Foreclosure defense and offense: Victims Stand UP!

I can tell you that most of the people using this blog site as a resource are male. As it turns out, though, the women who write in tend to be better informed at the start. One would think that this would give women the advantage. Yet the opposite is true, as this submission from JM shows:

As a woman I can tell you that single women, with or without kids, who own a home threatened by foreclosure often have a ‘victim’ mentality and will not fight like men.  Low self-esteem and passive responses are often a problem for these women.  Many of them had men in their lives at one time, and left the ‘financials’ to their spouse or male partner.  Other women are just beaten down emotionally trying to make ends meet with little or no emotional support.
It has been my experience in corporate America that the fear factor is very much in play for women to fight for their rights.  However, the women who drum up the confidence to achieve that courage to face their frustration and fears, are able to comprehend the intricacies of the problems of living paycheck to paycheck and trying to keep financially afloat.  They can wind up better prepared for their venture into fighting foreclosure than most men.  It’s just getting to that point is extremely difficult for most of women for the reasons stated above.
The only thing I would add is that the myth supporting the blaming of the victims in this mortgage meltdown is rising to the level of total belief in the minds of many of the victims. They are being told by mainstream media that this financial mess is all their fault for going after houses they couldn’t afford and taking loans they couldn’t repay. The facts seem to get buried under all the shouting and scaring of each other.
The facts are that most of the mortgages that are going bad were the concoction of people in the financial services industry. They even went so far as to hire 10,000 convicted felons in Florida to serve as “licensed mortgage brokers.” The most “upstanding” Wall Street people and bankers who are now in the trash barrel are there not because of some secret conspiracy amongst 20 million people borrowing money, but because they are human trash — because they lied, cheated, stole, and now wish to add insult to injury by taking the money and getting your house too. That’s right. The people foreclosing on your house have been paid in full and they are treating YOU as the trickster.
Picture a square room.
  • In one corner is you, a borrower who used to own a house that was paid off or nearly so until someone came knocking on your door and convinced you into taking a today only special that would make you rich. So now you THINK your house has a mortgage on it that is larger than the value of your house. But the truth is there is no mortgage and there is no note because the “lender” who gave you the loan was paid in full by someone else who had bigger and better plans for that signature of yours on those papers.
  • In the second corner is an investor who put up enough money to fund your loan and pay off a couple of dozen people in between.
  • In the remaining corners are the bank and the investment banker.
  • UP comes the FED from the middle of the room, sprinkles fairy money at the investment bankers, more fairy money at the bankers, and a little more at the investors. Mainstream press calls that a “bailout.” In fact it is a blow-out.
  • YOU are left holding the bag, unless you STAND UP FOR YOUR RIGHTS and declare your home is yours and not theirs.
Why the bailout/blowout? Because there is no mortgage, there is no note and in some cases, there isn’t even any property. So all the paper issued to investors on these mythical transactions is worthless and in this case Wall Street outdid itself. Tens of trillions of dollars were created and littered around the world. And now the world knows not to trust American finance because we don’t know how to police ourselves.
The current Paulson initiative is just another Iraq war resolution or Medicare Part D — sign now or else the world will end. Have you read it? It gives him complete authority to pay the money in any amount under any terms he deems fit without oversight of any governmental branch including his own. Do you smell something?

2 Responses

  1. Like a lot of folks who are completely flabbergasted by the Government’s repeated efforts to whitewash and gloss-over the all of the gross negligence, malpractice and criminality of this – The Worst Financial and Constitutional Crisis in Our Nation’s History – I decided last night I would look up some of what the guys and gals at the Federal Reserve, Treasury, SEC, and FDIC were up to between 1997 and 2007, and how it is they could not have seen any of this coming until apparently this week.

    I say apparently because the bureaucrats and sycophants are all maintaining that this whole fiasco is as big a surprise to them as it is to poor Mom-and-Pop getting foreclosed upon in their Golden Years.

    I know they are lying, and you know they are lying.

    So once again we will play the cat and mouse game of “who knew what and when” as the Crooks all disappear into retirement with their $Trillions of stolen loot, the Politicians will blowhard and achieve little or nothing, and the whole thing will fade away from the headlines with time and the advantage of a short American attention span.

    But for now, while every is watching and mad as hell, I am going to try my best to do my little part in exposing the hypocrisy and bald-faced lies that are being spewed around Washington DC and the mainstream press. I was on-line all morning and found so much material that I had to abandon my original post and choose just one document to focus on today – a complete summary of the 2002 Annual FDIC Seminar.

    This report, like the dozens of others I located by simply Googling “FDIC,” are available to the Public, to Elected and Appointed Officials, and to the mainstream press by simply doing the same thing I did, yet unsurprisingly the Fourth Estate has completely failed to do even the most remedial research while mass producing their “news” surrounding these watershed events. They simply parrot what the Crooks and Bureaucrats and overly simplified misinformation, then fill the dead air in between with a never ending list of questions they will never even try to answer, but use instead as a bridge to the all important commercial breaks.

    Somehow Anderson Cooper is just too busy in makeup or post-production to use a search engine and answer some the questions he likes to pose – or any of the media superstars for that matter.

    Thank God for that wonderful Series of Tubes we like to call the Internets.

    I now have the power to connect you to the information that magically remains just beyond the uneducated reach of John McCain – in that mysterious realm called cyberspace – of which john has heard tales.

    I have the power to speak to you about that which lays beyond the scope of what is practical to profess for Barack Obama – too restrained by the political cannon of vacuousness and rhetoric to bust out of the mold of the ordinary.

    The following is from an educated adumbration of the entire conference, including Keynote speakers and a summary of their presentations and crucial quotes form the players themselves. The conference was held in 2002 to primarily discuss Basil II and it’s implications for accounting in the Finance Industry, particularly the use of unproven new risk models and the exposure they represent.

    At this conference, most every problem that is plaguing Global Finance today is identified by presenters, discussed in detail by Industry and Regulatory “experts,” and dismissed by nearly all in attendance as the lure of unbridled growth and obscene profits overshadowed clear reason and sound evidence.

    Throughout, you will see that these problems were well articulated and understood at a point in time that well preceded the peak of the Housing Bubble, and certainly would have been in enough time to have averted this growing threat of a Global Depression.

    Amazingly, these people ignored their own warning and dismissed their own advice, and now they want us to believe this was all inevitable, and they never saw it coming.

    When they say they did not know, they are lying to you. While they are lying to you they are stealing your money. While they are stealing your money they are tying your hands. While they are tying your hands they are enslaving your children to foreign debt. While they are enslaving your children, they are destroying our country.

    A Blank Check? No Oversight? No Courts? No Indictments? You want to take my money, but you want to let the Crooks keep theirs?

    I am responsible, but I can not get a loan anymore. The Banks are irresponsible, and they get to bankrupt the Government? Bankrupt our Nation?

    Read this and email me – tell me why you are not out in the streets demanding Justice? Tell me why you are not enraged? All that money for Billionaires, and for the Citizens that built this Nation not a damn thing but the bill.

    This is Treason. You are being robbed. Please stand up for yourself and your progeny. Don’t let them destroy our Great Nation.

    “The Rise of Risk Management: Basel and Beyond July 31, 2002″ (I have added selective commentary that is not Italicized.)

    “Banks, brokerage firms, government sponsored enterprises (GSEs), and other financial institutions are becoming more complex and their risk management decisions must sufficiently address these complexities. Presently, regulators and financial institutions are addressing the importance of appropriate risk management policies and procedures by embracing a second Basel Capital Accord. “

    That is from the Introduction, they had already identified the number one problem before they even heard anyone speak at the conference. Amazing. This is 2002 here. It gets better:

    “Richard Thornburgh, Credit Suisse First Boston’s (CSFB) Vice Chairman of the Executive Board and Chief Financial Officer opened the discussion by citing the timeliness of the conference given the recent announcements from the Basel Committee on Banking Supervision just a few weeks earlier. He stated that CSFB places a premium on effective risk management practices and supports the ongoing efforts of the Basel community. While CSFB supports the Basel initiative, he noted that issues involving operational risk, pro-cyclicality, calibration, cost and complexity still concern the industry and stressed that the United States needs to be more vigilant to emphasize transparency. He went on to say that the industry relies on its regulators to ensure a fair and honest financial system in the United States, with the quality of supervision having played a key element in U.S. markets being the deepest, most liquid markets in the world.”

    “To be effective, senior management must play an active role in risk management. He (FDIC Chairman Donald Powell) discussed the FDIC’s interest in forming a close partnership with the industry in order to reach a mutual goal – a healthy, safe and sound banking industry. Regulators must be able to properly evaluate banks’ risk management practices and ensure that models produce appropriate results that provide viable options for the decision makers.”

    Remember that this is 2002, not last month. I know it reads like it all took place last month, but it really was 6 long years ago, way before we invaded Iraq, all of these issues were being “addressed.” Mind-blowing, is it not? There is more:

    “Chairman Powell stressed the need for transparency in financial markets. To that end, he announced that the FDIC would form a working group on enhanced disclosures by banks. He emphasized that the group would be comprised of both members of the financial services industry and regulators working together to recommend a disclosure policy around four principles: 1) to provide the markets access to important and timely information so investors can make sound decisions and impose market discipline; 2) to enhance the safety, soundness, and stability of the financial system; 3) to ensure that a level playing field on disclosure is maintained between U.S. banks and their overseas competitors; and 4) to ensure the proper and timely implementations of the proposed new Basel Accord.”

    Transparency and Quality Supervision, Principles, Market Discipline – brilliant! I wish I had their paychecks to produce these powerpoint regulations (heck, I just wish I had a job right now regardless of the size of the paycheck). Do you see now why I had to do a whole post on this one get together?

    The whole thing reads like it’s The Fox’s Outline to Successfully Running the Chicken Coup. Sure, management and sound business practices. Supervision. OK. Mmm Hmm. Check. Yep, got it.

    “Panel One: Risk Management in Complex Institutions: A Progress Report”

    “The first panel of the symposium highlighted current risk management practices at financial institutions. Thomas (Todd) Gibbons, Chief of Risk Management at The Bank of New York (BONY) began by discussing current issues in risk management. Mr. Gibbons believes there has been more development of sophisticated credit risk modeling, but that there is considerable room for advancement.He noted several improvements in BONY’s new risk management system. For example, the new system is more granular, meaning that risk is more finely assessed, with 18 grades of probability of default and 12 grades for estimated loss given default. Therefore, each loan can be categorized into one of 216 possible risks, allowing BONY to more accurately assess whether it is being adequately compensated for the risks that it assumes. In response to a question, Mr. Gibbons noted that while modeling was rightly assuming a more important role in risk management, the bank “does not manage to a model.” Overall, Mr. Gibbons stated that the industry was doing better with its risk management, but “we still have a long way to go.” “

    Last I checked BONY Mellon was doing pretty good – maybe there is something to that last bolded statement, that BONY does not manage to a model. This might be be the key to determining where underwriting and risk-based pricing broke down. I would appreciate any insight any of you readers may have on this point. Please comment on this at the end of the article.

    “The next panelist, Robert Dean, Senior Vice President of Market Risk Oversight Freddie Mac, focused his remarks on the measurement of market risk. Mr. Dean noted that the market has been more volatile in recent years, with the frequency of high stress, high volatility market environments increasing. Mr. Dean noted that value at risk (VaR) does not take into account many attributes of an unstable market. He suggested that the conventional VaR needs to be adapted to capture additional risks, including modeling error and liquidity risks. The goal is to try to calculate the unexpected loss or the potential for the market to be wrong, which is more likely to occur in high-stress environments. In response to a question, Mr. Dean acknowledged that Freddie Mac holds greater economic capital against similar portfolios than before.”

    They realized they were not accurately accounting for risk. They did nothing but continue expose themselves further. They ramped up new, risky exotics like ALT A, A- and EA. Insanity. How can they say they did not see it coming? Oh ya, they are lying their faces off. It gets even better still:

    “Next, Evan Picoult, Managing Director of Risk Methodologies and Analytics, Citigroupcited three crucial aspects of risk management. First, Mr. Picoult stressed the importance of having a consistent method for measuring risk and consistent policies for the management of risk across the firm. Next, he stated that the critical aspect of risk management is the integration of risk policies and practices into business decisions. The third aspect he noted concerns both the way risk measurement is structured and how functions are defined.Structural issues, such as whether risk management should be centralized or decentralized, should be considered. Mr. Picoult also mentioned that in some instances, perverse performance incentives caused excess risk to be taken by a bank. In his view, managers were rewarded for generating revenue without consideration for the risks they were taking.”

    Exactly! The policies in place at the lenders encouraged quantity over quality. They knew this is 2002, well before the flagrant abuses infested the industry to it’s core. They did nothing, and now they want that mark on you and your family. They want you to pay, to shut up, and to mind your own business. More still:

    “The final panelist was Robert Tortoriello, partner with Cleary, Gottlieb, Steen & Hamilton. Mr. Tortoriello highlighted the critical role for legal and compliance personnel by assisting management in identifying, monitoring, and mitigating various types of risks. The legal/compliance function must establish and implement a written compliance program relating to federal and state banking and securities law. He noted that the new Sarbanes-Oxley law only underscores the responsibility to disclose important developments, articulate accounting assumptions in an understandable way, properly analyze and execute off-balance sheet transactions, and properly disclose loans and other exposures to executive officers and directors.Finally, Mr. Tortoriello stressed the involvement of the legal and compliance functions in how a bank structures, discloses, and implements risk management practices.”

    Classic! I love it – accurate accounting assumptions to analyze off-balance sheet transactions. I think the entire idea of off-balance sheet accounting is itself a violation of any sort of accurate accounting methods. The reason they are off-books in the first place is because they are uber-risky and would make the books look like a minefield to investors. You can see they sampled a lot of the Koolaid they were serving.

    “Panel Two: The Road Ahead: Risk Management and the New Basel Accord”

    “Panel Two focused on risk management and the implications of the new proposed Basel Accord, also known as Basel II. The first panelist was William L. Rutledge, Executive Vice President for the Federal Reserve Bank of New York. Mr. Rutledge stated that under Basel II bank supervisors are emphasizing the need to understand and assess a bank’s internal processes, rather than focusing simply on a bank’s condition at one particular point in time. While Mr. Rutledge believes that competition and other factors would cause the quality of risk management to continue to rise, he feels that Basel II adds further encouragement to the improvement of risk management practices.The most significant advance in the new Accord is the application of an internal ratings-based (IRB) approach to credit risk. Mr. Rutledge stated that U.S. supervisors have embarked on an interagency pilot program that will help to prepare for the implementation of Basel II. The program is intended to help the regulators learn how to conduct internal ratings reviews and to evaluate banks’ current readiness to adopt an internal ratings-based approach to monitoring credit risk. Finally, Mr. Rutledge discussed the upcoming October 2002 launch of the Committee’s third “Quantitative Impact Study” (”QIS 3″), through which banks worldwide will estimate the effects of the proposed new rules on their capital levels.”

    From my perspective as an analyst working for the lenders I can tell you that increased competition led to the erosion of of risk management, it did not improve it. The desire for increased market share and originations revenue – not the conventional earnings from the long-term booked value of a loan – is what drove the erosion. The loans were sold off as fast as they were booked, and the sweatshop mentality developed out of Greed. And it infected everyone from the rooky LO to the Senior Management at the biggest lenders in the country.

    Next up is the first non-mentally disabled person to speak at the conference. Everyone must have taken a Hooker break or something and completely missed this speaker:

    “The next panelist, Karen Shaw Petrou, Managing Partner of Federal Financial Analytics, had a considerably different take on the appropriateness of the Basel initiative. Ms. Petrou said that she has significant concern with Basel II, not because the individual pieces of it are necessarily wrong but because “nobody understands how it all works together.” Ms. Petroustressed that reliance on models on which the Basel rules are based must be evaluated with tremendous caution and a careful look at the bottom line. She also highlighted problems with the operational risk rule. Reputation risk is not included in the Basel definition of operational risk for purposes of determining a capital requirement. As another weakness of the Basel II proposal, Ms. Petrou stressed the difficulty with relying on models. She suggested that the Basel Committee move forward only with the provisions of the rule on which there is widespread agreement and considerable evidence of immediate need.”

    Anyone know where Karen Shaw Petrou is today? I would love to hear her story. I bet voices of dissent like hers were not rewarded very well – what a bummer she must have seemed to all those privateers. Maybe she is out of work now like I am – we can give her Paulson’s job. She had a couple of allys too:

    “The next speaker was D. Wilson Ervin, Managing Director of Strategic Risk Managementwith CSFB. He also highlighted the problems with the proposed quantification of operational risk in Basel II, stressing that quantification of operational risk could create a false sense of security that operational risk had been measured, and thus controlled.He discussed another concern with the Basel initiative the pro-cyclicality of the rules. He noted that the new rules promote more risk sensitivity and assign higher capital to higher risk classes, which should encourage a better return on capital. However, he cautioned that bank capital tends to be hit hard during economic recessions and suggested that Basel II would have banks cut back on lending during a recession. Mr. Ervin concluded his remarks by saying that unless the current proposal is streamlined significantly, there would be a real risk that the mass of the new rules may outweigh the potential benefits.”

    And let’s get D. Wilson Ervin for Berneke’s job while we are at it. These are only two of four voices of reason at this event. Two more to follow. Too bad they did not listen to them then.

    A $Trillion Sorrys Everyone!

    “The final speaker on this panel was Adam Gilbert, Managing Director of Corporate Treasury Group at J.P. Morgan Chase & Co. Mr. Gilbert outlined five main benefits of Basel II: it will differentiate borrowers by internal or external ratings, it will create more incentives to hedge credit risk and to hedge operational risk, it will recognize more forms of collateral, it will factor correlation into the regulatory model in a much more explicit way by recognizing that products are different, and it will subject the banking industry to a more rigorous test to qualify for the advanced techniques. While Mr. Gilbert believes in the fundamentals of the Basel initiative, he also noted some potential problems. First, operational risk and disclosure requirements remain a concern. Next, he noted the implementation challenges for both supervisors and banks. For banks, he discussed the challenges of trying to meet the qualifying criteria for the IRB approach, including data capture and model input validation. For supervisors, Mr. Gilbert commented on the need to enhance resources to review bank readiness for implementation of Basel II.”

    But this guy probably was promoted to SVP. Reward the messanger for the message.

    “During the Panel Two question and answer period, the Federal Reserve’s Mr. Rutledge addressed the concern raised by other panelists that the system created could lead to uncertain outcomes on the safe and sound operations of a bank. He defined the basic concept of the revised Basel rules and described the lengthy process of consultations and calibrations to ensure that the system works effectively. “

    “Ken Thompson, Chief Executive Officer of Wachovia, was the luncheon keynote speaker at the symposium. In his remarks, he stated that the three primary concepts of Basel II – robust risk management, strong partnerships between financial institutions and regulators, and transparency of information – could not be more appropriate in today’s environment. Mr. Thompson noted the greater importance of risk management by discussing Wachovia’s approaches to traditional and non-traditional risks. First, he said that credit risk management has become more complex. He discussed how Wachovia has taken a conservative approach on credit risk based on the risk adjusted return oncapital. The second category of risk that Mr. Thompson discussed was the risk associated with a sizable merger. First Union and Wachovia merged almost one year ago, and to date Mr. Thompson reported that the bank was meeting or slightly exceeding its projected expense efficiencies for the year. One of the ways that the banks accomplished this feat was “to build risk management from the ground up.” The firm linked and coordinated the market, compliance, credit, and operational risks. Next, Mr. Thompson discussed reputation risk which he believes is one of the largest risks that banks face today. He noted that much of the goodwill that companies built over decades has been eliminated due to companies’ violation of trust of the American public. Mr. Thompson emphasized that adequate disclosures must become a best practice in corporate America.”

    This is the same guy who decided to buy World Savings at the very apex of the housing bubble – World savigs the poster-child for insane underwriting and total lack of risk management – isn’t he that guy? I am sure he will do just fine after we have to foot the bill for his poor management of a private company.

    “Panel Three: The Rise of Risk Management: Challenges for Policymakers “

    “The first speaker, Peter Fisher, Under Secretary of the Treasury for Domestic Finance, focused his remarks on the absence of credit culture. Mr. Fisher noted that the rise in “macro-volatility” has resulted in the development of the science of risk management which has coincided with a corresponding decline in the attention to the basics of credit analysis. He suggested that the current status of risk management and credit management is a natural consequence of today’s marketplace. Mr. Fisher noted that in a financial environment with large swings, macroeconomic events can be relatively more important than the particular circumstances of an individual borrower. He indicated that the recent lack of appropriate credit analysis in the corporate sector has created problems for the U.S financial sector. In closing, Mr. Fisher stressed that the challenge for policymakers over the next five years would be to take the models, capital requirements, and Basel initiatives and use them as a starting point for recreating a credit culture focused on credit analysis.”

    I have to keep reminding you – this is 2002. The next five he refers to puts us in 2007, the beginning of the credit crunch in earnest. Will somebody give this guy a medal or something?

    “The second speaker, Franklin Raines, Chairman and Chief Executive Officer of Fannie Maefocused his remarks on the current crisis in corporate governance. Mr. Raines reiterated the importance of restoring trust in American businesses by strengthening risk management and renewing confidence in public corporations. Mr. Raines views this era as a potential crisis period in corporate America, as capitalism and the selfish motives that underlie the system fall out of balance. He noted three problem areas that stand out: 1) compensation structures have fallen out of balance, 2) investors and managers have moved away from fundamentals, and 3) managers have denied responsibility for their actions. Mr. Raines noted that not only will new laws have to be enacted and enforced, but good corporate governance is essential to restore public confidence. He noted that Fannie Mae’s risk management practices are bolstered by seven major risk mitigants that may be helpful to other companies: 1) the continual onsite examination process of a financial regulator, 2) annual reviews by an independent external rating agency, 3) maintaining a minimum capital level, 4) operating under a risk based capital approach, 5) maintaining liquid assets to meet unexpected demands, 6) strengthening market discipline by issuing market-priced subordinated debt, and 7) ensuring sound financial disclosures. In the end, Mr. Raines stressed that risk management and risk mitigation must continue to be strengthened to restore public confidence in corporate America.”

    He certainly sounded promising. If his leadership was even half of his rhetoric, we might have saved hundreds of billions of dollars for something else – like education and health care.

    “The next speaker, Elizabeth McCaul, serves as the Superintendent of Banks with the State Banking Department of New York.Ms. McCaul believes that as regulators, “we have to share with our financial institutions some of the things that we’re seeing” in the areas of financial disclosure, financial transparency, and corporate governance.Ms. McCaul noted that as the financial services marketplace has evolved, financial institutions have become more sales driven and traditional client relationships have changed. She noted the lessons that were learned from banks’ losses in Long Term Capital Management where the importance of integrating market and credit risks were made clear. Ms. McCaul recognized the need “to build structures that get away from the siloing of risk analysis” and to integrate this analysis into the new financial services marketplace. In conclusion, Ms. McCaul articulated the importance of ethical decisions in the workplace and strong mentoring relationships as part of a training program to ensure that the best decisions are being made.”

    That was number four of the sane people who attended and presented. Not a single warning from any was heeded, and things only deteriorated more and more in all the specific areas of concern they outlined. Now the Fed and Treasury want us to believe they did not see this coming until it was too late. Pathetic. They think we are pathetic and stupid.

    “The final speaker was Randall Kroszner, who served on the President’s Council of Economic Advisors.Mr. Kroszner reaffirmed the important role of trust in the marketplace and the private market’s response to the issues of risk and corporate governance. He stated that striking the appropriate balance between government and market regulation is important, since government regulation will not work fully by itself.Ethics and individual behavior remain integral to the efficient functioning of the marketplace. Mr. Kroszner detailed President Bush’s actions to strengthen regulation, the steps taken by the SEC to hold corporate wrongdoers accountable, and the attempt of Basel II to better harness market forces. He believes that flexibility, innovation, and public disclosure are elements of a sound financial system. Mr. Kroszner stated that companies would seek to operate in appropriately regulated markets because of the confidence and trust that result. He added that third parties, such as rating agencies, also offer risk assessments of industries to promote corporate governance.Mr. Kroszner articulated that the meshing of public and private regulation is critical to ensure appropriate oversight responsibilities. A “one-size fits all” approach to regulation does not work well, and he stated that the new Basel Accord addresses this issue. “

    Ethics? Bush strengthened regulation? SEC held someone responsible? Oh, he was still under the impression that rating agencies were independent “third-parties” as opposed to paid cronies. Well, dismiss everything he said then because he either has no clue or was already a terrible liar.

    Now many of these people – well, mainly the ones who had no idea what they were talking about – are now making some of the decisions as to how to “fix” the very problems they created by ignoring the evidence and experts they paid to tell them better. Some of these characters are advising Presidential Candidates, and could end up in high profile positions in the next administration, like it’s all some big game of musical chairs.

    The truth is they made a lot of money, they destabilized the global economy, and they are now scrambling to cover their butts. Yet, even in the face of the worst financial crisis since the Great Depression, they are still maneuvering for ways to make another pile of money by being the ones who craft the solution.

    I heard this compared to “Financial Terrorism.” They created this problem and now threaten us with certain demise if we don’t pay them off with $Billions more. No strings attached.

    Do you really trust them to do what is best for you or your country? They never have so far.

    Symposium Agenda
    Speakers’ Biographies

    Related: Twist over at did a similar expose on an FDIC doc from 2004, and it’s more than worth a look: FDIC Underestimated The Risks Of Falling Home Prices


    “With so many lenders looking shaky these days, it brings up the question of how well prepared the FDIC is to deal with lender failures. That was a question that I asked, and posted on, back in July of 2006. I noted at the time that an FDIC paper written in 2004 showed only a mild concern with the risks of falling home prices, but a surprisingly positive attitude towards lenders encouraging borrowers to borrow the maximum amount possible. Apparently the wave of refinancing that occurred after interest rates lowered was nearing an end, and lenders were looking for new ways to increase profitability. I don’t believe the FDIC prepared adequately for a risk they didn’t see coming.”

    “In a fascinating report “Focus This Quarter” for Winter 2004, the FDIC looked in their crystal ball and saw 2006. It would have been comforting to see the FDIC accurately assess the difficulties, had they not appeared to encourage risky loan practices. The report specifically dealt with HELOC concerns (Home Equity Line of Credit), but addressed concerns with the mortgage industry in general as well.”

    Taken from “Your Mortgage or your Life” Blog



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