RoboDeal: Mullti State Settlement Neither Signed Nor Drafted When Announced

Many hat tips to Yves Smith and others who have pointed out that the grand settlement has neither been drafted nor signed in any form. This leads me to compare the entire securitization scam process with this settlement process and to highlight the “moral hazard” in front of us.

Now that everyone has announced the settlement and talked about it, they are done milking it for the PR value. At this point what actually goes into the settlement document and approved by the Court in North Carolina is as good as — well — any robosigned document. Nobody has released any formal summary or any documents that actually specifies the wording of the settlement.

The opportunity to “define” something that it is not, or to release something that wasn’t announced, or to provide preemptive wording that would enable the banksters to argue in court that the individual cause of action is blocked, at least in part, by this settlement or that there is no private right of action, or that the the AG of a state can’t charge them with crimes is a clear and present moral danger.

The very fact that the settlement is with the banks and excludes the investors and the borrowers is a problem.

The settlement implicitly ratifies the idea that the banks own the mortgages and when it is written down it might say it explicitly thus eliminating the central issue in the corruption of the title registries across the nation. What law enforcement and the media fail to grasp is that the banks did not loan any money to anyone.

They first got the money from investors and then took out huge amounts for fees that were not adequately disclosed to investors and then funded loans as conduits for the investors. At no time did any of those bank conduits possess a loan receivable or reserve for defaults because at no time was the loan ever owed to them.

The banksters kept the wording of documentation with the borrowers and the wording of the documentation with the investors vague and conflicting so that they could claim, when they wished, that the loans were owned by the banks, thus collecting on taxpayer bailouts, insurance, credit default swaps and other credit enhancements — and even claim losses on defaults that were nonexistent on loans they didn’t own. We are now left in the same position where the announcement or representations are one thing, but the wording of the settlement is unknown and could include anything.

The Banks are still running the show. The situation is left vague so they can grift their way through this settlements just the same way they the previous settlements and orders. At some point, it will be nice if someone did some arithmetic on the back of a paper napkin and realized that everything the banksters are saying and doing is wrong — not just from a technical legal standpoint — but from the standpoint of who has the money, who gets the money and who gets credited for payment.

Or, maybe we can all use a page from the playbooks of these giant banks. Each of us can announce we have losses of over a trillion dollars and that we won’t be able to meet our commitments unless the Federal government or the Federal Reserve provide the deficiency we created out of thin air. It doesn’t matter whether we have any actual losses or if we do, whether the losses are in the amount we say or that they were incurred in the way we said or even if the losses were already covered by other bets we made. We just want the money. And when all is said and done, after we get the money from the Federal government and Federal reserve, we will then seek to collect “debts” from consumers who know they have those debts but are completely without information as to whom the debt is owed. If we can get most people to pay, it is  windfall again — all starting from a point where we conducted no business, did no transactions, and suffered no losses.

This reminds me of a scam that is still going on. It seems that if you send an official looking bill for medical or business services of office supplies to tens of thousands of businesses and you keep the amount due low — like $35 or so, you will find that most people would rather pay the bill than contest it. Some people have gone to jail for mail fraud as a result of this — but most of the people out there doing this scam are free as a bird and stuffed with cash like the bankers on Wall Street. The business is simply about sending out false bills and collecting on them — same as Wall Street is doing with mortgages, credit cards, auto loans, student loans (the next big debt crash) and other consumer loans.