Predictions of bank failures from 2008

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Editor’s Comment:  

Some people have challenged our assertion that our predictions have been right on the money. The excerpted part of the first Workbook published was presented the first week of September 2008 after completing our analysis in August 2008.

The capital of the bank is its net worth. All regulations regarding banks watch the capital of banks carefully so that they are lending to a point where they are endangering their ability to honor the deposits or investments made by consumers and businesses. Here is how Wall Street “fell” and how we predicted it accurately.

There are three types of capital.

Level one is what the asset is obviously worth on the open market by looking at a publicly known and trusted exchange like the New York Stock exchange etc. Level two are assets that are combinations of level one assets. So if you had a soup can as an asset, you would be able to tell what it was worth by looking at the commodity markets to determine the value of carrots, celery etc. Level 3 assets cannot be valued by independent means. They are assets that re valued by management in any way they deem fit. They normally are extremely low in financial institutions because financial institutions don’t typically buy or create or acquire assets that have no independently verified value. They stick with known values that can be verified. That is what was so different starting in the 1990’s.

This says it all I think. Brad and I poured over the financial statements of the largest financial institutions and found to our shock and horror and level 3 or tier 3 assets were at levels unheard of in the history of banking. Usually hovering around 5%-15% of capital (at which point they were considered risky), we found dozens above 15% and this list that shows that level 3 assets were MORE than all (100%) of the capital the bank or financial institution claimed to have. The entire financial world had been turned upside down. Some other people were writing books about the impending collapse of the stock markets etc., but they were largely ignored.

On the day that Brad and I gave our first seminar In Santa Monica the largest mortgage lender on the West Coast, IndyMac was taken over by the FDIC. We decided to publish our findings that day predicting that it was not just the lending companies that were fronting for Wall Street that would fall. It was Wall Street itself.

Brad made a list of the worst offenders to the institution that had more level 3 assets than all their capital combined (100%), which means that they were doomed to imminent failure. Here is the slide in which he showed his analysis. Since we were concerned with the fate of homeowners and not investors in the markets, we did not elaborate other than to say that these banks would fail within 6 months. We were wrong. They all failed within 6 weeks of publication of our predictions. The slide and related slides were left out of revisions tot he Workbook #1 because it was an event that had already happened and we were, again, concerned with what we could do to help homeowners in distress, not banks in distress.

Predictions of Bank Failures 2008

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88 Responses

  1. Pretty! This has been a really wonderful post. Many thanks for supplying this info.

  2. […] Like this: Like Be the first to like this. Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor,Investor, Mortgage, securities fraud Tagged: | buying distressed properties, buying foreclosed properties, Canadian investors, money trail, pretender lender, short sales, waiver of subrogation, wire transfer instructions « Thank you for the inspirationPredictions of bank failures from 2008 » […]

  3. @ dcbreidenbach

    EST…

  4. @ANN
    just out of curiousity what time zone are you in?

  5. @ POPPY
    Just out of Curiousity what time zone are u in?

  6. kc – I may try your suggestion – thanks. But there are disclosures mutual to all loans, like reg z, gfe, ecoa, ror on o/o refi’s. The task is to identify the disclosures, first the “mutual” ones and then the ones peculiar to a peculiar loan, like the infamous option arm. Beyond that, I am interested in learning if the borrower as a matter of law must be provided copies of those docs (and the closing docs). I’m appauled to hear some people have next to nothing of their closing docs and must now beseech the servicer for copies. That’s just crap, so then the task would be to determine what to do about the lack of mandatory copies (other than the ror, which copies of are known to be legislated). I don’t need a description of the docs, just the names if only the ‘mutual’ ones to start. If I have a name, I will likely know what info is therein.
    Known -to me- loan docs at closing:

    note (arm riders?, deed of trust and any pud riders (planned urban devlpmt, generally when there’s an h.o.a.) The borrower is to get copies of these to the best of my knowledge.
    final reg Z truth in lending (apr, amt financed, late payment fee, no. of payments, amt of payments (p & i))
    *Notice of servicing – does lender service loans? what percent?*
    * an asterisk means this info might be disclosed during processing of the loan
    Arm disclosure(s)
    HUD 1 settlement statement
    copies of payoff statement from current lender if refi
    carie, before you get excited, and I don’t mean this in a neg
    way, I can’t swear borrower was to get copy of this, or even most of these – that’s the mission for anyone who wants to contribute
    Final 1003 loan app (which really should have been signed prior to
    loan approval, but well, you know……)
    hazard ins notice (you agree to maintain prop insurance)
    flood cert (based on FEMA map)
    1st payment letter and coupon
    *ecoa and it is the equal credit opp act notice
    3 day right of rescission with date (cannot be blank) on owner – occupied refi’s (and seconds, I think). The three days begin the day after docs are signed, so if sign docs on a thursday, loan cannot
    disburse til tuesday. Most lenders count saturday as one of the three days (but not Sunday), alleging to be open on saturdays and many probably were. Days of rec would be counted: friday, sat,
    and generally stated as monday at midnight (end of the third business day). Disburse on tuesday. Interest may only be collected as of the date of disbursement (after the 3 day ror had come and gone), not the date of signing docs in the case of an owner /occupied refinance (see your HUD 1) or a second, if ror applies. If a loan disbursed within the first five calendar days of a mo., the borrower probably received an interest credit on the the HUD, with the 1st pyment due the 1st of the next month. Conversely, if the loan disbursed after the 5th, the interest would be charged to the end of that month and the first payment would be due almost 2 mos later. (d/b May 14th, interest charged on HUD to end of May. 1st pyment due July 1.) Interest on these loans is paid in arrears, so when you made the july 1 payment, you were paying interest for June.

  7. @John, it would take me forever to explain it for each type of transaction. google your( loan transaction type and required lender disclosures), then google your (loan transaction type and required title disclosures).

  8. kc – are you able to find out (not counting the mandatory 2 copies of the ror to each borrower) what copies the borrower HAD to be given of the closing package? I know lenders who gave the borrowers complete copies of all docs. What I don’t know is if this were good business or the law. They had to be given a copy of the note and dot, that’s a given, but what else was mandatory? Can you find out? Know someone to ask?
    thanks ps – in ‘escrow’ states, would that include copies of the escrow instructions and anything else relevant thereto?

  9. @John, I went back to school (again) and got my Signing Agent and Title Abstraction Cerfifications. I also studied FM/FF underwriting programs,RegZ,TIL,HUD etc.. I could spy the errors/fraud quickly and encourage the borrowers to seek legal advise. If they did not take my advise, I refused to sign and close with the errors. They always found someone else to do it thou .. 🙁 The New Closing Practices and Standards of disclosure are coming soon.

  10. @kc – you are probably correct in your assessment that notaries were the ones who presented docs in the madness years , which imo is reprehensible. No person who has no working knowledge of the documents should be presenting them for the borrowers signature. Under those circumstances, notwithstanding the 3 day right of rescission (and not applicable on purchases), the borrower had NO chance of getting any questions answered at closing. (The bankster will probably say well, the borrower didn’t have to sign, which is factually true but nonetheless not the solution imo) If no law currently exists to protect the borrower, we can add that to our list of needed legislation. I’m not about legislation to wipe your nose, but these are significant transactions and events. Any expectation for the borrower to hire, say, an attorney for closing is unreasonable, tho it may be what one will have to do. I don’t know what the current environment is. People can help themselves by hiring an attorney who understands these docs (good luck, no offense to the legal comm; the reg Z is complicated, for instance, but at a glance, the further away from the interest rate the reg z is, the more the borrower is paying for the loan by way of points and fees) and get there early for review or by demanding the docs a day ahead of closing for review (good luck on that one, too, but remember, they want your loan once it’s approved. Make this demand known from the get-go and also that you will want the name and # of a person to whom you may direct questions. Lenders won’t like this because as it is, there is often a last-minute scramble for docs. They can adjust, esp if they’ve been noticed you want those docs a day ahead of closing. It’s your autograph and your future. Guard them!

  11. John, …. I can attest to the Fact that not all closing packages had two copies of the RTC, some had none at all. I can attest to the Fact that a Signing Agent (Notary) who has no knowledge of the requirement of these disclosures would not know they were even missing. If you do have a RTC in your origional closing package, look and see if the RTC date is filled in properly or even at all. All the above situations trigger recission ..

  12. […] Read more… Posted in Banks, MERS, News Around The Country, States « BUYING PROPERTIES: Pitfalls and Remedies “A day of reckoning may soon be coming.” Yves Smith » You can leave a response, or trackback from your own site. […]

  13. The right of rescission – two copies for each borrower – was probably appl on an owner-occupied second, also.

  14. One other mandatory notice: your right to select your own insurance co. for hazard insurance (could not be compelled to use affiliate of lender, or anyone not of your choosing). Hmmm…..wonder if this disclosure might be helpful for those victimized with force-placed insurance or w/e that bs is called.

  15. It’s news to me if 1) certain disclosures were optional (but some might be diff on an arm, of course, v a fixed rate loan) and 2) the borrower is not to be given copies of each document he signs. KC may be right, not sure. Borrowers had to be, no option, at least presented with certain mandatory disclosures, like TILA REG Z, gfe, notice of transfer of servicing (including, significantly, if the ‘lender’ ever serviced loans) , equal credit opportunity ‘act’?, dang I forget but abbrev’d as ecoa, notice of right to a copy of the appraisal (I think), and i forget what else.
    The borrower may not have been entitled to copies of some of these disclosures,tho I believe it’s that he was, but they had to sign that they’d been informed. Can’t believe the borrower would not be entitled to copies of the reg z and gfe.
    Every borrower must receive TWO copies of the right of rescission in an
    owner-occupied refi (with a stated deadline to rescind) or they are messed:
    Game over, no joke, subj perhaps to the st of limitations, which might or might not be tolled pending your discovery of your right to have received those two copies.

    You had to sign a doc stating that you had received the two copies. Whether you did or not is still debateable (“here, sign this”), but the law will generally find against you if the bankster produces your autograph saying you did. If a couple or two people, this means you walked out of there with FOUR copies.
    Every borrower should have gotten a complete copy of every document signed by the borrower at closing. Was this a law or prudence? I’d almost swear it was law. I know one thing, as to a contract, if one party does not receive a copy, that contract may be refuted easily enough.

  16. KC,

    The necessary ones were created after the fact is correct. Now title tells me that those forms belong to the lender. And that we do not keep those forms on file. Sorry, my question was is how does the loan disclosure process work. I didn’t ask what’s on file. You already sent me some copies of those forms, from my bankrupt lender, last year.

  17. @dcb – I know very little, actually next to nothing, about true economics. But I bet if I did, I would find at least some motivation came from discontent with the value of the Euro to the dollar, which might have been reflective of our true balance sheet. Jimmy Carter was all but crucified for trying to reign in runaway inflation and who knows what else (?)

  18. @ENRAGED and JG et al

    Over the weekend I wrote a tongue in cheek [theoretically] essay on a hypothetical meeting at a yacht regalia in coonecticut by bankers and hedge fund characters enjoying themselves by planning the best way to bring down the eu union and creating some really deep discount distressed assets. Today my speculation was proven accurate—although I cant say exactly what address they were gathered –or what the call in number was:
    Today Spain went into a deep nosedive from which as best I recall –no distressed euro-zomner has escaped without a big bailout:

    “The interest rate, or yield, on Spain’s 10-year bond spiked 0.22 percentage points to 7.45 percent. That is the highest level since the euro began in 1999 and is considered unsustainable for more than a few months. The main stock index tanked as much as 5 percent before recovering somewhat.” http://www.washingtonpost.com/business/interest-rate-for-key-spanish-bond-soars-to-741-percent-highest-since-euro-was-launched/2012/07/23/gJQAcUci3W_story.html

    well our markets tanked too—down 233 points on Dow at open–some great buy ops as expected by the connecticut gang—so the next question is how much of a decline did they schedule for the rest of the week?

  19. @Steve, you are correct about the closing instructions. Disclosures vary by the type of transaction. Unfortunatly there had been no oversight to ensure that disclosures were actually in the closing packages. You could say the necessary ones were created after the fact…. to show the buyer/borrower had indeed been given disclosure. The Consumer Protection Bureau is Hot on this… we expect new consumer disclosure forms and checklists any day now that will be mandated to be in every closing package. The Signing Agents will be the new Oversight Committee you might say.. over this.

  20. DCB,

    That very much what Bill Black was saying in the podcast below. Worth listening to if you have a sound drive in your computer. 90 minutes of serious class…

    http://mandelman.ml-implode.com/2012/07/understanding-elite-fraud-and-the-mortgage-meltdown-with-william-k-black-a-mm-podcast/

  21. @ENRAGED ET AL

    There was a little noted piece of the Perigrine scandel that really should get a spotlite on it. The old crook had set up several ventures that purportedly were involved in holding and trading physical gold as well as derivatives–ie paper claims calls/otions and whatever else imagination might come up with.

    The physical part bothered me—–there is a very indistimct line between ETF gold—which is purportedly an undivided interest in a pile of physical gold held by a commodies broker for you and others.

    Supposedly people go to the biggest of these a actually phoograph the stacks to make sure the stuff is really there that you own a piece of–you cannot receive delivery of physical gold from these ETF stocks typically. The history of gold —even referenced in public consumption tv like pawnstars—-is goldipped lead or cores of cast bars of gold that are nickel——a good chemist can calculate the materials that one could assemple that would have the same weight and volume so you basically have to do core samples and then test the samples to determine purity—this is really tough to do

    the problem is that we have the same guys that did perigrine and mf global–and probably more that are now pushing gold —what if one or more of these big goldstockpiles turns out to be as fake as all the other financial products they hawk? Its only a matter of time till they get caught–this is an as yet unregulated scam—will it affect anything else? we know fro recent experience that these guys simply cannot engage in honest dealing unless they have a couple incorruptible regulators watching every move they make—–so ergo we know the gold stockpiles backing ETFs and derivatives are overstated —probably by a lot–if you grabbed perigrines gold bars what do you think you would find?

    there are a lot of smart people that read and comment here—please offer some thoughts on the implications–if the peregrine fake gold scam leads to widespread testing of gold bars and the dimensions of the missing gold become known? Will this destroy gold as an investment or improve it–my suspicion is that the bottom will fall out of gold markets—-and that well-healed insiders will buy up the real gold at dirt cheap prices [see for example the MBS debacle]—what happens to the natl govts value of gold stockpiles? –how does the collapse of gold affect currencies?

    if i had to put my finger on the next backbreaking scandal its got to be gold–now i know perigrine was in it

  22. @ENRAGED
    “It said only simple “vanilla” derivative products are likely to be allowed inside the protected area of the bank after the legislation passes through Parliament in the 2012-2013 session”

    This is almost humorous in light of the blatant disregard and cicumvention of rules that has occured. In DC they would call this “feel good legislation” ——–PR that has no real intent to be enforced——1st thing they do is require reams of regs–which takes 3-7 yrs—-then they dont fund the enfocer—if there are any real enforcement provisoions.

    Who defines plain vanulla–and how do you prevent “creep”—-how can you have a protected area inside a single company–they ask that area VP to step outside the room when they talk about other stuff?

    This is not a positive thing–its an abdication of responsibility–of intent to do more than slap on some whitewash and windowdressing—–if they were serious they would require a spin off and demand a capital structure that has two effects for the gambling operations—-one–the principals of the investment banking operation have their own capital at risk right down to the $100 million paintings on the wall [as for 200 years prior to mif 1990s] and 2) this limits the amounts bet because the available capital is inherently much more limited that it is if you can go to the central bank and borrow at zero%

    both aspects reduce risk in the system–its not rocket science–its old school that worked for a long time——if they wont return to this that means they are still addicted and are just in a gambit to buy time

  23. It looks like nothing but it’s huge. All of a sudden, we’ll hear news we had no idea about. It is happening…

    Rupert Murdoch steps down from NI boards

    Rupert Murdoch’s grip on UK newspapers is loosening “finger by finger”, as he resigns string of directorships.
    Rupert Murdoch
    Rupert Murdoch has repeatedly insisted that he remains committed to his UK newspapers, vowing that he will remain a “very active chairman” of the publishing busines. Photo: Getty Images

    By Katherine Rushton, Media, telecoms and technology editor

    7:00PM BST 21 Jul 2012

    Comments175 Comments

    Rupert Murdoch has resigned as a director of a string of companies behind The Sun, The Times and The Sunday Times, fuelling expectations that he is preparing to sell the newspaper group.

    Companies House filings show that Mr Murdoch stepped down from the boards of the NI Group, Times Newspaper Holdings and News Corp Investments in the UK last week. He also quit a number of News Corp’s US boards, the details of which have yet to be disclosed by the US Securities and Exchange Commission.

  24. Dismantling of the banks is already starting across the pond. Coming soon in a theater near you…

    Lloyds Banking Group To Speed Up Ring-Fencing Plans – Report
    10:21 AM ET on Sunday, July 22, 2012

    LONDON -(Dow Jones)- Lloyds Banking Group PLC (LYG) is set to signal that it will bring forward its so-called “ring fence”, or separation of retail and investment banking, ahead of the 2019 deadline demanded by the Independent Commission on Banking, the Sunday Telegraph reported.
    Without citing sources, the news report said Lloyds Chief Executive Antonio Horta-Osorio will say that Lloyds is happy with the Government’s ring-fence plans and wants to have a simple retail bank structure without recourse to any complicated investment bank products.
    It said only simple “vanilla” derivative products are likely to be allowed inside the protected area of the bank after the legislation passes through Parliament in the 2012-2013 session.
    The report said the speeding-up of the ring-fencing process could be announced as early as this week when Lloyds announces its quarterly results.
    A spokesman for the bank couldn’t be immediately reached for comment.

    Newspaper Web site: http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9418283/Lloyds-vows-to-speed-up-ring-fencing.html

  25. KC,

    On the part about an honest notary following the law. Where do you find the laws listing the loan disclosures at closing. I was told those forms are only included if it’s part of the lenders closing instructions.

  26. This is true … but if you had an honest Notary Signing Agent that followed the law to the T, you will find those docs in your closing file. If you research A.P.R. disclosures on T.I.L., you might be shocked. There are certain costs of the loan to you that must be disclosed in the TIL A.P.R. rate. The A.P.R. rate is only considered accurate if it is within 1/8 of one percent lower than the actual APR rate if calculated correctly. Brokers were greedy they pushed the limits to maximize profit. I.E. they did not add all required cost of the loan to you in the APR rate…Right of.Recission starts from the day of disclosure, and I’m not talking the signing date …. but the date you get Honest disclosure of the true and proper APR rate. Of course lenders are not going to tell you this. Brush Up on how the APR is calculated and you might be surprised. You do not need the underwriting program to do this … But Good Math skills are required.

  27. @ las vegas,

    Don’t spend too much time. M Soliman nailed it years ago.

    http://borrowerclaims.blogspot.com/2009_08_02_archive.html

    form 1003 and 1008. The William Black podcast just confirms it.

  28. @ enraged,

    But you would go through the same process wouldn’t you. From the 1st day you walk in the door with financials to the last day you signed in front of the notary. All I ever wanted to figure out is who was responsible for what, what pages are involved, and how are they transferred. I never got straight answers.

  29. @dcb – true or prob close enough. Kind of maddening. Surely we can do better. I sure hope so, anyway.

  30. @steve & enraged

    I’m going through all my paperwork again with a fine tooth comb, we purchased from the prior owner who owned home free and clear in 1993, we did a private mortgage deal with him ( he held the paper) we got in trouble in 2003 by refinancing from a 9% fixed to a lower rate fixed with an orignator who sold to flagstar who purchased in secondary market (maybe) and then a subsequent refi in 2005 to a pay option arm. so my title issues started with that first refi.

  31. @Steve,

    And it gets trickier as you consider which origination we are talking about. The original purchase one? The subsequent refi? All of the above? Every single step of the way, fraud was committed!

    Sometimes, I just feel as though we should all file suit and name everyone ever involved in the damn house!!! The shotgun approach: you’re hit, you’re it.

  32. I kinda have to agree. What’s left to say? He covered everything on origination fraud in detail and even went back to the early 90’s. You were going to get duped long before you even considered buying a home. But it seems like everywhere you looked, the discussions remained focused on the foreclosure. Rarely did anyone want to discuss the origination. I never got that? Maybe everyone went along and allowed themselves to get double duped.

  33. @Steve…

    Except that something bothers me a tad. Bill Black is no longer offering solutions. I’m concerned that, as he said, it is “too little too late”. I don’t care for that part. Bill Black throwing the towel is not a pleasant prospect…

  34. Thanks for the link enraged. As always William Black is 100% right.

  35. “But Im sure somebody could exlain how much better the US cars are than those India cars.”

    A friend of mine escaped the Soviet Union before its demise. He told me that everyone there that had any money drove Saabs, not their Russian made vehicles. He told me why….as he explained it, the rear windshield heating element wasn’t there to defrost the window….it was there to warm your hands when pushing.

    🙁

  36. @JG

    Im not warranting these things as facts—its a hypothesis–entertaining reading—–

  37. @JG,

    DCB is right. This is the only way to look at it in light of what we all already know.

    I don’t know what hurts the most: getting kicked out of a house or losing all illusions of decency and honesty in human beings…

  38. @DCB,

    You really know how to kill a good weekend! That’s exactly what i was making my best effort NOT to understand…

    When are we picking up the Chinese at the airport?

  39. Finally! Bill Black on Mandelman Matters.
    He thinks it will end with pitchforks and guillotines… but not right away!

    http://mandelman.ml-implode.com/2012/07/understanding-elite-fraud-and-the-mortgage-meltdown-with-william-k-black-a-mm-podcast/

  40. @dcb I wish I had a witty response, but all I can muster today is holy sh$t, and that’s even if just half that is true. (which is not to say only half is true, not at all) You’ve laid out their very narfarious plan, but I wonder what is to do for it? I wonder what percentage of Americans are even aware of what’s going on with foreclosures, say, (which, in addition to being it’s own huge problem for many, is also symptomatic.) I remember in 2008, when I decided to fight, hearing this from a relative, something like this: “So, they want the house and you’re going to give them trouble?”

  41. @ ENRAGED
    At the turn of the century 19/20—-there were dozens of US automakers. By 1920 the competition had thinned out substantially such that the average person had a choice of a black Model T Ford or……….another black model T ford. If you were wealthy–well you had a lot more choice. Hoepfully you could afford the competitvely priced Model T——-of course “competitive” meant that Henry felt that is how much you could afford and should pay for the car. He exercised similar control over wages.. He made a few bucks in the exercise of his generous offerings—until he had problems with his unions and had to break out the Tommy guns.

    Today there are three US carmakers –sort of—as long as the govt maintains supports in time of need. They offer very economically priced cars—-the cheapest is say about 12k—–roughly the takehome for a person making min wage for a year. These are about 2-3 times the price of similar cars built and sold in India. But Im sure somebody could exlain how much better the US cars are than those India cars.

    For the last decade we were protected from the excessively low priced European cars which consumed diesel fuel. although diesel gets about 50% higher miles per gallon and diesel engines last about 5 times longer than gasoline engines, because the diesel engines are inherently superior to gasoline engines in every respect–save cold weather starting—but we needed to be protected for all these years from these low quality Volkswagons and Mercedes which seem to have a tendency to have much worse emissions in the North America than Europe as a result of as yet undetermined differences in the way in which fuel burns in North America vs anywhere else in the world—physicists still puzzling on that using Ford-funded PEW grants.

    although this seems a bit off the point of your query—-the bottom line is that too many cooks in the kitchen spoil the soup. The benificent big banks— like Henry Ford—- have been succesful in assuring that the US population should get the same opportunities in their banking affairs as Henry Ford provided the auto-customers in the teens and twenties.

    The hundreds of small banks in operation today create the same consumer perils as the independent auto companies of old. They serve to confuse customers as to the RIGHT rates that should be paid–the RIGHT terms on the loans–the RIGHT disclosures—etc It causes great distress to the american consumer to be compelled to sort through the apparent inconsistencies and waste time evaluating “competitive” loans, credi cards and savings/checking accounts. The big banks can much more efficiently provide a single competitive choice to US consumers more quickly and pass through the efficiencies to the consumers. The LIBOR rate setting process is absolute proof positive of the efficiency and speed of a properly coordinated marketplace. What are the chances that hundreds of bankers could arrive at just the RIGHT interest rate to charge everybody vs the efficiencies of a handful of guys establishing that rate over lunch between the time they get the menus and their 1st glass of Champaigne. You simply cant beat that for efficiency–and the savings to consumers are obvious and tangible. If there were more people involved if setting the rate—they might not get it done until midafternoon and each have to swallow half a bottle and roll over to the more expensive dinner menus–thus missing the kunch specials. Now you and I have to pay for that extra few bottles and the full cost of a dinner menu order—-not to mention the demurage on the limos waiting outside. It is obviously in our best interests that the process be fast and efficient–and as any meeting attender will quickly point out–once you get past about four decision makers—things just drag out.

    So its absolutely necessary that like auto-makers we have a deep need for the concentration of banking activities in the hands of say–four or so –or to improve efficiencies 2-3———and of course it would help if all 4 were big new york banks so they could have more effective participation in Fed Reserve policy–which is today all tangled up because there are simply way too many Fed Reserve regional bank boards—under the new plan the glimmers of which you note—-al, that is needed is the New York federal reserve. Redundancies are eliminated—-

    As we have seen Tim Geithner as a one man show was far more effective at deciding that Lehman should go under—and how and when to correct that LIBOR problem—by adding a few more US banks to the lunch crowd. Although of course–they need to give their proxies to JPM to keep things simple and transparent.

    And this explains why JPM froze Lehmans accounts 2 weeks before Lehmans had troubles or the system became distressed. Basically JPM could plainly see that the system was imperilled by excessive competition–and one less investment babk would greatly improve the long term financial security of every citizen. Somebody had to do something !!! We can all thank JPM and the New York Fed for fixing the problem for us.

    But there is much more work to be done to get to the desirable optimum ——-a single big bank with an exclusive license to operate in each region—and a cap on the membership to keep the lunchtime crowd at a manageable size. The question is how? we need this reform ASAP—–

    Now at a cocktail party in Connecticut this weekend the club is getting together to set the rate on Spanish and Italian bonds net week to get the ball rolling and forece those recalcitrant North Europeans to throw in the towel pretty soon and just dump the whole EU deal——and get some panic back in the markets where it is needed–pricing has just been too stable–volatility is desperately needed to allow the investment bank side of the business to recover before year-end bonuses are worked out. A nice little war with Iran will allow Obama to recover any lost support that a big second dip would otherwise cause—-and so its a win win scenario for Washinfgton and NYC.

    And then we will be freed from our confusion caused by pesky credit unions and local banks–all of which need to follow the S&Ls into oblivion for the perfect world to become reality.

    And you ask why the Chinese feel they need local banks in the US—what would you do to provide liquidity and security for your citizens and businesses doing business here—during the conversion to the competitive world view of a black model T equivalent bank-card in everones wallet? Maybe the reform plan should just mandate that you must use a black card issued by Capital One—-and then let it wack up the proceeds and give the other syndicate members their cut. Strict government mandates are really the simplest way to get this done—and a limit of say $300 on all cash purchases would really help with the bookkeeping too—at least thats the word from Greece where they are testing the pilot plan. But really who needs cash at all when you think about it—-

  42. I can’t seem to put the following in the proper perspective. What does that mean? A slow take over of private banks by government…? A return to normalcy and government sovereignty or something much more ominous? I really can’t say. And those players don’t seem to be involved in mortgages at all.

    I’m losing my perspective… Don’t like that either.

    http://www.marketwatch.com/story/banks-closed-in-4-states-2012-tally-hits-38-2012-07-21

    July 21, 2012, 10:29 a.m. EDT
    Banks closed in 4 states; 2012 tally hits 38
    Stories You Might Like

    Regulators close 2 banks in Georgia, 1 in Florida

    By Alan Zibel

    (Updates with Second Federal Savings and Loan Association of Chicago failure.)

    Regulators closed two small banks in Georgia as well as banks in Florida, Kansas and Illinois on Friday, bringing the nationwide tally of bank failures up to 38 for the year.

    The Florida Office of Financial Regulation closed Naples, Fla.-based Royal Palm Bank and appointed the Federal Deposit Insurance Corp. as a receiver. First National Bank of the Gulf Coast, also based in Naples, will assume all of the three-branch bank’s $85.1 million in deposits.

    Royal Palm Bank had about $87 million in assets at the end of March. Those assets were purchased by Royal Palm Bank.

    The FDIC, which insures deposits of up to $250,000, estimated that the bank’s failure will cost the agency’s deposit insurance fund $13.5 million. Royal Palm Bank was the fifth Florida bank to fail this year.

    In addition, the Georgia Department of Banking and Finance closed two banks: Georgia Trust Bank of Buford, Ga., and First Cherokee State Bank of Woodstock, Ga. So far this year, eight Georgia banks have failed.

    Community & Southern Bank of Atlanta will assume the deposits of both banks. Georgia Trust had $117.4 million in deposits and $119.8 million in assets. Community & Southern has agreed to purchase $111.5 million of the two-branch bank’s assets. That failure is expected to cost the FDIC’s insurance fund $20.9 million.

    Community & Southern also will assume First Cherokee’s $193.3 million in deposits and purchase $222.7 million in assets. The failure of the three-branch bank is expected to cost the FDIC’s insurance fund $36.9 million.

    The Kansas Office of the State Bank Commissioner closed Leawood, Kan.-based Heartland Bank. Metcalf Bank of Lees Summit, Mo., agreed to assume all of the failed bank’s deposits and purchase essentially all of its assets. Heartland had about $110.0 million in total assets and $102.6 million in total deposits. The failure is expected to cost the FDIC’s insurance fund $3.1 million. It was Kansas’s first bank failure this year.

    Second Federal Savings and Loan Association of Chicago was closed by the Office of the Comptroller of the Currency, marking Chicago’s fifth bank failure this year. Hinsdale, Ill.-based Hinsdale Bank & Trust Co. will take over the bank, agreeing to acquire all of the bank’s deposits and to purchase about $14.2 million in assets. Second Federal had $199.1 million in total assets and $175.9 million in total deposits. The FDIC estimates that the cost of the bank’s failure to its insurance fund will reach $76.9 million.

    More than 450 U.S. banks have failed since the start of 2008 in the aftermath of the housing market’s bust and ensuing financial crisis. Last year, there were 92 failures, down from the 157 banks that failed in 2010.

    This year’s pace of bank failures has slowed considerably from last year. At this point in 2011, 55 banks had failed.

  43. […] Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud Tagged: FDIC, INDYMAC, New York Stock Exchange, predictions, three types of capital, tier 3 assets Livinglies’s Weblog […]

  44. @ ETolle, … the Key is to Replace and Prosecute them all the way to the Top. The wheels of Justice are turning slowly, but they are turning. Unfortunatly I’ve heard no viable solution as how to unwind what has already been done. All the proposels seem to leave more victims in the wake of this diaster, (former or current owner of these properties). What is apparent to me thou …. is we MUST stop anymore titles from being destroyed … we do not want to become a nation of renters …. somehow former homeowners and current homeowners must come together and squeeze out the Fat Marshmellow in the Middle. Quite Frankly .. I can not imagine why either party would want a property with a trashed title … that is throwing good money away after bad.

  45. Dcbreidenbach wrote, “you still dont get it? it is approved conduct. nobody cares.”

    And therein lies the problem. Nobody cares, because they’re all protecting their system, their place at the trough….and thus it’s all approved conduct. From your stooge AG in his or her corner office counting out the settlement cash, to Obama/Romney’s campaign tills cha-chinging the tally from Wall Street’s donations du jour….it’s all good from their perspective. Because…. who is going to stop them?

    I’ve watched as hundreds of folks have come and gone here over the years….people not out to game the system a.k.a get a free house…..those simply trying to figure out how in the hell this could happen to them….how could they lose all of their hard earned money and now… watching in horror as their homes are taken as well…..all with the exact same backstory but with a few small details changed here and there. And it’s all happening with the precision of a well-oiled, perfectly designed apparatus. Nothing here is accidental. And it only took a few decades of graft.

    But when the truth finally hits these folks losing everything, they….we… all arrive at the exact same confusion creating conclusion….how in the world could Wall Street game the system so perfectly, so that when their highly orchestrated song stopped playing, they would be the recipients of not only all of the money, but of all the land as well? And how in the hell could it all take place under the guise of a government that is supposed to be of, by, and for us all? And as to our so-called representatives from high to low….not a word is spoken of the heist? How can that be?

    If in fact they decide that they can take each and every one of our properties and savings with absolutely no due process and totally fraudulent judicial or non-judicial processes, no questions asked….why in the hell would any of us not expect that they would also avail themselves of their further capabilities being systematically implemented all around us….from face recognition to paramilitary police forces on your local street corner to lethal drones soon to be overhead? Just ask yourself….who is going to stop them?

  46. WOW! 75% PRINCIPAL REDUCTIONS, THE NEW NORMAL RESOLUTION OF THE FORECLOSURE LOGJAM.
    July 18th, 2012 | Author: Matthew D. Weidner, Esq.
    http://mattweidnerlaw.com/blog/2012/07/wow-75-principal-reductions-the-new-normal-resolution-of-the-foreclosure-logjam/
    It’s not exactly an avalanche yet….but I am seeing a steady stream of modifications that include DRAMATIC principal reductions in mortgages.

    More and more the reductions we’re seeing are very meaningful, very, very meaningful indeed.

    TAKE A LOOK AT THE ONE FROM JUST TODAY….

    DEBT FORGIVENESS OF $298,670.41!

    There is much more going on behind the scenes here….but this new development is most encouraging…..in the short run.

    MOD1

    http://mattweidnerlaw.com/blog/wp-content/uploads/2012/07/MOD1.pdf

  47. More and more people are leaving this site now…Hmmmm
    There will be no investigation, the behavior is now deemed legal. Felony behavior is “legal” for many in corporate America. Soon, if a banker wants your property, any of it, they can steal it with the appropriate, not proper paperwork and NEVER go to jail. The future is grim for the citizens. Everything we trusted and knew to be true has eroded and been taken over by greed, self-interest, corporate interests and slavery of every culture. When we completely lose the monetary system, to plastic the entire country will be cash cows for financial giants and corporate schemes, while our ELECTED officials legislate more and more control over our every day lives. People have been sitting any plying themselves with things for so long, they don’t even see the carnage and it has yet to really reveal the end result.

    Stealing, lying and cheating is the norm and it will take decades to repair and only if the citizens of this once great country want a Democracy back….only then will things change. Four more years of Obamaism will make; realign the USA with many third world countries. That is Obama’s hope and change!

  48. no dcb its not permissable conduct at all! … I’m not sure what your options are, I’m not an attorney ….. and I have yet come across this situation (but I fear it). I would be happy to inquire for you. I can understand your frustration with (whom I hope is) your former attorney, but have you tried to find a new one?

  49. you still dont get it? it is approved conduct. nobody cares.

  50. The banks pushed passage of electronic signatures and notary seals … you see your doc on a comp screen and push the X as your signature to approve it. Althou our state never allowed electronic notary seals and still require wet ink signature on certains docs .. they did allow the electronic signature of the borrowers on remaining docs. Can you imagine the playground created for fraud in the states where electronic signature and electronic notary seals were made legal?

  51. When you pull out your handy secret service thankyou pen with blue ink at closing and they tell you to use their named black ink pen–it would be a good idea to get up and walk out

  52. Ok Folks … here is a new one for most of you here. The target …”businesses making notary seals and selling them without verifying the comissions. Hard to Believe? I thought so to … so I called the business in question and ordered a seal, manipulateded the data leaving out MI and changing exp date. I went to pick it up the next day and sure enough … I was handed the seal, paid cash for it and walked out. Needless to say, .. you know the rest of the story.

  53. @KC

    “went thru” hardly———–I often think that I am a ginea pig——that they try new and unique legal devices on me—monthly as it drags out into now past 3 years of ongoing litigation——-

    for example—–I lived in Crystal City from beginning of obama admin–went to the enviro inaugaral ball in fact–i know my way around–i lived about 3 miles from the Hill—as i was visiting the Hill describing my experiences –the robosigning to several Hill committee staff–congressmen–etc–from November 2009–thru mid 2010 while Dodd Frank was up—–i attacted more attn——

    I had to hire Ohio Counsel meantime——-one day I received a Motion to Enforece Settlement Agreement !!!!!! What settlement agreement? The motionand alleged agreement filed under seal——threats that my response must also be so filed—or contempt right—

    Well turns out opposing counsel asserts that she and my attorney agreed that my wife and I would turn over a deed to my home in exchange for what—–that part of agreement was blank—–so an evidentiary hearing was scheduled where my atty was subpoenoed to in effect testify to his agreement –ie against me…..my wife never even heard about any agreement before being served the motion——

    interesting thing is i know attorneys and had expressly removed his authority to agree to anything—–in the fee agreement

    so we were forced to attend a hearing to find an agreement–wherat i was faced with a roomful of attys —promises promises—–just sign the deed and your pain will be over——-

    -in fact just begun—-it will not be over until i die i believe—look at my example and be afraid—and take careful note 18 USC 1513 makes it a crime to retaliate against a whistleblower where a federal crime is reported to federal enforceent–in 2009 I reported securities fraud–interstate robosigning etc etc —-

    dont believe that you will be protected–or even noticed—-not even when your comments contributed to Dood Frank—a friend of mine used to say “there must be a martyr [or two or ten] for every cause”

    There is nothing but pain and suffering in resistance—–the worse that you affect them –the worse it falls to you—

    Most recently they have moved to sieze my farm—to gain easier access to the property they already siezed and allowed to be frozen

    please dont tell me about “the law”

  54. @dcb, we do not use special pens at closings in Illinois. However some states and counties require a certain color,to be used or they will not record it. We carry black, blue and red pens. The color most used was black … I’m not up to date on the special pens and inks or how they used them. Thank You for the info.

  55. @DCB,

    I don’t remember signing with any particular pen at closing (and/or a refi), except that the lender insisted that I sign with a blue pen.

    I believe that the ease with which a signature can nowadays be retrieved from a doc electronically and pasted on another document explain why the Prez changes pen for every single letter when he signs anything important. I wouldn’t be surprised if each letter was of a different color as well and if there was a clear record kept of the order in which he used each pen.

    Keep in mind that some of the best bank note forgeries of the past 10 years were made on a computer printer and that fooled a lot of people for quite a long time… do you ever watch “American Greed”? We have entered a technology era that allows for the most sophisticated fraud as an art form.

    Banks have the same technology every crook has and they used it whenever necessary to boost their profits. They probably still do. And with outfits such as LPS and Docx (vendors who, in most likelihood, sign contracts with those banks in which they agree to hold them harmless and indemnify them against everything under the sun), banks are completely removd from prosecution. on the other hand, that explains why Navada went after LPS with such a vengeance.

  56. What a nightmare dcb., I can not imagine what you went thru. What happened was just wrong. Allowing it to continue is worse. Keep hammering dcb, your not alone. Putting them out of business and slapping them with a fine … = ‘ed opening up with a new face and a new name. That is going to be hard to do from Jail this time….

  57. 18 usc 1513–excuse me if im really really not impressed by federal prosecutors so far

  58. tell her/him to read 18 usc 1513——–seems like most of them cannot seem to grasp it

  59. You must be able to measure the consistency of the depth of the indentation on the auto-pen—the photocopy is fairly easy to tell–the autopen much harder–particularly when you did not retain an original ink countercopy——and they demanded at closing you use their name-emblazend inkpen

  60. I can tell you all … I have been asked to sign and back date documents for all the players. Of course I always declined and reported to a person who has been working at the state level for 8 years. Unfortunatly our AGs took cash instead of prosecuting them at the state level. Althou they left open our private right of action, … they left us to battle the devil alone. I’m excited to announce my friend is now a Federal Prosecutor. This person has proof of ongoing Crimes, and out right disreguard to any settlements … Its Prosecution Time!

  61. @ALL

    CORRECTION “DOCX was almost immeduately closed-irs employees fired”

    not “irs employees fired” –should read “its employees fired”

  62. @KC In Sept 2009 I interviewd two DOCX employees —before any depositions or other inquiries—they described the alpharetta operation–stamp and sign dept. Korrel Harp and Notary Kelli Woolever. Ib Oct 2009, I filed a complaint with Fulton County Clerk Of Courts re Notary abuses by three DOCX notaries. In Nov 2009 I “informed LPS’ outside auditor and Board of Directors Audit Committee of the problem with that business unit–and the peril it represented to have defective documents in the chain of title. CC SEC and Senate Banking Committee Chair Brown, DOCX was almost immeduately closed-irs employees fired. Lorraine Brown, DOCX CEO and PLS VP at the time stands charged with violating the Notary laws in Missouri—others in Nevada–although as best as I can tell that tent folded . LPS disclosed notary regulatory problems in its 2009 10K Annual Report under Regulatory Matters——–on XMAS Day 2010 after my Ohio home was siezed while I served a federal agency in DC, the home was allowed to freeze.My wife intervened to mitigate damage–sahut off the water pouring from the house that was still covered by my insurance policy. She stands accused of civil trespass for that intervention–which reduced any claim for weather-related freeze damage. The back door was standing open–the pil run out for the furnace after 30 days’ “preservation”. We stand accused of damaging the reputation of servicer AHMSI for stating the foregoing.
    The assignment og mortgage was filed and refiled—Korell Harp was a convicted felon at the time he executed the assignment–convicted of possession of multiple documents for multiple ficticious persons–male and female. He was quick to talk at length–in falsetto in the AM and as a man in the afternoon while at home with his family for dinner. He was 24 and a VP of MERS.

    The following December 22 2011 I received a notice of emergency hearing to seal the record in the case i filed against the parties for breach of virtually every provision in the settlement agreement
    The emergency hearing was held on the 29th of December 2011—my XMAS gift for 2011.

    I am wondering what 2012 XMAS will hold for my family and me.

    Yes KC I understand why you would want to hide–you are wise–I was not–if I had it to do over again–i would not have raised the robosigning issue. My mistake. At the time I felt it was the right thing to do. Now I know it was just the stupid thing to do.

  63. DCB,

    One more thing…

    You may have heard of foreclosure defense attorneys hiring graphology and forensic expert to determine the authenticity of initials and signatures.

    Not only do they look at the signatures but they also look at the ink, how it was applied, whether it is a copy of a true signature or a twice or three time remote copy of a cut-and-paste. Unfortunately, banks have unlimited money (ours) and homeowners have hardly the means to fight them because those experts cost a lot.

    I feel terrible destroying the last of illusions about attorneys and their honor. Banks attorneys don’t have any and they count (successfully) on the fact that many judges still do. So far, it has worked. But it is crumbling.

  64. DCB,

    That’s what is impossible to determine without the “blue ink original”. Cut-and-paste means that the computer allows you to actually retrieve the initial or the signature from one existing page and paste it onto a different document.

    Whenever banks go to court, they never produce anything other than copies. Oftentimes, those copies may even be copies of scanned, forged documents (therefore twice removed from the original firgery). What did lenders and banks do? Throw away the blue ink docs and preserve only the forged doc that is now part of the computer file.

    Many people balked when they realized it and that’s when that “produce the original note” took a life of its own. One of the reasons so many homeowners have been unsuccessful at pleading forgery is that courts cannot even imagine that anyone, anyone at all would have the temerity to pull that kind of stunt on a judge. For a decent judge who believes in the laws, it is so unconscionable that he can’t wrap his head around it.

    Many homeowners realized, after the fact, that the documents produced in the court contained incomes completely different from those they hold at home. Those inflated income (fully initialized by cut-and-paste) allowed the banks to pull a fast one Fannie and Freddie.

  65. I understand dcb. Read enraged post just below to you. She is absalutely correct about the multiple sets of docs. There is a differant set for each player in the game. It does not matter what name they use ..LPS, DocX, Sign on the X etc….. The wolf just changes into a new set of sheeps clothing and gives itself a new name. If catch my drift …. I keep good records and I will not alter my journal for any scoundral …

  66. @KC Are you working with any prosecutor now?

  67. What do you know about forged notes if anything?

    The cutn past initials —were they auto-pen or photocopy—i mean were there indentations?

    the items you and KC are speaking of are clearly proof of intentional forgery–the attorneys who offer them are subject to crimial prosecution as “uttering forgery” ——the transaction is void as having been induced by fraud—its significant—its more compelling than simple robosigning—its very important–not so much because they did it but because they were concealing something else by doing it—possibly the actual theft of the note—-

    the failure to file loan schedules in 204-6 enabled multiple sales of the same note—the servicer collection agency then allocated the notes to trusts in a manner which constituted conspiracy to defraud investors–the upshot is that wquite likely there will be two trusts pursuing homeowners –the 1st with a copy of note–the 2nd with the true original–

  68. @KC
    Last place I worked we referred to your information as an anomoly and a “lead” —-do you understand ? Please look at 18 USC 1513–

  69. @dcb .. sorry dcb, putting my email address up or responding by email makes me an open target. 🙁 I can however give you a better example based on a true story. Borrower sets up a Signing. Notary assignment recieved thru LPS. Borrower makes several changes and inicials all of them with Notary. Borrower numbers every page. LPS refuses the docs on behalf of N.A. who is whaling about the changes and the pages being numbered. LPS requests new Signing. Borrower refuses. Eventually the Borrower signs the docs again without the presence of a Notary and forwards them to LPS . LPS attatches Notary Affidavit from first witness signing to to the second set of docs that were not witnessed. What would you call It?

  70. DCB,

    I’m going to barge right in. You are right: many documents were intentionally forged after the fact. As an example, the copy that many borrowers were given at signing (you know, the two copies we all get within 48 hours of signing) are, in some cases, not the documents that the lender sent to the bank. That is why it is so important to keep the copies you were given and request those retained by the lender. i did exactly that and, sure enough, they are different. In some cases, even my initials appear on documents that differ from those I was given.

    That is also why the “produce the blue ink note” became such a big thing a couple of years ago. Computers allow a cut and paste job on the initials. The same way that one doesn’t sign exactly the same way each time, one doesn’t initial exactly the same way on each page. By comparing the initials from my copies and those on the docs sent by the lender 5 years later, right before I sued, I could tell that pages had been replaced after the fact.

    If you haven’t done so, it may make a lot of sense to request from your lender the entire copy of your closing docs and check them against those you kept. It might even open your eyes on how far and deeply the fraud went. I don’t believe that one aspect of real estate transactions escaped it.

  71. ok–i cant discuss more online–thankyou

  72. @KC
    We? In what role–you were not an LPS employee? they manipulated your docs after the fact? Well althought the robosigning stuff is not exactly forgery in the narrowest sense—–even from my perspective as a victim–what you describe is clearly intentional forgery for the purpose of deceiving a homeowner to obtain property by deception–ie alleged theft by deception—-if i understand what you are saying?

    I have to be careful—they have me in a bad spot–id have to go offline to go further into this
    dcbreidenbach@aol.com

  73. @KC—–i did just now–no action since may 2011—–am i mising something current–i have some passing familiaritywith the Nevada and Missouri actions—-and substantial knowledge of LPS—-more than was good for me as it turns out–so im a faithful follower of their travails—pls advise —is it DOCX—Lori Brown?

  74. @KC closing agents
    Please excuse my extreme ignorance –but what exactly is the role of a closing agent–seriously—i do not know what affidavit you refere to?/

    but this was what i hope to do from here–is get a better appreciation from people who engage in the business side—i freely admit iv had no experience with retail transactions involving securitization—-except the one that suckered me

  75. Judge to borrower …. Is this your signature on this release/waiver? Borrower looks and sees what appears to be his signature followed by the Notary signature and Seal. Borrower responds to Judge … this appears to be my signature, I do not recall signing this. But I must have… their is the Notarys Seal witnessing his signature. GET It? Sad but True….. sighs

  76. I believe it was David E. Martin who said: “An entire generation of bankers will have to be permanently removed from the financial sector if we want to overcome the successive economic crises of the recent years.” Probably true.

    A lot of Chinese-style rehabilitation will be required if we are to believe these numbers…

    http://www.dailyfinance.com/2012/07/20/stockbroker-corrupt-wall-street-cheats/

    Wall Street Professionals Admit: Yes, Lots of Us Are Corrupt
    By Rich Smith, The Motley Fool

    Posted 5:15PM 07/20/12 Posted under: Investing, Market News

    Is Wall Street corrupt? Responses vary depending on whom you ask. But ask the folks who work in the financial services industry and you’ll get a surprisingly clear answer: “Yes.”

    A recent survey of 500 financial services professionals, conducted by market researcher Populus at the behest of law firm Labaton Sucharow, turned up some surprisingly candid results from the folks surveyed. For example:

    39% of financial industry insiders surveyed “reported that their competitors are likely to have engaged in illegal or unethical activity in order to be successful.”
    And this was more than just suspicion. “26% of respondents indicated that they had observed or had firsthand knowledge of wrongdoing in the workplace.”
    Nearly one in four “believed that financial services professionals may need to engage in unethical or illegal conduct in order to be successful.
    Nearly one in three said they themselves felt “pressured by bonus or compensation plans to violate the law or engage in unethical conduct.

    But pressure need not be succumbed to. Surely these financial industry professionals put their ethics, and the interests of their clients, ahead of personal gain, right?

    Well … not necessarily.

    16% of respondents admitted that they — personally — would break the law by trading on insider information “if they could get away with it.”
    Fewer than half could say unequivocally that they would not engage in insider trading in a situation where they knew for sure that they would get away with it.
    What’s more, chances are they can get away with it. Because “only one in four financial services professionals believe [financial watchdogs such as the SEC or other government regulators] are effective.”

    Lies, Damn Liars, and Statistics

    Needless to say, these numbers are a bit discouraging. After all, these are the people to whom we entrust our money, our nest eggs, our life savings. The people who are supposed to use their expertise to help us establish a secure retirement. The folks who, in theory at least, have a fiduciary duty to obey the law and put the interests of their clients first.

    Yet out of the ranks of these supposed paragons of virtue — bankers, fund managers, asset managers, and analysts — one in six lacks sufficient moral backbone to resist the temptation to break the law unless someone’s constantly looking over their shoulders, making sure they play by the rules. (And that’s the best-case scenario. Theoretically, as many as half of our financial “professionals” are potentially corruptible.)

    Now add to this fact the apparently widespread conviction that “everybody else is doing it” — and getting away with it — and the further belief that breaking the law is almost a job requirement.

    All of a sudden, the epidemic of mortgage fraud, the Bank of America (BAC)-Merrill Lynch bonus debacle, the Madoff scandal — all of it starts to make sense. Suddenly, you start to understand why Goldman Sachs (GS) CFO David Viniar, when asked earlier this week whether decreased profitability at his firm was a cue to cut costs after he had just noted that Goldman was paying out 44% of all corporate revenue as compensation for his employees, responded simply that “we aren’t going to cut our way to prosperity.”

    As I heard it, he might as well have responded: “Hey, I’ve got mine, Jack.” Because on Wall Street today, that’s apparently all that matters.

  77. LPS attatched our signatures and seals to documents we did not witness. LPS does not number the pages in their document packages for a reason ….. Copy, Paste and Attatch.

  78. dcb ….. google Illinois Attorney General, & Lender Processing Services.

  79. @ dcb …Because we closing agents know what they did with our affidavits. They used them illeagaly! Nothing like evidence to back up the facts ……. but you know how things go, there is always one out there willing to do their dirty work.

  80. Everything in your life is a reflection of a choice you have made. If you want a diffrent result … make different choices.

  81. @KC “Those who work for LPS shake in their shoes here”

    Im afraid i dont follow the logic here? Why in the face of political corruption would LPS employees be in fear?

  82. @ToLLe,

    This one is for you.

    Now It’s the Big Banks That Are Getting Foreclosed On
    Published: Friday, 20 Jul 2012 | 3:06 PM ET

    “A representative from JP Morgan says that while they have lost other homes to HOAs (Homeowners’ associations) in lawsuits over delinquent dues, in this particular case, the bank serviced the mortgage, but the ownership during the past two years may be in question.”

    Did you see that? “they have lost other homes to HOAs (Homeowners’ associations) in lawsuits over delinquent dues…”

    http://www.cnbc.com/id/48259827?par=fincont

    What’s interesting is that it is making MSM news. So we can expect it to spread like wildfire.

  83. @dcb …. our last two govenors are in prision. That should say alot about change in our state. Those who work for LPS shake in their shoes here. As far as the pensions they screwed already … they are trying to retarget them … we do have money left after all. You know how the wheels turn … as long as there is still a profit to be made.

  84. @ KC ——Why do you say they are targeting Illinois Teachers fund for this particular investment–did i read by that ? It makes sense because they obviously have more reach in Illinois because of the Daleys and the Obama connection. All those guys are owned by the investment bankers—current employees but for the current mayor of chicago who I guess would support this effort for housing in Chicago—and let the teachers pensions pay for it. It makes a lot of sense what you are saying–what is your source.

  85. @dcb, one of the pension funds targeted it the Illinois Teachers Pensions. I’m doing everything I can to prevent that. I am thinking this is all Hogwash … just another attempt to manipulate the market. These buttwipes are trying to dump their toxic waste on anyone .. including the taxpayers via Fannie and Freddie.

  86. Elizabeth Warren: ‘Libor Fraud Exposes Rot At The Core Of The Financial System’

    http://www.huffingtonpost.com/2012/07/20/elizabeth-warren-libor_n_1689534.html?utm_hp_ref=business

    Elizabeth Warren jumped into a growing chorus decrying the massive Libor manipulation on Thursday with a scathing editorial in the Washington Post.

    “The Libor scandal is more than just the latest financial deception to come to light. It exposes a fraud that runs to the heart of our financial system,” writes Warren, a long-time Wall Street critic who is running for the U.S. Senate in Massachusetts.

    “The Libor fraud exposes rot at the core of the financial system,” Warren writes…

  87. @AUTHOR

    Nice work—-so how about some prognostication on the implications of the newest scheme—-securitization of single-family rental assets?
    WSJ reported today that the investment bankers are at it again—seems like these R&MBS would fit firmly in your tier 3 assets class?

    It strikes me that the device would have the effect of providing a basis for denying the opportunity for a defaulted homeowner to even rent her own house back. As any landlord with experience would quickly point out–the creditworthiness of the prosepective tenant is a prime consideration of eligibility.

    So if there is any implication of the rental stream being a significant part of the valuation–then the servicer turned lanlord [God Help Us] would have to warrant that it will not lease the properties to persons with credit scores below X. Seemingly there is a strong punitive element to the servicers overall behavior towards default homeowners. they clearly are solid in their belief that any person that defaults on the home loan is cheating the system if he does not file bankruptcy and thus become a type of indentured servant under Ch 7.

    It is hard to imagine a change in attitude that would convert the predatory servicer into a customer-driven landlord????? A slum landlord maybe. as a landlord of a couple dozen properties for decades–it seems to me that that this proposal is a nightmare for the following: the hapless tenant, the hapless neighbors, the building maintenance. A home with a bad landlord–either inept or mean-spirited is in a death spiral. The tenant has a leg up on the homeowner—the tenant is typically protected by decades of statutory provisions that were intended to prevent the sorts of abuses we hear of often these days—break ins—entry without notice—-and rent is paid into escrow if maintenance fails.

    Like homeoweners in default, property managers’ fees skyrocket when vacancies occur. This is partly reflected by normal business exigencies; advertising, property showings, background /credit checks, new carpet, new paint, new locks, delousing, —these are for typical plain vanilla changes of tenant. A bad turnover can suck up half the value of the home—-take a hard look at the reality programs that show hoarders. Common—look hard at the programs that show pet hoarders. pet urine penetrating through carpet—wooden floor underlayment–joists–sprayed on drywall up to two feet high.

    If the tenant is POd by the abusive landlord—a midwinter vacancy tests the system; the landlord figures out after a month or two rent remains unpaid that the tenant turned off the heat and moved out say January 1——-and every 4 inches of waterpipe in the house is split

    Bring in the preservers !!!! –watch the fixtures and wire and pipe disappear——this whole plan is being dreamed up by ivory tower rich kids who have no idea what they are talking about

    My question for the author is what will be the consequences to investors—????

    Presumably these MBS are going to offer some reallyenticing yields—–is this another pension fund ripoff? who is the targeted sucker here?

  88. Sheila Bair On New York Fed’s Role In Libor Scandal: ‘I Don’t Understand Why They Didn’t Investigate’

    http://www.huffingtonpost.com/2012/07/20/sheila-bair-libor-new-york-federal-reserve_n_1689720.html?utm_hp_ref=business

    “…Bair added in the interview that as FDIC chair, she “had no idea” that there was “really overt rate-fixing” by the banks. “I don’t think anybody did, except apparently the New York Fed,” she said. A 2008 Wall Street Journal analysis found evidence of Libor manipulation by major banks…”

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