Stop Wall Street Looting Act of 2019 Introduced in Congress

When it comes to losing one’s homestead the legislature, the executive branch and the courts insist on knowing that in all events the proceeds of foreclosure sales go to pay down the debt. A party having no risk of loss has no injury thus depriving the court of jurisdiction. A party who has no money at risk fails to satisfy the condition precedent clearly stated in the UCC. 

Long overdue, many politicians are starting to understand the real nature of securitization as it is being practiced in Wall Street. This has produced a heightened awareness of the risks of not dealing with Wall Street practices and the risk of what many are calling the coming economic crash.

see Congress Tackles Looting by Wall Street

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The most salient part of the bill, in my opinion, is the part about retaining risk. It is an official acknowledgement, in addition to other governmental findings that the investment banks and hedge funds who played the unregulated securitizations scheme simply retained no risk or so little risk of loss as to be just a cost of doing business.

This bill seeks to take that issue head-on and prevent “lenders” from (a) hiding their identities and (b) creating junk loan products for the purpose of selling and trading unregulated securities.

I don’t think there is anything more important than the recognition that all or most of the risk of loss has been parsed out into many attributes each of which was sold to different classes of investors using different classes of unregulated security instruments.

None of the buyers or traders in such securities ever purchased the debt of a borrower even they paid money equivalent to a purchase of the debt. No legal title or right to enforce any debt, note or mortgage was ever conveyed to the holders of “REMIC” certificates nor any other class of investors.

Without having technically sold the debt, the investment bank retains bare legal title to the debt, which is an outcome anticipated by the framers of the Uniform Commercial Code Article 9 §203, adopted in all 50 states as law of each state. Bare legal title might be enough to enforce a note that qualifies as a negotiable instrument (article 3) but it is not sufficient to enforce a mortgage in foreclosure.

The reason is obvious and contained in the minutes of committees who created this section and the states who adopted it.

When it comes to losing one’s homestead the legislature, the executive branch and the courts insist on knowing that in all events the proceeds of foreclosure sales go to pay down the debt. A party having no risk of loss has no injury thus depriving the court of jurisdiction. A party who has no money at risk fails to satisfy the condition precedent clearly stated in the UCC. 

 

 

TAMMY BALDWIN INTRODUCES RESOLUTION TO BLOCK BANK AMNESTY

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EDITOR’S COMMENT: That the resolution was even necessary shows how much pressure the Banks are using to get out of the corner they painted themselves into. The stage is set for the real facts to come out and they will continue to come out in large quantities of information and data that will show that the Banks didn’t just make mistakes — they took the honored traditions of Banking and turned them on their head using the irrelevant past as a means to deceive investors, consumers, homeowners, taxpayers, legislators and law enforcement.

The key fact that I see coming out is going to be relative to the Tier 2 yield spread premium that the Banks booked as trading profits. When investors get the data, they will be able to prove that the Banks skimmed a large chunk of the money intended to be used for funding mortgages. The amount loaned by the investors will not match up with the amount loaned to borrowers. Add that to the long list of intentional acts of fabrication, fraud and deception and those Banks are extremely vulnerable not only to civil attack for damages and injunctive relief but for criminal behavior. Remember that over 800 people went to jail when the savings sand loan crisis was revealed in the 1908’s. So far, in this case there have only been a handful of people.

If the full accounting for all money in and out is completed, there will be no doubt what happened. Whether the investors will recoup the money stolen from them by the Banks is for another day. But one thing is certain — if there was money coming in the Banks kept most of it and didn’t report accurately to either the investor lenders nor the borrowers. It is a certainty in my opinion that the account balances of borrowers on every type of loan will be affected and shown to be misrepresented when the Banks sought to enforce the debt. The balances will be reduced, in some cases below zero and in many cases the undisclosed profits and compensation is due back to both the investors and the borrowers under different laws. The Banks have created a double liability situation for themselves and I have no compassion for their situation.

The Banks are using their formidable resources to create a vehicle for amnesty in which the settlement is small and the liability for criminal or civil wrongs is effectively cancelled. Tammy Baldwin is running for Senate from her Congressional seat. She is running against the Banks and for America. Anybody in Congress who opposes this resolution will be an easy target in this election cycle. Aligning with the Banks now is seen by most as aligning with the forces of evil. Any politician looking to win an election this season had better take note.

Tammy Baldwin To Introduce Resolution Opposing Immunity For Banks In Foreclosure Deal

First Posted: 11/3/11 09:00 AM ET Updated: 11/3/11 09:00 AM ET

Tammy Baldwin

Rep. Tammy Baldwin (D-Wis.)

WASHINGTON — Rep. Tammy Baldwin (D-Wis.) is set to introduce a resolution in Congress this week calling on the Obama administration and state attorneys general to ensure that any deal reached with the nation’s biggest banks on foreclosure abuses includes full investigations into what happened, awards proper compensation to victims and provides no immunity for potential wrongdoing.

U.S. Attorney General Eric Holder and the state AGs have been working with the nation’s five largest mortgage firms — Ally Financial, Bank of America, Citigroup, JPMorgan Chase and Wells Fargo — to settle disputes over potentially illegal foreclosure practices, such as the so-called robo-signing of foreclosure documents.

Baldwin’s resolution states that any settlement should follow three guidelines: 1) Banks that engaged in fraudulent behavior “should not be granted criminal or civil immunity for potential wrongdoing related to illegal mortgage and foreclosure practices,” 2) the federal government and state AGs should “proceed with full investigations into claims of fraudulent behavior by mortgage servicers” and 3) any monetary sum paid by the banks should “appropriately compensate for, and accurately reflect, the extent of harm to all victims.”

“We have to do the best we can to make innocent victims whole. But secondly, especially in light of the taxpayer bailout of the biggest banks, we owe taxpayers a solemn effort to do everything we can do to uncover what went wrong and whether laws were broken,” Baldwin said in an interview with The Huffington Post. “Part of that is to make certain this won’t happen again. That, to me, is one of the most basic responsibilities we have.”

According to news reports of a possible settlement between the parties, banks would pay around $2025 billion in return for immunity from state lawsuits.

“While I can’t discuss the details of our negotiations, I will say that we are negotiating a limited — not a broad — civil liability release. We are discussing additional ways to help homeowners while still holding the banks accountable,” said Geoff Greenwood, spokesman for lead negotiator Iowa Attorney General Tom Miller.

Baldwin’s resolution follows a letter she wrote to Holder on Nov. 1, in which she argued that the low sum being discussed in settlement talks would be insufficient to help underwater homeowners. Twenty-four of her colleagues in the House of Representatives joined her on the letter.

“These underwater homeowners owe roughly $750 billion more than their homes are currently worth,” she wrote. “This $750 billion stands in contrast to reports of a $20 billion settlement with mortgage servicers. We are concerned that this $20 billion will provide little help to the estimated 14.6 million struggling homeowners who are underwater. Indeed, many of these families have been victims of outright fraud, and they deserve justice and just compensation.”

Obama administration officials, such as Housing and Urban Development Secretary Shaun Donovan and Treasury Secretary Timothy Geithner, have repeatedly said they would like to see a quick resolution to the mortgage probe.

When asked why there is such a push for a settlement amongst some of the members involved in the probe, Baldwin replied, “What I’ve read is that there’s an interest in resolving this prior to the next set of elections.”

But, she cautioned, such a strategy could backfire. “I do fear that a settlement that is just a tiny drop in the bucket, given all the devastation that’s occurred because of this, would have strong political ramifications,” she said.

The negotiations originally involved AGs from all 50 states, but a handful of them have pulled out due to concerns reflected in Baldwin’s resolution.

New York State Attorney General Eric Schneiderman (D) has been the leading voice pushing for a narrower deal, expressing concern that the proposed settlement would preclude state AGs from fully investigating and prosecuting banks found to have committed wrongdoing. In late August, he was kicked off of the 50-state task force after he refused to go along with the quick settlement the administration and his fellow state AGs were working out. Since then, several other state AGs have backed Schneiderman’s position.

Congress is not directly involved in the negotiations, but Baldwin said it was important for the administration and the state AGs to hear from the people’s representatives.

“I get a lot of constituents calling my office who are underwater in their mortgages, who are paid up but can’t refinance, can’t get lower interest rates. They’re struggling financially because of the economy,” said Baldwin. “Their calls aren’t even responded to by the big banks. They’ll call [my office] and say, ‘How am I supposed to talk about these federal programs that are out there for refinancing and help for homeowners who are underwater, if my bank won’t even call me back?'”

Baldwin is running for the U.S. Senate seat in Wisconsin being vacated by Sen. Herb Kohl (D) and currently has no Democratic primary challenger. The GOP field is more crowded: former governor Tommy Thompson, Wisconsin state Assembly Speaker Jeff Fitzgerald and former congressman Mark Neumann are all running.

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