Daily Caller: One Nation, Under Fraud (Friendly Warning: The Foreclosure Mess is About to Get a Lot Worse, and That Will Affect You) (New Update in Post #508)

[TMK9973]

You're missing the point of the article. The problem is that the banks, as they themselves explained, do not have the original paperwork at all. None of it. It's your word against theirs. It's a cluster ****. You can not win a lawsuit, foreclosure or otherwise without that documentation.

Hubbs, how long until this goes nuclear? What do you see happening, if you had to guess?

Not really - I mean -Assuming there has been at least 1 payment - you could argue that the pepople who wrote the check agreed that there was a mortage and the people they wrote the check to were the holders of it.

[Hubbs]

Banks are submitting affidavits to courts by employees who are swearing under the penalty of perjury they have personally reviewed the documents related to the foreclosure, when they never did. These "robo-signers" are going to end up costing the banks an insane amount of money.

It's not just the affidavits. Read the story.

ok - Am I missing something?

I get whats happening, and how bad it is and the foreclosure stuff...

I get the paperwork wasn't filed correctly...but it sure seems like all it will take is a precident of the courts to say misfiled paper work, or lack of signature here and there is not enough if you can sure clear intent by all involved on who owns the loan....

Simplest way to do that? Look at last mortgage payment made and track where the money all went to...

Maybe I'm just a optimist -But I think all this will really do is encourage banks to negotiate a little more to avoid foreclosures because they know they have been sloppy - but if someone simply refuses to pay - they can follow thru...

BTW - this is not that far fetched - Many judges have already sided with the banks even after seeing the sloppy paperwork saying "Not enough- I'm not letting a lost paper or lack of signature on 1 paper ignore the fact that you stopped paying"

The only thing you're missing is the fact that when banks say that this is "just a technical issue," they're lying. It's not a technical issue.

They have no idea who owns the mortgage. None. Absolutely none. Following the payments will generally lead to mortgage-backed securities, which are owned by clueless banks, foreign investors, and pension funds who expect the trust company holding the mortgage itself to foreclose correctly if the payments stop. The investors have no idea what the mortgage documents say, but the trust companies also have no idea what the mortgage documents say either, because they don't have the mortgage documents. They destroyed them. On purpose. Read the story, it explains everything.

so pay your mortgage and you should be all good?

No, everyone should stop paying their mortgage and it'll be all good.

You're missing the point of the article. The problem is that the banks, as they themselves explained, do not have the original paperwork at all. None of it. It's your word against theirs. It's a cluster ****. You can not win a lawsuit, foreclosure or otherwise without that documentation.

Bingo.

Hubbs, how long until this goes nuclear? What do you see happening, if you had to guess?

I can't give you a timeframe, it depends on judges, but they're wising up at an accelerating rate. So far, state attorneys general are looking into fraudulent court documents. Soon, they'll realize that the root of the problem is actually fraudulent mortgage documents. I can't tell you exactly when "soon" will happen. All I can tell you is that it will happen.

As a total guess, I would say that "soon" will get here before the end of the year.

Hubbs, I noticed you said..."Good so far? I hope so. Now I have to be vague to protect the information I have, but I wanted to let you all know about a couple things that will soon come to light:"

Any chance you could elaborate a little more or would it compromise privileged info (in which case, forget I asked) I'm really curious is all.

Court documents and conversations with lawyers.

Oh, and when can I stop making these mortgage payments? I need a nice vacation!

When you think the judges in your states have wised up enough to realize that there are no legitimate documents in existence that say where your payments are supposed to go. I would add that it would probably behoove you to figure out if your mortgage was one of the ones that was traded electronically. It would also behoove you to make sure banks can't affect your credit score if you stop paying.

[Hubbs]

Not really - I mean -Assuming there has been at least 1 payment - you could argue that the pepople who wrote the check agreed that there was a mortage and the people they wrote the check to were the holders of it.

They didn't agree. People write checks to banks who simply forward the payments to different banks, because they think those banks own the mortgage. What they're starting to realize is that the recipients of the forwarded payments own a big bag of nothing. Zero. Nada. Air.

[Goaldeje]

Ok, so what happen? What's the endgame? The article says there are Hundreds of Trillions of dollars tied up in derivatives and mortgages, so if all of those go poof, what happens? Best case and worst case?

[Hubbs]

Ok, so what happen? What's the endgame? The article says there are Hundreds of Trillions of dollars tied up in derivatives and mortgages, so if all of those go poof, what happens? Best case and worst case?

The system collapses, and we build a new one. Or the system gets bailed out. Or the fraud is allowed to continue. Those are our choices. I don't think #3 is going to happen much longer. I also don't think the powers that be will allow #1 to happen. So #2 will happen. The only question is when. Some of it is already happening through what some financial analysts have dubbed "stealth monetization" of the government's debt, which banks hold as assets. The Fed prints, bids up the prices of government debt, and banks turn around and lever up 40 to 1 to buy other assets. The "stealth" part is referring to the fact that most people don't understand what's going on.

[Goaldeje]

So, if they don't really own my mortgage and I decide not to pay, it's not a big deal because I am one mortgage. But if you extend that throughout the US, does everyone get their house for free? How long does it take before anyone can purchase property again? If I had an extra $1500 a month to spend instead of my mortgage payment, I would help the economy, as would most other people. But is that why you all are talking about inflation?

(and yes, I am a moron when it comes to this, I truly appreciate any help)

[Hubbs]

So, if they don't really own my mortgage and I decide not to pay, it's not a big deal because I am one mortgage. But if you extend that throughout the US, does everyone get their house for free? How long does it take before anyone can purchase property again? If I had an extra $1500 a month to spend instead of my mortgage payment, I would help the economy, as would most other people. But is that why you all are talking about inflation?

(and yes, I am a moron when it comes to this, I truly appreciate any help)

Yup. Free and clear.

But no, we're not talking about inflation because of the free part. We're talking about inflation because this means that banks are very, very, very bankrupt. The whole system will crash unless it's bailed out. Where does the money to bail it out come from? The government isn't sitting on cash, so it has to borrow it by selling Treasury bonds. The two biggest purchasers of Treasury bonds since the crisis began have been major American banks and the Fed. The banks can't bail themselves out. So the Fed will have to buy enough bonds for the bailout to happen. (Or just lend money to the banks directly, which it's already doing.) How does the Fed buy bonds? It prints money. That causes inflation.

This will be a very specific kind of inflation, though. It will be preceded by deflation, because as banks stop lending (because they're bankrupt), demand for goods and services evaporates and prices go down. Bernanke has already told us what he will do when that happens. He'll print money. There's nothing in the world Ben Bernanke hates more then deflation. His entire life's work is dedicated to preventing deflation. So he'll print as much money as he thinks is necessary to prevent it.

This will eventually mean that he's going to try McD's "print $13 trillion" plan, or at least something close to it. Bernanke will become McD5. Weird, huh?

[Predicto]

Mortgage backed derivatives are causing huge problems in documentation, and I'm sure that some foreclosure cases have involved fraud, but I'm not sure I buy this entire story. Daily Caller has a history of overstating things in order to be the guys who break the "next big story," and as far as I can tell, their sources for this story are almost entirely lawyers who are suing on these cases.

In other words, I'll wait and see what develops.

[Hubbs]

Mortgage backed derivatives are causing huge problems in documentation, and I'm sure that some foreclosure cases have involved fraud, but I'm not sure I buy this entire story. Daily Caller has a history of overstating things in order to be the guys who break the "next big story," and as far as I can tell, their sources for this story are almost entirely lawyers who are suing on these cases.

In other words, I'll wait and see what develops.

The bank was asked about this stuff. It didn't want to say anything.

[PeterMP]

How do you own the house free and clear?

The people that own the mortgage now might not be able to prove that they own the mortgage, but you certainly can't either.

In most cases, SOME bank can certainly prove that they lent you money for the mortgage. They might not be able to tell you who they sold the mortgage to, but that's proof that you own it.

If anything, this seems like a big boon for the banks that originally gave out the mortgages. I'm guessing in most cases, there is proof that they lent you money (heck, I have proof that the bank that lent me money lent me the money). The people that they sold the mortgages to might not be able to prove that they sold them the mortgages (other than a letter from the company that lent me the money, I have no evidence who actually owns my mortgage as the original company is still "managing" the mortgage).

In other words, the original bank can prove they lent the money. Anybody after that, might not be able to prove that they bought it.

The mortgage will default to the last company with proof, I'd expect.

[twa]

In other words, the original bank can prove they lent the money. Anybody after that, might not be able to prove that they bought it.

The mortgage will default to the last company with proof, I'd expect.

Exactly....this only effects who has the right to foreclose....the ones that 'bought' the mortgages have other recourse to recoup if needed.

[I_Bleed_B&G]

I just want a free house. How do I go about doing that? :laugh:

[twa]

I just want a free house. How do I go about doing that? :laugh:

Marry a rich woman?

[Hubbs]

How do you own the house free and clear?

The people that own the mortgage now might not be able to prove that they own the mortgage, but you certainly can't either.

In most cases, SOME bank can certainly prove that they lent you money for the mortgage. They might not be able to tell you who they sold the mortgage to, but that's proof that you own it.

If anything, this seems like a big boon for the banks that originally gave out the mortgages. I'm guessing in most cases, there is proof that they lent you money (heck, I have proof that the bank that lent me money lent me the money). The people that they sold the mortgages to might not be able to prove that they sold them the mortgages (other than a letter from the company that lent me the money, I have no evidence who actually owns my mortgage as the original company is still "managing" the mortgage).

In other words, the original bank can prove they lent the money. Anybody after that, might not be able to prove that they bought it.

The mortgage will default to the last company with proof, I'd expect.

Not quite. The original bank should be able to figure out a way to prove that they lent the money, yes. But that's not the whole story. The original bank was paid. The owner can't owe the bank when the bank isn't owed money anymore. Someone else is now who's owed money. But nobody can prove who that someone else is.

[Destino]

This will be bad but you're forgetting the long standing tradition in the US... blame someone else. The government is going to be out for blood on this because they aren't going to fix it legally without hanging someone. They aren't going to hang the banks because they can't kill the financial system. After the first mortgage crisis the banks blamed homeowners and brokers even though anyone with any knowledge of the business knew that was bunk. Republicans blamed red lining (forgetting the civil rights movement apparently) and government involvement (clearly showing a complete lack of understanding of what the secondary market is and no knowledge of the role CDO's played). This time they are going to blame asset managers and third party companies like MERS is my guess... and the government of course. It's always the governments fault. We might even see individuals get tried for fraud and things of that nature while law makers quietly make the paperwork problem go away.

[AsburySkinsFan]

Not quite. The original bank should be able to figure out a way to prove that they lent the money, yes. But that's not the whole story. The original bank was paid. The owner can't owe the bank when the bank isn't owed money anymore. Someone else is now who's owed money. But nobody can prove who that someone else is.

Ok, if this is true then that's some really crazy stuff. You said that #2 (printing money) bailout was the likely option, but what does that mean for the homeowners? And is this why we are having such a lag in the economic recovery?

[Hubbs]

Ok, if this is true then that's some really crazy stuff. You said that #2 (printing money) bailout was the likely option, but what does that mean for the homeowners? And is this why we are having such a lag in the economic recovery?

That means that homeowners are going to be looking at a greatly decreased value of the dollars that they'll be demanding Congress ensure they can still withdraw. Actions have consequences. Sometimes the consequences aren't immediate, but that doesn't mean that the consequences won't happen. In this case, homeowners are going to want to own their homes free and clear while simultaneously wanting their deposits to be backed up. Who wouldn't want a free house? But that means the dollars in those deposits will have to be devalued. No such thing as a free lunch (or a free house).

The weird thing is that the devaluation will likely happen only after a period of deflation, for reasons that have to do with how a credit market functions. But it'll happen. It's already happening (after a period of deflation in 2008-2009) in commodities. What happens when gold, silver, corn, wheat, and soy jump in price? Your dollars won't buy as much of any of them as they would have before.

No, this isn't why we're having a lag in recovery. We're having a lag in recovery because the people running the largest economy in the history of the world are, strangely enough, ****ing stupid. They're not the ones who were running the economy as it became the largest in the history of the world. That's not a coincidence. Like I said in the other "wealth-creating" thread (that I'm going to bump soon, I've had a lot of work over the past few days and haven't been able to devote time to answering many questions on ES), Bernanke hasn't prevented the Great Depression. He's merely postponed it. And he's made it worse by doing so.

Get ready to replace the Dollar Menu with the Five Dollar Menu.

[Hubbs]

This will be bad but you're forgetting the long standing tradition in the US... blame someone else. The government is going to be out for blood on this because they aren't going to fix it legally without hanging someone. They aren't going to hang the banks because they can't kill the financial system. After the first mortgage crisis the banks blamed homeowners and brokers even though anyone with any knowledge of the business knew that was bunk. Republicans blamed red lining (forgetting the civil rights movement apparently) and government involvement (clearly showing a complete lack of understanding of what the secondary market is and no knowledge of the role CDO's played). This time they are going to blame asset managers and third party companies like MERS is my guess... and the government of course. It's always the governments fault. We might even see individuals get tried for fraud and things of that nature while law makers quietly make the paperwork problem go away.

Well, hold on a sec. The bank argument was bunk, but it was bunk largely because of what Republicans were saying. Fannie and Freddie were tripping over themselves trying to guarantee or buy every last mortgage Countrywide was fraudulently creating for borrowers that it knew would never be able to pay what they owed. Both Fannie and Freddie fraudulently created all sorts of mortgage-backed securities. They were MERS' first two customers. They're a huge factor in all of this.

That's not to let the private sector off the hook, it's simply to point out that one of the proper roles of government is to enforce laws, and the government either didn't recognize or, and this is the description I believe is accurate, didn't care that laws were being broken. I think the government didn't care because the people within the government bought into the "housing prices always go up" argument, so Countrywide's fraud would ultimately have been considered to be of little consequence. This is born out by the fact that Fannie and Freddie were purchasing so many Countrywide mortgages.

[mojobo]

Ok, if this is true then that's some really crazy stuff. You said that #2 (printing money) bailout was the likely option, but what does that mean for the homeowners? And is this why we are having such a lag in the economic recovery?

The printing of the money would likely be a result of the homes basically being given to homeowners with mortgages that haven't been paid off. The money would go to either compensate banks who should have been paid, or lent to them to keep them solvent. The lag in recovery is happening because we were largely a borrow to spend country instead of spending based on what we produced. Once the housing market crumbled, taking the financial system down with it our economy crumbled with it. The fed is printing and giving out money to try to keep our ability to consume going, but all that did is buy us an extra few years and turn what would have been a sharp deflationary recession into an inflationary depression. Instead of eliminating these cancerous banks through bankruptcy and failure we are bailing them out and causing the problem to grow more and more. Instead of getting their business together the banks continued to make the same mistakes and stupid loans they always did. Without the threat of failure we will continue to be throwing our money at a lost cause and if the FED keeps printing money to solve our problems our dollar will be about as valuable as the Zimbabwean dollar. The fact that this foreclosure mess is happening shows the banks did nothing with the borrowed time the FED gave them. There is no easy way through this and our banking failure will likely cause us to lose our status as an economic superpower. When the **** hits the fan on this it will be catastrophic and it will be a while before we ever recover. Worst case is we could enter into a depression much worse than we experienced in the Great Depression, and it is becoming more and more likely that it might come to this.

[McD5]

This will eventually mean that he's going to try McD's "print $13 trillion" plan, or at least something close to it. Bernanke will become McD5. Weird, huh?

The solution was extremely easy. But the policy makers chose the banks over the American households from the start. That's the bottom line. They made a critical error from step 1.

The simple solution would have dropped the value of the dollar, which has already happened, and will continue to happen violently in the future. But we would be experiencing a boom right now that could have lasted for decades. Americans would be working again, foreclosures would have stopped overnight, and both private and public balance sheets would have been fixed.

Unfortunately, our leaders are not intelligent.

And the intelligent people that could have fixed this problem overnight? They don't seek public office. And they are usually opposed by a confederacy of dunces. (Not you Hubbs)

http://www.extremeskins.com/showthread.php?291021-How-to-Fix-the-Economy-Overnight-And-Start-an-Economic-Boom-that-Will-last-Decades

[Hubbs]

The solution was extremely easy. But the policy makers chose the banks over the American households from the start. That's the bottom line. They made a critical error from step 1.

The simple solution would have dropped the value of the dollar, which has already happened, and will continue to happen violently in the future. But we would be experiencing a boom right now that could have lasted for decades. Americans would be working again, foreclosures would have stopped overnight, and both private and public balance sheets would have been fixed.

Unfortunately, our leaders are not intelligent.

And the intelligent people that could have fixed this problem overnight? They don't seek public office. And they are usually opposed by a confederacy of dunces. (Not you personally Hubbs)

http://www.extremeskins.com/showthread.php?291021-How-to-Fix-the-Economy-Overnight-And-Start-an-Economic-Boom-that-Will-last-Decades

McD, I get what you're saying. What I don't get is the refusal to address the problems behind what you're saying.

Your plan would turn the Dollar Menu into the Five Dollar Menu. (A plan which I would note is the same plan that Bernanke will ultimately follow.) That's not good for the American middle class.

Explain why you think that it would be good.

[btfoom]

Really, an Op-Ed piece is now posted as a 'real, truth containing article'?

This supposition is just as bad as someone quoting Glenn Beck or Keith Olbermann in a story and presenting it as fact.

[McD5]

McD, I get what you're saying. What I don't get is the refusal to address the problems behind what you're saying.

Your plan would turn the Dollar Menu into the Five Dollar Menu. (A plan which I would note is the same plan that Bernanke will ultimately follow.) That's not good for the American middle class.

Explain why you think that it would be good.

We are going to the 5 dollar menu either way. That should have been obvious from day 1.

As I said in my thread, it was the solution to get this economy booming immediately. Don't believe for a second that Bernanke is some financial genius because of his title. Nor because of his education. There are others out there with nearly, if not an even better educational background, that can make much better decisions. They just don't seek office. Was Zorn a great football coach? Cerrato a good GM? But Ben is great, right?

With the solution I proposed, unemployment would be a thing of the past.

Foreclosures too.

And balance sheets would have been repaired overnight. Both personal and bank balance sheets.

With the solution I proposed, we would be facing that five dollar menu with a healthy consumer, banking system, and low unemployment. An employed consumer without debt--and banks no longer in crisis.

Instead? We are now facing it with the exact opposite.

[twa]

Not quite. The original bank should be able to figure out a way to prove that they lent the money, yes. But that's not the whole story. The original bank was paid. The owner can't owe the bank when the bank isn't owed money anymore. Someone else is now who's owed money. But nobody can prove who that someone else is.

Faulty reasoning there,while there are legal problems with many foreclosures there remains a mortgage.....delay does not change reality nor ownership.....a last resort would be fed buyout of the mortgages(which we already see)and they are perfectly capable of asserting property liens.

You will find a resolution come thru govt intervention and of course record fines.

(as we continue to monetize the debt and flirt with inflation)

[PeterMP]

Not quite. The original bank should be able to figure out a way to prove that they lent the money, yes. But that's not the whole story. The original bank was paid. The owner can't owe the bank when the bank isn't owed money anymore. Someone else is now who's owed money. But nobody can prove who that someone else is.

But the proof stops somewhere.

If push comes to shove, the courts are going to decide the last person with proof owns the mortgage.

If I buy something from you, and then say I can't take it with me because it is to big so I'll pick it up tomorrow, and I get a reciept from you with your signature and all.

I also pay in some manner that leaves an electronic trace.

I then leave your place, and I go to somebody else and tell them what I have bought, and they offer to buy it from me. I sell it to them, but they pay me in cash and get no reciept.

The next day I go to pick up the piece, and the other person also shows up.

They claim it is there's. I claim I didn't sell it to them.

You are confused and call the police.

I have the receipt and evidence that I paid you.

The other person doesn't have a recpiet, but might have some evidence that they planned to buy it from me (maybe they have text messages between us about the item and an agreement to pay X for it, and they can show they withdrew X from the bank).

You have nothing.

The court might decide that the other person, through a preponderance of evidence, owns the item, or they might decide that they don't have enough proof, and it isn't theirs and that my receipt is the only legally binding document.

But there is no way they are going to decide it is yours.

The person that actually owns the item might get cheated, but I'd guess in a VERY VERY FEW cases is the court going to decide that the owner owns it out right.

If anything, this is bad for home owners.

I got my mortgage from a company that then sold all of their mortgages, including mine. Mine got sold to Wells Fargo (according to the paper work that I got from the original market).

I never even made a single payment to the original company.

Then, after the financial crisis started, Wells Fargo sold it to the government, but continues to manage the mortgage so I pay them.

Now like I said, I have the paper work with the original lender, and my lawyer represented the bank at the closing and so I know he he does. In addition, their name is on my home owners insurance policy so there are multiple documents.

If push comes to shove and Wells Fargo can't prove they bought the mortgage from the original company. The courts are going to decide that the original company owns it. Now, I haven't made a single payment to them. (Now, I do have a letter from the original company stating that the they sold it to Wells Fargo, and then a similar letter from Wells Fargo, but if I didn't have those letters or the court decided such a letter didn't raise to the level of proof that Wells Fargo actually owned the mortgage.)

So if they own the mortgage, I haven't paid any of my mortgage. That leaves in them in the free and clear to sell the whole thing WITH the interest that has been going to Wells Fargo.

Now, I can go after Wells Fargo for fraud and try and get whatever money I can get from them, but good luck with that.

Now, if you are in foreclosure, I can see why this might be good in terms of delaying the process, and the banks might even decide to cut you a break and come to some new agreement rather than go through the process of figuring out the paper work, but I'll pretty much guarantee you in every case SOMEBODY can prove that they loaned you money for the mortgage, and the only question is how much money have you paid them vs. can you prove that is who should have been paying and if not, can you get any of that money from the person that you have been paying it to.

For people not in foreclosure, they WANT the paper work for their home to be correct.