Foreclosure Review Process Handed Over to the Banks

Jan 10, 2013

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Editor’s Comment: Along with members of Congress and millions of homeowners I remain deeply disappointed in the failure of the Obama administration to grapple with the mortgage meltdown. The current path will lead to more of the same and it never does anything but escalate when somebody gets away with theft, fraud and PONZI schemes.

The prior so-called “review” process involved people who were neither independent nor skilled nor trained to find wrongful practices and the damage caused by those wrongful practices. They were given inadequate information by the banks who continue to hide the fake securitization scheme and PONZI scheme.

The agencies are complaining that it takes too long to process the review. Let’s see. If John Jones was foreclosed by somebody who had no right to do so on a loan that was unsecured and paid down to zero, and then he was evicted, just how long is too long for the agency to slam the offending bank? Are you kidding? What kind of double-standard are we setting up here? If I do it, I go to jail. But if a bank does it then it is an error and here is $2,000 for your trouble. Now under the new settlement agreement, if I do it, the agency is telling me to determine whether I committed a crime or civil theft. Yeah, I’ll get right back to you on that.

Obama and his administration continue to buy into the bank myth that these were bad lending practices instead of being intentional acts of fraud, theft, forgery and fabrication. They still think the loan receivables are “out there” somewhere but they have no evidence to substantiate that belief because there isn’t any. Those loan balances were paid down long ago.

The plain truth is right in front of them and there is no good reason to say that this task is too onerous for the regulators so we are just going to turn it over to the banks that were guilty of the wrong-doing. Does ANYONE really think that a bank is going to review its files and declare that a terrible injustice has been done?

Everything is tied to this mortgage mess. Consumers have been slammed with most of their wealth siphoned off by banks who were acting intentionally to screw the pension funds and the people who rely on those pension funds. The loan balances, if adjusted to reflect payments by insurance, credit default swaps and bailouts — all promised to the investors — are far less than anything demanded and in many cases are zero.

Nobody wants to give a windfall to the homeowner and nobody wants to give a windfall to the banks. But our government has decided that between the two, the banks ought to get it in order to preserve stability in the financial system. The stability of the financial system is, in my opinion, secondary to the stability of our economy. Our debt and deficits collectively and individually are all tied to the wrongdoing of about 2 dozen banks.

And I strongly disagree with the notion that the break-up of the mega banks will destabilize the financial system. When the dust clears, we simply won’t have banks that are too big to regulate, as shown in this review process. There is no evidence that clawing back the money for the pension funds that invested in fake mortgage bonds issued by fake investment pools will destabilize anything except the lives of some people who really need to go to jail.

Quite the contrary, putting the money back where it belongs with the pension funds and doing an accounting for the money in and the money out related to these mortgages will produce mortgage balances, without “forgiveness” that are far lower than demanded in foreclosure or end of month statements. Underwater homes will be a thing of the past, and mortgage payments can be adjusted to the real balances enabling the consumers in a consumer driven economy to spend.

Justice is more in this case than simply doing the right thing. It is a fiscal stimulus that does not cost one dime. If we can spend a trillion dollars on a war for the security interests of our country, then why can’t we spend 1/10 of 1% of that amount on following the money trail and determining the identity of the stakeholders, the amount of their stake and the terms of repayment?

The precedent here is dangerous. If “I am too important to go to jail” actually works as a defense, then we have changed the rule of law in ways that will haunt us for hundreds of years.

Agencies Give Up and hand the Mortgage Mess Over to the Banks to Resolve

Tags: accounting, Federal reserve, FORECLOSURE REVIEW, Obama, OCC, wrongful foreclosure
Posted in bubble, Corruption, Eviction, securities fraud |