Mortgage fraud: flaw or feature?

In case you haven't seen this, I suggest you watch and listen closely.



It's quite apparent now that mortgage fraud wasn't a 'flaw' in the system....

It *WAS* the system.

The corpse is obviously rotten to the core...



See also:

Big Banks are out of control criminals

Bernanke Tells the Truth: The United States is on the Brink of Financial Disaster

Anyone still have the warm and fuzzies?

Hmm where are all of the ATS posters who always state "they took a larger mortgage than they could afford, they deserve to lose their house" ?

I am glad this is getting public exposure. It needs more and more of this kind of exposure. And we need to keep a comperable watch on congress because no matter who is in office, they will try to cover for the banks.

I think the issue is rather clear here as stated in the video:

1) We ignore the issue and give up our property rights
2) We fix the issue and sink the banks

I am all for option 2. Why continue throwing good money after bad. There comes a time when the system is so corrupt that salvage is not possible.

reply to post by rogerstigers


This is what I have said since day one of this crisis. FRAUD is the system....from the borrower...to the lender...to the regulators...

B-A-N-A-N-A

R-E-P-U-B-L-I-C

Cigars or coconuts, anyone?

Originally posted by rogerstigers
Hmm where are all of the ATS posters who always state "they took a larger mortgage than they could afford, they deserve to lose their house" ?

The people that that did take a larger mortgage than they can afford was part of the scheme. My wife an I decided not to buy a house a few years ago and it was the wisest decision we ever made. I told my parents not to buy another house and I am glad I was able to convince them. There are many out there that decided that buying a McMansion or just buying any property was a horrible and overpriced investment. Then there are those that got suckered into buying homes because of the easy credit, personal ego, and false beliefs that it is a good investment. True it wasn't ALL their fault, our culture trains people into this mentality, and out of a such a culture we get bankers and politicians that relfect such a mentality.

As for this mortgage mess, many in the industry knew this was happening for a long time. There is a rat in all of this. The fact that this is coming out now tells me that the hidden rat is huge.

If the foreclosure process stalls out, this would prevent a massive glut of homes flooding the market. The choices are simple. The banks can babysit a bunch of squatters and pay some lawsuits with taxpayer or printed money, or home prices could fall dramatically. The system, as corrupt as it is, can absorb the first option.

But if prices fall dramatically, all hell would break lose for the financial industry and the government. Some of the main problems are that people that are paying their mortgages now would just as well default and find some super cheap house to buy and live in. The pensions that bought up bundled mortgages as investments would lose a ton of money and many retirees would see their savings collapse. Local governments would see a huge loss in property tax revenue as this is based on home values. In short the entire economic system of the entire world would blow up. The heartless part of me says that this should happen and is the only cure but there will be a lot of people, especially older people that will be severely hurt.

The entire system is held up by debt, inflation, and growth. Falling home prices are the opposite of this and pulls out the entire rug. I think this new publicity (over old news) is just a stall tactic and internal bloodletting by those that want to preserve the system.

In most cases, it is a total flaw. In many cases it is totally intentional.

reply to post by wutone

It is indeed a two sided problem. Thank you for being level headed enough to see this.

reply to post by inivux


It's really more about two possible outcomes, as mentioned in the video;

1) Ignore the consequence of fraud and eviscerate all remaining notion of property ownership; or

2) Address the consequence of fraud and watch the entire house of cards collapse.

Lovely reality, huh?

reply to post by loam


Why blow off property ownership altogether? And what ever became of the Homestead Act? The American Dream IS owning a home of our own.

Karma happens. I'm not going to hold my breath because I am cynical enough to think that our criminals in Congress will figure out a way to cover the bankers' butts, but wouldn't it be incredible if this backfired on them?
Justice served!

Instead of xx,000 new IRS employees to enforce the health insurance bailout, we should have those new IRS employees audit these crooks. (that is, IF their Ponzi schemes can ever BE untangled) Then, the people who were illegally thrown out of their homes should get them back.
This is the classic nursery tale of the dog with the bone. (The dog, who has a bone in his mouth, sees his reflection in a pond and drops his bone in the water because he wants that one, too- and winds up with nothing)

I suppose we now know which course of action may be preferred by some:

Momentum builds for nationwide freeze on foreclosures

Senior Obama administration officials said Friday that a nationwide moratorium on foreclosure sales may be inevitable, despite their grave reservations about the impact a broad freeze would have on the nation's housing market and economic recovery.

Their remarks were made as pressure for a nationwide moratorium mounted Friday when Bank of America, the nation's largest bank, halted foreclosure sales in all 50 states. Senate Majority Leader Harry M. Reid (D-Nev.), who is locked in a tight reelection campaign, called on other major lenders to follow suit.

The White House has so far resisted joining the election-season calls for action but convened two interagency meetings this week to discuss reports that banks filed fraudulent documents to evict delinquent borrowers and to deal with questions about whether banks are seizing properties without having clear ownership of the mortgages.

MORE....

Up to 40 states plan joint inquiry into foreclosures

The attorneys general of up to 40 states plan to announce soon a joint investigation into banks' use of flawed foreclosure paperwork.

A person briefed on the investigation said Saturday night that an announcement could come as early as Tuesday. The person spoke on condition of anonymity because the investigation was not yet public.

We appear to be just at the beginning of this mess.

Originally posted by loam
I suppose we now know which course of action may be preferred by some:

Momentum builds for nationwide freeze on foreclosures

Senior Obama administration officials said Friday that a nationwide moratorium on foreclosure sales may be inevitable, despite their grave reservations about the impact a broad freeze would have on the nation's housing market and economic recovery.

Their remarks were made as pressure for a nationwide moratorium mounted Friday when Bank of America, the nation's largest bank, halted foreclosure sales in all 50 states. Senate Majority Leader Harry M. Reid (D-Nev.), who is locked in a tight reelection campaign, called on other major lenders to follow suit.

The White House has so far resisted joining the election-season calls for action but convened two interagency meetings this week to discuss reports that banks filed fraudulent documents to evict delinquent borrowers and to deal with questions about whether banks are seizing properties without having clear ownership of the mortgages.

MORE....

Yet those very same characters tried to ram through HR3808 to protect banks and force us to accept fake but notarized documents at face value. Congress and the WhiteHouse collaborate on issues this big. Thankfully the fraud was made public before it could be signed.

Originally posted by wutone

Originally posted by rogerstigers
Hmm where are all of the ATS posters who always state "they took a larger mortgage than they could afford, they deserve to lose their house" ?

The people that that did take a larger mortgage than they can afford was part of the scheme. ...

I agree, but it was a cycle where banks and buyers thought equity can only go up. Buyers thought, the more house you can buy, the bigger gain you get. Realtors thought the same thing. Banks thought the same thing, equity can only inflate. No risk in lending to the unqualified since equity goes up.

Congress and a few presidents were also pushing for widespread home ownership, and pushed to cut qualifications for the people who couldn't afford mortgage payments in the first place. Actually having to prove you can afford payments was seen discriminatory after all. But we all remember this.

Originally posted by dbriefed Yet those very same characters tried to ram through HR3808 to protect banks and force us to accept fake but notarized documents at face value. Congress and the WhiteHouse collaborate on issues this big. Thankfully the fraud was made public before it could be signed.

Does anyone know if this was actually Veto'd? I know he did not sign it, but did he veto it?

I worked in that system for seven and a half years, so I think I am qualified to speak upon the topic with some measure of authority.

There was fraud on all sides, all angles, from top to bottom.

There were the hedge fund managers and the high rollers working on Wall st and within the large mortgage banks and lenders who were designing and implementing fraudulant, explosive mortgage products that were high risk high yield, which made them extremely wealthy but were incredibly irresponsible and destined for problems.

There were the managers and the loan officers at the branch levels, who were grinding and working round the clock to sell and pimp these exploding Alt A and subprime loan products to prospective buyers and refinancers, any consumer who wanted a mortgage loan and could pass the minimal qualifications (in some cases none at all) in order to qualify. This is where documents were forged, income was lied about and generally any unscrupulous activity imaginaeable was taking place in order to book more loans and drive more revenue, not only for the branch and the people who worked there, but also the previously mentioned fat cats who raked in the lions share from the fraud they were overseeing.

Then you had the crooked appraisers who were paid triple and quadruple to see to it that the needed value was met so that the loan would close. In many cases they were done sight unseen, and this inflated values falsely so as to drive revenue for the bankers and mortgage lenders, who in turn sent the appraisers more business.

Also lets not forget the greedy, unscrupulous realtors, who made it their lifes work to place unqualified buyers into way more house than they could afford, which led to loan officers hooking up buyers with "No Doc" loans, or as we called them "liar loans". Stated income stated asset, no verification required with a minimum FICO score of 550. Realtors set em up, the mortgage brokers knocked em down, everyone got paid in huge amounts, and the world was a happy place for all.

Last but not least, you had Betty and Barney Scheister, the borrower, the consumer, who was also guilty without doubt. These people would fudge W2's, lie about income, lie about time of residency, employment history, anything needed to get into the house they wanted. There were millions of people who went out and got multiple home loans on dozens of rental and income properties who had no business owning one house, must less twenty. Wonder why the foreclosure rates and defaults are so high? Income properties. They were obtained with false documents and stated income loans, then dropped and left to rot when the economy sank.

Thye short answer to your question, it was everyones fault. It doesnt mean there werent honest hedge fund managers who worked through this dibacle. It also doesnt mean that there werent honest brokers and loan officers out there who didnt try to do things by the book, who refused to sign off on a bad or fraudulant loan. I knew many many hard working, honest, law abiding people who did everything right and lost everything anyway. It also doesnt mean that every person who bought a home and later defaulted was a crook or did anything wrong, it just means that desperate people, when enabled by greedy people, will do unscrupulous and nonsensical things.

Blame the system, the whole thing is rotten. Wherever man sticks his nose there will be greed and corruption, because humans by nature are greedy and corrupt. History has proven this time and again, nothing new, and it wont likely change any time soon.

I have never mentioned this before to ATS, but this seems a good time..

When y wife and I were shopping for a home, we ended up getting a buyer's agent. That was our first mistake. This guy was crooked as hell. He asked us what we were looking for as far as home value. I was making 35K at the time and had good prospects for future growth in income. I said 100K home value which roughly translated to 1K per month home payment with escrow. The guy laughed in our faces! He told us we could easily afford twice as much!

Luckily, I had done some homework and knew what I wanted to have in a home and what I wanted my bills to be like, We stuck to our guns. Our house was 109K when we bought it. Now it is worth 145K, but we owe $120K ish (due to stupid refinancing decisions on my part).

I will never forgive the system for trying to get us into more house than we could afford. However, I am grateful that I was able to see through the muck to see what they were trying to sell me.

If you haven't seen this video, you should.

It explains the financial crisis rather well.

If you think the housing bubble bursting is a problem, look at what the cure will do.

Check this out !

With all that is going on with the robosigning, forgeries, fabrications and LIES, we decided to dig into this to see if something was there to help educate the masses on the issues that all of us as Americans face… Guess what we found… President Obama is a victim of the robosigning phenomenon that has taken the financial industry by storm…

Apparently, even our president was a victim of a Chase robo-signer when he paid off his mortgage. Good stuff originated at 4closurefraud and repeated by zerohedge and others.

reply to post by rogerstigers

Hmm where are all of the ATS posters who always state "they took a larger mortgage than they could afford, they deserve to lose their house" ?

They sure are fun people now aren't they?

There is still more to this conspiracy.

This fraud was basically perpetrated to do too things.

1. Make a massive payment on our national debt to the International Banking Cartel

2. Securitize our debt to the International Banking Cartel by putting the only thing left of real value in their hands, the titles to most American Homes.

Now what people don't get is the Federal Reserve that has overseen all this, and looted the Treasury in the Troubled Asset Relief Program can not be audited, all we have is it's word as to where the money goes.

The banks that claim to have recieved the majority of the TARP funds are of course part of the International Banking Cartel. Combine the fact that they too were involved in the fraud and expecting them to be truthful about what they did with the TARP money is equally rediculous. In fact they flat out told Congressional Investigators they would provide no accounting for it.

The good news is the bad news. We aren't alone. The other major nations are equally in debt and equally desperate to keep their own financial systems afloat.

We will likely see in the next several months or year or two at most at this rate, now that they can no longer hide most of these things, a collapse, an orchestrated collapse of the World Wide Financial System so that the debt that all the nations owe to the International Banking Cartel can be restructured and a new system put up in it's place.

It is likely to be very painful.

The worst is yet to come, and sadly boys and girls, moms and dads, since most of our manufacturing has been transfered off shore, and the infrastructure is in the hands of huge corporations that have a monopoly on it, and there are few independent farmers left, we really are going to have a tough road to hoe.

We are about to find out the real American dream!

reply to post by ProtoplasmicTraveler

Originally posted by ProtoplasmicTraveler
It is likely to be very painful.

The worst is yet to come, and sadly boys and girls, moms and dads, since most of our manufacturing has been transfered off shore, and the infrastructure is in the hands of huge corporations that have a monopoly on it, and there are few independent farmers left, we really are going to have a tough road to hoe.

We are about to find out the real American dream!

I completely agree.

In all of these long years, I have sat on the fence concerning meaningful preparations. These last few months have pushed me decidedly into that direction.

I know it will be a very painful experience. I just hope the fears are greater than the actual experience.

reply to post by loam


Oh it won't be all that bad, just a lot of screaming and dying, raping and pilaging, lawless gangs roaming the streets dragging defenseless men women and children from their homes and cannabilizing them, people forced into slavery, people sold for the body parts.

Nothing really to it all!

As long as there is no raw sewage left in the streets I am cool!