Livinglies's Weblog

See https://www.marketwatch.com/picks/dramatic-increase-foreclosure-filings-are-up-more-than-150-heres-what-that-tells-us-about-the-housing-market-01659181360

Here is the unvarnished truth from the dark side:

The number of foreclosure starts — which is when the first public foreclosure notice happens — is up 219% since the start of the year, according to real estate data analytics firm ATTOM Data Solutions’ midyear 2022 U.S. foreclosure market report. What’s more, the number of properties that had foreclosure filings (this number includes foreclosure starts) is up 153% from the same time period last year.

There are several explanations for the spike in foreclosures that are recited in the above article. Some of them make no sense. But all the explanations have one thing in common: they assume the existence of an unpaid loan account receivable on the books and records of someone, even if it is not the named claimant. Therefore even if there are defects, deficiencies, and fabrication of documents, illegal foreclosures continue to be permitted.

The courts are routinely winking and nodding their way through a myriad of such defects, deficiencies, and fabrications on the strength of the doctrine encapsulated in “damnum absque injuria.” That is a violation without injury since the homeowner was obviously in default and therefore should lose the property pledged as collateral for the “loan.” So if there really was an unpaid loan in default, what is the harm? Under that doctrine, the violations are acknowledged, but the result is not changed because there is no injury to anyone. This follows the fundamental doctrine that there is no claim without injury.

Here is the rest of the story.

Nearly all foreclosures are based upon a false claim that someone is losing money because the homeowner did not make a scheduled payment. Both law and the popular consensus agree that in the absence of injury there is no claim. But for 25 years, continuing through the date of publication of this blog article, foreclosures have been successfully invoked despite the absence of such injury.

The injury is absent but the claims persist. This was considered impossible and obviously illegal until the ascent of false claims of securitization. Those claims were based on the false narrative that investors were buying shares of loans. There were no loans and the transactions conducted with homeowners and investors resulted in no sales to any third party of any kind.

Contractually there was an offer and acceptance of loans just like Mr. Ponzi and Mr. Madoff offered shares in a scheme that did not exist. And just like all scams, the start was mostly legitimate and then veered off into the highly profitable world of illusion. 

This was made possible by the use of accounting tricks and “liberalizing” accounting rules such that a potential creditor could receive payment in full and still maintain the illusion of a valid claim. This was all predicted in the 1960s by Abraham Brilloff (RIP) in his book “Unaccountable Accounting.” If anyone wants to join me in republishing this book, his heirs have already given permission. It will take about $10,000 to do it.

The end result or conclusion of all of this, as most people suspect, is that homeowners are still paying the price for the mortgage meldown and the perpetrators of that Ponzi scheme are still doing it and still generating obscene amounts of money. This money is then subject to the absolute discretion the of management of Wall Street firms who can choose to report the revenue or not and choose to pay taxes or not.

If a bailout is the payment of money to rescue someone, the banks never received a bailout. What they have consistently received are extra extravagant revenues and profits. That provides a pool of money (trillions of dollars) that the Wall Street securities brokers (“investment banks”) control and divvy out to politicians, state and federal agencies (the revolving door of employment after work at an agency), and thousands of individuals and companies that are paid to shut up and play along.

There are other analogs in history like tobacco, oil, and slavery, but this one easily surpasses the size and scope of those dark periods in American history — at least if one is to measure only economic effects. If you add social effects, the others are obviously more comparable.

EVERYONE IS ADDICTED TO YOUR MONEY.

And once again, like any Big Lie, this persists because most people believe that if I were right, everyone would know it. The success of Big Lies depends upon being so outrageous that everyone hearing it, especially if it is repeated broadly and loudly, will gradually or impulsively believe it to be true.

So once again, I challenge and defy anyone who is trained, experienced, and licensed in the financial sector with personal knowledge of the inner workings of what is generally referred to as securitization and derivatives to say I am wrong  — and then explain how I am wrong. In 16 years, nobody in CLE seminars or any other venue has ever accepted that challenge — on stage or off stage. Instead, in live seminar sessions, the participants clear a 20-foot radius around where I am seated so they won’t get fired by being “friendly with the enemy.”

HOMEOWNERS CAN AND SHOULD WIN FORECLOSURE CASES

Any homeowner who reads this and believes it is merely accepting the possibility that it might be true despite all appearances and statements to the contrary. That is the start of a successful defense strategy that can, and usually does, result in victory for the homeowner.

When that happens, you will be asked to sign a nondisclosure agreement (NDA) in exchange for the payment of money. You will also be asked to agree that the court record can be scrubbed. And, of course, neither side appeals. So there is effectively no record of the homeowner’s victory, and most people end their inquiry with a Google search or search for appellate opinions that don’t exist.

Lawyers who believed me in 2006-2009 made millions of dollars defending foreclosure victims. But one by one, they were chased out of the marketplace by bar associations and agencies responding to the undue influence of Wall Street.

 

 

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