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Posts Tagged ‘mortgage bond fraud

You want to fix the U.S. economy? Here’s a start…

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by Charles Hugh Smith
Posted July 19, 2011
on Of Two Minds 

A SIMPLE 8-POINT PLAN WOULD RESTORE BOTH THE BANKING and the real estate sectors, and end the political dominance of the parasitic “too big to fail” banks. Craven politicos and clueless Federal Reserve economists are always bleating about how they want to fix the U.S. economy and restore “aggregate demand.” OK, here’s how to start:

1. Force all banks to mark all their assets to market at the end of each trading day, including all derivatives of all types, including over-the-counter instruments.

2. Allow citizens to discharge all mortgage and student loan debt in bankruptcy court, just like any other debt.

3. Banks must mark all their real estate to market weekly as defined by “last sales of nearby properties” adjusted for square footage and other quantifiable measures (i.e. like Zillow.com).

4. Require mortgage servicers and all owners of mortgage-backed securities to mark every asset within each pool to market weekly.

5. Any mortgage, loan or note which was fraudulently originated, packaged and sold, including the misrepresentation of risk, the manipulation of risk ratings, fraudulent documentation by any party, etc., will be discharged as uncollectable and the full value wiped off the books and title records without recourse by any of the parties.

If a bank fraudulently originated a mortgage and the buyer misrepresented material facts on the mortgage documents, then both parties lose all claim to the note and the underlying asset, the house, which reverts to the FDIC for liquidation, with the proceeds going towards creditors’ claims against the bank.

6. Any bank which misrepresents marked-to-market asset values will be fined $10 million per incident.

7. Any bank which is insolvent at the end of a trading day will be closed and taken over by the FDIC the following day, and liquidated in an orderly manner via open-market auctions of all assets, including REO (real estate owned).

8. All derivative positions held by the insolvent bank will be unwound immediately, and counterparties who fail to make good on their claims will also be closed, given to the FDIC and liquidated.

You know what this is, of course: a return to trustworthy, transparent accounting.
And you know what the consequences would be, too: all five “too big to fail” banks would instantly be declared insolvent, and most of the other top-25 big banks would also be closed and liquidated.

At least $3 trillion in impaired residential mortgage debt would be written off, maybe more, and $1 trillion in impaired commercial real estate would also be written down. Derivative losses are unknown, but let’s estimate it’s at least $1 trillion and maybe much more.

If $5.8 trillion of fantasy “value” is wiped off the nation’s books, that’s only a 10% reduction in net household and non-profit assets, which total $58 trillion. Even an $11 trillion hit would only knock off 20%. If that’s reality, if that’s what the assets are really worth in the real world, then let’s get it over with. Once we’ve restored truthful accounting and stopped living a grand series of debilitating lies, then the path will finally be clear for renewed growth.

The net result would be the destruction of the political power of the “too big to fail” banks, the clearing of the nation’s bloated, diseased real estate market, and the restoration of trust in institutions which have been completely discredited.

Bank credit would flow again, and we could insist on a healthy competitive system of 250 small banks instead of a corrupting system of 5 insolvent parasitic monsters and 20 other bloated but equally insolvent financial parasites.

Those who lied would finally get fried. At long last, those who misprepresented income, risk, etc. would actually pay some price for their malfeasance. Criminal proceedings would be a nice icing on the cake, but simply ending the pretence of solvency would go a long way to restoring banking and real estate and ending regulatory capture by TBTF banks.

What’s the downside to such a simple action plan? Oh boo-hoo, the craven politicos would lose their key campaign contributors. On the plus side, the politicos could finally wipe that brown stuff off their noses.

The Ultimate Cost of Zero Percent Money

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by Jim Willie CB
Posted originally December 29, 2010

home: Golden Jackass website
Jim Willie CB is the editor of the “HAT TRICK LETTER”

Another major article from the inimitable Jim Willie. It seems so long now since we have had a zero interest rate policy in place that it appears to be just part of the normal background, and most of us don’t give it more than a passing thought. But here Jim Willie digs deep into the part that zero percent money plays, and it is not a pretty story… –Aurick

SINCE THE EARLY 1990 DECADE, THE NATION’S MAESTROS HAVE PROMULGATED the notion that cheap money is a beneficial factor for the sustenance of wealth, for economic development, for the standard of living, for the robust industries, in general for the American society. Nothing could be further from the truth, but even today the reckless US economists from the Keynesian Camp and their controllers from Wall Street have convinced the multitudes that cheap money is a good thing.

Cheap money comes with a deadly ultimate cost. The inept professor occupying the US Federal Reserve Chairman post has gone on record claiming the US banking sector has a secret weapon in the Printing Pre$$ that it can use with zero cost, in its electronic form. Nothing could be further from the truth. The Clinton & Rubin team began the distortion of the Consumer Price Index, ostensibly to reduce Social Security and USGovt pension benefits in cost of living raises. They wanted to cause a massive USTreasury Bond bull market, and succeeded in doing so. They wished also to bring down the USTreasury Bond yields.

The infamous Fed Valuation Model dictated that as rates rose, stocks fell. So the scheme to manipulate the bond market began with the venerable craftsmen of rigged markets, ruined engines, and mega-fraud schemes. They taught from their high priest pulpits that cheap money was good for the financial markets. Nothing could be further from the truth.

Many analysts have sought the underlying root cause for the systemic failure of the USEconomy, the US Banks, and the USFed itself. One can start in pursuit of answers by looking at the cause being a sequence of costly wars and the ensuing monetary inflation, followed by lost industry to globalization and price inflation. The Vietnam War had a powerful consequence of inducing Nixon to exit the Gold Standard, a linkage few if any economists or even gold analysts make.

But the true single cause of wreckage is the artificial low forced cost of money, the near zero cost of usury. The subtitle to that billboard is that CAPITAL IS TRASH. Imagine in a nation that developed, promoted, and exploited the fullest riches of capitalism, embarked upon a path to destroy capital without even the recognition by its best brain trusts. Their mental chambers have been totally corrupted by the justification that inflation is a positive force that must be managed. Nothing could be further from the truth. The consequences of artificially cheap money, the wrecked pricing of usury, ultimately is capital destruction and economic failure.


My friend and colleague Rob Kirby calls the artificially low cost of money, the cost of usury, to be the pox on humanity. It is actually a pox on the entire economy, in which humanity resides. The Jackass calls it acidic paper mixed in the cauldron to dissolve capital. The points of this article expose the most glaring blind spots of USEconomic and USBanking, a mindboggling failure that has delivered the United States of America to the doorstep of the Third World. The sins committed are almost precisely what Banana Republics have done, and faced ruin. The annual $1.5 trillion USGovt deficits are proof positive of the failure. Those deficits are grossly under-stated when hidden costs of war are factored, and when hidden costs of nationalized acid pits like Fannie Mae and AIG are factored. Leave alone the costs of endless war and its seamy motives. Consider the many sides to free money, the forcibly low cost of usury.

The 0% usury cost has destroyed capital, with the recent destruction seen as in an accelerated phase. The 0% money encouraged asset speculation, not business investment. The steady stream of nonsensical labels to the USEconomy are comical. The Macro Economy ten years ago fizzled. The Asset Economy six years ago fizzled. The bylines of a Jobless Recovery offer insult to one’s intelligence. Nothing could be further from the truth, since no such contraption exists. The 0% money even encouraged drainage of real assets, like gold. The Clinton-Rubin gang altered the gold lease rate toward 0% in an experiment. Almost the entire gold inventory was drained from the USTreasury and its secure storage facility at Fort Knox. It was essentially stolen from the front door using official trucks. In defiance, the USFed and USDept Treasury continue to refuse an independent audit. With artificially low rates come complete destruction of capital formation, as economic laws have all been commandeered.

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Foreclosure Fraud: How to gloss over perjury, forgery, and fraud upon an American court and expect to come out unjustly enriched!

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Posted by L

Posted in Foreclosure Fraud on November 21, 2010

Admitted to perjury and fraud tens of thousands of times over across America:
• GMAC/Ally
• JP Morgan Chase
• Bank of America
• Wells Fargo
• CitiMortgage

1. Blame “the borrowers”.
2. Hire an excellent PR team.
3. Hire excellent criminal defense attorneys.
4. Research countries that do not have extradition agreements with the United States.
5. Minimize the misdeeds by using light words such as “improprieties” and “irregularities”.
6. Downplay the implications, consequences, and repercussions at every opportunity.
7. Prepare a repertoire of arrogant, indignant expressions and vocal tones to be liberally feigned at the merest hint of holding corporate financiers accountable for known and admitted crimes.
8. Acknowledge the fact that America’s top financial institutions & their corporate officers need not comply with rules, regulations, laws, or quaint, arcane state & federal Constitutional rights of or belonging to the serfs the American people.
9. Remind the Administration, lawmakers, judiciary, regulatory agencies, and law enforcement of #8.
10. Expect some inconsequential fines as the cost of doing business.
11. Anticipate record bonuses in a few weeks.
12. Maintain the status quo of the financial industry where the ethical operative upon which a highly successful and lucrative business model is predicated upon massive, dangerous, abusive, predatory, and criminal fraud.
13. Plan on longevity.

At bottom is a link to an example of how to redo fraudulent documents that propounded fraud upon the court and arrogantly imply that the fraud is of no consequence whatsoever. Florida Default Law Group, a foreclosure mill in Florida files a Motion to Ratify Summary Judgment (check back at same link in a few days for the underlying affidavit and the exhibit A of this document)

Just wait until word gets out that the fraudulent documents are not limited to affidavits of indebtedness! Interesting responses indeed to be expected in response to the revelations about verificationsassignments of mortgage,satisfactions of mortgage, robosigned nonsensical documents that do not match the MERS data, fraudulently backdateddocuments, free-for all with the stamps of notaries, affidavits that previous satisfactions of mortgage were erroneous (here and here), refinances that never paid off the original mortgage, photo-shop endorsements of promissory notes, fabricating documents that never existed and swearing to the accuracy of facts not known on practically every document touched by the mortgage securitization ghouls and their corrupt law firms.

How they gonna “redo” all that?

Maybe. Just maybe. Maybe millions of families across America would like a similar opportunity; one where they jump at the chance to escape accountability and repercussions by a simple “redo” of their participation in an abusive, predatory financial transaction that left them completely tapped out and facing homelessness?


HSBC and J.P. Morgan face lawsuits for precious metals manipulations

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from The Daily Bell
Posted originally Monday, November 01, 2010

Could this be it? … Two guys on our Christmas card list this year will be Ted Butler and Bill Murphy. Butler has been chasing the silver manipulation story since 1990; Murphy’s Gold Anti-Trust Action Committee (GATA) has been chasing the gold side of the manipulation story for just about as long. It only took two decades, guys, but finally a regulator returned a phone call. Last week, CFTC Commissioner Bart Chilton described “repeated” and “fraudulent efforts to persuade and deviously control” silver prices, according to the Wall Street Journal. “I believe that there have been repeated attempts to influence prices in the silver markets,” Chilton, a Bush appointee reappointed by Obama, said. – The Wallace Street Journal

Dominant Social Theme:
Don’t look at the man behind the drawn curtain. There. The one looking miserable. He’s just been served…

Free-Market Analysis:
Hard-money writer David Bond has composed a short but cogent update (excerpted above) that spells out what could be going on with the gold and silver markets now and in the near future. It’s his impression (and the impression of some Bell feedbackers, as we noticed yesterday) that the metals markets have arrived at an imminent turning point. The CFTC itself is beginning to acknowledge that there has been significant manipulations of the metals markets and several lawsuits have now been filed. Here’s more from the article:

Two traders, in separate lawsuits, alleged that HSBC and J.P. Morgan-Chase were the culprits. According to Forbes, quoting Murphy, who was citing CFTC reports, the two banksters together controlled 43 percent of the net short commercial position in gold and a staggering 68 percent of the short interest in silver last November. It’s difficult not to infer a conspiracy here.

One of the traders filing suit alleges that the banksters colluded on the silver futures market and let each other know about large trades, placing “spoof” trading orders in order to suppress the price. At this point these are allegations, but they should be taken seriously, considering their sources. Murphy and Butler were ridiculed for two decades for figuring out what, finally, regulators are waking up to: Something is rotten in Denmark.

More important even than the attention of regulators is that now the Wall Street media can no longer ignore the story. Quipped Murphy: “We’ve been quoted in Forbes. What’s next? Field and Stream?” You won’t hear about Chilton or the traders’ lawsuits on CNBC or Bloomberg, just yet, but the fuse has been lit. This is a story that’s just become too big to be busted …

The last week of October, 2010, may well be the watershed event for precious metals, and for the U.S. Federal Reserve Dollar. Should the short-side manipulation of silver and gold ever become understood by Joe Sixpack, the Fednote is toast and there will be no upside limit to genuine, precious metal money.

Bond is too careful a journalist to draw definitive conclusions, though, at the same time, he is pointing out a potential market event. He is correct to do so, though Bond knows – as do we all – that timing a market is good bit more difficult than predicting a trend. Here at the Bell, we have never much doubted a massive conspiracy to keep down the price of gold and silver.

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Want to Get Away with Murder? Become a Bank!

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by Alan Sloan
Originally posted October 26, 2010

THE BIGGEST DANGER TO THE U.S. CAPITALIST SYSTEM DOESN’T COME FROM communists or community activists or left-wing academics. It comes from some of the nation’s biggest financial institutions. These companies, which helped create the financial meltdown that touched off the Great Recession, have now found yet another way to undermine the public’s faith in capitalism and markets: the foreclosure fiasco.

Even before the foreclosure problem appeared, the level of public distrust of our financial and political systems was approaching the pathological. It’s going to get even worse when the true lesson of this episode sinks in. To wit: If you screw up big-time when you deal with a giant bank, you’re toast. If the giant bank screws up when it deals with you, it gets a do-over.

Sure, many — probably most — of the people whose mortgages are being foreclosed got in trouble because they overreached or lost their jobs, not because anyone cheated them. But if we’re going to have rules, they ought to be binding on everyone. If I’m supposed to obey the law and pay my bills, the people I’m paying ought to have to obey the law too.

You miss a payment on your credit card or send it in a few days late, you get whacked. Forget to make a loan payment, your credit rating gets vaporized. But if a bank doesn’t do its job properly — for example, if you can’t get a knowledgeable and competent human on the phone to deal with a loan modification or a paperwork screwup because the bank is holding down back-office costs to save money — it ends up being your problem, not the bank’s.

It’s utterly shocking, even to a congenital skeptic like me, to see that giant institutions such as Bank of America (BAC, Fortune 500), GMAC, and J.P. Morgan (JPM, Fortune 500) were allegedly using misleading affidavits to oust people from their homes. Employees of these institutions — the “robo-signers” — repeatedly misled courts by saying they had examined documents they hadn’t examined and had reviewed documents they hadn’t reviewed.

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Imminent Big Bank Death Spiral

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by Jim Willie CB
Posted originally October 28, 2010

Use the above link to subscribe to the paid research reports, which include coverage of critically important factors at work during the ongoing panicky attempt to sustain an unsustainable system burdened by numerous imbalances aggravated by global village forces. An historically unprecedented mess has been created by compromised central bankers and inept economic advisors, whose interference has irreversibly altered and damaged the world financial system, urgently pushed after the removed anchor of money to gold. Analysis features Gold, Crude Oil, USDollar, Treasury bonds, and inter-market dynamics with the US Economy and US Federal Reserve monetary policy.


THE MORTGAGE AND FORECLOSURE SCANDAL RUNS SO DEEP THAT ORDINARY OBSERVERS can only conclude the US financial foundation is laced with a cancer detectable by ordinary people. The metastasis is visible from the distribution of mortgage bonds into the commercial paper market, money market funds, the bank balance sheets, pension funds under management, foreign central banks, and countless financial funds across the globe.

Some primary features of the cancerous tissue material are allegations of mortgage bond fraud, major securities violations, absent linkage to property title, income tax evasion, forged foreclosure documents, duplicate property linkage to single mortgage bonds, NINJA (no income, no job or assets) loans to unqualified buyers, and more. In fact, more is revealed it seeems each passing week toward additional facie to high level and systemic fraud. The world is watching. The growing international reaction will be amplified demand for Gold, from impressions that the USDollar & USEconomy have RICO racketeering components extending to Wall Street banks and Fannie Mae mortgage repositories.

The centerpiece question, when allegation of the US bond fraud is coupled with European sovereign debt distress, comes down to WHAT IS MONEY? The answer is Gold and Silver and not much of anything else. Other assets like crude oil or farmland are effective hedges against tainted money, but when they contain debt tethers, they too are vulnerable. Huge flows of funds are fleeing traditional asset groups. Some mistakenly still believe the USTreasurys to be a safe haven. A shock of cold water comes to them when that bubble goes into reverse perhaps several months later after reaching 2% yields. The big magnificent epiphany in the last couple years has been that a house is not a hard asset, but rather a debt instrument extension. Important questions have arisen as to what assets are free from counter-party debt risk. The grand demands for physical gold prove that the futures gold contracts are not money either, but tainted Wall Street and London securities contracts that keep the system going.

The big banks have been called too big to fail. They are too big to plow under without removal from power of the bankers themselves. They are too big to permit their balance sheets to be liquidated without a US banking system seizure together, and a 30% to 50% additional housing market price decline. They are too big to send into receivership without igniting a credit derivative sequence of explosions. They are too big to block the widespread illicit practices and enforcement of law of regulations. However, a wondrous spectacle has begun to shine light:

The mortgage & foreclosure scandal could turn out to be the big US Bank tombstone epitaph, as bank revenues from mortgages slide, as home owners tend to refuse on mortgage payments, as court cases unfold in full view, as class action lawsuits provide evidence on racketeering at a systemic level, as MERS and REMICs are isolated by the courts for further investigation. Time will tell. Time will reveal extraordinary efforts by the USCongress to pass additional laws that grease the bank pathways, past and present. Remember back in July 2007 when Bernanke claimed this was just a subprime mortgage problem. The Jackass called it an absolute bond contagion from its origin, which it surely turned out to be.


Two critical elements have been identified. The MERS electronic title registry system was designed to facilitate recording of property titles as associated mortgage bonds traded freely and changed ownership hands. Unfortunately, the title database has no legal standing, as declared by several state courts, including some supreme courts. Banks or financial firms holding the mortgage notes cannot team with the title database and force eviction during the home foreclosure process. That is the first gaping flaw.

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