Why Modifications of Mortgages Won’t Solve Anything

Securitization is all pretense. Alan Greenspan said that with 100 PhD’s he couldn’t figure out what they were doing and he was wrong to give them a pass. He should have insisted on the real facts before allowing the continuation of the creation of fake money.

Modification is all pretense. If banks and servicers received any part of TARP money they must CONSIDER modification proposals submitted by borrowers. But they don’t. And they don’t even allow the investors to know that the offers exist. Here’s why.

The creation of the bogus mortgage bonds was a mere accounting trick in which the typical loan receivable account was transformed into a security. The way the banks played it, they asserted ownership and control over the loans and the bonds until they were done wringing the last cent out of them. All told, they appear to have received $17 trillion in aid on a total of only $13 trillion in loans, in which there were only $2.6 trillion in defaulted principal and half of that was the actual loss. Of course they didn’t give the $17 trillion to the investors because that would pay off the loans, so they claimed the loss of the investors as their own and received $17 trillion in bailouts.

But wait there’s more. They also received money in insurance, and credit default swaps.  All told the average loan was sold an average of 15-20 times. So that $300,000 loan of yours was worth $5-$6 million as long as they declared the pool in default — even if your loan was paid up to date.

The pool they declared in default never existed, because it was never funded, and never treated as though it was a separate entity except when it suited the banks who were routinely stealing identities of the investors and borrowers. Despite the obvious fictional nature of these transactions, they were treated as real in the financial world. I wrote an article about this a few years ago entitled the Emporer’s New Clothes. We are still in the period where most people are afraid to notice that the Emporers on Wall Street are buck naked and that they never had any cover or clothes.

So they got all these trillions of dollars for loans that were in default and all the loans that were not in default. If they modify your loans in any large volume, all those trillions they received will be refundable to the insurers and counterparts to the credit default swaps and the bailouts. And the investors’ losses will be cut, thus exposing the fake losses declared by the Master Servicer. Money will flow in large waves back to pension funds and homeowners.

So they sit on the proposal, or go into trials that they know will end in rejection, and then they say they considered the loan modification and rejected it. The real reason is that they will lose millions on each modification. So they neither consider it nor communicate it to investors. You can challenge them in court on this. Bring in a realtor and/or appraiser and show that your proposal was over fair market value of the property, that foreclosure proceeds were 50% of fair market value and that no reasonable person would reject your offer if they knew about it or truly considered it. You can demand to know who reviewed it, what formulas they used and proof that they asked the investors.

Those who take this route are getting traction.  The last thing the banks and servicers — all of whom are really only intermediaries —- want is for borrowers and investors to get together and compare notes. If that happens the housing crisis will be over. But the party of the mega banks will also be over.

16 Responses

  1. They already cashed the checks and got paid by the trustees for the trust of the peoples money…..The U.S. Treasury Dept….They never applied OUR PAYMENTS to THEIR ORIGINAL LOAN….Along with the ongoing bailots, they want our property and they are STILL NOT PAYING BACK THEIR ORIGINAL LOAN TO TREASURY….! AMERICA… STOP PAYING FOR FRAUD and STOP THESE PAYING THESE CROOKS..!

  2. Hey best way a collection agency could predate a person that way–negotiate a principla reduction–increase fees embedded in the interest rate —-when he complains–they cut the payment so he thinks he won——-then they come after him for the whole note in about 3 years—because he cant get a novation on a note he cant touch—they dont have power–because they dont possess the note—if he came up with cash —he couldnt get the note back–they need to go through foreclosure because anybody that does a payoff through another fincer–will dedemand the paid off note–this is a pure red flag

    chances are they are diverting payments right now from any legit investor

  3. A friend of mine says the bank will give a loan modification, BUT he has to show even more income than when he got the original loan and also his payment will be higher because the best they can do on the interest rate is EIGHT per cent!!

    Even though he’s got one of those WAMU loans that Chase admits was not assigned to them.

    Making the terms unrealistic is obviously another way to push through the foreclosures and prevent homeowners from getting help.

  4. It would take A significant portion of the populous to stop paying to the wrong party for an expensive RENTAL
    And demand the government re think TBTF
    Is that likely.

  5. Warranty Deeds convey clear title to you…read the Owners Title Insurance. It protects YOUR TITLE from many frauds. http://www.virtualunderwriter.com/vumanuals.jsp?displaykey=UM00000052
    The FDIC is the American People by agency proxy… We The People NEVER AUTHORIZED or AGREED TO ANYTHING they have done or they are doing in our names. Therefore, it is all fraud to gain UNJUST ENRICHMENT FROM WE THE PEOPLE. THE U.S. GOVERNMENT MUST STOP THE ILLEGAL BAILOUTS….! STOP THE FRAUDCLOSURES…!

  6. Modifications won’t work because the banks destroyed the economy. They never paid back the Original Loan to the Treasury and oversold investments in their debt to the tune of a quadrillion dollars. Therefore their debt is insolvent and unsustainable and can never be repaid. The bailouts are simply robbery of WE THE PEOPLE…..THIS IS HOW THEY DID IT..

  7. Go to foreclosure fraud by dinsfla
    See Jp Morgan – trustee will not give Investors the details for 500,000 mortgages under a purchase and assumption agreement. Bet ya that’s the last we wil hear of that . What has this world come to.

  8. Comments by Mr Schneedlemen

    sure mods are useless because likely nobody has authority to release the note much less modify it

    stop …wrong ….OMG ,
    forget it .


  9. Liz in a Tiz

    These debt collection firms and their clients are nothing but sick, disgusting forms of life. I pray for their families being related or being around such pathetic sociopath/physchos.




    nomods…thanks again

  10. Leave a Reply

    I think I will . You say , something about modifications.and …Im not sure what your saying , but !

    “The modification is a critical tool for the servicers , alleged. So is CA CC 2923.5 which is equally oppressive and unjust.

    One Fed and the other state devisee for recognition purposes.They both act as triggers for “re-cognition ” Yes Neil , under GAAP and provide sufficiency for claims of breach of accounting rules and duties for reporting purposes.

    ….Brother, how many experts do you have on hand now?


  11. The more I think about the implications of limited warrantee deeds on a chain of title and on property values—the worse it is—–it will take a few years–some sleeping junk debt claims overturning current possessors –but there is another ugly chapter to be written—i would think at this point it would be malpractice to advise a buyer to acquire a home that had a mortgage on it that was securitized to fail to do a quiet title action as a condition to closing—–its as if these securitizers intentionally set about to destroy the real estate market

    sure mods are useless because likely nobody has authority to release the note much less modify it

  12. These debt collection firms and their clients are nothing but sick, disgusting forms of life. I pray for their families being related or being around such pathetic sociopath/physchos.

  13. It’s all fraud.
    There is no statute of limitations on fraud.
    Amazing that rabbit hole gets deeper and deeper and deeper.

    Woe to judges who did not consider the evidence before them, did not allow discover, made presumptions of might makes right, etc.

    The servicers, banks, and other companies may be fiction, but a lot of people participated in this ‘economic war’ on American soil.

    Without firing a single shot, they stole our lands and destroyed us and they set up that system a hundred years ago.

    Lots of pawns that refuse to admit their role and if it weren’t for their support, this could not have been possible.

    Remnants of an old internet document.
    “The way to outdo England without fighting her.”
    Carey, Henry Charles, 1793-1879.

    Trespass Unwanted, corporeal, life, free and independent state

  14. to carie

    Yes the judge can refuse and will if (s)he wants you to join the other millions of former homewners living under the bridge

  15. “You can demand to know who reviewed it, what formulas they used and proof that they asked the investors.”

    You can demand, but can’t the judge just say “no”—if he feels like it?

  16. REST REPORT !!!

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