OBAMA ADMINISTRATION GETS INTO GEAR: WHAT DOES IT MEAN TO YOU?

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I have been involved with all three branches of government for a long time. The sudden release or barrage, if you like, of the MERS cease and Desist, the Senate Report, and the decisions by several courts reported in recent days is no coincidence. It’s all about politics and the 2012 election. It’s a lot of words on paper, spoken in grand speeches and agency actions that COULD  mean nothing. That said, I think that the banks have had their 15 minutes and that the Obama DOJ and Federal Agencies are getting ready for a variety of options — all of which amount to showdown with the Banks.

In the meanwhile, the facts coming out in support of the actions taken in the last few days and what will still come out will be very damaging to the megabanks. It is even possible that they will reach a tipping point, particularly if the administration reverses itself on criminal prosecutions. In the 1980’s 800 people went to jail in the savings and loan Lincoln Savings (Arizona) crisis and I mean to tell you I knew some of them, and the ones that didn’t go to jail were well aware that there but for the grace of the almighty, went someone else.

Whether intended or not, each step escalates the position of the megabanks from being adversarial to being in a pitched battle for survival.. In the end it is hard to imagine a scenario in which they will survive. The question is not whether they will last, but how much damage will they be allowed to cause before they either collapse of their own weight or are brought down by regulators. Every day the corruption of our title registry in all 50 states is compounded by false and fraudulent foreclosures. Every day increased pressure is put on housing prices because of the illusion that the foreclosures were valid and real.

Whether anyone realizes it or not, Obama has an advantage that nobody but a few inner circle could have been thinking about — the slingshot effect of a sudden shift in the housing market wherein the middle class suddenly reappears, banks become competitive, and the control of government by a few Wall Street individuals abruptly ends. Of course this is wishful thinking — but it also a pretty good estimate of things to come. The balance sheets of the megabanks continue to be so far over the line of, as reported, as to be a mere continuation of the process of attaching AAA ratings to mortgage bonds representing interests in asset backed pools that either didn’t exist, or had no assets, or both. Their assets are based upon old appraisals of property and securities that are so far over-stated, any officer of a public company signing those representations and any auditing firm certifying them, is not only risking their business existence, but their liberty as well.

BOTTOM LINE: We have slowly moved from a position where the legal defenses and strategies recommended or proposed on this blog have gone from preposterous to dangerous. Every prediction and description here of fabrication, fraud and forgery on a wide scale, every assumption made on following the money has been right on the money. Go back and look for yourself. So here goes. It has been my opinion since June, 2007 and remains my opinion, that there is no way out of this jam for the megabanks. The entire securitization scheme was an illusion and the 31 million mortgages active on MERS as well as 50 million or more other mortgages are NOT legally secured, and will be stated as such within 2 years.

It is further my opinion, as stated in early articles 3 years ago (Why You Don’t Owe the Money) that in most cases there is no liability running from the homeowner to anyone on Wall Street. Lastly, it is my opinion that there is very likely little or no liability running from the homeowner to anyone else because of the PAYMENT of monthly payments by servicers, and the PAYMENT of amounts that should have been allocated to the Principal obligation by third parties who, for reasons of their own, expressly waived any right to subrogation, which means they expressly in writing waived the right to collect.

Sounds counter-intuitive, fantasy based, a load of crap as one judge put it in Florida? That Judge characterized what I have said into a statement that all securitization is illegal. That is absurd. Virtually everything that happens on Wall Street is a form of securitization and it has been happening for hundreds of years and will continue for hundreds more. From that mischaracterization, the Judge went on to say that I was wrong. But I have not been wrong. It is the failure of the pretenders to follow their own securitization documents, the failure of the pretenders to follow state and federal law, and the failure of the pretenders to properly document and disclose the transactions to the investors and borrowers that will bury them — not some far out theory that securities are illegal.

The “can” will be kicked down the road s long as it is politically expedient to do so. President Obama has a pattern of waiting and biding his time and instead of leading the charge, letting the charge build and then leading it. Like Lincoln, he figured out that if you do something that the people already want, the opposition will have very little to say about it. That is what I predict will happen in 2011 and 2012. More people will be relieved from this foreclosure mess than currently meets the eye.

Tags: bailout, Bank of America, borrower, credit crisis, disclosure, foreclosure, foreclosure defense, foreclosure offense, fraud, Lender Liability, predatory lending, rescission, securitization, TILA audit, trustee
Posted in bubble, Corruption, Eviction, securities fraud |