FIGURING OUT THE ECONOMICS OF OUR AMERICAN MELTDOWN FRAUD

Gump59 – Why buy performing mortgages? If they are producing income for their owners, why wouldn’t they be held onto?
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ANSWER: You’d buy a performing mortgage if you thought that you were buying it at a bargain, guaranteed with Triple AAA rating. If you buy a mortgage note that has a principal balance due of $500,000 and the stated interest rate is 6% you are expecting $30,000 in income. But if you think you are buying it for $250,000, and still getting $30,000 per year, then you are getting 12% plus a $250,000 bonus (when the note gets paid off). In the mortgage meltdown, this is what occurred. But what they were buying was one performing mortgage and 1,000 mortgages that already had the fuse lit to blow up (become non-performing). On paper it looked like 12%. In reality it was 1%, and that too vanished when the stuff hit the wall. As for the principal due on the note —- well that also vanished. The intermediaries (depository lending institutions and Wall Street investment bankers) got paid twice or three times (with Federal bailout) over, the borrower lost everything, the investor lost everything. Now the officials who gave the bailout understand that Wall Street pulled off the greatest triple fraud in history — the investors, the borrowers and the taxpayers — and in many cases because of pensions, annuities and other factors it was the same person getting pounded by the same transaction over and over again.

Neil F. Garfield, Esq.
ngarfield@msn.com

Tags: audit, bailout, bankruptcy, borrower, disclosure, Federal reserve, foreclosure defense, foreclosure offense, fraud, Lender Liability, mortgage meltdown, securitization
Posted in bubble, Corruption, Eviction, securities fraud |