by the powers that be, including the Obama administration. Once again the banks are calling the bluff of the American people and the government just as they did when the Tarp bailout was signed. -----"We're seeing a mess and we're seeing a process that takes anywhere from nine months on the short end to two or three years," said Peter Murphy, president of Tampa, Fla.-based Home Encounter LLC a realty firm. He says that in the last week, as the documents issue unfolded, he saw 15% of all foreclosure-sales listings of bank-owned homes yanked from the market. "I would expect that if we didn't have the judicial process, we'd be either right at the bottom, or we'd be bumping along the bottom getting ready to recover."------------ So what is good for the housing market is to have a glut of homes that have bee foreclosed all hitting the market so we can have more sales? This guy is full of it if he thinks they would be near the bottom in Florida if the would have sped up the process. Who does he think is going to buy all the homes????? Possibly all the people that aren't working? California doesn't seem to be in the building frenzy during boom times that FL AZ and NV had gotten into where builders were building way too many homes....and there are far more densely populated than Florida also. The spin campaign to cover up the banks fraudulent activity has begun by the powers that be, including the Obama administration. Once again the banks are calling the bluff of the American people and the government just as they did when the Tarp bailout was signed.

What has lead to forclosures? Can't blame it all on homebuyer.

Are we forgetting to include the effects of the MBS market and the loss of jobs caused by the banking industry meltdown when referring to foreclosure? Many people lost jobs and were in difficult situations because the mortgage business could not resolve the issues involving a slight up tick in defaults. Why? Because they set up a system that was based on pieces of paper such as stocks and bonds that had little regard for the collateral of real property. The failure to see that real estate was much more critical to the economy than a stock certificate has led to a disaster. The brightest minds that figured out how to make more money slicing and dicing mortgage notes were acting in the world of theory. They lived on the yellow notepad. This was a defective and faulty premise. Real property can not be treated as a divisible product. Today after 3 or more years of this crisis we are finding out just how removed the collateral has become from the note it was supposed to represent. The lesson should be that you can not treat collateralized mortgage notes as a trading vehicle or have them used by investment houses to create phantom income as was created by the sale of credit default swaps that would pay out if the securitized failed. The insurance could be purchased by anyone regardless of their connection to the original transaction or risk of loss. It was an attempt to allow mortgages and the housing market to be sold short and as with most insurances transactions in the face of disaster----the sellers of cds could not meet their obligations if there were more defaults than usual. Just like the insurers that call on the government to bail them out after a hurricane hits and they are expected to pay out on more than the average number of claims. It was as if Wall Street wanted the power to take the housing industry out of business by driving its price down by selling it short, as they often do in the stock market. The only difference is that the broken up pieces of mortgages were backed by real property and were not localized in just on company that would marginally affect the economy. Wall had finally found a way to tear apart the last wealth generating vehicle that was left for the little guy. The fat cats had to get in on the money. They had to figure out a way to profit from the boom in housing without ever having to get their hands dirty fixing up a home or building a home. The Wall Street elite couldn’t stand to see a sector of the economy that was thriving with out the fat cats exploited it until it was driven into the ground. It was collusion between Wall Street, big banks and the government. When the banks got in trouble they came crying for a bailout and the government knew they had to fold. The had their hands so far in the cookie jar that you couldn’t see their elbows and they had no choice but to succumb to bank manipulation. They gave a government credit card worth billions to the banks and never once checked for credit worthiness. The very thing they were all complaining that was the crux of the housing issues---less than credit worthy borrowers due to lack of standards----was the method of operation used by the federal government as they handed over keys to the vault that held trillions of taxpayer dollars. It was absurd and for two years now the banks have run rough shod over homeowners and taxpayers.

banks, fraud and foreclosure

I was wondering how long before people realized the banks were fleecing the country. It seems that banks have had a major meltdown in regards to paper work and legal procedure. The banks have had the rules in their favor for years and they have never been questioned. However, it has become clear that not only did the banks screw the entire economy with their security frenzy, they may have done the same to themselves now that they are not getting a free pass when it comes to chain of title. Their recent attempt to side step the law and have a new law passed backfired when the president vetoed the recent pro banking, anti homeowner legislation. The bill was to have allowed validity of electronic signatures and files with no regard for original "wet ink" documents. It appears the banks rarely transferred original paper work when loans were sold and MBS. They also on occasion even destroyed the original paperwork once it was entered as an electronic transaction. They have been fraudulently staking claim to property by falsifying documents and recently decided to go all out and rubber stamp paperwork to try and cram as many foreclosures through as possible. This was clearly a blatant act of fraud with banks hoping they could keep the public from noticing their obvious abuses. It makes perfect sense if we look back on the situation a few years ago. There was no real reason for the housing sector to have a meltdown when such a small portion of loans were going into to default. The reason the banks could not resolve the problem and take back the collateral in the beginning was because it was likely through the peak of the mortgage craze, banks could not provide proof of title. They also wanted to avoid the responsibility of having to buy back notes from investors because they were going sour in the first several months. More to follow.