Martha Coakley gets it. Read her letter. Being a politician she does not say that the abstract fear of strategic defaults on all loans across the board is absurd. Well, actually she does say it. Principal reductions and ending patently illegal policies preventing homeowners from buying back their own property at auction are at the center of the solution to the foreclosure mess along with one more thing: things will change when we get the answer to the question IF THESE POLICIES HURT LENDERS, INVESTORS AND BORROWERS, WHY WOULD ANYONE LISTEN TO A THIRD PARTY WHO BENEFITS?
As the new head of the Federal Agency administrating Fannie and Freddie, Watts, replacing DeMarco, signals a major change in policy and regulations. The question is whether he means it. There is no doubt at the White House that the economy will continue to be dragged down by foreclosures. Their answer to the problem lies in modifications with “principal reductions” and loosening some standards for lending and securitization.
While the modification policies should be changed, this isn’t enough. Modification has been used as a tool of Wall Street to lure unwary borrowers into the illusion of immediate relief only to be faced with terms that are worse than the borrowers had before when underwriting was virtually nonexistent — albeit with some fees and other “skin in the game” restrictions that could slow up some of the continuing securitization fraud.
The issue is still the same and the fear is still there — will the entire system collapse if we stop putting the full brunt of the foreclosure mess on the backs of unsophisticated homeowners who were induced to buy loan products that were filled with false pretenses, false assumptions and nonexistent review, verification and other underwriting procedures.
At this point, considering the rampant appraisal fraud, homeowners should be given an opportunity to regain equity and have some skin in the game — as opposed to the all or nothing proposition they are fighting in court with complete strangers to their transactions 000 alleged by parties relying on evidentiary presumptions rather than real facts of each transaction.
In 2007 I proposed amnesty for everyone and that everyone share in the the losses from civil and perhaps criminal fraud caused by the banks taking money from investors and applying it to loans that were guaranteed to fail and then scaring government into thinking that the world would end if they were called on this predatory and illegal practice on the basis of being too big too fail.
Too big to fail is a myth. First, the banks can’t collapse because they are cash rich off shore. Trillions were siphoned out of pension funds, taxpayers and insurers and guarantors taking so much money that the federal reserve had to engage in various schemes of direct and disguised quantitative easing (like buying mortgage bonds that were worthless at 100% of par value). The losses claimed by the banks were also fictional.
At this point everyone at the levers of power knows the truth. The trusts were never funded and the trusts never acquired the loans. This places the investors in the position of being undifferentiated and unattached creditors for loans they funded but were never given proper documentation in the form of notes payable tot he investors and mortgages pledging collateral to the investors, leaving them as unsecured creditors.
But now the government is committed financially to a policy of continuing fraud started by the banks which is the same thing that is happening in court. The issue is not whether a deadbeat homeowner will get a free house (that is a choice presented by the banks in a false set of presumptions). despite the dire straits of investors in worthless and fraudulent mortgage bonds, homeowners are mostly willing to offer new notes and new mortgages that reflect economic reality. No, those deadbeats are nothing of the sort. They are hard working, play by the rules people who simply want a fair deal and they are willing to shoulder the loss forced on them by the banks.
Want to test it out? Call us about our AMGAR project — 7 years in the making — in which we call the bluff of the banks. It takes money, but the investors are starting to line up to help, and the homeowners with independent assets to offer the money rather than the foreclosure are racking up wins in case after case. Watch the banks back peddle as they reject the money in favor of their much needed foreclosure judgment and sale so they can report the loan was a bust — and therefore the money the banks received in servicer payments to the investors, insurance tot he banks, guarantees and other proceed from other obligors won’t need to be paid back.
And if played properly, the tax revenue due from the banks for violations of the REMIC provisions, part of which will fall on investors who fail to make their case against the broker dealers who sold them that mortgage crap, will more than offset the lack of revenue on Federal and State levels. All they need to do is give up on too big to fail and give up on thinking that killing the middle class is a good idea because the burden must fall somewhere. In fraud, the burden falls on the perpetrators not the victims although it is rare that restitution ever equals the loss. Virtually every foreclosure is merely the court’s complicity in the continuing fraud.
Remember the playbook of the bank attorneys into undermine your confidence until the very last second when they submit their voluntary dismissal in court. Call their bluff, offer the money based upon YOUR terms or the terms of an investor who is willing to make the commitment. Your terms require proof of ownership and proof of balance after credits for third party payments. you will find they don’t own the loan and the balance of the loan has already been paid down or paid off entirely.
Don’t just file motions to enforce discovery. File motions with affidavits from forensic analysts that explain why you need what you are asking for. You’ll get the order. And as soon as you get the order, the offers of settlement will start pouring in.
For information and further assistance please call 520-405-1688 or 954-495-9867. We provide help and guidance to professionals that know foreclosure defense, foreclosure offense, modifications, short-sales, Hardest Hit Funds and other Federal, State and private programs. Remember to ask about AMGAR. It is time to strike back. Let the other side start feeling the pain.
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