The Myth About How Greedy Borrowers Caused the Financial Crisis and Should Pay By Losing Their Homes

The law needs to be changed to permit securitization schemes to designate a specific receiver or player to act as the real party in interest — or there will continue to be an absence of such real parties. Without that the debt can never be legally retired even if paid off to some securitization player. The courts lack jurisdiction (authority) to do anything about that. The statutes must change.

I there is one thing I know for sure and most people agree with me, it is that the banks caused the 2008 crash just like they did repeatedly in the past, most notably in 1929. Another thing I know for sure is that greedy bankers have always successfully controlled the narrative after such crashes and placed the blame on the victims. And the third thing I know for sure is that most of all bought that bulls–t.

Paul Krugman, with whom I sometimes agree pretty much nails it in his article about Zombie ideas that have been completely debunked by reality and are still perpetuated by the banks and other capitalists who simply want to make more money without regard to the impact on our society.

I’m all for free markets if they are free. But if you want to keep them free then you need to put the referees back on the playing field. If you want to rely on free market forces to correct imbalances and excesses then you need a free market. I think that most potential voters understand that, which accounts for the rise of Sanders, Warren and lately Bloomberg.

The current lending market is not free. it is corrupt and controlled by a few mega players at the top who push out any meaningful competition from thousands of other sources of lending (i.e., the 7,000 other banks, credit unions and S&Ls). You can’t compete if your competition is willing to offer incentives like no interest for 7 years because they are making pornographic profits selling securities based on the the apparent existence of loans many of which might be toxic or failing.

One or both of two things needs to happen — securitization must become totally transparent to investors and borrowers and small banks need to have access to the securitization process. Then borrowers will get the chance to bargain for incentives and investors will be able to bargain for greater returns.

But that still doesn’t address the current illegality of securitization as practiced. Under current law it is illegal to split ownership of the debt from payment of value. But the banks did it anyway when they sold certificates to investors who were forced to disclaim any interest in any debt, note or mortgage.

The law needs to be changed to permit securitization schemes to designate a specific receiver or player to act as the real party in interest — or there will continue to be an absence of such real parties. Without that the debt can never be legally retired even if paid off to some securitization player.

Without a change in the law, and a change in the documentation of loans, there is no official record of who actually has the legally right to act as designee-creditor of any debt that is subject to claims of securitization. Securitization as currently practiced is simply illegal — not just confused as many courts choose to think.

Without such legal and practical changes in law and practice, no lien could be legally released. That’s why hundreds of recording offices came out long ago and said that title has been irrevocably clouded by securitization. Right now “authority” and “ownership” are based upon off record assertions that consist entirely of “Because we said so.” What happens if the banks say something else tomorrow?  Do we really want to leave property law in the hands of the banks?

The banks would have made that change by lobbying lawmakers but for one fact: they would also need to address transparency. Under SEC and Federal State lending laws, all compensation arising out of the purchase of the certificates and arising out of the loan origination must be disclosed. Right now the main compensation arising from those sales is deeply concealed from government, investors and borrowers, contrary to existing long-standing law. The taxable profits that were untaxed was in the trillions of dollars.

If the banks told investors that they were going to create profits equal to multiples of the amount invested and multiples of the amounts loaned, the both borrowers and investors would truly understand the scope and nature of the transactions. Banks don’t want that because they want to keep all those profits for themselves and they want to continue keeping those profits as off balance sheet and offshore non taxable accounts.

If we enforce the laws, rules and regulations then small banks can compete on an even playing field. Loans would again become local and nobody would be making  toxic loans just so they could bet against them and keep the profits from sale of the loan product and the failure of the loan product. There would be no crash because there be no bubble.

My message to homeowners is “Stop blaming yourself.” You were a victim of a carefully constructed scheme to outwit the government, investors and you and it worked. You got screwed not by your own greed or some liberal idea of giving away free money but rather by the greed of corrupt banks.

Seehttps://www.nytimes.com/2020/02/17/opinion/bloomberg-buttigieg-economy.html?smid=nytcore-ios-share

FREE REVIEW:

If you want to submit your registration form click on the following link and give us as much information as you can. CLICK HERE FOR REGISTRATION FORM. It is free, with no obligation and we keep all information private. The information you provide is not used for any purpose except for providing services you order or request from us.

Posted in Uncategorized |