Insurance fraud added to banks woes. How long can they get away with breaking the law?

It seems to be getting deeper and deeper for the banks.  It is amazing they are getting away with such flagrant violations of law.  The abuses were over looked as long as the banks were making money and the politicians were getting their campaigns funded and perks provided.  The trust in the government and banking system will be shattered for years if this is allowed to continue.  If we do not see people prosecuted for knowingly and willfully violating nearly every statute on record  regarding real estate, mortgages and ownership rights, we may never see the bottom. 

The only moral hazard is letting the banks get away with steam rolling multiple laws regarding real property.

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. 

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

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.

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.

Uptick in Housing or just normal trends?

I am guessing that we could look at the traditional home buying patterns in good and bad times and see that regardless of the economy; certain months always show more sales. I can't believe these genius economists just spew out bottom talk when sales could just be tracking normal averages but just at much lower levels. This is insane. Granted it may be an overall improvement as well but to just take one month and not compare to normal sales trends is silly.

The Banks pull the rabit out of the hat

It amazes me that this bailout of the banking system continues and the administration allows for CEO such from Citi and BOA to give irresponsible statement to the public regarding how profitable they have been during the first quarter. This is complete manipulation and it is how we got into the mess in the first place. People wrongly assumed that banks were being honest about their number and they bought the story. It appears that we are all buying it again as they pass out kool aid for wiling drinkers. The banks have soaked the tax payer for trillions of dollars and would have been bankrupt a few weeks ago if they had not gotten massive injections of capital from the government. In a miraculous turnaround a few weeks later they have become profitable companies? Wow these CEO’s must be the best and the brightest and it is a shame that they weren’t there running the companies during the meltdowns and massive liquidity problems. Oh wait! I forgot most of them were there during the meltdown and were the ones at the helm during most of the credit crunch. But now they come out with a memo or a luncheon speech and say whatever they want about profitability and now ones questions them, the stock market bounces, and Obama looks like a “guru” stock picker. I have heard the stock market is always looking forward by several months but I don’t see how the banking system can be fixed in several months as housing is still falling, credit is tightening, unemployment rising, and taxes increasing. There was no lag time between the Citi memo on profitability and the market turning upward. Where was the forward looking lag time? I tend to believe that this was more of a short covering rally than the all in signal but I don’t know either way. It just seems to me like we are adding to the lack of trust in the system by allowing bankers to have public forum to preach profits without examination of the data. If we see a downturn of the banks again after this bounce we will have done even more harm to the fragile confidence of investors and the American public. If the banks are saved it is great for everyone and now they can just write the check back –with interest- to the government and send out that memo tomorrow. If this is more smoke and mirrors from the CEO’s we will have taken two more steps back.

Mark to market could prevent crisis if allowed to work

What happens when there is no market where banks can sell their securites or mortgage paper? If the market stalls, the pricing of assets becomes extremely difficult, but there usually is a market. The issue today is that the banks don't want to sell at market price.

It means these assets have the potential to be toxic because the underlying collateral is valued far less than the paper asset. the banks over extended themselves and made no plans for market downturn. Everything changes for the banks and actually individuals as well when there is no one willing to bid on what you are selling. mbs or individual home.....losing that flexibility of selling in reasonable time to at least cover the cost of the asset or home spells disaster. Our economy is suffering because the fluidity of these markets has disappeared. If some individuals default it is the job of the regulators and banks to make sure they can survive and prevent meltdown. The assets may not be worth zero by most people's opinion but in reality if no one will pay you for your asset, at least enough to cover the debt of that asset, then it is virtually worth $0. Even using a home as an example makes it clear. If you have a home most likely everyone will agree that it is not "worth" zero. However, it becomes toxic as soon as you need to move or sell if there is no market. It might be worth less than zero because it becomes an albatross around someones neck. It can start the snowball effect. This is where banks got stuck also. They never accounted for the lowering of asset values. They are supposed to be the back stop and maintain enough strength to withstand defaults. Mark to market is in place to protect the economy but when the government comes in and basically says to the banks that we are going to let you slide for a while even though your forecasting and reserves are inadequate, it prolongs the cycle and prevents mark to market rules from cleaning out the system quickly and efficiently, then it is virtually worth $0.