FED, Investors Want Money Back for MBS: Another Bailout Coming?

COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary

“setting the stage for a huge battle between mortgage holders like the government, hedge funds and other institutional investors on one side and the big banks on the other.”

Editor’s Note: The plot thickens. Even as the Fed and investors talk about wanting their money back on mortgage backed securities, they refer to themselves through the media as “mortgage holders.” What are they? If the Fed and the Investors are mortgage holders then none of the foreclosures are valid because none of them name the Fed or the Investors as the creditor. To quote from the Fordham Law review that can be found on this blog “Will the real party in interest please stand up?”

The real problem is that the buyers (FED and Investors) don’t really know what they bought. It’s embarrassing. Trillions of dollars were advanced but none of them know what they own or what rights they have. They only know they were sold based on a pack of lies. So while we don’t know whether the Fed’s demand is based upon some contractual right or simply fraud in misrepresenting the status, quality or warranty of ownership, we DO know that the Fed thinks they own these securities and that they think they are the mortgage holders. Same for the investors.

Considering the standard waiver that was contained in most synthetic instruments based upon the so-called mortgage bonds, it is likely that contractually nobody has a right to demand the buy-back. So they are sitting with some paper of dubious quality and dubious authenticity based upon representations that they took at face value from the same banks that were lying all along to everyone. And they have a tort action for damages because of the fraud.

The relevance to borrowers, besides the obviously obscured ownership situation, is that the MONEY was handled in a way that probably decouples the obligation from any note that was signed — an additional wrinkle to the decoupling of the note from the mortgage and the decoupling of the obligation from the mortgage. It looks like when the dust clears the only action against homeowners it going to be unjust enrichment, because under any reasonable application of black letter law, there is no mortgage, the note is all messed up so it can’t be used as evidence even if they come up with the original, and the obligation has been paid in full to the party or parties of record who pretend to be the beneficiaries of an encumbrance (mortgage) on the home, but are not owed any money.

This additional cloud on the title of tens of millions of homes, both foreclosed (and sold) or not, will require an act of God to correct, because the legislatures are all going to get conflicting signals from the mlutiple securitization parties each of whom has an interest adverse to anyone else.

There IS a solution to all of this that will save face for everyone who either has egg on their face or an omelet en route. The ONLY solution is to give up on the blame game and go for amnesty for everyone and then fix the problems in a practical way. But to get to a place where a solution is possible we have to accept first the fact that there are no mortgages, there are no notes and the obligations are hopelessly obscured. THEN using the reality of fair market values and the losses incurred by the innocents (investors, taxpayers, government agencies deprived of revenue and homeowners) develop a program that allocates the real pie into real pieces instead of illusory claims to a pie that doesn’t exist.

Financial innovation was the hallmark of Wall Street that got us into this mess because the umpires went on sabbatical. Financial innovation, with the umpires returned to the field, will get us out of this. Stop blaming borrowers and investors for getting fooled, and stop blaming Wall Street for being greedy salesman. We knew the consumer was ignorant of everything in closing documents before this mess and we knew that Wall Street was all about greed before all this started.  It doesn’t matter anymore. What matters is that we fix it and maybe, heaven forbid, learn from it.

October 19, 2010

Fed Wants Banks to Buy Back Some Bad Mortgages

By NELSON D. SCHWARTZ

To the long list of those picking fights with banks over bad mortgages, add the Federal Reserve.

Two years after the Fed bought billions of dollars in mortgage securities as part of the financial bailout, its New York arm is questioning the paperwork — and pressing banks to buy some of the investments back.

The Federal Reserve Bank of New York and several giant investment companies, including Pimco and BlackRock, have singled out Bank of America, which assembled more than $2 trillion of mortgage securities from 2004 to 2008.

Bank of America is already dealing with the fallout from the fight over whether foreclosures were handled properly. It insists that no foreclosures have been initiated in error, and on Monday announced it would resume the foreclosure process in 23 states where court approval is required to go ahead.

But while the human toll of the foreclosure crisis has grabbed the headlines, the fight over how these loans were created in the first place could last longer and ultimately cost the banks much, much more. And it is setting the stage for a huge battle between mortgage holders like the government, hedge funds and other institutional investors on one side and the big banks on the other.

“It’s very serious,” said Glenn Schorr, an analyst with Nomura Securities. “The numbers are all over the map.”

If the Fed and the investors succeed, it could cost Bank of America billions of dollars. On Wall Street and in bank boardrooms, the question of whether investors can force banks to buy back, or “put-back,” the bad mortgages to the banks that sold them is dominating the debate and worrying analysts, money managers and banking executives.

It also makes for some strange bedfellows. After all, it was the government that bailed out Bank of America — twice — during the financial crisis, the same government that includes the Fed.

And it is going to be a fight. On Tuesday, after watching its shares get pummeled again, Bank of America went on the offensive, vowing to “defend the interests of Bank of America shareholders,” and hire more lawyers.

“It’s loan by loan, and we have the resources to deploy in that kind of review,” said Brian T. Moynihan, Bank of America’s chief executive, on a conference call to discuss the bank’s results for the third quarter.

Although the bank turned in better results than expected, much of the call was given over to the put-back issue. “We have thousands of people who are willing to stand and look at these loans,” Mr. Moynihan told analysts. “We’d love never to talk about this again and put it behind us, but the right answer is to fight for it.”

The legal battle turns on the question of whether the banks properly represented the loans they put together into mortgage-backed securities when they sold them to investors. If the banks ignored evidence that the underlying mortgages did not conform to underwriting standards or they lacked the proper paperwork, the banks could be obligated to buy the troubled mortgages back.

The Federal Reserve Bank of New York and the other large investors are pressing Bank of America to buy back a portion of the $47 billion in mortgages it originated, most of which were assembled by Countrywide Financial just before the real estate boom turned to bust in 2005, 2006 and 2007.

Countrywide, which specialized in subprime mortgages, was acquired by Bank of America in July 2008.

“People did not think bondholders would be able to organize themselves, but they can,” said Kathy Patrick, a Houston lawyer who is leading the effort. “It’s a large amount of money but the principle is simple. When you promise to do something in an agreement, you should do it.” A letter from Ms. Patrick detailing the claims was obtained by The New York Times.

The danger posed by angry — or opportunistic — investors ‘putting-back’ mortgages to the banks is hardly limited to Bank of America. Other giants like Citigroup and JPMorgan Chase face similar claims, and last week JPMorgan set aside $1.3 billion just for legal costs, including put-backs.

JPMorgan has said it expects repurchases of mortgages to run at about $1 billion a year, but that expense should be covered by $3 billion it has earmarked specifically for put-backs.

At Bank of America, repurchases have been running at about half a billion dollars a quarter. The bank estimates total put-back claims stand at $12.9 billion, as of Sept. 30. In the third-quarter, Bank of America recorded an $872 million expense for put-backs.

Besides the major institutions, hedge funds like York Capital and Moore Capital have been jumping into the game recently, buying up bad debt in the hopes it will eventually be bought back, according to traders and money managers. Both funds declined to comment.

And smaller ones are sniffing around, hoping to ride the depressed securities higher as the fight over put-backs gathers steam.

“Any hedge fund with a distressed desk is contemplating this trade,” said one analyst who insisted on anonymity. “The idea of bottom-fishing vulture funds buying this stuff up for a nickel on the dollar so they can sue the banks to get 100 cents must be pretty odious for the Treasury, which bailed out the banks in the first place.”

Indeed, the group that includes the Fed is one of two coalitions that is gearing up for a fight with the banks.

Bill Frey, chief executive of Greenwich Financial Services, leads a group of investors that holds just under $600 billion worth of mortgage-backed securities.

But it is the recent controversy over foreclosures that has jump-started interest by pension funds, hedge funds and other players. “In the last two weeks, there has been a flood of new investors,” Mr. Frey said. “We haven’t even had a chance to do the arithmetic, that’s how fast they’re coming in.”

Besides all the lawyers that billions can buy, the banks have other weapons in their arsenal. Some hedge funds and other investors are nervous about challenging the banks too forcefully, because they trade with them daily.

There is risk too for the government, despite the Federal Reserve claims. If the banks are indeed forced to spend tens of billions to buy back securities, they could turn once again to the federal government for help.

Given the legal resources available to the banks, though, that is unlikely to happen quickly. And for now, broader conditions in the financial services are improving. On Wednesday, Bank of America reported that operating earnings in the third quarter hit $3.1 billion, in contrast to a loss a year ago.

A substantial portion of the profit gain came from the expectation of lower losses among credit card and mortgage borrowers, rather than new business, but the bank was able to recapture money it had earlier set aside. It released $1.8 billion from reserves, compared with a release of $1.45 billion in the second quarter.

On a noncash basis for the quarter, the bank reported a loss of $7.3 billion because of a $10.4 billion write-down in the value of its credit card unit, attributed to federal regulations that limit debit fees and other charges.

43 Responses

  1. Neil

    Much apologies. It’s not your staff removing posts.

    WordPress automatically doesn’t show the post, to anyone else, until it’s been moderated I assume.

    When the auto-cookie remover erases off the cookies, the post (temporarily) disappears even on the posters’ screens, even though it hasn’t been ‘moderated’ or seen by staff yet. A computer anomaly, not Livinglies’s.

    Figured out what is going on & much apologies.

    Much thanks for your website and love for free speech. You have built one heck of a engine of discussion here.

    America has a chance with discussion and action like this.

    Patrick

  2. Yeah PJ – we all know about property taxes. And, we all know government wants the foreclosures so the municipalities can collect their taxes. But, that does not solve the fraud – or situation.

  3. Interesting article & watch Mr.Whalen in the video, note his comments on “property taxes”.

    http://www.washingtonpost.com/wp-dyn/content/discussion/2010/10/19/DI2010101903081.html?nav=rss_nation/special

  4. It’s to scare people who are finally growing the balls to challenge foreclosures. COME ON PEOPLE REAL CHANGE WILL NOT COME FROM BANKS OR GOV (IT HASN’T SO FAR WHY WOULD THEY START NOW?) IT WILL NEED TO COME FROM US THE PEOPLE. THESE CROOKS (MOSTLY JEWISH OR CONTROLLED BY) ARE INHUMAN AND HAVE NO RIGHT TO TREAT US THE WAY THAT THEY ARE. I SAY WE RETALIATE WITH FORCE.

  5. DyingTruth
    research the Bilderberg Group-many top world leaders and bankers–explains who is behind this

  6. NO PJ–I Don’t Get It, Please explain why you are talking about bugs on this foreclosure blog? Are you an entomologist?

  7. I wonder who’s behind all this…
    “Once we squeeze all we can out of the United States, it can dry up and blow away.” –A comment made by Benjamin Netanyahu to Jonathan Pollard

  8. California Court Rules: MERS Can’t Foreclose, Citibank Can’t Collect
    Posted on July 21, 2010 by Foreclosureblues

    http://foreclosureblues.wordpress.com/2010/07/21/california-court-rules-mers-can%E2%80%99t-foreclose-citibank-can%E2%80%99t-collect/

  9. How much litigation can BofA afford? With the investors suing BofA and other banks, are we going to see any of these banks go under? It seems to me that more banks failing is inevitable. I certainly would like to see homeowners prevailing in their suits against the lenders. I am in that situation right now and hope to keep my home. I work for a small law firm, and we provide legal documents to homeowners to fight foreclosure and loan servicing issues. We provide a Quiet Title action to file with the court for a reasonable price. Then, we recommend that the client obtain an attorney to contiinue the legal action. By filing our document, the plaintiff saves a great deal of money. We charge $600 for the document (Quiet Title or Motion to Dismiss) depending on whether the plaintiff’s home is located in a judicial or nonjudicial state. We want to help people for a very reasonable cost. Burmese8@yahoo.com (864) 241-8602

  10. PJ-
    Working honey bees.-“working”?

    Jobless Thursday: We’re Still Jobless!
    The Market Ticker ® – Commentary on The Capital Markets
    Posted 2010-10-21 08:41
    by Karl Denninger
    in Employment
    Jobless Thursday: We’re Still Jobless!
    http://market-ticker.org/akcs-www?post=169843

  11. It’s called THE GSE BUSINESS MODEL. Each player in the Model is indemnified by the prior according to their contracts (mandatory in the GSE Guides (FNMA). It is a game of musical chairs leaving the taxpayers standing with the cost.

  12. PJ-corruption is massive, and it’s been going on for a long time right under our nose.
    Nothing shocks me any more.

    read this article:http://www.zerohedge.com/article/1-2-administrative-judges-commodity-futures-trading-commission-vowed-never-let-complainant-w

    The Commodity Futures Trading Commission (CFTC) is an important agency. It is largely responsible for regulating derivatives and other important instruments.

    It is supposed to prevent and prosecute fraud.

  13. PJ-
    Very interesting article. Can you please explain your thoughts on this?
    I live in NJ, but did not hear about this investigation.
    NJ has the highest property tax, and for those struggling to pay mortgage is having tougher time paying their property tax.

    Thank you
    ps.-same players, this whole mess is orchestrated by the big boys club !! The top 1%-Look up who the players are, and their background.

  14. From that same Huff Post article:

    [Donovan] ….added, however, that the administration is focused on ensuring future compliance, rather than on looking back to make sure homeowners and investors weren’t harmed during the reckless boom years. The administration is “committed to forcing institutions to change the way that they conduct business,” Obama’s top housing official said, “to make sure these problems don’t happen again.”

    So, that sounds like free pass to all of the frauds of the past, kind of like giving out millions of get out of jail free cards. These so called officials are proving themselves to be the bankers best friends.

    Michael Barr, asst. sect. treasury said:

    “This is not a problem for Secretary Donovan to fix,” Barr said. “This is a problem for the banks and servicers to fix. They can fix it as fast as they feel like it.”

    Wow, unfreakin’believable! Now that’s what I call a solid investigation right there. We’ll just turn our backs, not look into the past at all, and you guys just fix it whenever you get around to it.

    In the mean time, we’ll all be out on the streets pushing grocery carts back to our new homes underneath America’s bridges.

  15. Spin it like you will Abby/ in CA there aint’ no HONEY without a healtly woking Honey Bee… get it!!!

  16. HUD Secretary Shaun Donovan’s email is
    Secretary.Donovan@hud.gov

    His phone is 202-708-0417

    His Chief of Staff is Laurel Blatchford
    her phone is 202-708-2713

    We must let him know ‘all is NOT ok’.

    this refers to the Huffington Post article about Obama punts …see next

  17. CALL TO ACTION–WE NEED TO SET DONOVAN STRAIGHT–HE SAYS ‘all is well’ ??????

    Shahien Nasiripour
    shahien@huffingtonpost.com | HuffPost Reporting

    Arthur Delaney
    arthur@huffingtonpost.com | HuffPost Reporting

    Obama Team On Furor Over Foreclosures: ‘Problem For The Banks and Servicers To Fix’

    First Posted: 10-20-10 07:09 PM | Updated: 10-20-10 10:02 PM

    This story was updated at 10:00 p.m. ET to include additional information from a Treasury spokesman.

    U.S. Housing and Urban Development Secretary Shaun Donovan said Wednesday that the Obama administration will attempt to protect homeowners and police the kind of paperwork fraud that led the nation’s largest banks to temporarily halt foreclosures this month, but added that the administration had yet to find anything fundamentally flawed in how large banks securitized home loans or how they foreclosed on them.

    “Where any homeowner has been defrauded or denied the basic protections or rights they have under law, we will take actions to make sure the banks make them whole, and their rights will be protected and defended,” Donovan said at a Washington press briefing. “First and foremost, we are committed to accountability, so that everyone in the mortgage process — banks, mortgage servicers and other institutions — is following the law. If they have not followed the law, it’s our responsibility to make sure they’re held accountable.”

    He added, however, that the administration is focused on ensuring future compliance, rather than on looking back to make sure homeowners and investors weren’t harmed during the reckless boom years. The administration is “committed to forcing institutions to change the way that they conduct business,” Obama’s top housing official said, “to make sure these problems don’t happen again.”

    Donovan said HUD began a review earlier this year of the five largest mortgage companies it deals with on government-backed mortgages through the Federal Housing Administration. The review focuses on how the companies attempt to keep delinquent borrowers in their homes and how they transition homeowners who have been foreclosed on out of their homes.

    “We are very focused on making sure … steps are being taken early in the process is to keep people in their homes,” Donovan said.

    Within the foreclosure process, the probe examines how mortgage servicers — firms that collect payments from homeowners with a mortgage — handled the various affidavits employees were supposed to carefully review, sign and notarize in order to carry out a foreclosure in states that require a court’s approval, and how the firms performed the final stages of a foreclosure.
    Story continues below
    Advertisement

    Donovan said the administration had yet to complete its review, which began in May. Thus far, though, it had found “significant difference in the performance of servicers, and in particular, information that shows us there is not compliance with FHA rules and regulations around loss mitigation.” Donovan said the findings were limited to firms that deal with FHA loans. He declined to single out servicers. Other HUD officials likewise declined, despite repeated requests.

    When it came to the larger issue of what some legal experts describe as a fundamentally-flawed and fraud-ridden mortgage market — fraudulently-underwritten loans that passed through a maze of institutions that failed to properly maintain basic paperwork or follow legal procedures in bundling, securitizing and ultimately selling those mortgages to investors — Donovan said that, thus far, all is well.

    “The primary issue that’s been the focus of the moratoria is, is the foreclosure process being followed correctly? Are affidavits being filed correctly, and are notarizations and other things being done correctly? That is one set of issues,” he said. “A second set of issues — and we think this is very important — that we look more broadly at, ‘Are servicers taking steps to help keep people in their homes?'”

    The lesser, third issue that has been raised, Donovan said, is whether the process underlying the securitization of mortgages is “in question.”

    “So that’s the point that I’m trying to make, is that the issues that we are finding … that we’re focused on are, ‘Are there particular servicers that are not following these processes?'”

    Donovan added that “we have not found any evidence at this point of systemic issues in the underlying legal or other documents that have been reviewed.”

    That review, however, is fairly new. Experts in mortgage processes, housing law and bankruptcy say the practices employed by the big mortgage originators, securitizers and servicers is largely flawed, and that in some cases the basic process of how a loan came to be securitized and sold can be legitimately questioned. It’s unclear how hard the administration looked into the matter prior to Donovan’s diagnosis.

    Meanwhile, several state officials have called for a foreclosure moratorium. All 50 state attorneys general — Republicans and Democrats alike — are investigating servicer behavior. Many have vowed to get to the bottom of the mortgage mess, and at least one has already launched a lawsuit. The state attorneys general say the large mortgage companies may be engaging in “deceptive” practices, a legally loaded term. Some large servicers voluntarily halted foreclosure sales.

    Michael Barr, an assistant secretary at the Treasury Department and one of Timothy Geithner’s top lieutenants, offered a clarification at the press briefing. “When the word ‘systematic’ or ‘systemic’ is used in this context, I think Secretary Donovan was referring to the safety and soundness of the financial system, not saying that there couldn’t be significant real problems that affect real people in a very, very real way,” Barr said. “We are seeing that, and that is why we are stepping up to the plate and making sure that those problems get corrected.”

    The officials announced that on Oct. 6 the Treasury Department sent a letter to all mortgage servicers participating in the Obama administration’s Home Affordable Modification Program, reminding them that they must certify that all pre-foreclosure options, such as a modification or a short sale, have been exhausted before a servicer repossesses a home. Homeowner advocates have said that HAMP, under which more borrowers have been booted from their homes than have received permanent relief from their servicers, has shown that the companies rush to foreclose without first exhausting other options — an act directly contravening the administration’s promise to voters.

    “Treasury did have a robust and does have a robust compliance system in place,” Barr said of HAMP, which was the administration’s main effort to help three to four million strapped borrowers stay in their homes. “When we have found problems we have ordered them to be corrected and they have been corrected.”

    A government audit this year found that servicers routinely made mistakes, and that those mistakes may have improperly booted thousands of homeowners from the program.

    The Treasury Department now conducts quarterly “Second Look” reviews of HAMP servicers. The most recent review found that “fewer than 5% of loans sampled from large servicers were evaluated incorrectly by the servicer,” documents show. “Where applicable, servicers are required to forestall foreclosure sales and reevaluate these homeowners under HAMP guidelines.”

    Treasury has no procedures in place for sanctioning servicers under the program. To date, not a single fine has been levied.

    When pressed how much longer the government’s review would take, Donovan estimated another nine weeks, placing its completion the week before Christmas. Barr had a less committal answer.

    “This is not a problem for Secretary Donovan to fix,” Barr said. “This is a problem for the banks and servicers to fix. They can fix it as fast as they feel like it.”

    Treasury spokesman Steven Adamske later told The Huffington Post that Barr meant to convey that servicers can not simply hide behind an additional nine weeks of review before fixing their respective problems. Rather, Barr meant to say that servicers should act now, Adamske said in an e-mail.

  18. One more thing here from Bob G…

    “Local communities are desperate for tax revenue.”

    ‘Really Bob G….. why is that? Have they spent it, you know “vapor money”

    Jane & John Doe are out of work… retired people are eating cat food on toast… while local goverments are worried about their “tax revenue”, or do you mean pensions..

    FT is all I have to say… have worked for years helping retired people on a fixed income try to get their “assessment” reduced due to speculative assessments.. local property tax appeals have become a convoluted nightmare of back dated false appraisals for most… your assessment goes down… but the tax rate , via local government payment goes up… aint that nice… simply adjust the tax rate… there is no relief to reflect the fleecing of the “actual tax payer”.’

    Spin it like you will, there aint no Honey without a healty worker bee.

  19. Just for those that missed this statement and verbage “as soon as they “vest” from Bob G! Vest is the key word in Bob G’s post!

    “PJ – I read the article a couple of days ago.
    Local communities are desperate for tax revenue. They are selling off these tax liens as soon as they vest, and creating new law to do so. “

  20. So Bob G, it really is not that complicated after all! Just more pig’s drinking at the public tax payer’s trough. Thanks for making it so very clear!

  21. http://www.scribd.com/doc/39783189/Mortgage-Fraud-federal-Court-Indiana-bethany-Hood-Lenders-Processing-Services-Inc-Mers

    FEDERAL JUDGE IN INDIANA MAKES A STATEMENT ON THE SYBIL—,MULTIPLE PERSONALITIES OF MERS, AND LPS

  22. PJ – I read the article a couple of days ago.

    Local communities are desperate for tax revenue. They are selling off these tax liens as soon as they vest, and creating new law to do so. In my community it used to take 3 years before a property went to auction by the county. Now they are selling these liens off to private companies as soon as they become liens. They take 93 cents on the tax dollar. The purchasing company does not get to cherry pick. They must take the whole batch or none.

    Not sure where you’re going with this.

  23. PJ – follow up.

    At the local level, where these property tax issues get resolved, you’re dealing with locally appointed or elected judges. After 5 or 10 years, if they stay in office, they get vested in the state’s public pension system. That’s why they are not going to rock the boat on this one, tank their local govt’s property tax revenue, and not get their party’s nomination at reelection time.

    State judges usually are either appointed or elected for much longer periods. They however can be beholden to local major law firms for campaign contributions.

    Federal judges, with the exception of BK judges, are Article I judges pursuant to the U.S. Constitution. They are nominated by the President and then approved by the Senate. They have lifetime appointments. They don’t take any bullshit from parties or attorneys. They’ll sanction at the drop of a hat. And if you miss a filing date by 1 minute, you’re done.They have the responsibility of upholding the dignity and authority of a sovereign nation. Not so with state court judges, who countenance all sorts of nonsense from attorneys, and give all kinds of leeway.

    By the way, I meant to say “Too complicated” not “To complicated” in my prior post.

  24. Really Bob G, to complicated… it will go nowhere… think again… read it and then let us all know… remeber without the worker bee’s there aint no honey!

    http://axisoflogic.com/artman/publish/Article_61431.shtml

  25. PJ – Property Tax Issue…

    It’ll go nowhere. To complicated. Homeowners already have the remedy of a tax certiorari review. All they have to do is protest for next year. This is a yawner for the local courts. Sorry, but that’s how it’s gonna play out. Issue has absolutely no legs.

  26. Servicing executives were required by the Treasury Department to sign Sarbanes-Oxley-type agreements by Sept. 30 certifying they were in compliance with the Making Home Affordable Program. Some servicing executives initially balked at signing personal requirements akin to the Sarbanes-Oxley Act of 2002, which required that executives take personal responsibility for the accuracy and completeness of a company’s financial statements.

    The agreements make it a federal crime to provide false or misleading information to Fannie Mae or Freddie Mac.

    http://www.scribd.com/doc/39781579/Sarbanes-Oxley-May-Expose-Bank-Execs-to-Suits-in-Foreclosure-Doc-Mess-FAT-BOY-ATTORNEY-ED-TREDER

  27. Bob G, not quite sure which behavior you are referring to… but the “property tax” issue is about to hit the fan… big time.. have been talking about this for some time, as it has been legislated in quietly at the local and state level for sometime now. Try being the only person in the room bringing this up at the local “council meeting”… or better yet at a county or state “legislative session”….

    Now lets talk about all the people that were just going about their business living within their means, that may be a young family just starting out, or a person retired living on a fixed income that had their property “assessed” due to inflated “appraisals” /home sales within their community… bammmm the tax bill to the complacent “local government” explodes… No recourse for them of course since people are getting loans based on false appraisals.

    Granny, Grandpa or that young family is now faced with a property tax bill that exceeds their mortgage payment … plenty of them out there… all who worked or are working hard, who are being hung out to dry by complicate bloated local & state government’s.

  28. Something different :
    I just got a e-mail from my Attorney about the
    CHASE CREDIT CARD CLASS Action , where
    pay back was raised from 2 % to 5 % .

    More INFO : http://www.girardgibbs.com/Chase.asp

  29. I believe that we have to jail and dispossess of assets, to include those that support families, all those who were responsible for this outrageous disaster. Their families need to suffer as a result of the bad behavior of the heads of those families. We then need to prohibit them from ever being employed in the financial services industries, the lobby industries and the public service industries. They need to become Walmart greeters.

    You see, it’s important to instill an “institutional memory” in these folks, their families and those who read about these folks. If a man or woman even contemplates such heinous behavior, he/she will be forced to think about his family before he decides to ever attempt this kind of behavior.

  30. Neil

    Why does your staff remove my posts critical of the Federal Reserve?

    You post an article here about the Federal Reserve ‘holdings’, and then remove comments negative to the Federal Reserve of both mine and a friend’s.

    The private Federal Reserve counterfeiting is the very core of this MBS mess. Did you use to work for them?

    Hiding problems of the Federal Reserve paints an incomplete picture as to what is going on.

    It is the Federal Reserve, through the counterfeited ownership of the MBS, who are kicking us out of our houses.

    Please repost our comments. They are applicable to this very question you raise here.

    Thank you,

    Patrick

  31. http://www.scribd.com/doc/39774721/Onewest-Hires-Criminal-Lawyers-lenders-Talk-to-States-on-Foreclosure-Probes-Wsj
    BANKS LAWYER UP FOR CRIMINAL PROBES OR BEND OVER ONEWEST BANK FSB

  32. My fear. It aint gonna happen. But will the laws of our land hold up.

  33. Not satisfied with the gain’s of fraud, Hedge Funds and the TBTF banks set up shell companies to foreclose/confiscate properties for “over leveraged” state and local goverments on people that are behind on “property taxes”. The backside of “false appraisal’s” that fanned the housing bubble!

    http://axisoflogic.com/artman/publish/Article_61431.shtml

  34. Mr Garfield,

    The sad thing is that there are still people out there including many victims, judges, lawyers, local government officials that still think that this is a technical break down. The more pressure we apply the more outrageous, incongruous, incoherent, and rear kissing these people’s statements become.

    I tell my kids every day they live in the best country in the world, right now I do not think if I am lying to them or if I just have to tell them that we live in a nation of lies, theft, corruption and total agony for its citizens.

    I will not relent. As you were at one point so poignant to illustrate, the theft is huge. Every time we peel off another layer of this stinking onion, it gets worse, and our representatives just want to kick the can further.

    If the nation is broke then let us face it collectively.

    if the nation is broke then tell the truth the American people cannot be underestimated. We are hard working and innovative people we will find a way out.

    The definition of madness is to do the same thing every time expecting different results. They have foreclosed on 7,000,000 and the result is still the same. Am I the mad one or some one else?

  35. Not to mention the fact that we are still chasing a barefoot saudi (bin laeden) all over the world That is costing us who knows how many trillions?

  36. Frankielee

    Warren Buffet is a main investor in Wells Fargo and I think he is an advisor to The President Obama. Are things becoming clear now?

    What do you think the Chinese and Indians thinking?
    They must be salivating, like a doberman, rotweiller or pitbull who has not eaten in two days and are smelling fresh meat.

  37. TW

    The appraisals are 20% of the problem.

    The Fed counterfeited the non-worked trillions of electronic ghost ‘principle’, so these their banking buddies since 1998, could earn trillions of dollars in labored-for interest, on the fake electronic principle.

    The Fed is the number #1 to blame. Plus their umpiring and bailing it all out in Nov 2008 with $24.5 Trillion, shows they are not for the people.

    Goldman Sachs and the Fed are one in the same. Buying the buildings of the world with counterfeit money for 90 years, and then kicking everyone out, so they can now ‘rent’ at inflation adjusted increasing rents…. Inflation they created in the first place, by devaluing the currency 7% a year since 1913.

    Prosecute & liquidate the Fed, cancel the securitized mortgages, and start over.

    We can be a great county again, but not until.

  38. And then there’s this, from the Sect. of HUD today (NY TIMES):

    “….that the administration is much more concerned about improving the loan modification process than about any problems that may happen in the final stages of the foreclosure process.”

    This is an absolute outrage! It’s become impossible to identify the bad guys in this war. Oh wait, maybe they’re ALL bad guys! Welcome to the beginning of the 2nd American Revolution if these guys don’t start doing the job we pay them to do!

    Aid and abet the criminals by helping them to modify existing fraud? Now that’s a great plan of action. And forget about the “technicalities” that are, according to this clown, only showing up late in the foreclosure process. Like when the homeowner is initially served fraudulent foreclosure docs?

    I just got off the phone with an asst. AG. He told me that the banks are not talking with any of the AG’s across the country. He said that they wrote Wells and demanded that they stop foreclosure proceedings until they could look over their paperwork. Wells said, and I’m quoting the AG guy here, “You’ll never see our paperwork!”

    He went on to say that the AG’s across the land are cuffed until the feds do something dramatic. He told me he sent a nasty letter off to BOA on my behalf. I can already hear the BOA shredder.

    See you in tent city folks. I’ll be there just in time for Christmas.

  39. The FED wasn’t without blame either;

    http://www.ny.frb.org/banking/circulars_archive/11119.html

    Appraisal Standards for Federally Related Transactions

    December 18, 1998

    Circular No. 11119

    Amendment to Subpart G of Regulation Y

    To All Bank Holding Companies, and Others Concerned, in the Second Federal Reserve District:

    The Board of Governors of the Federal Reserve System has adopted an amendment, effective December 28, 1998, to Subpart G (Appraisal Standards for Federally Related Transactions) of its Regulation Y, to exempt any transaction involving the underwriting or dealing of mortgage-backed securities from the Board’s appraisal requirements. This amendment was originally proposed by the Board in December 1997 (see our Circular No. 11010).

    The amendment permits bank holding company subsidiaries engaged in underwriting and dealing in securities (so-called section 20 subsidiaries) to underwrite and deal in mortgage-backed securities without demonstrating that the loans underlying the securities are supported by appraisals at origination that meet the Board’s appraisal requirements.

    The Board’s official notice in this matter, as published in the Federal Register of November 27, is available as a file (pdf – 27kb). Questions may be directed, at this Bank, to Jim Keogh, Examining Officer, Advisory and Technical Services Department.

  40. Neil wrote:

    “stop blaming Wall Street for being greedy salesman. We knew the consumer was ignorant of everything in closing documents before this mess and we knew that Wall Street was all about greed before all this started. It doesn’t matter anymore. What matters is that we fix it and maybe, heaven forbid, learn from it.”

    Any possible fix MUST require orange jumpsuits and a lengthy visit to a federal pen. I simply don’t have it in me to stop blaming Wall street. They’ve exploded the world. We have to remove them from power, plain and simple. We’ll never ever be able to recover as long as they are in power. We had the chance before and Hank gave out IOUs instead of pink slips attached to a summons.

    I say throw them all in jail now, and work it out later. Much.

  41. I can’t agree with the amnesty for the biggest boys. They are Bernie Madoff 14,000 x 1. Too much moral hazard.

    The middle and lower ones – perhaps – in exchange for acknowledging the securitized Notes & Deeds of Trust are null. And no more counterfeiting non-worked-for money at the Federal Reserve, like they have for 90 inflationary years, buying up the world’s resources at interest. And no more government-protected monopolies to handle money for us.

    All of them can start from $0 again, with a non-mortgaged home…. Like they expect us to do.

  42. Here we go again!

    Banks are willing to allot BILLIONS of dollars in repurchases, new attorneys’ fees, and “thousands” of people to inspect and “correct” documents when they could simply give the “borrowers'” their homes, save money, and be done with it!

    It reminds me of the company that spends millions of dollars defending a case that’s worth 100k, when they could have settled for 100k or less and been done with it. They retreat licking their wounds like they are the injured parties. What a farce!

    I am not an accountant, attorney, or whatever…but none of this is adding up! It’s a bunch of complex circumvention designed to keep us all distracted while they find ways to maximize profits….over and over and over again…STOP the FRAUD already!!

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