It’s Down to Banks vs Society

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We are trying to rescue the creditors and restart the world that is dominated by the creditors. We have to rescue the debtors instead before we are going to see the end of this process. — Economist Steve Keen

Bankers Are Willing to Let Society Crash In Order to Make More Money

Editor’s Comment: 

I was reminded last night of a comment from a former bond trader and mortgage bundler that the conference calls are gleeful about the collapse of economies and societies around the world. Wall Street will profit greatly on both the down side and then later when asset prices go so low that housing falls under distressed housing programs and 125% loans become available in bulk. They think this is all just swell. I don’t.

The obvious intent on the part of the mega banks and servicers is to bring everything down with a crash using every means possible. When you look at the offers state and federal government programs have offered for the banks to modify, when you see the amount of money poured into these banks by our federal government in order to prop them up, you cannot conclude otherwise: they want our society to end up closed down not only by foreclosure but in any other way possible. They withhold credit from everyone except the insider’s club.

So now it is up to us. Either we take the banks apart or they will take us apart. I had a recent look at many modification proposals. In the batch I saw, the average offer from the homeowner was to accept a loan 20%-30% higher than fair market value and 50%-75% higher than foreclosure is producing. It seems we are addicted to the belief that this can’t be true because no reasonable person would act like that. But the answer is that the system is rigged so that the intermediaries (the megabanks) control what the investors and homeowners see and hear, they make far more money on foreclosures than they do on modifications, and they make far money on all the “bets” about the failure of the loan by foreclosing and not modifying.

The reason for the unreasonable behavior, as it appears, is that it is perfectly reasonable in a lending environment turned on its head — where the object was to either fund a loan that was sure to fail, or keep a string attached that would declare it as part of a failed “pool” that would trigger insurance and swaps payments.Steve Keen: Why 2012 Is Shaping Up To Be A Particularly Ugly Year

At the high level, our global economic plight is quite simple to understand says noted Australian deflationist Steve Keen.

Banks began lending money at a faster rate than the global economy grew, and we’re now at the turning point where we simply have run out of new borrowers for the ever-growing debt the system has become addicted to.

Once borrowers start eschewing rather than seeking debt, asset prices begin to fall — which in turn makes these same people want to liquidate their holdings, which puts further downward pressure on asset prices:

The reason that we have this trauma for the asset markets is because of this whole relationship that rising debt has to the level of asset market. If you think about the best example is the demand for housing, where does it come from? It comes from new mortgages. Therefore, if you want to sustain he current price level of houses, you have to have a constant flow of new mortgages. If you want the prices to rise, you need the flow of mortgages to also be rising.

Therefore, there is a correlation between accelerating and rising asset markets. That correlation applies very directly to housing. You look at the 20-year period of the market relationship from 1990 to now; the correlation of accelerating mortgage debt with changing house prices is 0.8. It is a very high correlation.

Now, that means that when there is a period where private debt is accelerating you are generally going to see rising asset markets, which of course is what we had up to 2000 for the stock market and of course 2006 for the housing market. Now that we have decelerating debt — so debt is slowing down more rapidly at this time rather than accelerating — that is going to mean falling asset markets.

Because we have such a huge overhang of debt, that process of debt decelerating downwards is more likely to rule most of the time. We will therefore find the asset markets traumatizing on the way down — which of course encourages people to get out of debt. Therefore, it is a positive feedback process on the way up and it is a positive feedback process on the way down.

He sees all of the major countries of the world grappling with deflation now, and in many cases, focusing their efforts in exactly the wrong direction to address the root cause:

Europe is imploding under its own volition and I think the Euro is probably going to collapse at some stage or contract to being a Northern Euro rather than the whole of Euro. We will probably see every government of Europe be overthrown and quite possibly have a return to fascist governments. It came very close to that in Greece with fascists getting five percent of the vote up from zero. So political turmoil in Europe and that seems to be Europe’s fate.

I can see England going into a credit crunch year, because if you think America’s debt is scary, you have not seen England’s level of debt. America has a maximum ratio of private debt to GDP adjusted over 300%; England’s is 450%. America’s financial sector debt was 120% of GDP, England’s is 250%. It is the hot money capital of the western world.

And now that we are finally seeing decelerating debt over there plus the government running on an austerity program at the same time, which means there are two factors pulling on demand out of that economy at once. I think there will be a credit crunch in England, so that is going to take place as well.

America is still caught in the deleveraging process. It tried to get out, it seemed to be working for a short while, and the government stimulus seemed to certainly help. Now, that they are going back to reducing that stimulus, they are pulling up the one thing that was keeping the demand up in the American economy and it is heading back down again. We are now seeing the assets market crashing once more. That should cause a return to decelerating debt — for a while you were accelerating very rapidly and that’s what gave you a boost in employment —  so you are falling back down again.

Australia is running out of steam because it got through the financial crisis by literally kicking the can down the road by restarting the housing bubble with a policy I call the first-time vendors boost. Where they gave first time buyers a larger amount of money from the government and they handed over times five or ten to the people they bought the house off from the leverage they got from the banking sector. Therefore, that finally ran out for them.

China got through the crisis with an enormous stimulus package. I think in that case it is increasing the money supply by 28% in one year. That is setting off a huge property bubble, which from what I have heard from colleagues of mine is also ending.

Therefore, it is a particularly ugly year for the global economy and as you say, we are still trying to get business back to usual. We are trying to rescue the creditors and restart the world that is dominated by the creditors. We have to rescue the debtors instead before we are going to see the end of this process.

In order to successfully emerge on the other side of this this painful period with a more sustainable system, he believes the moral hazard of bailing out the banks is going to have end:

[The banks] have to suffer and suffer badly. They will have to suffer in such a way that in a decade they will be scared in order to never behave in this way again. You have to reduce the financial sector to about one third of its current size and we have to also ultimately set up financial institutions and financial instruments in such a way that it is no longer desirable from a public point of view to borrow and gamble in rising assets processes.

The real mistake we made was to let this gambling happen as it has so many times in the past, however, we let it go on for far longer than we have ever let it go on for before. Therefore, we have a far greater financial parasite and a far greater crisis.

And he offers an unconventional proposal for how this can be achieved:

I think the mistake [central banks] are going to make is to continue honoring debts that should never have been created in the first place. We really know that that the subprime lending was totally irresponsible lending. When it comes to saying “who is responsible for bad debt?” you have to really blame the lender rather than the borrower, because lenders have far greater resources to work out whether or not the borrower can actually afford the debt they are putting out there.

They were creating debt just because it was a way of getting fees, short-term profit, and they then sold the debt onto unsuspecting members of the public as well and securitized their way out of trouble. They ended up giving the hot potato to the public. So, you should not be honoring that debt, you should be abolishing it. But of course they have actually packaged a lot of that debt and sold it to the public as well, you cannot just abolish it, because you then would penalize people who actually thought they were being responsible in saving and buying assets.

Therefore, I am talking in favor of what I call a modern debt jubilee or quantitative easing for the public, where the central banks would create ‘central bank money’ (we cannot destroy or abolish the debt, which would also destroy the incomes of the people who own the bonds the banks have sold). We have to create the state money and give it to the public, but on condition that if you have any debt you have to pay your debt down — no choice. Therefore, if you have debt, you can reduce the debt level, but if you do not have debt, you get a cash injection.

Of course, this would then feed into the financial sector would have to reduce the value of the debts that it currently owns, which means income from debt instruments would also fall. So, people who had bought bonds for their retirement and so on would find that their income would go down, but on the other hand, they would be compensated by a cash injection.

The one part of the system that would be reduced in size is the financial sector itself. That is the part we have to reduce and we have to make smaller.  That is the one that I am putting forward and I think there is a very little chance of implementing it in America for the next few years not all my home country [Australia] because we still think we are doing brilliantly and all that. But, I think at some stage in Europe, and possibly in a very short time frame, that idea might be considered.

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38 Responses

  1. […] Read more… Posted in Banks, MERS, News Around The Country, States « NEW YORK Foreclosure Help from Mandelman Matters – START HERE Nevada Foreclosure Laws » You can leave a response, or trackback from your own site. […]

  2. Very interesting and revealing article. History is cyclical, whether we agree or not. Why? Because humans tend to forget fast, as it should be: it is a survival necessity to forget after a certain time. Otherwise, we’d all be running around as neverending scolded cats, feeling the human pain from the first man to the last one. There would be no escaping, there would be no creation, no invention, no discovery.

    We’ll get through it for a few generations and then, it will start all over again.

    http://www.occupythebanks.com/

    “Monday, June 11, 2012
    Dr. Dodd and His Warning about Hidden Fascism in America
    by Nomad

    Dr. William E. Dodd

    “Fascism
    is on the march today in America. Millionaires are marching to the tune. It will come in this country unless a strong defense is set up by all liberal and progressive forces. …”

    These words, apt as they are today, were actually said by Franklin Roosevelt’s ambassador to Nazi Germany, William E. Dodd, in an interview upon his return from Europe on January 7, 1938. Having seen first-hand the threat of fascism, he believed, with all of the connections between the industrialists and bankers, that time was running out for liberty in the United States.

    Soft-Spoken Historian from the Carolinas

    Dodd had not been Roosevelt’s first pick for the ambassador post. The other candidates for that position understood the challenges and realized what kind of political equilibrium would be required to make everybody happy. With varied excuses, each had politely bowed out of the running. Finally, in June of 1933, Roosevelt offered the post to Dodd and he accepted.

    Read the rest by clicking on the link.

  3. Cheryl,

    I am in federal court and I sued on Respa, Tila, FDCPA and other statutory violation, plus negligence and, and we are adding players, we are adding counts such as breach of contract. I’m suing for actual damages and I will end up with the house since no one has been able to produce the note, document the transfers/assignment of the loan and no one has recorded anything. But the house is really not what I’m after. It’s a weight on my ankle and it’s holding me hostage.

    I have that very strange feeling that banks have been told to lay low and all those weird fringe websites appear to know something we don’t. I am absolutely convinced that banks are on their way out. The sudden push for foreclosures is something else altogether and I think it emanates from government more than banks. Something IS going on. I can feel it.

  4. Enraged –

    If you can tell did you sue for damages or are you talking about money the back may pay off. I have a similiar situatiton to yours. Thanks.

  5. @enraged

    Never said anything about having it both ways…I was merely relating what he said about suing.

  6. Didn’t you guys read that whistleblower story about how the loan mod applications were shredded as soon as they rolled off the fax machine? Loan mod, fooey. All the servicers just delight in watching you jump through each and every hoop they hold out, leading you to believe they lost 40 million submissions somehow? Come on. Banks are paper pushers and record keepers. There has to be some point where you start to question what is obviously a lie. The only people who got real honest-to-goodness loan modifications were people who worked for a bank or a financial company, who knew about the scam and threatened to expose them. Only those few slipped through the effective block they put up–claiming that they “lost” your paperwork. If none of us posted in forums like this one, complaining about having to resubmit seven or eight times only to be turned down, then each of us would believe we were a single case wherein they actually “lost” our documents…but we do talk and this communication is the cog that gets the machine rolling that crushes the banks with law suit after law suit until we rid society of these blood sucking criminals. We don’t need no stinkin’ banks! Never did, never will. The propaganda has stopped here, we need to educate everyone and keep talking until virtually EVERYONE knows. I am starting to meet people who know all about it! I just rented a house next door to retired army family who told me things I didn’t even know. Unfortunately, this place I moved into will be foreclosed on July 3rd. I have no way to know if the bank will honor my year lease, so I may be moving again thanks to the asshole who never told me he was about to lose the place. So you aren’t the only one who is constantly uprooted, enraged. Life is a dance on hot sand for me too.

  7. @Carie,

    Read what Goi posted. It’s CA. And he/she gives names of attorneys.
    Worth contacting them. And they did a nice job. Although… Chris won mostly because B of A didn’t show up. Then again, B of A didn’t show up because the attorney’s leg work was probably too much already. Well done!

  8. @Carie,

    Read the entire post. And quote the entire post as well. And by the way, what were you after? A mod? I thought you didn’t want to put your signature on some “fraudulent” document… And didn’t you harp forever against the mods?

    Can’t have it both ways, kiddo.

    I, personally, don’t want a mod. I went that route. Servicers screwed me over, it cost me $3500. I said no more. Question of choice, I suppose…

  9. @Nora,

    You got me there. So, here are the things I really worry about. Not having toilet paper. Big one. Or tooth paste, for that matter. Having 50 trees in my yard but not knowing (yet) which one would make me very sick if I ate its leaves. (That, I can figure out ahead of time but I’ve been lazy).
    What roaches taste like. Termites taste like nuts. I know. We, kids, ate them in Africa. Roaches? I don’t really know… Not in a hurry to try either.

    Think about it: we are in the mess we’re in because people worried about money. Live by the sword, die by the sword. Retirement. Gotta put money aside. My Bible never said i had to stop working at 65 and sit on my thumbs while chumping down oreo cookies. On the contrary: gotta work my entire life. That’s why it’s so importaqnt to do something you like. Life insurance “just in case I died (which i will but… you never know, right?)” Being sued and then, they’ll take my money and I’ll have nothing left. AHHHH! That one is soooo big! It’s all about money. Always. The only thing people thought they had control over. Even that “Get food. Stash it away “just in case”, to prepare for Armaggedon. By the time you really need them, your rice and your beans will be eaten by little bugs crawling everywhere in the containers. Dig a bunker to protect yourself in case of a nuclear war. And then what? You come out to realize that everyone else is dead and you’re just by yourself or, worse yet, the only people left are those neighbors you never could stand? A bit Twilight Zone, isn’t it? Either people have faith in their abilities and… God (or whatever they get their strength from) or they don’t and all they do is make plan Bs all their life.

    And those trillions you’re mourning? They never existed in the first place!

    @Goi,

    I’m with you there. As a matter of fact, I don’t want gov. to nationalize the banks now that they have no money. That would seriously compromise the outcome of my case. We can’t have that now, can we? Nationalizing should be done only when the businesses have plenty of money. Not when they have embezzled all of ours. What i’m hoping for is that my servicer will last until after my case is resolved. That would be a real bummer if servicer went bankrupt before.

    Congratulations, by the way. I, for one, would rather have the money than the house. There are still many countries i haven’t seen…

  10. @enraged

    Looks like your buddy doesn’t agree with you:

    http://mandelman.ml-implode.com/2012/06/things-i-think-homeowners-should-know-about-loan-modifications-hamp-2/

    “…Some will say that loan modifications are all scams because of such factors as a clouded title, or some sort of failure in the securitization process, or because documents were signed by Mickey Mouse and notarized by Donald Duck. They’ll tell you that you should file a lawsuit against your servicer or lender, because that’s the best way to save your home from foreclosure.
    They’re wrong…”

  11. I agree. The real problem is government, because without their direct involvement, the banks could never have gotten as powerful as they are. We have essentially lost control temporarily of our republic through government and the correlated corruption. It’s time for government to be nationalized! (and hacked down to a constitutional size) The banks will orchestrate their own undoing with their isatiable greed, but government will have to be dealt with. Congress needs to be tossed out and the two party system abolished. We need an entirely new type of government structure that severs the money from the political process.

  12. Nationalizing Banks is NOT the answer. If you use the current banking laws: you can ‘win’ your house FREE & CLEAR [I DID]. No whining; just use your head and get HELP…!!!

    Here’s the Judge Signed Order: http://www.scribd.com/doc/90184879/I-Won-my-House-FREE-CLEAR-Here-s-HOW

  13. It’s the things you never thought of or worried about that get you. Some idle Teusday afternoon becomes the one where your world is forever altered from some unforseen event beyond preponderance. Worrying about anything other than real threats is indeed a waste. Ignoring them or using the Scarlet O’Hara method (Fiddle dee-dee, I suppose I’ve done murder…I’ll worry about that tomorrow) will only temporarily relieve the stress.

    More and more of us are losing everything we worked for and having to travel light, but not by choice. Everything about government is a lie and yet some of us choose to continue to participate. Government is the instrument of the evil psychopaths who’ve usurped control of it and are keeping two sets of books. Trillions and trillions didn’t just evaporate. http://beforeitsnews.com/story/1590/729/Government_Corruption_Hidden_In_Plain_Sight,_Documents_Known_As_Comprehensive_Annual_Financial_Reports_CAFRs_..html

  14. “I’m going to opt for preparedness since I have experienced times when things happeded unexpectedly.”

    That’s all to your honor. I, for one, prefer traveling light. I’ve lost everything so often and started from scratch so many times (starting with when I came to this country with just a suitcase 30 years ago) that piling up for rainy days doesn’t do it for me. All it would do is buy me a few days or a few weeks. I’m more of the: “We’ll cross that bridge when we get to it” kinda person. Because the way I see it, if I start worrying about something and it happens, I’ll have lived through it twice. If, on the other hand, I worry and it doesn’t happen, what a waste of a good energy spent not enjoying whatever life i have today…!

  15. A Notary has a duty to place the affiant under oath and attest to certain facts. A Notary has a duty to verify the auticenity of the affiants claim of their idenity. A Notary must determine if the affiant is compentent ( the ability to understand what they are agreeing to and signing). If the affiant fails any of these … the Notary can not sign or seal the agreement withut exposing themselves to legal implications. Wake Up borrowers…. do you really have the abilty to understand what you agreed to? Come on now .. be honest! Of course NOT! The origionators always led the borrowers to believe the Signing Agent was a representive of the lender. Not True! .. they are a Public Servent, hired by either the borrower/consumer or title agency or representing attorneys office. They are Never a represenitive of the origionator/pretender lender or any party in intrest. If they are legalizing transactions into witch they are a party of intrest in the contract … that is a Criminal Act. Now how many of these young students the banks hired in these forclosure mills had actual real knowledge of their true legal responibilities themselves to the consumers of their state? Who do you think trained these notaries and paid for their seals along with their paychecks? Not the NNA (National Notary Association). They certify that their notaries are trained as impartial public servants.

  16. It absolutely is time for new rules, the old rules that permitted this whole situation to evolve failed miserably. What you are referring to is human nature, not rules. The rule of law has been corrupted, resulting in abuse of process. It is time for new rules, written by the people, not corporations. Rules control behavior when a consensus authors and abides by them, they do not make people better they just make their behavior agreeable to the concentium. Forty thousand new laws were passed in 2011 and every single one of them needs to be thrown out. We just need a few simple rules, those allowing us to be free and live as we choose so long as we don’t harm anyone else.

  17. I get it from having studied accounting and keeping the books for several businesses and reading. Our governments keep two sets of books, just like Enron did. There are many people who are aware of the double set of books. Just because you don’t know about it, don’t assume I’m incorrect or making “sweeping statements”.
    Wave theory won’t save you from a sudden event. It doesn’t sound like you expected or prepared for the financial crisis of 2008. I’m going to opt for preparedness since I have experienced times when things happeded unexpectedly. Often when things seem to be a long way off, they happen overnight. This is particularly true when people are hungry, angry and oppressed and fear for their children’s safety. That point is approaching rapidly. No one is able to predict the future with certainty, or rely on history to determine the timing of events. The ones who are ready to defend our freedoms now have a leg up on the psychopaths who are moving according to their decades-long plans that move slowly and meet with failures like their inability to get rid of Chavez. That was a big fail for them.
    An iniative and an offense to rid the world of their financial tyranny now would be rewarded well. If we just sit and wait for the fit to hit the shan, we’ll be screwed. Many more will die than necessary.

  18. @Nora,

    “Time for new rules.” Nope, not “new” rules. We already know what they should be and they ain’t “new”. In fact they’ve been tried and proven since the beginning of time. We don’t need “new” rules. We just need to get back to the old ones. You know… like: keeping one’s word, thriving for simplicity, giving the benefit of the doubt, loving one another and not immediately jumping to conclusion when people don’t act the way we’d like them to.

    We’ll get back to that: only way humans can survive. comes with the territory. We want to be humans and survive? We have to follow them. We don’t want to follow them? Bye bye humans. Another species will take over.

    Simple as that.

  19. Besides, if you become self-sufficient you don’t even really need money. Use all your cash for a cabin and drilled well. Build some solar panels and a greenhouse. Grow some safe, nutritious food. Become a good shot and trade your surplus food for bullets or shotgun shells. You will begin to see “survivalist colonies” spring up, recruiting skilled trades people and master gardeners, who are off the grid, who consider themselves sovereign and who resist any attempts by government to encroach on their rights. Far better than winding up in a FEMA camp.

  20. @Nora,

    I love people who make sweeping statements such as: “Hidden money… 2 sets of books…” and such things. Where do you get that from?

    Honestly, I really believe that what we’re looking at is the culmination of human stupidity, pride, greed, envy, jealousy, etc. All those nice little qualities we were warned against. I don’t believe in “evil doing” (that would be giving too much credit to the culprits and no one is spiteful and hateful enough to risk self-destruction just for the hell of destroying the rest of the world). As far as I know, Jamie boy, Stumpf and those guys have nowhere to go but here. “Evil” will never risk self-destruction. Otherwise, it is too stupid to even qualify as “Evil”.

    What we’re looking at is complete impotence before a situation those guys created and can’t analyze, let alone fix. We’re looking at the absolute failure of people who wanted to be viewed as geniuses

    And for those who can’t gather five minutes of elementary patience, here is how it will play out. I, personally, believe it: it’s been 2000 years in the making… and it follows everything we know about how history has played out in the past. I can’t see why any of the rules would have changed. Truth was truth then and it is truth now. Anything can happen: truth won’t change. Anything can happen but it still follows certain rules common sense taught us (and we collectively decided to forego). Time to face the musice… collectively.

    The Economic Collapse Is Not A Single Event
    Posted on Jun 16, 2012 in Conspiracies | 0 comments
    Michael Snyder/Activist Post

    Many people hype “the coming economic collapse” as if it is some kind of big summer Hollywood blockbuster. Many people out there write about it as if it is something that will happen in a single day or over a few weeks and that it will suddenly change how the entire world functions. But that is not how the financial world works.

    The financial world is like a game of chess – very slow and methodical. Yes, there are times when things happen very quickly (like back in 2008), but even that crisis played out over a number of months. Sadly, most Americans are not used to thinking in terms of months or years.

    These days, most Americans have the attention span of a goldfish and most Americans have been trained to expect instant gratification. They are simply not accustomed to being patient and to wait for things.

    Well, despite what you may have read, the economic collapse is not going to be a single event. It is going to play out over quite a few years. In some ways we are experiencing an economic collapse right now. When the next major financial crisis occurs, many will be calling that “an economic collapse”. But if you really want to grasp what is happening to us, you need to think long-term. We are heading for a complete and total nightmare, but it is going to take some time to get to the end of the story.

    Yes, there will certainly be times of great chaos. The financial crisis of 2008 was one of those moments. But the financial crisis of 2008 did not completely destroy us. Neither will the next crisis.

    I think it is helpful to think of what is happening to us as a series of waves. When you build a beautiful sand castle on the beach, the first wave that comes in does not totally destroy it. Rather, the first wave weakens the castle and it is destroyed by subsequent waves. Well, that is what is happening to us.

    The financial crisis of 2008 was a wave. The epicenter of the next great financial crisis will be in Europe and that will be another wave. For many, the next financial crisis will feel like “the end of the world” but it won’t be. There will be waves after that one that will be even worse. Yes, the waves are going to start coming more rapidly and will start becoming more intense. In that way, they will kind of be like birth pains.

    But these problems did not build up overnight and they are not going to disappear overnight either.

  21. We must not stop purchesing new items, we simply need to shop at the local owned maa & pop stores. Remember we need employment. But if we stop shopping at the wall street stores, as they lay off.. the locally owned small stores and business will grow and create new jobs . This especially goes for Chain Restraunts …. we are all guilty of that. But a change in shopping habits and eating out can have a major impact of wall street companies. When shopping resale, go to a non for profit store where you money is pumped back into your community for those who need the help most.

  22. The collapse of infrastructures will be engineered, just like the engineered to fail “loans”, there is no need for it. All municipalities have money hidden. There is a double set of books, one is given for public scrutiny and the other shows a surplus that has been siphoned off for decades through “zero balance” bookeeping, which is only known to government insiders. The government is every bit as much to blame for the economic disaster on the horizon as the banksters. It is time to refuse to accept their authority over us and get rid of them. Our government was established to protect our freedoms and serve our needs, not enslave and sicken us. Time for new rules.

  23. @Nora,

    We’ve been saying that for years. Had it been followed right from the beginning, we’d be out of the woods by now. It’s gona take a little longer before people get it. in fact, what may very well happen is that, since people don’t do it voluntarily, they will be forced by the collapse of infrastructures as we know them. Because once municipalities and utilities run out of money completely, there’s gona be no turning back: we won’t be able to access the money. Period. So, it will simply vanish, along with the banks. And once people start living without banks, they will lose any taste for them.

    Banks were a convenience way bacdk then. Not anymore. We’ll end up doing without. Question of time.

  24. If we want to take the banks down to the mat, all we have to do is stop borrowing. Pay cash for everything and buy used items rather than new that entail payments. With the debt based model the banksters have set up, the only way more money can be created to profit on, is to make new loans. When there are no new customers and the old customers refuse to pay, the banks are goners. Don’t feel guilty about not paying either, because the banks create money out of thin air. It’s nothing more than key strokes and ledger entries. They use the Note
    you create when you sign as collateral for your loan, so you actually fund your own loan. Then you work for thirty years and pay them three times the amount you “borrowed” in interest on money they just created out of thin air. Biggest con in history. Stop paying everything owed to banks, and spread the truth to everyone you know or meet.

  25. @menandmarriage, Be Careful there! You may be giving them legal advise by advising them not to sign. But you yourself can refuse to sign, (fidicuary duty) that usually leads to questions… thats when you look at the borrower dead in the eye and repeat over and over ..”I am not an attorney”, I can not give you legal advise”. Get louder and louder and do not lose eye contact.

  26. @Carie,

    Put things in perspective here, shall you? Iceland is a small country with very few people (12 or 18 million on the upside?) Means that there are ONLY 18 million people who wnated those guys’ skin.

    We’re 320 million (minus the 1% waiting to get theirs). it means, if we believe in mathematics, that there are 320 million reasons (give or take a few) to punish them and punish them good!!! Ain’t gone be 4 1/2 years. No sireee! Not here! Because here, one bad apple rots a 320 million basket load. in China, they kill them because one bad apple rots a 1.2 billion truckload of apples. Can’t afford that. Nor can we here. Simple mathematics.

  27. @enraged

    “four-and-a-half years” is harsh? wow.

  28. If it can happen there, it can happen here. Just a question of getting off our butts and getting moving…

    Seriously, guys, replace the names with people we know, like… I don’t know… Dimon? Bankfein? Then, reread the whole thing and see how good it makes you feel all of a sudden! That’s called “visualizing”. And it works.

    Former Icelandic Bank Executives Jailed For Fraud After Almost Bankrupting The Country
    Added by TheTruthIsNow on June 16, 2012.
    Saved under HEADLINES, THE MONEY SCAM
    Tags: bank bailouts, bankers, banking crisis, Former Icelandic Bank Executives Jailed For Fraud After Almost Bankrupting Iceland, political, world elite, world news Ice News:

    The former chairman and the former CEO of the Icelandic Byr Savings Bank have each been sentenced to four-and-a-half years behind bars after being found guilty of fraud. The country’s Supreme Court found that Jon Thorsteinn Jonsson and Ragnar Zophonias Gudjonsson abused their positions as executives at Byr when granting an ISK 800 million (EUR 4.9 million) loan to Exeter Holdings ehf, just as the Icelandic banking system was on the brink of collapse in 2008.

    Exeter then used the loan to buy Gudjonsson and Jonsson’s shares in Byr, before putting them up for sale as a collateral guarantee for the loan.

    A ruling posted on the Supreme Court’s website said the sentences were harsh because the “magnitude of the offences was significant”. It continued that Gudjonsson’s “infraction was committed under the auspices of his mandate” as Byr’s CEO, and that Jonsson’s action “relieved him from personal guarantees on loans”.

  29. @Kris,

    “Why do we keep comparing ourselves to every other economy? We are not China, UK or Greece…Wall St. sold them bogus loans too. The hybrid Socialist economies are not ours.”

    1) We keep comparing ourselves to everyone else because it is a distraction to tackling the real issues. Everything going today is a distraction, including Fukushima: read and do your reserach and you’ll soon find out that Fukushima was manmade. But is did accomplish the goal: people are getting so scared that they overlook what is going on here.

    2) We are, to a certain extent, a “socialist” economy. In this country, banks gain are capitalists. Banks pay near to nothing in taxes when they earn big. When they lose through gambling, government bail them out. It’s socializing the losses. Krugman said it very well.

    3) Fraud has been endemic in the real estate business for over 30 years. Just recalling my own experience with my refi made me realize how much we all were abused. It still goes on.

    It will have to blow.

  30. I as well was repremanded at work. Human Resourses was told by an employee that I was telling people not to pay their debts. I work for a bank. Further, they said I was providing legal advice by informing clients when entering into a loan or mortgage that the loan could be securitized and do not agree to a mortgage were MERS is the mortgagee. Also, do not sign any mortgage documents at closing until you give yourself time to read through the loan docs and have a third party attorney review them for you. I sat at closings with clients and specifically told them not to sign…Do not agree to allow your loan to be sold to another party. Force the lender to either include their name as mortgagee or the party who is funding the loan. That way if something goes wrong, you have more information to support your position.

  31. bottom line Kris- the wheel must turn, the financial wheel of the globe-
    governments have no choice but to make the wheel turn, they gave up the reigns long time ago, what i want to see is it turn towards a better future than the one we are on course for right now. i maintain that the rule of law must be the order of the day, im not an attorney but without law and those boundaries it affords society, developed from the magna carta, we will have nothing, no where to go but the streets.

  32. Why do we keep comparing ourselves to every other economy? We are not China, UK or Greece…Wall St. sold them bogus loans too. The hybrid Socialist economies are not ours.

    None of us signed on for other than one loan-with one lender. These parasites sold loans multiple times and used our collateral for the end-game value of our mortgages. Show me the contract for that. My DOT says the mortgage may be sold, singular…approximately 25-50-75% of the time. The DOT does not say, your loan will be sold multiple times and you will be held personally responsible for payments if the originator does not fund, misuses the money or intentionally defaults the loan for insurance proceeds? Our personal information and homes were used for profit to thugs, who knowingly, willfully, intentionally mislead the lenders, investors, homeowners, the government and insurers. Not that I am any fan of some of these people, but really, forgery is acceptable now? Bernie Madoff is a choir boy compared to these folks.

    Having done thousands of hours of research, this is not just about “show me the note”. The framework on this is much larger. My information has found satisfactions of deeds in multiple townships and counties from title companies, servicers, debt collectors and substitute trustees and closed corporations, interesting at the very least? Thousands done second after second…minute by minute. Many of you have satisfied debts…guarantee it, but the work is daunting. I just received a copy of my note, supposedly the original…it is blackened out, where the signature is (no signature, just 2 initials), date, book and page number, etc..entirely forged. Assignments do not look like that, nor do transfers. Just saying.

    In the end, show me the note, is just a piece of the puzzle. There is much more going on…stay vigilant people. At the end of the day, many of you will find your note is satisfied and a servicer or a debt collector has bought your “paid-off” note and has wrongfully foreclosed. Just a footnote; many of the banks have made title claims, which means the homeowner is entitled to one too.

  33. @ Enraged, I am so sorry! I wished I were your Closing Signing Agent…I for some odd reason enjoyed those lender/borrower&Kat talks with the lender on the phone at closing time, the lender/broker acting all macho and yelling and screaming thru the speaker phone & telling me I was just a Nobody Notary who did not know what I was talking about, hahahaha…. .I always stand up for the borrower. Most borrowers do not know their legal rights. Like these “You have a right to choose your own Title Co, Title Insurer, you have a right to request your own Notary/Signing Agent at your closing, you have a right to have an attorney present.”” Your informed of most of these rights in your book at closing after your pretender lender sets everything up for you. The lenders wanted your trust …. if you had no representation, YOU WERE A TARGET for bait and switch.

  34. The tragic part was, at closing the final terms were almost never what was agreed in pre disclosure docs by a long shot …..(not the avg give or take $200 margin) Whopping $3-10,000 differances, higher intrest rates and the one that just rattled me the most ….. the company that added on a regular basis 1800.00 in attorney fees on the final HUD under the title charges, when the borrower had no councel there. There were so many horriffic things they did to the borrower to induce them into signing if they tried to back out. We’ve managed to get most shut down thru AG office. I’m very proud of our AG. Althou, I must admit the AG settlement without inditements, knowing dag gone well the borrowers were victims and need protection is a huge disappointment..

  35. @Kathy,

    I believe you. When I refie’d, I almost refused to sign because I did not understand what I was getting into. The lender did go ballistic. He insulted me, accused me of having wasted his time, threatened me with having me pay all the costs associated with the closing and for his time wasted in working the refi if I refused to sign, etc. I got intimidated (I’ve grown a lot since…) and I signed.

    Three weeks later, I realized what I had signed: an adjustable mortgage, with interest-only payments. i was much, much worse off than before. And I contacted the CEO of the lending company after the lender refused to answer my e-mails. That lender had made a terrible mistake: he called me and left me a 10 minute-long message threatening me with bodily harm. he knew where I lived and he would “take care of the situation in person” if i didn’t stop harassing him. I threatened to go public and to got after their license. I filed with the AG, I filed with BBB and i filed criminal charges against the lender. I moved hell and earth. When the CEO heard my taped message left by his agent on my cell phone, he decided to handle that matter personally. The whole thing was reversed but I still lost a lot in the shuffle. In retrospect, i could have milked it for everything it was worth but I just wanted it over and done with and I didn’t know what I know now. Had I known, I would have pursued and obtained damages. Live and learn. I did keep that infamous recording, just in case.

    Yes, they did use threats to force you to sign. And they used threats to stop you from canceling within the three days. In fact, they ignored you for the all 3 days and then, they would tell you that you had 3 days and you had blown it. Again, I was naive, I didn’t know that environment and I had no idea what was going on. All I knew is that I had been conned into a bad refi and I wanted out.

  36. I’ve had borrowers call me weeks & months after closings and inform me they enforced the RTC. But the new lender is sending them bills and they are still sending payments to the old lender. Borrowers called me out of desperation all the time. The lenders would not return their calls and the new lender was charging them late fees. I advised to call an attorney right away! If a borrower did not sign, we were to call the lender at closing. I heard everything and the moon…lies..more lies…. then desperation, just sign it now and we will fix it later or we will have to start the process all over again from the begining after dragging it out3- 6mo already. ..And if all that failed then they dropped the bomb..Threats!!! If you cancel you will be responsible for all the closing fees. Yep BEFORE THEY SIGNED…Yep… I opened my mouth. I keep my black list …and never worked for them again. There were so many…like cockroaches running out of all the corners. I witnessed it upclose and personal. I can tell you the lender sold the loan before the borrowers signed and went bilistic on the borrowers if they refused to close.

  37. Enraged, I agree! I surveyed borrowers at closings this year…I asked if they were aware their loan was going to be securitied? They asked what is that? I would ask (before signing the mortgage) if they understood that MERS ,Mortgage Electronic Registration Systems would hold lien to their titile? They asked Who? I have actually been repramanded and had my fee reduced because a borrower marked out the income stated in his application and wrote in the correct amount (always over stated). Many homeowners complained that the information on the final loan application (fabricated for closing) was incorrect. We were directed to call the lender , .. the lenders common response was … I see that, do not worry about it, we already have you approved, its a typo and we will fix it before funding.

  38. “When it comes to saying “who is responsible for bad debt?” you have to really blame the lender rather than the borrower, because lenders have far greater resources to work out whether or not the borrower can actually afford the debt they are putting out there.”

    It has been my position all along (and the Bible’s position: the temptor is always guiltier than the temptee): lenders knew exactly what they were doing. They were the “experts”. That’s what they did. The cop, military, firefighter, teacher or office clerk was good at his/her job but would never have expected lenders to jump in it without training. Likewise, lenders should not expect borrowers to be, retrospectively, held to their level of expertise as regards mortgage lending. Courts have badly screwed up when holding borrowers to an unreasonable level of expertise they knew ot should have known the latter didn’t have. Borrowers have been held to the level of expertise of the lender, the attorney, the realtor, the title insurer, the servicer and the legislator.

    Would we hold a high-school graduate to the level of an economics MBA? Of course not! Was is it any different just because money was involved? People understand that “No” is a full sentence. Had most of them been told: “Sorry but you do not qualify for a mortage.”, they would have been hurt on the moment, they might have been disappointed but they would have moved on. Because of the atrocities committed, the entire society is unable to move on. If this is not criminal, I don’t know what is.

    Every single state has laws concerning comparative negligence and/or assumption of risk. Those laws must be invoked by every homeowner in his fight against the banks and servicers.

    Justice is about refocusing the responsibility where it truly belongs.

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