In a previous series Banker Jekyll will Hyde Your Money, we delved into the paperwork problems Bush II era bunkonomics had generated.Which led to what was originally called the "Troubled Asset Relief Program", or TARP (which caused no little political turmoil) has now evidently morphed into "Troubled Relief Asset Program", or TRAP, which may cause even more troubled waters:
... if a Wall Street bank were to discover that, due to shoddily executed paperwork, it still owns millions of defaulted mortgages that it thought it sold off years ago, it could face billions of dollars in unexpected losses. To put in perspective the potential problem, the mortgage-backed securities market totals approximately $7.6 trillion, so irregularities that affect even a small percentage of this market could have dramatic effects on bank balance sheets - potentially posing risks to the very financial stability that the Troubled Asset Relief Program was designed to protect.(Congressional Oversight Committee, see Full Report, PDF). In
other words the mortgage market was being managed by the plunder barons who were hiring the robber barons who were hiring unemployed McDonald's personnel to create the greatest McMortgage disaster in the nation's history.Expect a storm of propaganda a la the great gulf of truth storm that happened in the Deepwater Horizon ecological disaster.
Yes, this next financial disaster puts the banksters in the same Deepwater of red ink the life in the Gulf of Mexico experienced from the oilsters of MOMCOM, and therefore some folks are going to hurt for a long, long time:
Borrowers may be unable to determine whether they are sending their monthly payments to the right people. Judges may block any effort to foreclose, even in cases where borrowers have failed to make regular payments. Multiple banks may attempt to foreclose upon the same property. Borrowers who have already suffered foreclosure may seek to regain title to their homes and force any new owners to move out. Would-be buyers and sellers could find themselves in limbo, unable to know with any certainty whether they can safely buy or sell a home.(ibid, Congressional Oversight Committee Report, linked above, emphasis added). I can't help but repeat the Dredd Blog mantra that national propaganda from officialdom leads to demented dishonesty, which trickles down to those MOMCOM considers to be "the great unwashed".
Y.I.K.E.S.
ReplyDeleteGreat video link that explains "the Quantatative Easing II," which is the Fed's ham-handed way of dealing with the problem by flooding the market with even more "funny money," which is all going into the stock market to drive up asset prices as we speak. The great theft continues...
ReplyDeletehttp://www.creditwritedowns.com/2010/11/video-quantitative-easing-explained.html
The mortgages are still owned by the last bank to file an actual mortgage of record with the local government in which the mortgaged property is located. The mortgages that back the mortgage backed securities do not exist. Therefore the banks that own mortgage backed securities can't legally foreclose on properties even though they gave money for those mortgages to the banks that last held them. They didn't file in the localities as mortgage owners of record.
ReplyDeleteLiberal observor,
ReplyDeleteFor your benefit I added this to the post (for those who may not have had time to read the report):
"Borrowers may be unable to determine whether they are sending their monthly payments to the right people. Judges may block any effort to foreclose, even in cases where borrowers have failed to make regular payments. Multiple banks may attempt to foreclose upon the same property. Borrowers who have already suffered foreclosure may seek to regain title to their homes and force any new owners to move out. Would-be buyers and sellers could find themselves in limbo, unable to know with any certainty whether they can safely buy or sell a home."
This crime spree does not involve issues that potentially damage only financial / banking institutions, it is a reality that will take down many innocent people.
I have read depositions taken by several lawyers in several states, and there is no completely consistent behaviour which implicates only the securities pooled and sold based upon a single mortgage.
Note that even some of the basic required paperwork, e.g. new homes - first time sold, have paperwork illegalities and non-filings because one of the primary purposes was to avoid standard county filing fees for deeds, etc. (go to the Banker Jekyll... link in the first sentence of my post. It explains MERS in the context of this historical crime spree).
Additionally, states have different laws, complicating litigation in which many "home owners" (they hope) will not be able to hire a lawyer (have to litigate pro se).
Add to that the fact that this is a new development in mortgage law, even lawyers may struggle to deal with it to their client's advantage, since there is nothing in the past, recorded law, to easily cover it.
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