Warren in – Summers Out: Change is in the Wind

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The surprising departure of Lawrence Summers, once touted as the next FED chairman, along with the installation of Elizabeth Warren, Chair of the Congressional Oversight Committee on TARP is a clear signal that the administration has turned its attention to the fundamentals of the economy and away from the ideology that directly maintained the continuing fraud on the American taxpayer, the hapless borrowers who were defrauded over a 10 year period, and the equally hapless pensioners whose fund managers supplied the capital to create this mess. Continued joblessness along with the projection of increases in joblessness will depress housing and other driving forces of the economy.

The simple logic is irrefutable. If there is no money to buy and we are out of options to even pretend (using credit) that there is a supply of money to buy, then selling is going down the drain. Dollar Stores are seeing increased business while most everyone else is sitting with rising losses and decreasing profits. The next big dipper in what everyone was SAYING would not be a double dip recession is coming and it is right around the corner. China isn’t helping either, as they maintain policies that give their companies an unfair subsidy that their American counterparts are not getting.

So now the Federal reserve is going to be buying debt again by printing more money and by using the proceeds of their investments in mortgage bonds. What? Is the FED getting the money on the mortgage bonds, and is the money coming at least partly from borrowers? Is part of the money coming from co-obligors pursuant to securitization documents that created the securitized infrastructure?

So just who is foreclosing on middle America? The Federal Reserve, that’s who. But are they getting the proceeds from foreclosure or simply accepting money that is a scrap of what once was because of the feeding frenzy of illegal fees, profits and rents taken out by the pretender lenders, servicers, investment banks and their agents and affiliates? Using the same plausible deniability argument that the rest of the banks and pretender lenders are using the Fed will say “Don’t look at us we are just own the receivables from the bond.”

But you see that is exactly the point. Pretender lenders are going to court and giving an accounting from a non-creditor (the servicer) and refusing to disclose whether any other money hit the table. Judges are left with the misimpression that because the borrower missed a payment, a default occurred. Not true. There is no default unless the creditor has lost money. If the Fed is still getting paid, then the Notice of Default is a fraud.

Is that fair? You bet it is. In any commercial loan situation, if the lender had already mitigated its damages, there is no way the court or bankruptcy court would allow the lender to ignore it. Why should it be any different for residential loans? The principle is the same: no creditor should receive more than the amount owed. And yet in every foreclosure involving a securitized loan (96% of all loans) that is exactly what is happening. The creditors and their agents are receiving money from multiple sources AND taking the house without crediting the obligation with the extra money they received.

• They turn down short-sales when the proposed selling price is LESS THAN THE AMOUNT OWED TO THE CREDITOR. And of course they refuse to identify the actual creditors and refuse to provide a full accounting.

• They turn down modifications when the proposed correction in the principal due is LESS than the amount owed to the creditor on the obligation. If the creditor were paid any more they would be receiving more than the amount owed on the obligation. And they do. WHEN THE BORROWER COMPLAINS ABOUT THE DOUBLE DIP PAYMENTS THE BORROWER IS ACCUSED OF IMMORALITY AND TRYING TO GET A FREE HOUSE. WHEN THE CREDITOR AND THE CREDITOR’S AGENTS GET PAID SEVERAL TIMES OVER ON THE SAME OBLIGATION, THAT IS BUSINESS, TOUGH LUCK.

• They initiate foreclosure proceedings and sales based upon accounting information that they KNOW is only a partial accounting and that they KNOW is ignoring other money received, thus depriving the homeowner of a chance to settle or refinance the house.They use fraudulent affidavits signed by people who know nothing (see article on GMAC and similar articles on Deutsch and other pretender lenders)

• They pretend to have a secured loan when they never perfected the lien. The originating lender was never owed the money. The actual lender was never on the note or security instrument.
  

So now Obama has some choices to make and they are narrowing. Does he continue to allow this charade or does he stop it. Because if he stops it, then a lot of powerful people are going to increase their hatred of him. But if he stops it and the tide turns, then middle America is back on the path to being restored, the taxpayers are back on the way to reducing deficits, and the stranglehold that Wall Street has exercised mercilessly will be broken. What’s a President to do?

Tags: Federal reserve, Obama, Summers, TARP, Warren
Posted in bubble, Corruption, Eviction, securities fraud |