NY Times: Borrowers are not deadbeats


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Free Houses Go To Banks Not Borrowers

Kamala D. Harris, the attorney general of California, is adamant that homeowners are not looking to abuse the system. “I have met with these families,” she said, “and every single one of them wants to pay to stay in their homes.”

EDITOR’S COMMENT: The Attorney General of the state of California is not the only one who has come to the conclusion that the “free house” mythology has been turned on its head.  All the Attorney Generals in all the states know that homeowners are victims and the banks are the predators in our current situation.

Taking their cue from political strategists, the banks have preempted the accusation that they are stealing homes with a widespread and repeated lie that homeowners are seeking a “free house”. 

In 2008 and 2009 I gave extended formal and informal testimony before law enforcement officials and law makers proving that free houses were only going to the banks with no exceptions.  In every case where I have interviewed or heard from the many thousands of homeowners whom we have helped at livinglies the homeowner was always willing to pay to stay.  In fact they were always willing to accept a mortgage balance in excess of the fair market value of the home.  

We all know the values were wrong when the mortgages were originated.  We all know who the experts were who used those values to sell bogus mortgage bonds and bogus mortgage loans.  It wasn’t the homeowners, it wasn’t the pension funds, it was and continues to be the banks who still control the servicers, the trustees, foreclosure specialists that act strictly in accordance with the instructions of the banks that caused this mess.

The bottom line is that until the facts catch up with the myth promulgated by the banks, the bulk of the risk of loss caused by the banks will be avoided by the banks, with the further result being that the risk of loss is completely absorbed by the US taxpayer and homeowners.  Homeowners have demonstrated with hundreds of thousands of requests for modifications that they are willing to pay far more than the proceeds of foreclosure as reported to the pension funds and other investors.  The entire securitization scheme and the entire foreclosure scheme is a living lie.  

The banks control the narrative because we insist on believing that we are different than the guy down the street.  As long as we actively search for ways to separate ourselves from others, to make ourselves different than, or better than another, that’s the myth and the chasm they can exploit.  When we realize that we are all the same, and we are all getting screwed in the same way, by the same people then things will change.  Hats off to the Occupy Movement for providing each of us with the opportunity to help ourselves by standing up for our neighbor.  The Occupy Movement operates in the context of the best American traditions of civil disobedience.

Moral Hazard: A Tempest-Tossed Idea


THE reports outraged America: In the wake of Hurricane Katrina, people who fled the ravaged Gulf Coast were spending disaster relief, paid for by taxpayers, on tattoos, $800 handbags and trips to topless bars.

It turned out that few, if any, Katrina evacuees actually did any such thing. A vast majority used debit cards issued by FEMA to buy necessities like food and clothing. But the damage was done: FEMA swore that it would never hand out money like that again.

Behind this brouhaha was an idea that Americans seem particularly preoccupied with. It is called “moral hazard” — an obscure insurance term that has taken on new currency in our troubled economy. We’ve heard a lot about moral hazard lately, first in connection with the bailouts for big banks, and now with efforts to help homeowners who got in over their heads.

Moral hazard sounds like the name of a video game set in a bordello, but in economic terms it refers to the undue risks that people are apt to take if they don’t have to bear the consequences. In other words, if the money is free, why not spend it on a designer purse? If you know that you’ll be bailed out, why not roll the dice on some tricky mortgage investments — or splurge on a home that you can’t really afford?

Moral hazard became part of the national conversation in the financial crisis of 2008, when ordinary Americans wondered why they should rescue banks that helped drive the economy off a cliff. Now those same banks point to moral hazard to explain why they can’t do more to help people with mortgages. And it’s not just banks — the Tea Party movement was inspired by outrage over a government plan to, as Rick Santelli put it in a famous rant on CNBC, “subsidize the losers’ mortgages.”

The cherished American ideal of self-reliance has a flip side: discomfort with the idea of bailouts and safety nets. The notion that even a small portion of such aid might find its way to the undeserving can be enough to scuttle support, or restrict help so drastically that few can use it. The specter of moral hazard haunts a basic tension in American life: to what extent are people responsible for their own problems? The more trouble you’re in, moral hazard suggests, the less we should help.

Bankers say that generously easing loan terms or reducing mortgages outright would only encourage homeowners who can pay to pretend they can’t. It would also, the bankers say, send a dangerous message: a financial commitment isn’t really a commitment. Economists and policy makers say the bankers are right — but only to a point. Shaun Donovan, the secretary of the Department of Housing and Urban Development, said that there was a “nugget of truth” to the moral hazard argument. But he also said that only about 10 or 15 percent of Americans who can still pay their mortgages try to walk away from their debt. Most troubled homeowners, like the Katrina victims, are genuinely hard up.

Kamala D. Harris, the attorney general of California, is adamant that homeowners are not looking to abuse the system. “I have met with these families,” she said, “and every single one of them wants to pay to stay in their homes.”

Still, the $26 billion deal that authorities struck with banks this month over foreclosure abuses — a main element of which will require the banks to reduce homeowner debt — angers some. Homeowners who keep paying their mortgages, even if their homes have lost value, reasonably wonder why neighbors who weren’t as responsible are getting help.

On the other hand, the problems in the housing market are a problem for all of us. Many economists and housing experts agree that the debt that now looms over homeowners is holding back a broad recovery.

Since the settlement was announced, pressure has mounted for Fannie Mae and Freddie Mac, the mortgage giants whose loans are not eligible for the deal, to allow debt relief for their borrowers as well. But concerns over moral hazard, among other things, have held them back.

MORAL hazard has long been used to explain why social safety nets like welfare, unemployment insurance and workers’ compensation should be less generous. It is almost always applied to the recipients, rather than the providers, of such benefits. A lot of energy has gone into arguing that higher workers’ comp payments, for example, make workers careless. Far less is said about how lower workers’ comp invites moral hazard for employers by, say, making them less attentive to workplace safety.

Economists have longcomplained that moral hazard could easily be described in more neutral language, like “misaligned incentives.” But the term, with its implied judgment, has stuck.

It seems to have originated in the 19th-century insurance industry. (Hazard was a popular game of dice.) Insurers drew a bright line between natural hazards, like storms, and moral hazards, like playing with matches, that stemmed from what the 1867 edition of the Aetna Guide to Fire Insurance called “carelessness and roguery.”

Today, insurers battle moral hazard with co-pays and deductibles. If you have health insurance, you are, based on the theory of moral hazard, less likely to avoid smoking, and more likely to go to the doctor for a common cold. But in a 2005 article in The New Yorker, titled “The Moral Hazard Myth,” Malcolm Gladwell noted that people with insurance do not check into hospitals for their enjoyment, and that people without insurance forgo preventive care that could save thousands of dollars. Moral hazard also overlooks the noneconomic costs of risky actions like smoking — costs like ruined lungs, suffering and death.

“The economics of moral hazard work to convince us that, however well intentioned, social responsibility is a bad thing,” Tom Baker, a law professor at the University of Pennsylvania, wrote in “On the Genealogy of Moral Hazard,” a historical account published in 1996. “Moral hazard signifies the perverse consequences of well-intentioned efforts to share the burdens of life, and it also helps deny that refusing to share those burdens is mean-spirited or self-interested.”

That is not to say that there is no such thing as moral hazard. Economists point to a 2008 settlement in which Countrywide Financial announced that it would modify subprime loans for people who were delinquent. Suddenly, many of Countrywide’s subprime customers stopped paying.

But remedies can be designed to reduce moral hazard, said Adam J. Levitin, a Georgetown University law professor and mortgage expert. He points out that Countrywide, now owned by Bank of America, offered help only to those in default, instead of to all those who were given suspect loans. In the case of the debit cards, an investigation found that FEMA neither checked the identity of recipients nor told them how the money could be spent.

Under the new foreclosure settlement, only homeowners who were already delinquent will be eligible for principal reduction.

Plenty of other factors keep homeowners from trying to shirk commitments, said Elyse D. Cherry, C.E.O. of a community development group, Boston Community Capital. Ruined credit makes it harder to borrow money, get an apartment and, with employers increasingly doing credit checks, find a job. Moving is hard on families. And then there are the larger social costs: pockmarked neighborhoods and declining property values.

Moral hazard, Ms. Cherry said, “is hogwash.” That is an interesting view coming from a woman who runs what might be considered a petri dish for moral hazard. Boston Community Capital buys homes that have gone into foreclosure, then sells them back to the original owner at a price they can afford. If homeowners later sell at a profit, they must split the proceeds with Boston Community Capital.

Presumably anyone who heard about the program, which is small, would be tempted to default. Banks are so sensitive to this possibility that many forbid the resale of a foreclosed home to its original owner, even though it would make no difference to the banks’ bottom line.

But usually, the clients have defaulted long before hearing about the program. Some, in fact, are packed and waiting for eviction.

Consider the case of one Boston Community client. In one view, she might seem like a classic case of moral hazard — the kind of person many Americans are loath to help. When the banks offered to lend her money against the rising value of her home, she happily accepted. Now she owes $400,000 on a house worth closer to $100,000. Aiding her now might only encourage that type of behavior.

Another view is that she is a working person striving for the American Dream. She had every reason to believe that her bankers knew more about finance than she did. She paid a contractor for renovations; he absconded. When the recession hit, her work dried up and her home’s value dropped. Now, she’d love to buy back the home for its current market price.

WHICH view is correct?

Ms. Cherry answers that question with a question: Does it matter? Moral hazard, she said, has been used to fend off solutions long enough.

“Let’s assume that the guy who says, ‘I paid my mortgage; why shouldn’t she pay hers?’ wins, right?” Ms. Cherry said. “Now what do we do? How is that a strategy for getting out of the problem that we’re in?”

40 Responses

  1. Hey THE GREY is that DAN CLEM? wheres the Cecilia Rodriguez signature we were to trade for only thing is I gave you mine and even after several requests you never sent me anything who are you friend or foe? Bev Sheffer vchockeydude@aol.com

  2. @ Alison

    Thank you for your kind thoughts and prayers. I am a strong believer in the power to prayer and we all need to keep sending them out there for God to help all of us. I am still in my home and fighting them. I just hope that if/when we have to move I can find somewhere with my dogs. My health has remained good for the most part. I am sorry that you are suffering. I know the feeling of sleep deprevation and it wrecks havoc on your mind and body. I am sleeping much better now and it does make such a difference. You might try taking Tylenol PM or Advil PM before you go to bed. It helps with the little aches and pains and does help you sleep. Stay strong and know you are not alone. There is a very good video posted on 4closurefraud showing a news reporter asking the banker a questions that the banker, obviously, had no answer for. It would appear that the siphoning of money from hardworking people’s tax dollars is a global thing. We may end up seeing a global uprising! Hang in there!

  3. Dearest Katherine, you are in my thoughts and prayers as are your precious pets. I too have lost alot emotionally and have my dogs and a cat who mean the world to me, their’s is truly uncondtional love. Please don’t worry or you will lose your health also as I have along with 50 pounds and many sleepless nights. Just know that you are not alone and I will take up a collection to help you and your beloveds. There have been so many wonderful people on this site and others who would be happy to help. For now I will pray for you.

  4. Ken Dost kwddesigninc@centurytel.net
    is the expert on MindBox – Artificial Intelligence – OwnIt – Litton – Bill Dallas –

    Banks, Insurance Companies, Real Estate, Government – all use Mindbox to figure out how we will make decisions

    Like decision of how much one can bet the bank a default or prepayment will occurr before 7 years, 5 years, 3 years, so they can create the ‘best’ individual variable rider/note deal for beneficiary

  5. I am holding the In re: AGARD, decision in hand right now, I have been looking it over for several days and almost can’t believe what I’m reading….

    You do realize, of course, that MERS can not let this decision become precident without a fight. They will appeal. Let’s hope that the BAP or the U.S. District Court that first hears the appeal is not already in the pocket of the Big 5. Then that decision will move on up to the Appeals Court for the District of New York.

    This decision is well thought out and supported in precident that is older than the court systems themselves, the road ahead is long but if this decision holds then the Banksters are through. No amount of bail-out money would be able to prevent their fall from grace.

    I will be using this decision in the 10th Circuit Bankruptcy Courts as early as next weekand so the process begins…


  6. @Nora C.

    This is probably the reference to mindbox..just a guess which I’m sure will be corrected if I am mistaken.

  7. Foreclosure – MERS is DEAD, ILLEGAL by NY Court
    Date: Mon, Feb 20, 2012 at 6:53 AM
    Subject: MERS is DEAD –
    Attached is the Memorandum of Law that puts the FINAL NAIL in the BIG BANKS!
    New York’s U.S. Bankruptcy Court Rules MERS’s Business Model Is Illegal –
    Feb. 16, 2011
    United States Bankruptcy Judge Robert Grossman has ruled that MERS’s business practices are unlawful. He explicitly acknowledged that this ruling sets a precedent that has far-reaching implications for half of the mortgages in this country. MERS is dead. The banks are in big trouble. And all foreclosures should be stopped immediately while the legislative branch comes up with a solution.
    For some weeks I have been arguing that MERS is perpetrating foreclosure fraud all across the nation. Its business model makes it impossible to legally foreclose on any mortgaged property registered within its system — which includes half of the outstanding mortgages in the US. MERS was a fraud from day one, whose purpose was to evade property recording fees & to subvert 5 centuries of property law. Its chickens have come home to roost.
    Wall St. wanted to transform America’s housing sector into the world’s biggest casino and needed to undermine property rights to make it easier to run the scam. The payoffs were bigger for lenders who could induce homeowners to take mortgages they could not possibly afford. The mortgages were packaged into securities sold-on to patsy investors who were defrauded by the “reps and warranties” falsely certifying the securities as backed by top grade loans. In fact the securities were not backed by mortgages, and in any case the mortgages were sure to go bad. Given that homeowners would default, the Wall St. banks that serviced the mortgages needed a foreclosure steamroller to quickly and cheaply throw families out of the homes so that they could be resold to serve as purported collateral for yet more gambling bets. MERS — the industry’s creation — stepped up to the plate to facilitate the fraud.
    The judge has ruled that its practices are illegal. MERS and the banks lose; investors and homeowners win.
    Here’s MERS’s business model in brief. Real estate property sales and mortgages are supposed to be recorded in local recording offices, with fees paid. With the rise of securitization, each mortgage might be sold a dozen times before it came to rest as the collateral behind a mortgage backed security (MBS), and each of those sales would need to be recorded. MERS was created to bypass public recording; it would be listed in the county records as the “mortgagee of record” and the “nominee” of the holder of mortgage. Members of MERS could then transfer the mortgage from one to another without all the trouble of changing the local records, simply by (voluntarily) recording transactions on MERS’s registry.
    A mortgage has 2 parts, the “note” and the “security” (not to be confused with the MBS) or “deed of trust” that is usually just called the “mortgage”. The idea behind MERS was that the “note” would be transferred from seller to purchaser, but the “mortgage” would be held by MERS. In fact, MERS recommended that the “note” be held by the mortgage servicer to facilitate foreclosures, but in practice it seems that the notes were often lost or destroyed (which is why all those Burger King Kids were hired to Robo-sign “lost note affidavits”).
    At each transfer, the note & mortgage are supposed to be “assigned” to the new owner; MERS claimed that because it was the “mortgagee of record” and the “nominee” of both parties to every transaction, there was no need to assign the “mortgage” until foreclosure. And it argued that since the old adage is that the “mortgage follows the note” and that both parties intended to assign the notes (even if they did not get around to doing it), then the Bankruptcy Court should rule that the assignments did take place in some sort of “virtual reality” so that there is a clear chain of title that allows the servicers to foreclose.
    The Judge rejected every aspect of MERS’s argument. The Court rejected the claim that MERS could be both holder of the mortgage as well as nominee of the “true” owner. It also found that “mortgagee of record” is a vague term that does not give one legal standing as mortgagee. Hence, at best, MERS is only a nominee. It rejected MERS’s claim that as nominee it can assign notes or mortgages — a nominee has limited rights and those most certainly do not include the right to transfer ownership unless there is specific written instruction to do so. In scarcely veiled anger, the Judge wrote:
    “According to MERS, the principal/agent relationship among itself and its members is created by the MERS rules of membership and terms and conditions, as well as the Mortgage itself. However, none of the documents expressly creates an agency relationship or even mentions the word “agency.” MERS would have this Court cobble together the documents and draw inferences from the words contained in those documents.”
    Judge Grossman rejected MERS’s arguments, saying that mere membership in MERS does not provide “agency” rights to MERS, and agreeing with the Supreme Court of Kansas that ruled “The parties appear to have defined the word [nominee] in much the same way that the blind men of Indian legend described an elephant — their description depended on which part they were touching at any given time.”
    He went on to disparage MERS’s claim that since in legal theory the “mortgage follows the note”, the Court should overlook the fact that MERS separated them. He stopped just short of saying that by separating them, MERS has irretrievably destroyed the clear chain of title, although he hinted that a future ruling could come to that conclusion:
    “MERS argues that notes and mortgages processed through the MERS System are never “separated” b/c beneficial ownership of the notes and mortgages are always held by the same entity. The Court will not address that issue in this Decision, but leaves open the issue as to whether mortgages processed through the MERS system are properly perfected and valid liens. See Carpenter v. Longan, 83 U.S. at 274 (finding that an assignment of the mortgage without the note is a nullity); Landmark Nat’l Bank v. Kesler, 216 P.3d 158, 166-67 (Kan. 2009) (“n the event that a mortgage loan somehow separates interests of the note & the deed of trust, with the deed of trust lying with some independent entity, the mortgage may become unenforceable”).”
    That would mean not only the end of MERS, but also the end of the banks holding unenforceable mortgages because they were not, & cannot be, “perfected”. MERS & the banks screwed up big time, and there is no “do over” — there is no valid lien on the property, so owners have got their homes free and clear.
    There have been numerous court rulings against MERS — including decisions made by state supreme courts. What is significant about the US Bankruptcy Court of New York’s ruling is that the judge specifically set out to examine the legality of MERS’s business model. As the judge argued in the decision, “The Court believes this analysis is necessary for the precedential effect it will have on other cases pending before this Court”. In the scathing opinion, Judge Grossman variously labeled MERS’s positions as “stunningly inconsistent” with the facts, “absurd, at best”, and “not supported by the law”. The ruling is a complete repudiation of every argument MERS has made about the legality of its procedures.
    What is particularly ironic is that MERS actually forced the judge to undertake the examination of its business model. The case before the judge involved a foreclosed homeowner who had already lost in state court. The homeowner then approached the US Bankruptcy Court to argue that the foreclosing bank did not have legal standing because of MERS’s business practices. However, by the “Rooker-Feldman” doctrine (or res judicata), the US Bankruptcy Court is prohibited from “looking behind” the state court’s decision to determine the issue of legal standing. Hence, Judge Grossman ruled in the bank’s favor on that particular issue.
    Yet, MERS’s high priced lawyers wanted to push the issue and asked for the Judge to rule in favor of MERS’s practices, too. So while MERS won the little battle over one foreclosed home, it lost the war against the nation’s homeowners. The Judge ruled against MERS on every single issue of importance. And it was MERS’s stupid arrogance that brought it down.
    As I predicted 2 weeks. ago, MERS would be dead within weeks. Judge Grossman has driven the final stake through its black heart. The half of America’s homeowners whose mortgages are registered at MERS have been handed a “get out of jail free” card. Wall St. has no right to foreclose on their property. The tide has turned. It won’t be easy, but homeowners in those states with judicial foreclosures now have Judge Grossman on their side. Those in the other states (just over half) will have a tougher time because they can lose their home before they ever get to court. But the law is still on their side — foreclosure by members of MERS is theft — so class action lawsuits may be the way to go.
    MERS is dead, but can the banks survive? There are two separate issues. First, there are the “reps and warranties” given by the mortgage securitizers (Wall St. investment banks) to the investors (pension funds, GSEs, PIMCO, and so on). We now know that a quarter to a third of the mortgages bundled to serve as backing for the securities did not meet stated quality. Worse, we also know that the banks knew this — they hired third parties to undertake “due diligence” to check quality. This was not done to protect the investors, rather, the purpose was to strengthen the bargaining position of the securitizers, who were able to reduce the prices paid for the mortgages. Now, the investors are suing the banks for restitution–forcing them to cover the losses and buy-back the bad mortgages at original price. To add insult to injury, even the NYFed is suing them. That is a lot like having your parents sue you for their inadequate parental oversight of your behavior.
    The second issue is that the mortgages backing the securities were supposed to be placed in Trusts (affiliates of the securitizing banks), with the Trustee certifying not only that the mortgages met the reps and warranties but also that the documents were up to snuff and safely locked away. We know they were not. As mentioned above, MERS told the servicers to hold the notes, and many or most of them were destroyed or lost. Further, the notes were separated from the mortgages — making them null and void. In any case, they are not at the Trusts. This means the MBSs are not backed by mortgages, meaning the MBSs are unsecured debt. MERS’s business model ensures that. So, again, the banks must take back the fraudulent securities — paying off the investors.
    What can Wall St. do? Well, I suppose the “help wanted” signs are already up at MERS and Wall St. banks: “Needed: Burger King Kids to Robo-sign forged quasi-professional-looking docs”. The problem is that even with tens of thousands of Robo-Kids, Wall St. will not be able to pull off a vast criminal conspiracy on the necessary scale. Think about it: 60M mortgages, each sold ten times, means 600 million transactions and assignments that have to be forged. MERS’s documentation was notoriously sloppy, relying on voluntary recording by members. The Robo-Kids would have to go back through a decade of records to manufacture a paper trail that would convince now-skeptical judges that there is a clear chain of title from the first recording in the public record through to the foreclosure. It ain’t going to happen.
    The only other hope is that Wall St. can call in its campaign contribution chips and get Congress to retroactively legalize fraud. That is what they do in those dictatorships that protestors are now bringing down in the Middle East. Is Washington willing to take that risk, just to please its Wall St. benefactors?

  8. @NancyDrewe
    What is mindbox? Connected to Tavistock Institute?

  9. @Nancy Drewe,

    What’s wrong with you?

  10. @ Nancy Drewe

    I don’t worry about who is a mole or who is really trying to help. Nothing I say here is secret and I really couldn’t give a rat’s ass if Mr. Moynihan himself reads every one of my posts everywhere I’ve posted. Actually, I invite him to do that. Just perhaps he may learn something about humanity and honest dealings. I must admit I have a hard time following you sometimes but no harm meant. I’m not sure what you are getting at about Enraged, but she has put a lot of time and effort into her posts and sharing of information. I am posting to share and learn for whatever it’s worth.

  11. NANCY DREWE- MINDBOX! I haven’t heard of that for 2-3 years and completely forget what it is, what it’s for, and who came up with it. Can you elaborate please? By drawing inferences from the rest of your post, I suspect that it sounds like something that the Rand Corporation or McKinsey and Co. would come up with.
    ALSO- I am extremely interested in allonges, there is very little said about them, I have read everything available pertaining to allonges, can you elaborate, also, what if the loan number given on the allonge is not the loan number of the target f/c complaint? What goes on here?




  15. In New York, the FBI said that to date, out of 64 arrests made in “Perfect Hedge,” 59 people have been convicted or have pleaded guilty. These prosecutions, in partnership with the office of the Manhattan U.S. Attorney and the U.S. Securities and Exchange Commission, have been an important deterrent, the agents said.

  16. Send them all a red solo cup, they’ll get it

  17. Chas,
    I hear ya–we the people are supposed to exercise “personal responsibility” yet the banks don’t have to? Fuck that noise. Via the bailout of Fannie Mae, I am paying them to defend my lawsuit against them. That strikes me as inequitable, at the very least. And I’m sick of the inequity. The banks come to us with their hands out because they made bad decisions but we just have to suffer? Think again–spring is coming!

  18. Take heart. As I have been saying all along, we outnumber them 750 to one. There is also another aspec to it, and that is the people who knew that what they were involved in was a criminal enterprise, but they went along with it and did as they were told, knowing full well it would one day come around on them. Now they’re faced with either turning states evidence and saving themselves, or going down with the ship while the rest of the crew continues to paint cabins. Funny how bing faced with jail time scares a criminal into reassessing their behavior.

  19. And this is why I don’t understand why our representatives aren’t crying gout for a national disaster. More home have been effected and notice not a lot of attention is being paid to what can easily be predicted to fail? They were both Man made properties, know at some point, they would fail by those we pay well to represent us, not the greedy corporate executives and Board of Directors. They not only buy products in bulk at a discount, they have bought Americans. Those that can still make their payments do not suffer now, but will, directly. Then they will cry, but by then, the 96% will be too tired and overworked to raise a hand. All these rules and no true enforcers, whether deliberate or not, it is a Disaster!

  20. @Katheryn,

    I second Carie,

    Time is on our side. 5 years ago, we all were doomed. We couldn’t pay. We wanted to but money was no longer following. We fell behind. We juggled, we made do, we stopped paying certain things to keep other running and we ran a bad credit. We liquidated what could be (life insurance, retirement, jewellery, whatever we could do without) and it still didn’t get any better. We were still behind after 3 years of sleepless nights and worries. And we were literally flat broke.

    Some people smartened up and started to investigate.

    While this was happening to us, it was happening to everyone else as well but few people knew where to turn. Hamp, our dear president for real change’s program, drowned many of us who believe in him. Harp finished the job. We saw obscene bonuses dished out to bankers while we were falling farther and farther behind. Our president betrayed us so badly that we don’t believe in justice any more.

    Katheryn, justice is on the way.

    More people than you know have gone though what we have. If you haven’t been evicted, stay put on don’t worry. Take care of the pets (I have a dog. I know what you feel). If there is someone to contact, go for it. I keep posting names and links all the time.

    Contact OWS if it becomes urgent. Contact Mandelman to find an attorney. Ask references from Dannlaw blog, Matt Weidner Blog, Foreclosure defense nationwide blog (Jeff Barnes), Abigail field blog, Naked capitalism blog. And know that it is only a tough time to go though.

    Katheryn, the hardest has past. The best is yet to come.

    I abolutely believe it. Look at what is happening worldwide! And Carie is right: even if you have to move, you will find compassion for the pets. Sometimes, even more than for the humans. Your pets will be ok. Be upfront about them: they are your family. People who don’t want them, you don’t want as landlor.

    Things are happening. Things are moving. Unfortunately, there is, in the USA, a true press censorship that you don’t have in Europe. It’s not a “police” state. It’s a “money dictates” state. To me, it is a lot worst. The reason i can post a lot is because I get a lot of info from other countries. I promise: it is moving in the right direction.

  21. i love it the 500 club…i dont look either and guess what im still the same person

  22. @Katheryn

    The truth will all come out, eventually. You can’t hide the truth forever.
    As far as dogs and moving—that was my fear, too. We found a nice rental house with a yard and the owner agreed we could have our two dogs and 1 cat—I don’t know if that is unusual, but I think it is a blessing, and obviously possible if your situation comes to that. I have found that people are more and more sympathetic and less likely to frown on someone who has had a tough break with regards to all this madness.
    Keep the faith.

  23. @ Enraged

    What am I really afraid of. Great question and for which I realize I don’t have an instant answer for. I’m not really afraid of losing my house but I am afraid that I would not be able to keep my dogs. We have no children at home and our dogs are like kids to us. It may sound lame to most people but I fear the terror our dogs would feel if we had to give them up. I am more angry than fearful at feeling like we are losing our Constitutional rights. I am not fearful of having a 500 credit score rather than mid 700’s. I’m done feeding the beast to keep a great credit score. I am fearful for the world and all the evil that seems to be ever more prevalent all around us and I am profoundly sad at those who are the most harmed and the most innocent. I am fearful that we are losing our humanity and our way. With that said, I don’t have any single great fear of anything and live my life day by day as best I can. I have always had a deep inner faith in God and my life path has not been easy my faith seems to get me through. Again, this is more sadness than fear, but it seems like we are regressing as human beings and lately, there seem to be those that want to take this country backwards with regards to our rights. I like to remember the story of Rosa Parks who refused to give up her bus seat and her courage in taking a stand. We all must continue to take a stand each and every one of us in our own unique ways. Mine has been by way of hard knocks but my life has been basically good as I see those whose path have been really hard compared to mine. I have always been a fighter so I spend more time trying to figure my way in or out of something rather than fearing what might be. How about you, Enraged, what do you fear?

    Nancy Drewes and M. Solimon both seem to speak in a code of sorts and for which my tiny brain just has a hard time deciphering. The more I research Fannie Mae the more stuff comes to light. Like you, I also did a refi. Have you made any connection with Fannie Mae, MRC/MMA and Muni Mae which were connected to Blackrock? My closing documents listed MRC as the account beneficiary. I try not to get too bogged down in this stuff because the court just won’t hear this argument but I start trying to connect the dots out of couriosity. It is very hard to make a determination of which trail to take but I honestly believe that the courts must have the guts and honesty to start ruling by the law and to put a stop to all the BS these banks are getting away with in the courts.

  24. @Katheryn,

    I had a lot of respect for Nancy Drewe until… yesterday. And come to realize, I have yet to read from anyone, and I mean someone/anyone, that:
    1) They got it;
    2) They applied it, used those arguments in court and… they won!!!

    Nope. Hasn’t happened yet. People win the old and tried arguments: Respa, Tila (fingerfood and Fila, as E. Toile said) And I have yet to get one word of explanation and one answer to my questions, such as: “If I have a Fannie Mae, can you please walk me through the steps to find out who my trustee is?”

    Katheryn, I need to ask. What are you afraid of? I mean, seriously? We have almost lost everything as a country, except the facade and the glitter for which we owe every country an arm and a leg. The sword of Damocles has been hanging over our collective heads for 5 years (actually, much longer but we became aware of it only 5 years ago or so…) and, suddenly, things are happening that indicate a complete reversal of the trend.

    I for one am pretty excited!!! Can’t wait to see what’s next!

  25. @Enraged

    Glad I’m not the only one who has trouble following Nancy. I do try, but sometimes I just give up because I get to frustrated trying to figure it out. I’m sure that it is great information for those that get it! We can only keep praying that these beasts will fall. It is a very scary time for the world right now. I keep thinking I need to just find a nice cave to go hide out in. I often wonder what internally causes some to never be satisfied with “enough”. Enough power; enough money; enough mansions; etc. Outrageous greed and glutony ultimately destroys everything it touches. It removes the ‘human’ from humanity. Why can’t they see that? We all need to keep praying that they are brought down and we can start to rebuild this country or else I am going to start researching the possibility of moving to another one. Everyday more and more pure evilness seeps out from under the rocks. Today it’s the child porn from within our own government. It doesn’t get much lower than that in my book; that is the ultimate crime of crimes. Money made at the expense of children. It’s depressing but we must keep up the fight!

  26. @Chas404,

    Same here! I had an 820 when i refi’ed. Nowadays, I don’t look anymore. Don’t give a hoot anymore.

  27. @Katheryn,

    I got a math one from E. Toile last September. Never did crack it up. Which is too bad because it was explaining how to read Nancy Drewe’s posts…

    I hope I’m right too but everytime I turn arouns, there are new resignations. Today was the entire board of Olympus Corp. 11 members quit all at once. And some executives have been arrested. I take it as writings on the walls. It’s everywhere. Except here. Maybe they’re waiting to round them all up together, as a surprise to us…? 🙂

  28. That is exactly what I’ve done although it took me some time to realize the scam be played on me.

    My original lender (October of 2003) disolved its corporation September 1, 2005 without any assigns, heirs or successors, however, Countrywide as the servicer continued to collect my mortgage payments for well over a year before everything fell apart.

    Since then I have endured 5 foreclosure attempts and in each one the same law firm has claimed to represent a different party who claimed to be the holder of the note. Problem being that in the last foreclosure hearing held in the non-judicial rule 120 hearing in Colorado the Judge stated for the record that my note DID NOT contain any assignments leading to BAC who was trying to foreclose but that they were not foreclosing on the note but rather on the Deed of Trust. Go figure that one out….

    My original note exists between myself and the original lender with no assignments and that lender has been out of businees for almost 7 years. One would think it would be hard to come up with a legitimate signature to assign that note at this late hour. But nothing the Banksters do these days surprises me anymore.


  29. Haha I like the “FICO 500 Club”.

    Funny because another way to think of deadbeat is this….

    My loan 2005. I maintained FICO 750 until just recently…….

    original loan 2005….

    original mortg broker gone no longer in the career
    original mortg broker company gone
    Title Agent gone, folded, sold
    MortgageIT, Inc. originator gone swallowed up by parent Deutsch Bank
    Wells Fargo servicer TARPED and supported by Fed Reserve etc
    Fannie Mae $160 billion bail out and counting

    So one way to think about my transaction is…. WHO really is the deadbeat. I continued with FICO 750 paying into a transaction where ALL THE OTHER PARTIES are gone/folded/BK or bailed out by govt.

    I, along with my credit score, survived and outlived them all until I realized that I was getting punked.

    I was not going to pay fixed 5.75% interest on upside down scammed loan when Fannie gets bailed out and Wells Fargo can access 0.25% Fed Funds yet nobody would refinance me despite perfect score etc.

    So I just took my toys away and refused to play!

  30. A good fico score is just an “I love debt” score…
    I don’t love debt and will never have it again…so I don’t give a da*n what it is.
    Everyone should feel that way—then the banksters will SURELY die…

  31. I am going to get a t shirt printed that says ” Proud Member of the FICO 500 Club”.

    Enraged: I pray you are right!

    E Tolle – I need the smiles; keep cracking me up. I’m still working on your math equation from a couple of weeks ago 🙂

  32. Just so everyone is aware, BAC has not discontinued the use of robo-signers and the fraudulent misrepresentation of material facts to the foreclosure court system.

    During the time frame of the 50 state attroneys general investigation BAC was refining its ilegal foreclosure scheme. First evidenced by a large number of mortgage/deed of trust assignments by MERS to BAC Home Loans Servicing LP. (all dated May 31, 2011 or earlier-the day before BAC announced it had merged BACHLS LP. with Bank of America NA. f/k/a Bank of America). Another shot at the document shell game that has proved profitable for BAC in the past.

    A lot of these assignments are being acknowledged by a Notary Public out of California by the name of Darryl Brown and signed by a Cecilia Rodriguez as Secretary for MERS. I have personally examined 3 different assignment documents with Ms. Rodriguez’ signature and only one of those matches the one on file in the notaries journal.

    Same game with some new players so be aware that BAC has not changed its game plan only the way in which it is playing.


  33. “i paid my mortgage, why should you get a free house?”

    we have to learn how to explain the difference between the ownership and the real estate interest called ‘mortgage’.

    nobody “pays” a mortgage. they BUY the mortgage. it’s the same as buying stock in the house. very simple stuff.

    exchanging positions dollar-for-dollar is called a swap, not a debt or a “free house”. we already have our property free and clear; it’s called the title. that there may be other attachments is ordinary and fails to show a controversy by themselves. it’s not an automatic comparison between mortgagee and mortgagor. the two exist in harmony, covering different bases.

    The only real question in any foreclosure or seizure proceeding is “how much is the place worth?” and “how much position has the secured party got?

    between municipal liens and other charges that defeat any mortgage automatically,

    the costs of litigation and misc fees,

    and the wholesale discount because that’s all foreclosure ever brings, the “credit bid” of any contender is always limited to about 20% of the ‘fair-market value’. that’s it, the whole controversy is about 1/5 of the value, all of which is illegally taken by the ‘pretender lender’ as fees and costs and penalties etc- not a penny to pay down principal. so the ‘debt’ is clearly unsecured.

    meanwhile ‘deed in lieu’ subject to continued ownership is actually cheaper all around, in that the banks can list the property value on their books. So it’s clearly worth more to settle the difference at “Title to Bank” and “Ownership to Possessor”.

    in fact if there is any difference this must be measured in payable money. What if we could just pay a “10 % stabilisation fee” of the fair appraisal and keep the house subject to the basic terms of the original mortgage, that the next in line if abandoned or condemned is the Trustee (like a bank).

    it works just like bankruptcy, the owner is a debtor-in-possession and keeps things together within a certain standard. nothing to do with “payment”, it’s not a payment issue, it’s a question of equity.

  34. Monsanto isn’t doing too well in Europe either…


  35. When large numbers of people lose their jobs because of downsizing and/or outsourcing, the fact that they can’t pay a mortgage is not because they lack “personal responsibility.”

  36. @E. Toile,

    You, me and many others, the world over, have taken that oath…

    The US might be trying to hold tight but it ain’t gona fly. The end is near for the 1%. And now, bank CEOs are fleeing their own countries for fear of arrests and whatever is coming down the pipe. Their ill-gotten gains might get them temporary asylum but it’s closing in on them.

    Just waiting for Stumpf, Dimon, Moynihan and the rest of them to try and see if the world will welcome them with open arms. They’re American. Except in England (their partner in crimes), being American ain’t gona be such a hot ticket anylonger.

    O well! It’s called justice. And we believe in it.

    That list is updated as of today. I’ll keep everyone posted since, apparently, no one else seems interested in what’s going on in the rest of the world. The thing is: we don’t live in a vacuum. What happens there will happen here. Just a question of time.


    Oh, and as of yesterday, quite a few pharma CEOs, ABC CEO, oil companies CEOs had also fled the sinking ship.

  37. I totaly agree with E. Tolle I’m guilty as charged or guilt by association if you will.Wow never realized that by trying to buy a piece of the American dream was going to end up like this,but in for a penny ,in for a pound.What will be will be.

  38. Mr. Garfield the term “deadbeats” is not a “Myth” this is Neo Nazi LIKE Propaganda.

    Please look at the Nazi propoganda against the Jews in world war 2. This is the same name calling. parasites they compared jews to Rats etc…..


  39. Mr. Garfield wrote:

    In every case where I have interviewed or heard from the many thousands of homeowners….. always willing to pay to stay. In fact they were always willing to accept a mortgage balance in excess of the fair market value of the home.

    Uh, well….there’s always a first….and evidently today’s that day Neil.

    I, Jilted Borrower, do hereby declare that it is my intention to cause such egregious harm to the banking industry that it will never recover with ANY of its current hired hands or logos intact. Call it my Personal Scorched Banking Policy. The must all suffer a horrible fate.

    I do solemnly swear that to the best of my abilities, I will expend any and all efforts to destroy the financial industry and each and every government participant in the Ponzi scheme entitled “Securitization”. I will continue to refuse to accept the tired meme that I owe a mortgage balance to any entity that took part in the fraudulent system of conspiratorial theft.

    How long are you willing to wait for THEM to fix things people?

    The 99% Declaration – It’s Now Or Never!

  40. Mortgage contract is a business contract not a moral contract. You are morally bound by family and possibly religious obligations (if you are religious). You should be ethical in business and in personal and family conduct.

    Not paying mortgage is not a crime.

    Bankruptcy is not a crime.

    Newly earned crap 500 FICO is not a crime.

    On the other side….

    However, stealing the title insurance premium and not funding the policy is fraud and a crime.

    Setting up a borrower and not properly reviewing the income and expenses properly and loading him with fees is certainly unethical and possibly fraud and a crime.

    Setting up a system whereby employees sign false affidavits etc is fraud and a crime.

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