WATCH DYLAN RATIGAN TODAY MSNBC: But Dylan still doesn’t quite get it

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

“When you rob the bank you pay for the crime. When you ARE the Bank, you still do the time.”

It’s good that Dylan is highlighting the mortgage mess. He had Matt Weidner on yesterday who did his best in answering a bad question. Ratigan asked Matt why homeowners shouldn’t get off on a technicality when criminals do that all the time. Weidner correctly pointed out that this was about real property rights and stability of the real estate market as a whole and the entire economy without saying that Ratigan had asked the wrong question. He was diplomatic since he was being given a national audience and he didn’t want to offend the host of the show. And getting into it with Dylan over the question would have diluted Weidner’s message so he wisely stuck to his point.

It’s true that there are widespread “technical” deficiencies. Starting with the solicitation of mortgage business from consumers, to the execution of questionable documents and the entirely absent documentation supporting what we all thought was securitization of loans, the deficiencies and defects are many. It is increasingly apparent that the pools are empty and can’t be filled which means the investors received nothing for their purchase of RMBS except occasional distributions that were not the subject of a proper accounting or payments. And it is equally true that those deficiencies are not the fault of the borrower and they are entirely the fault of whoever put these documents together, whoever was supposed to record them, and whoever decided to dispense with legal transfers of loans, notes, mortgages, receivables and obligations.

What is bothering the megabanks now, and increasingly those financial and economic analysts who are finally doing the due diligence that should have been done 10-15 years ago as this scheme was being put together, is not the technical deficiencies that could be papered over or corrected, but the fundamental flaws in the basis of the transactions which were, for the most part, fraudulent. We don’t need new laws to invalidate these mortgages and notes and we don’t need new laws to offset the amount of the obligation. Those laws are already on the books. And THAT is the problem — not some technicality.

The fundamental problem facing the country is that some 60 million+ real estate transactions are fatally defective, meaning they don’t comply with the laws governing transfers of real property. That means we not only have a credit crisis, we have a title crisis that is already screwing up the entire real estate market — both residential and commercial — as well as the financial markets. Weidner explained this quite well but it was not truly understood by Ratigan and he and Weidner are basically on the same side of this issue. This is not some problem that can be resolved by allowing the foreclosures to proceed, because there is no right to foreclose under any scenario and there might not be any obligation left after set-offs and deductions. So the lesson for all lawyers and all homeowners is that if you are looking for relief, you need to make your points short and sweet and not lengthy analyses like the articles on this blog.

Those 60+ million transactions must be settled and we are not headed in any direction yet that will do so. The only way they are going to be resolved is case by case as each one ends up in court or homeowners who have long since sold or been foreclosed out of their property are suddenly asked to sign off on some paper that when the smoke clears admits that they still own the property and could demand money for their signature or even demand the current residents move  out as they take possession of the property they thought they had sold or lost.

This was intentionally created by a financial industry that was interested in keeping its options open so they  could move around the receivables and, they thought, the right to enforce those receivables to whomever they designated. In their heads they were the ultimate arbiters on the law of real property, commercial transactions and negotiable instruments. That is how it was when societies were governed by the rule of men but in our society we are governed by the rule of law. If you break it and you can’t fix it you pay for it. The banks broke this system and now they must take responsibility for the corrections required in a manner that affects all of the 60+ million transactions they so gleefully spawned in the first place.

The simple truth is that the fraud backfired and now the homeowners are sitting with all the power. The investors are coming in droves claiming their money back because they recognize this simple fact. And the perpetrators of the fraud are trying to get the law changed to somehow legalize what they did because, understandably, they don’t want to be liable for trillions of dollars, and they don’t want their licenses revoked and the individuals don’t want to  go to jail. When you rob the bank you pay for the crime. When you ARE the Bank, you still do the time.

19 Responses

  1. David,

    I really suspect that CountryWide did not transfer the notes, regardless of whether the were neg arm or even fixed rate. I know even fixed rate subprime CW loans are showing up with paperwork filed in the County Recorder’s office just this year. The actual trust pool closed in 2005.

  2. No doubt that the banks and the investment bankers recklessly allowed the proliferation of the uncertainties to conceal a number of evils: air-loans, undeserved premiums for “sales” of MBS in excess of the principal amount of home-loans [notes] that “backed” the MBS, enable double and triple dipping of investment recoveries via swaps, insurance and bailouts—and keep the fees rolling in. At the same time the “mess” enabled bank-oriented thedge-fund types to selectively buy up distressed MBS that the insiders knew would payout. WIN WIN WIN WIN. Too many WINS here for the one group of insiders in the banking system for it all to have occurred absent coordinated efforts. It was no accident that loan lists were not filed on negative amortization loans placed in purported trusts that did not really exist as claimed.
    No accident that the securitization documents typically REQUIRE the servicer to force the homeowner into default simply to ask for a few months grace while searching for a new job. ETC ETC-how many coincidences are we expected to believe?

    But in so far as the expectation of truth and justice to prevail—forget it. Look to the Irish problem. The Irish “bank” problem is a vivid example of rape and pillage by London bankers. They induced Irish banks that were influenced and controlled by Brit banks to make horrible loans and other financial deals that were designed to fail. Like was done to AIG.

    Nine times Irish GNP—this was not Irish home loans thank you very much.. Then the very same Brit bankers through EU and IMF demand that the Irish govt backstop this foreign debt. Then EU and IMF further demand that the Irish people suffer huge economic punshment in order to get the loans to pay off the Brit banks that put them in the box on the foreign loans in the 1st place. The Irish people know the evils of the Brits better than anyone–organized genocide was perpetrated against the Irish for centuries by these people. The real question is will the Irish people tolerate the re-establishment of Brit colonialism? I doubt it–and thus fall the dominoes–The Irish govt will be dumped. The EU /Brit demands dumped. Irish default is a virtual certainty.

    Ireland is a nation that is being foreclosed as we are one by one. The banks are now swee[ping up entire nations.

  3. We have to remember an important caveat–that when speaking to a national audience, throwing around the legalese we do on these forums and explaining the complexity of the issue in-depth would take up more than the whole cable news hour on these types of shows. Anyone who goes on, as Weidner did, has a 10-15 minute window to succinctly describe just the tip of the iceberg in this whole mess. With that in mind, Weidner did well despite the limitations of the medium of communication.

    Not sure if anyone mentioned it yet but Rachel Maddow Show also did a few sections on this.

    One here: http://www.msnbc.msn.com/id/26315908/vp/40346655#40346655

    and another on “The Last Word” about the Bankruptcy section about it with an attorney in Alabama.

    http://video.tvguide.com/The+Last+Word/David+vs.+Goliath+of+the+banking+industry/6669493

    I’m just glad to see this stuff getting some airplay finally.

  4. You are getting close to figuring this mess out. It’s
    called :

    “THE GSE BUSINESS MODEL”.

    Unless you include the fact that without the government guarantee on day one—-there would be no competitive advantage dealt to the GSEs which means NO MORTGAGE MESS.

    Imagine Bernie Madoff initially going before congress seeking a government guarantee on HIS “Business Model”.

    Let us smell the coffee.

  5. There is something strange going on here.

    http://foreclosureblues.wordpress.com/2010/11/23/michael-barr%E2%80%93liaison-on-foreclosure-fraud-investigation%E2%80%93leaves-treasury/

    Just one week ago, Iowa’s Attorney General Tom Miller told Chris Dodd that Assistant Secretary of the Treasury for Financial Institutions Michael Barr was the key person from Treasury working with the Attorneys General investigation into foreclosure fraud.

    Miller: We haven’t had any contact with the [Financial Stability Oversight Council]. We have had repeated contact with the Department of the Treasury, with Assistant Secretary Michael Barr and his staff. We’ve developed a terrific ongoing relationship with them. We talk about these issues and try and help and support each other on these issues. So we’ve had a lot of discussions with Treasury but not with that particular Council.

    That’s funny. Because Barr is leaving Treasury. Imminently.

    Diana Farrell, deputy director of President Barack Obama’s National Economic Council, and Assistant Treasury Secretary Michael Barr are leaving the administration, adding to the turnover in the ranks of the White House economic team that worked on the government’s response to the worst financial crisis in more than 70 years.

    Farrell will leave by the end of the year and Barr’s last day at Treasury will be Dec. 3. Both played key roles in shaping Obama’s financial regulatory overhaul plan, which was signed into law in July.

    [snip]

    Treasury spokesman Steve Adamske said Barr would continue his academic career at the University of Michigan in Ann Arbor.

    (Note, Barr is not currently listed as teaching next semester.)

    In addition to working with the Attorneys General “investigating” the banksters’ foreclosure fraud, Barr had been considered a leading candidate–after Elizabeth Warren–to lead the Consumer Finance Protection Board and/or the Office of the Comptroller of the Currency (the agency that regulates the big banks) and (as the Bloomberg piece makes clear) had a key role in Dodd-Frank.

    As you recall, the same day that Tom Miller told Dodd he was working closely with Barr, at almost the moment when Miller said the investigation would take months, sources that sounded an awful lot like the banks were suggesting a deal on the “settlement” ending the “investigation” was close. But even that article didn’t seem to suggest it’d be done by December 3.

    Also note, the Financial Stability Oversight Council–the entity set up by Dodd-Frank to stave off systemic crises–meets on Tuesday; they promise to address efforts so far on the foreclosure fraud problem.

    The group will provide an update on what various agencies are doing to investigate widespread paperwork problems that have called into question millions of foreclosures across the country, as well as how regulators are coordinating with the Justice Department, state attorneys general and other officials scrutinizing the mess.

    Mind you, I don’t know what Barr’s departure means. But I find it notable that–after recently being floated for key positions going forward and given his role in efforts to respond to the foreclosure mess–he is leaving now.

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  6. New MSCNBC video regardng foreclosure

    http://www.msnbc.msn.com/id/3096434/vp/40342863%2340342863#40342863

  7. http://foreclosureblues.wordpress.com/2010/11/23/wrongful-foreclosures-how-the-fdcpa-can-help-you/

    Wrongful Foreclosures — How The FDCPA Can Help You
    Posted on November 23, 2010 by Foreclosureblues
    Alabama Wrongful Foreclosures — How The FDCPA Can Help You
    Today, November 23, 2010, 4 hours ago | John Watts & M. Stan HerringGo to full article

    How Does The FDCPA Apply To Foreclosures?

    The Fair Debt Collection Practices Act (FDCPA) is a powerful federal law that applies to debt collectors. So how is this relevant to foreclosures? If the mortgage servicer, or the owner, or the foreclosure lawyer are debt collectors under the FDCPA, and if you are dealing with your personal residence, then the FDCPA may apply and give you some powerful protection and tools to fight back against wrongful foreclosures.

    Let’s take a look at this to see how it works.

    Who Is A Debt Collector?
    Any company that is assigned or that buys a debt that is in default the first time the company obtains the debt. This means that if your mortgage servicer (BAC Home Loan, Wells Fargo, Chase, Green Tree, etc) obtained the loan after it was in default (i.e. you were late), then normally it will be considered a debt collector.

    If the alleged “owner” of the loan (a trustee such as Bank of New York, Deutsche Bank, etc) obtained the loan after it was in default – quite common in Alabama foreclosure cases – then the owner is considered a debt collector.

    If the foreclosure lawfirm (Sirote & Permutt, etc) sends you a letter demanding payment of the loan, then it normally will be considered a debt collector also.

    What Does It Matter If A Company Is A “Debt Collector”?
    If the company you are dealing with is a debt collector, several important things happen.

    First, the company cannot in any way lie or misrepresent anything to you. Now, Alabama law prohibits this as well but the FDCPA is not as strict as Alabama state law and the damages can be better.

    Second, the company cannot threaten you with anything that it either cannot, or will not, actually do. So if the company threatens you with a foreclosure when it has no legal right to do so, this violates the FDCPA.

    Third, there can be no bogus fees or charges or expenses added to what you owe or else the FDCPA is violated. We often see this with the inspection fees, BPO fees, and improper crediting of payments resulting in late fees.

    Fourth, all communications to you have to have the warning that the communication (letter, call, email, etc) is from a “debt collector” and that this is an “attempt to collect a debt.”

    Fifth, the debt collector cannot report false or inaccurate credit information about you to the credit reporting agencies such as Equifax, Experian, Innovis or Trans Union.

    Finally, the FDCPA prohibits debt collectors from harassing you or treating you unfairly. They can still collect, but they can’t mistreat you.

    OK, So The FDCPA Applies And Prohibts Certain Practices – So What?
    Here’s what you get when the FDCPA applies:

    1. Normally it is a strict liability law which means you don’t have to prove intent or negligence to show a violation . . . instead you simply show the violation. There are exceptions – such as misrepresentation and false credit reporting but for the most part the FDCPA is a strict liability statute.

    2. You can receive up to $1000 in “statutory damages” even if you do not have any actual damages. In a foreclosure case this would be rare to not have actual damages but you don’t have to have them.

    3. You can receive your full “actual damages” – what the jury decides the violation of the FDCPA caused you.

    4. Your lawyer can receive attorney fees and litigation expenses which can increase the amount of any settlement or verdict that you keep.

    How Does The Defendant Paying Legal Fees At The End Of The Case Help Me Save My Home?
    It helps you because it makes the Defendant/Mortgage Company think twice about dragging out the litigation because it knows that if it loses, it will have to pay your attorney for the time spent on the case. At the time of this writing, our hourly rate according to Federal Judges in Alabama is $350 per hour. So a mortgage company takes a big chance if it wants to drag out litigation. A case we recently tried under the FDCPA that was much easier and less complicated than a foreclosure case resulted in $125,000 in fees by the end of the four day trial.

    The mortgage company has to seriously think about this before deciding to not settle in a reasonable manner when it knows it has been caught violating the law.

    What’s The Bottom Line To The FDCPA Applying In Foreclosure Cases?
    Mortgage companies are subject to a stricter law than Alabama law. Mortgage companies face a much higher liability when you consider the FDCPA fee shifting statute.

    This adds up to the mortgage company normally being more willing to try to make their wrongs right as it is in the mortgage company’s financial self interest to resolve these cases earlier, rather than fighting them all the way to trial.

    And if the mortgage company will not resolve the case when it has been caught doing wrong? With the FDCPA you have the best chance to recover your damages and maybe even have your lawyer fees paid. By the mortgage company. Now that is poetic justice….

    Contact Us If You Have Questions About Your Alabama Foreclosure Situation
    We are sorry but if you live outside of Alabama we cannot speak with you. We have so many Alabama citizens that need help that we have to focus our time on individual consumers that we can help as we are not licensed outside of Alabama.

    If you live in Alabama and want a brief phone conversation or if you want to set up a formal consultation in our office, please contact us through this website or through our blog here or by picking up the phone and calling us at 205-879-2447.

  8. […] This post was mentioned on Twitter by i8 wamu, kim thomas. kim thomas said: WATCH DYLAN RATIGAN TODAY MSNBC: But Dylan still doesn't quite get it : http://t.co/hxoywJm […]

  9. ANONYMOUS,

    You areo right about the inspection needed.

  10. Some Inspiration: Remember why we fight !

  11. Lucy

    Agree – heard the same today.

    Neil

    Great post.

    What needs to be done is examination of all SPV trustee “ledgers” and Bank accounting. We need investigators and regulators that are will to go in and reconcile bank accounting with default loan foreclosure accounting. There needs to be disclosure of insurance and derivative contracts.
    It is not enough to simply do a “stress test” on the banks.

    The problem is that the regulators/investigators do not want to disrupt the deregulated financial market of derivatives/insurance. And, lobbyists have fought hard to – keep things as is.

    As someone else pointed out here – (may have been Neil) – the choice is limited to (paraphrase)- 1) continue to protect and save the banks 2) expose the fraud and and let the people harmed rightly prevail – and the banks fail.

    Unfortunately, politics continues to be about power. But, in the near future – if not corrected – that power may destroy all – including those that have controlled.

  12. Now I’m really worried. It’s like asking the thieves to house sit for you while you’re out.

    http://latimesblogs.latimes.com/money_co/2010/11/foreclosure-paperwork-regulators-financial-stability-oversight-council-treasury-.html

    Review of foreclosure paperwork process finds ‘widespread’ and ‘inexcusable’ breakdowns, Treasury official says
    November 23, 2010 | 11:24 am

    An ongoing review by government regulators of foreclosure paperwork problems has found “widespread and, in our judgment, inexcusable breakdowns” in the process for seizing homes of delinquent borrowers, a top Treasury Department official said Tuesday.

    “These problems must be fixed,” said Michael Barr, assistant secretary for financial institutions.

    But the sweeping review of the foreclosure process won’t be completed until the end of the year, and a formal report based on that review won’t be finished until late January, Barr told members of the Financial Stability Oversight Council.

    The newly formed council brings together the government’s top regulators, including Treasury Secretary Timothy F. Geithner, Federal Reserve Chairman Ben S. Bernanke and Securities and Exchange Commission Chairwoman Mary L. Schapiro, to monitor the financial system for signs of major risks. The council was created by the financial reform law and held its second meeting Tuesday.

    Barr updated council members on the status of the review by a foreclosure task force set up by the Obama administration, which is coordinating its effort with state banking regulators and a probe by all 50 state attorneys general. Obama administration officials have balked at calls for a nationwide moratorium on foreclosures and have said the review has found no signs that the issue poses a threat to the financial system.

    The task force is trying to determine the scope of the paperwork problems and intends to hold banks accountable to fix them, including assessing penalties and providing redress to affected homeowners, Barr said.

    “We are working to bring clarity and certainty as quickly as we can, but reviews will take time,” Barr said.

  13. LPS class action-ok it’s a start. So if the “investor’s” win will anyone be able to use as evidence, i.e. the robo-signers, the forged document’s ect? This will be a good mile stone for all.

  14. I enjoy watching Dylan Ratigan. I think we should all keep in mind that we are at the front edge of the wave here in litigation and in understanding the full purport of the fraud committed. It is still very similar to Madoff in that it is a classic Ponzi scheme. The securitization mess was also perverted and became part of the scam. There are going to be a mountain of pissed-off investors out there. I hope they litigate until the cows come home. The mega banks can be put out of commission with enough fees for litigation and the put backs for the investors. http://www.challengingforeclosure.com Sirak@challengingforeclosure.com

  15. LPS DEFAULT–CLASS ACTION FILED

    http://www.scribd.com/doc/43795930/Robbins-Geller-Rudman-amp-Dowd-LLP-Files-Class-Action-Suit-Against-Lender-Processing-Services-Inc

    The complaint charges LPS and certain of its officers and executives with violations of the Exchange Act. LPS operates in the mortgage industry and is the industry’s number one provider of mortgage processing services, settlement services and default solutions, and the nation’s leading provider of integrated data, servicing and technology solutions for mortgage lenders.

  16. Neil, you said, “So the lesson for all lawyers and all homeowners is that if you are looking for relief, you need to make your points short and sweet and not lengthy analyses like the articles on this blog.”

    You’ve worked tirelessly for years to help us finally realize that the same fraudulent issues affect all the mortgages registered in MERS. What we need is a brief outline to help us make our points short and sweet. Do you have something posted on this site that could help me do that?

    My brain hurts from trying to understand so much while I’m in such a panic. Your comment was like water in the desert. Changed my focus altogether. Thanks a million times over for the help you have given me. I don’t remember how I found your site, but I certainly and glad I did!

  17. BRAVO
    Great article

  18. Anyone who says “Raitgan doesn’t get it” is really sticking their neck out. Ratigan has been on the cutting edge of this mess from the git go and “gets it” a Hell of a lot better than most of the courts are likely to.

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