More Financial Reality.

Jesse's Café Américain: Chris Whalen: JPM and the Banks Have the MF Global Money And the Status Quo Is Protecting Them

2012-02-16T00:31:00.000-08:00

Jesse's Café Américain: Chris Whalen: JPM and the Banks Have the MF Global Money And the Status Quo Is Protecting Them

Credit Slips

2012-02-16T00:18:00.000-08:00

Financial Reality Revisited: Quelle Surprise! San Francisco Assessor Finds Pervasive Fraud in Foreclosure Exam (and Paul Jackson Defends His Meal Tickets Yet Again) « naked capitalism

2012-02-15T23:52:00.000-08:00

It is clear that there has been widespread abuse of mortgage recording procedures that are being ignored by everyone because no one is willing to stand up for the homeowners or to stand against the banks. It is tragic that the administration and the politicians of this country are unwilling to do the right thing. They are all turning their backs on the people every time a large dollar figure gets waved in front of their eyes as has been done with the bogus settlement with the banks and states AGs. Look at the information provide here from the New York Times and then commented on by Yves Smith of Naked Capitalism.

"So the latest report from San Francisco county should come as no surprise. From Gretchen Morgenson of the New York Times, emphasis ours:

An audit by San Francisco county officials of about 400 recent foreclosures there determined that almost all involved either legal violations or suspicious documentation, according to a report released Wednesday….

The improprieties range from the basic — a failure to warn borrowers that they were in default on their loans as required by law — to the arcane. For example, transfers of many loans in the foreclosure files were made by entities that had no right to assign them and institutions took back properties in auctions even though they had not proved ownership.

Yves here. I wish Morgenson had not deemed the latter abuses as “arcane”. They are actually pretty basic to lawyers – you can’t assign rights you don’t possess or sell what you don’t own. And these are concepts that laypeople can grasp readily. Back to the article, which makes clear the state attorney general Kamala Harris, who was doing a victory lap over the mortgage settlement, had nothing to do with this probe:

read the rest by following the link below Quelle Surprise! San Francisco Assessor Finds Pervasive Fraud in Foreclosure Exam (and Paul Jackson Defends His Meal Tickets Yet Again) « naked capitalism

Financial Reality Revisited: Quelle Surprise! San Francisco Assessor Finds Pervasive Fraud in Foreclosure Exam (and Paul Jackson Defends His Meal Tickets Yet Again) « naked capitalism

Financial Reality Revisited: New York Creates New Foreclosure Courts to Clear Backlog « naked capitalism

2012-02-15T15:49:00.000-08:00

Financial Rea lity Revisited: New York Creates New Foreclosure Courts to Clear Backlog « naked capitalism

The article mentions the fact that a New York court requirement implemented in October 2010, that required lawyers filing for foreclosures to certify that they had taken reasonable steps to verify the accuracy of the information in the filing. That in turn lowered the bar for sanctioning lawyers who failed bogus information or documents signed by parties with no personal knowledge. That led to a near-halt of new foreclosure actions, which speaks volumes as to the accuracy of prior filings. If the problems were mere “paperwork,” you might have seen a hiatus as banks implemented new procedures, but this points to far more basic problems with the banks’ ability to prove they have the right to foreclose on loans they service.

My skepticism relates to the banks’ intent. The assumption is that they want to foreclose and that the various complaints about foreclosure delays reflect their frustration. But this is like Bre’er Rabbit complaining about being thrown in the briar patch. Banks make money on attenuated foreclosures. Georgetown law professor Adam Levitin has written about how servicers put borrowers in a fee sweatbox. If nothing else, they continue to earn servicing fees even when a borrower is hopelessly delinquent, as well as late fees, which they finally recoup when the home is sold. So I’m not confident the banks are going to enter into these talks with an eye to modifying mortgages. As both Adam Levitin and attorney and securitization expert Tom Adams have said, servicers are not set up to do mods. It’s like a new loan underwriting and they don’t have the staff or the fee structures for that to make sense.

Nevertheless, there is one area where this effort could make a big difference, and that is in short sales. I’ve heard complaints from different states that banks won’t even respond to a short sale proposal. In LA, owners have to advertise “no short sale,” otherwise brokers won’t bring buyers to a viewing. This format will make it awfully difficult for a bank to reject a short sale offer that is in line with current market prices. So this new system will probably yield some benefit but I don’t expect it to be the remedy that its sponsors hope it will be.

Multifamily Buildings to Lead U.S. Construction Gains: Economy - Bloomberg

2012-02-15T02:56:00.000-08:00

Multifamily Buildings to Lead U.S. Construction Gains: Economy - Bloomberg

Foreclosure Defense Nationwide - Mortgage Foreclosure Help - Free Advice

2012-02-15T01:12:00.000-08:00

Foreclosure Defense Nationwide - Mortgage Foreclosure Help - Free Advice

2012-02-15T01:04:00.000-08:00

We have been receiving literally dozens of e-mails from homeowners inquiring as to what effect the bank settlements with various attorneys general will have on their foreclosure cases. Answer: NONE, for several reasons.

First, the Attorney General claims were just that: claims by attorneys general against the banks. Private litigants were not parties to the litigation, so they are not parties to any settlement. In fact, it has already been reported that the settlements have no effect on and do not preclude an individual pursuing legal relief against a lender.

Second, the settlements are not even finalized yet. They have to be filed in court, and once they are, the states which filed the lawsuits will be free to enact whatever procedures, processes, requirements, etc. they wish as to whether a homeowner “qualifies” for any settlement proceeds. As we all know from the loan mod scam, this process can take months or even years, and there are a million ways that a homeowner can be found to ultimately not “qualify”.

Third, and perhaps most revolting and insidious, is that several of the states have ALREADY announced that portions of the settlements will be diverted to state budgets. Specific instances include Wisconsin’s announcement that it plans to use $25.6 million of the settlement money to “plug holes in the state’s budget”, while Missouri has announced that it plans to put $40 million of the settlement money into the state’s “general fund”.

So, once again, the homeowners get nothing. In fact, it has been separately announced that because the attorney general lawsuits have been resolved that the banks will be ramping up individual foreclosures, obviously now because they will not have state governments and attorneys general examining what they do. Sad, but unfortunately true.

Foreclosure Defense Nationwide - Mortgage Foreclosure Help - Free Advice

"Fraud Digest" Put an end to MERS, but damage already done

2012-02-13T12:13:00.000-08:00

"Fraud Digest" Put an end to MERS, but damage already done

Fraud Digest

2012-02-11T04:07:00.000-08:00

Fraud Digest

Financial Reality Revisited: The Subprime Shakeout

2012-02-11T03:47:00.000-08:00

Is this settlement for the people or for the banksters? It really is not for the people at all and it is for the banks and the politicians trying to buy votes by pretending they are actually doing something to ease the housing crisis and to help the economy. More propaganda and ridiculous claims that amounts to next to nothing for those who have suffered most from the criminal behavior of the banks.

This is just another way to give the banks a handout and a free pass. The banks are dictating policy because they have the money that is used to manipulate the politician puppets.

Financial Reality Revisited: The Subprime Shakeout

Financial Reality Revisited: Mirabile Dictu! Missouri Attorney General Files Criminal Lawsuit on Robosiging - Digg

2012-02-07T01:51:00.000-08:00

Financial Reality Revisited: Mirabile Dictu! Missouri Attorney General Files Criminal Lawsuit on Robosiging - Digg

Moody's cuts BofA, Wells Fargo and Citi ratings

2011-09-21T16:55:00.000-07:00

Moody's cuts BofA, Wells Fargo and Citi ratings

Creation of the Kleptocracy killing off capitalism

2011-08-17T08:38:00.000-07:00

Creation of the Kleptocracy and good bye to Free Market Capitalism.

We are going through a very difficult time. We have suffered a major recession that on paper looked more like a depression. We are on the verge of falling into another recession. The possibility of falling into another recession means that we are going on the assumption that we were delivered from the first one. This is debatable but regardless of what our opinion is on the economy, we have had a difficult run. If you are in your 40s you are living through something never before seen in your lifetime. We have seen the standard of living for the current generation fall below that of the previous generation for the first time since WWII. If you were in high school in the 80s and finishing college in the 90’s you probably had a very good beginning to your career.
If you survived the dot com bubble and were able to start a business, invest in the right stocks, or find a good job you likely had your life on the right track for nearly 20 years. You did all the right things, read all the right books and invested for the long term. Everything you read and researched on the stock market and real estate told you to invest for the long term. The graphs and the pie charts all showed the best way to have a secure retirement was to invest in the long term and not worry.

Kleptocracy as defined by Wikipedia:

Kleptocracy, alternatively cleptocracy or kleptarchy, from Ancient Greek: κλέπτης (thief) and κράτος (rule), is a term applied to a government subject to control fraud that takes advantage of governmental corruption to extend the personal wealth and political power of government officials and the ruling class (collectively, kleptocrats), via the embezzlement of state funds at the expense of the wider population, sometimes without even the pretense of honest service.

As the economy grew, manipulations by the government, the banks and the corporate Kleptocracy hypnotized everyone into believing we were safe in our investments. We could take any book off the shelf in the library or book store and see that real estate has never gone down if we took date from the 50 states. The trend of the housing market was always increasing. We had all the evidence to believe that the safest, most stable investment was our home or rental property. Americans took pride in making their monthly payments and meeting their obligations to the banks and lenders. What was interesting was that people remained committed to making payments to the banks even after the savings and loan scandals of the 70’s, 80’s and 90’

We were given a wake up call that should have increased our suspicion of the mortgage banking, banking and lending industry. However, thanks to government coming to the rescue, and an unsuspicious media, the banks were given a free pass. This free pass seemed to make the banks and lending institutions even more brazen and fearless. The banking industry took over the economy and bought off the entire government as well.

This all sounds like conspiracy theory but if we look more closely at what has happened to our form of “capitalism and free markets” we can see that we have given up on a free market economy and allowed corporate America to pillage Main Street from their ivory towers of Wall Street. How else could we explain the unquestioned fleecing of county and state governments with the magical creation of the Mortgage Electronic Registration System? The MERS system was instituted with no fan fare, scrutiny or act of law. It was a drastic change to one of the founding principals of our country. The registration of property and chain of title has been one of the reasons for our successful economy. How could the corporate banks completely ignore the system in place and create a new one without any vote of the people or legal standing?

They did it because the politicians are in bed with the banks. Our so called representatives have been bought and paid for many times over. They were all fell to their enormous desire for power and money. The banks bought politicians easily and created a pseudo power system through campaign donations and strategic appropriations against their enemies. They were smart on one level however, by giving the country a taste of super prosperity in the real estate markets so they could continue their bidding to put all the pieces in place to plunder trillions of dollars from the American middle class. Who would question what the banks were doing when so many people were making easy money? Who would question the banking system when banks were freely lending out capital at great rates?

No one would question the banks behind the scenes manipulations during prosperity. The late 1990’s and the early 2000’s were the banks final push to destroy the economy and redistribute trillions of dollars out of the hands of hard working Americans and place it in the fat bank accounts of the Wall Street and D.C. criminal elite. There is no question there was a method to their madness. Anyone who thinks this was all a big accident is gravely mistaken.

Despite the hype and cheerleading of the President and Congressional officials angling for re-election we are no where near the end of this recession or recession like economy. The foundation of the country is the financial system. This system must thrive for the country to prosper now that we have little manufacturing left to generate the dollars needed to increase the velocity of money. The only reason we were able to have a stable system of banking was because of a stable housing market. The home mortgage gave the banks a very high yielding, highly profitable and highly consistent and stable source of income. The banks were taking little or no risk on home mortgages. If you factor in the high percentage of paying customers with the reality that the collateral backing these mortgages were valued well in excess of the note. The unbeatable combination of homeowners paying down mortgages while the collateral securing the notes continued to increase, lined the coffers of the banks with unlimited amounts of money.

Lets not forget that a large percentage of mortgages were insured by the government and were sold quickly by the originator at huge, fast profits made the banking model perform a lot like a Ponzi Scheme. Of course it was all done under the vale of “free market” capitalism but it was a complete scam backed 100% by the full faith and credit of the US Government. Our government was complicit in the devastation of the economy and the destruction of the retirement accounts of millions of Americans.

What does that leave for the next generation? It leaves a very different world for our children and grandchildren. It also leaves a very treacherous and winding road back to prosperity for the 40 something demographic. Our economy has ground to a halt and we are not seeing any recovery since the economic meltdown that started over 5 years ago. We have seen the American dream that has been the guiding light of average Americans who had the freedom to work hard and persistently and expect to get ahead by the time they retired. The arrogance of power has taken our country to the abyss. Those in power are trying so hard to convince the rest of us that we are not hanging over the edge of oblivion with our lifeline working the hold loose as we wait for some real evidence that were are not heading straight down.