Quantum Pranx

ECONOMICS AND ESOTERICA FOR A NEW PARADIGM

Posts Tagged ‘mortgage 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.

Four time bombs that will blow up Wall Street

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by Paul B. Farrell, MarketWatch
Originally posted March 1, 2011

 

 

 

SAN LUIS OBISPO, Calif. (MarketWatch) — Put Goldman Sachs CEO Lloyd Blankfein in jail for six months, and all this will stop, all over Wall Street and America, a former congressional aide tells Matt Taibbi in his latest Rolling Stone attack, “Why Isn’t Wall Street in Jail? Financial crooks brought down the world’s economy — but the feds are doing more to protect them than to prosecute them.”

Taibbi’s right, everyone knows Wall Street’s run by a bunch of dictators who are doing more damage to democracy and capitalism than North Africa’s dictators. But jail the CEOs of Goldman, Citi, B. of A. or my old firm Morgan Stanley? Too late.

Only a revolution will stop Wall Street’s self-destructive capitalism. And watching the people revolt against dictators like Mubarak and Gadhafi reminds us of the spirit that sparked America’s revolution in 1776. But today we need a 1930s-style revolution.

During the S&L crisis two decades ago America had a backbone, indicted 3,800 executives and bankers. Today’s leaders have no backbone. Besides jail time won’t reform the darkness consuming Wall Street’s soul. We’re all asleep, in denial about the moral crisis facing America. Yes, we need a new revolution.

Jail time? We’ve heard that many times before. Journalists have been beating that dead horse for three years. Jailing CEOs made sense in early 2009. But our naïve president missed that opportunity, instead surrounded himself with Wall Street insiders as Bush did with Blankfein’s predecessor. Trojan Horses manipulating a Congress filled with clueless Dems mismanaging tired Keynesian theories.

Taibbi got it right: Washington’s error was in protecting Wall Street’s billion-dollar crooks when they should have been prosecuting CEOs for criminal behavior in getting us into the 2008 mess. So today, the political statute-of-limitations has run. Jail solution is wishful thinking, like praying to the tooth fairy for a miracle. Time for action. Time for a revolution on Wall Street.

Jail Wall Street? Old news. They got away with it. We chickened out

“Jail Bank CEOs” makes a great sound bite in the cable pundits’ echo chamber. Remember Taibbi’s earlier indictment of Goldman Sachs: the “world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”

But so what? Just three years after Wall Street’s crooks “brought down the world’s economy” Goldman’s Blankfein and his buddies are paying record bonuses, and laughing at us.

Seriously, think about it folks: Since the 2008 meltdown magazines and newspapers have analyzed the 2008 crash to death. It really is old news, history. Journalists churned out book after book: “Greenspan’s Bubbles,” “House of Cards,” “Trillion Dollar Meltdown,” “13 Bankers,” “Dumb Money,” “Bailout Nation,” “All the Devils Are Here,” “The Big Short,” “Too Big to Fail,” “The Failure of Capitalism,” “This Time is Different,” “And Then the Roof Caved In,” on and on, ad nauseum. All talk, no action, and no effect.

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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

PLAN:
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?

http://4closurefraud.org/2010/11/21/foreclosure-fraud-how-to-gloss-over-perjury-forgery-amp-fraud-upon-an-american-court-amp-expect-to-come-out-unjustly-enriched/

How the banks put the economy underwater

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by Yves Smith
Originally published October 30, 2010

IN CONGRESSIONAL HEARINGS LAST WEEK, OBAMA ADMINISTRATION OFFICIALS acknowledged that uncertainty over foreclosures could delay the recovery of the housing market. The implications for the economy are serious. For instance, the International Monetary Fund found that the persistently high unemployment in the United States is largely the result of foreclosures and underwater mortgages, rather than widely cited causes like mismatches between job requirements and worker skills.

This chapter of the financial crisis is a self-inflicted wound. The major banks and their agents have for years taken shortcuts with their mortgage securitization documents — and not due to a momentary lack of attention, but as part of a systematic approach to save money and increase profits. The result can be seen in the stream of reports of colossal foreclosure mistakes: multiple banks foreclosing on the same borrower; banks trying to seize the homes of people who never had a mortgage or who had already entered into a refinancing program.

Banks are claiming that these are just accidents. But suppose that while absent-mindedly paying a bill, you wrote a check from a bank account that you had already closed. No one would have much sympathy with excuses that you were in a hurry and didn’t mean to do it, and it really was just a technicality.

The most visible symptoms of cutting corners have come up in the foreclosure process, but the roots lie much deeper. As has been widely documented in recent weeks, to speed up foreclosures, some banks hired low-level workers, including hair stylists and teenagers, to sign or simply stamp documents like affidavits — a job known as being a “robo-signer.”

Such documents were improper, since the person signing an affidavit is attesting that he has personal knowledge of the matters at issue, which was clearly impossible for people simply stamping hundreds of documents a day. As a result, several major financial firms froze foreclosures in many states, and attorneys general in all 50 states started an investigation.

However, the problems in the mortgage securitization market run much wider and deeper than robo-signing, and started much earlier than the foreclosure process.

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The Rot Within: Our Culture of Financial Fraud and the Anger of the Honest

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by Charles Hugh Smith
Posted originally October 15, 2010

Misrepresentation, fraud and gaming the system are all heavily incentivized in the U.S. culture and economy, and honesty is punished. This truth is finally being revealed on a grand scale. The coming implosion of the U.S. economy has been richly earned.

TODAY I AM PUBLISHING A COMMENTARY BY AN ACCOUNTANT with decades of experience in high-level global consulting firms and Fortune 50 U.S. corporations. What he has observed is unknown to the vast majority of Americans.

I have documented the poisoning of the nation’s culture and economy by a “game the system”/exploitation mentality: With accountability effectively lost, cheating, lying, misrepresention, embezzlement and fraud, both petty and monumental, have all been incentivized. Thus the “little people” game the welfare/entitlement system and the Financial Elites game the mortgage market, and everyone gamed whatever piece of the housing bubble they could grab.

Where does that leave the honest citizenry? At an extreme disadvantage. Lying, sins of omission, misrepresentation and doing the bidding of evil organizations gets you bonuses and career advancement, while refusing to game the system as instructed gets your fired.

How does that make honest people feel? How about righteously angry?

I’d like to provide some context for this commentary from the Survival+ critique. Here is how I would summarize an integrated understanding of our plight:

1. Humans are selected to seek windfalls and exploit them. I call this windfall exploitation. It is neither good nor bad, it is simply a profoundly advantageous strategy in a hunter-gatherer-wanderer environment. Individuals can maximize their gain by exploiting windfalls alone, but some windfalls are better exploited by groups. This is the basis of cooperation, which is expressed in both capitalist and socialist systems.

2. The natural resources windfalls have all been exploited. In general, the natural resources are in depletion and there is active competition for them which reduces the windfall.

3. Neoliberal Capitalism developed a solution for this paucity of natural windfalls: the partnership of the Financial Elites and the Central State. The Central State gathered powers of taxation and control which enable it to “enforce” the collection of the national income which can be channeled to its cronies in wealthy (and hence politically powerful) cartels.

The investment banking/mortgage banking industries are the example of this dynamic par excellence. (Please see The Coming Collapse of the Real Estate Market for more.)

4. The last significant windfall available to advanced global Capitalism was the financialization of the global economy. In the U.S., we see this clearly in the financial share of corporate profits; from a pittance in the “real growth” decades of the 1950s and 60s, finance-derived profits came to dominate Corporate America’s profits.

5. This financialization effected a net transfer of public and private income streams and wealth from the citizenry and State to the coffers of the financial Elites. As actual productivity and wealth-creation declined, so did wages and incomes when priced in purchasing power.

To offset that decline, people, companies and governments replaced income with debt: they borrowed to fill the gap between their desires/commitments/spending and their net income.

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Conversations with God… about Gold and Silver!

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by Bix Weir
http://www.roadtoroota.com/public/255.cfm

*The following interview was conducted in a similar manner as was conducted in the best selling book series “Conversations With God” by Neale Donald Walsch. Although I do not possess the same intimate knowledge of spirituality as Mr. Walsch, my ten year journey following precious metal markets has connected me to some very powerful spiritual monetary beings…and they have something to say. So let’s begin…

Me: Is anybody there?

God: Yes, I am here.

Me: Hi God! How do I do this? I read the books but I don’t want to sound like I’m anyone special because I can talk to God.

God: But you are special… we all are. You just ask your questions and the answers will be provided by your thoughts. Don’t stop to edit your thoughts. Just trust your answers and we will both provide the answers we need.

Me: Ok. I’ll start with an easy one. Are gold and silver markets manipulated?

God: Of course they are… Duh!

Me: Wait, is God supposed to say duh?

God: Don’t waste my time. What’s your next question?

Me: Who is doing it and why?

God: There are many groups of people who manipulate all markets and they all have different reasons. Some are driven by money, some by power but the largest group is driven by fear.

Me: Fear?! These people control the world…what could they be afraid of.

God: They are afraid of you and people like you. They are afraid they will be found out and the world as they know it will come crashing down. They are afraid that the people of the world will begin to understand the fiat money fraud and will be angry.

Me: Well don’t the ones with the money, the rich and powerful, make the rules? Why would this ever end?

God: The “rich and the powerful” are only rich with their monetary illusion. Without fiat currency they are not rich and their power crumbles. The rules will be changed very soon.

Me: How soon? I thought this would be over years ago. What will stop them from running this scam FOREVER?

God: You are stopping them…and people like you. There is also a group of people who have been working on taking these people down much longer than most know. They have been hoarding physical gold for many years and are preparing to go on a gold standard. They have been VERY secretive but they are ready to end the fiat money system.

Me: When?

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Oh, you thought we’d forget the felonies? Nope.

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by Karl Denninger
Posted November 29, 2010

(COLUMBUS, Ohio) — In response to Wells Fargo’s statement acknowledging that it “made mistakes” and that affidavits in 55,000 foreclosures filed by the bank did not “adhere” to the law, Ohio Attorney General Richard Cordray offers the following statement:

“The big mortgage servicers and financial firms continue to demonstrate their belief that they do not need to play by the same rules as everyone else who uses our court system. The suggestion by Wells Fargo and its colleagues at several other national firms that they can cure fraudulent testimony by simply refiling new affidavits and continuing to proceed toward foreclosures shows they do not recognize the seriousness of the problem they have created. There is no simple ‘do-over’ for false testimony that will be likely to avoid sanctions and penalties imposed by the courts. Their brazen efforts to minimize their financial exposure by sweeping these problems under the rug are an insult to the justice system in this country. These disclosures by Wells Fargo will now become the focus for a new prong of our on-going investigation.”