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The mortgage is still owed, but there's going to be a problem figuring out who actually holds the mortgage, and they would be the ones bringing the foreclosure. You have a trust that has been getting payments from borrowers for years that it has no right to receive. So you might see borrowers suing the trusts saying give me my money back, you're stealing my money. You're going to then have trusts that don't have any assets that have been issuing securities that say they're backed by a whole bunch of assets, and you're going to have investors suing the trustees for failing to inspect the collateral files, which the trustees say they're going to do, and you're going to have trustees suing the securitization sponsors for violating their representations and warrantees about what they were transferring.
Foreclosure Fraud: It's Worse Than You Think
www.cnbc.com...
Originally posted by Mary Rose
Those synthetic CDOs Ellen refers to are derivatives. My understanding is that derivatives are the major culprit in the worldwide financial meltdown.
Filing false documents in courts to obtain illegal foreclosures, breaking into homes and changing the locks while the residents are still legally living there, and even foreclosing on homes which have no mortgages—these are just some of the things the derivatives arms of the giant banks are doing, as they throw people to the wolves in a vain effort to stop their own collapse into oblivion. . . .
The horror show playing out before our eyes in the foreclosure markets, is the continuing collapse of perhaps the greatest financial swindle in the history of mankind: the derivatives markets. The story revolves around the way that derivatives were used to create a giant pool of fictitious capital, nominally based on home mortgages, and the way that the banks are now attempting to seize the homes to turn their funny money into hard assets.
What is absolutely clear, is that the mortgage system—which was run by and for the big derivatives players—systematically ignored legal requirements for the conveyance of promissory notes and mortgages, as they engaged in this giant scam. Individual mortgages were sold by their originators, and combined into pools, which were, in turn, used as the basis for the issuance of mortgage-backed securities (MBS). These MBS were then sliced and diced into pieces, and sold. Then many of these pieces were combined into new pools, against which new derivatives were created and sold, ad nauseam.
Rather than record these sales with county courts, as required by state real estate laws, the bankers created a giant database called MERS, to keep track of the sales. This allowed the banks to save billions of dollars in time and money on court filings, and made the whole train-wreck run more smoothly—for a while. . . .
We must finally recognize that this financial crisis—from the so-called "subprime crisis" to the "foreclosure crisis" and everything in-between, has been the result of a derivatives market which has turned the global financial system into a giant, and completely bankrupt casino, and that the attempt to bail out this casino by sticking the public with the bill is killing us all. If we are to survive, we must shut down the derivatives markets, declaring all existing derivatives contracts null and void, and prohibiting them in the future. Wall Street will howl, but that's just a sign something right is being done. If they're not howling, we're not doing enough. . . .
Finally, in closing, we have a suggestion for all the investigators looking into the foreclosure crisis. The devil is not in the details, but in the nature of the now-dead financial system. You are looking at a vast criminal conspiracy intended to destroy the United States, and the nation-state system itself, in favor of the re-establishment of the British Empire on a global scale.
You should also consider the possibility that the deliberate failure to follow legal document-recording standards has to do with more than just saving time and money. We suspect, knowing the nature of the empire, that what they were really doing is selling the same assets to more than one buyer. They will gladly take "paperwork" fines, to hide that. Don't let them get away with it. . . .
Originally posted by Mary Rose
Web of Debt author Ellen Brown is now writing about the current foreclosure issue.
Looming losses from the mortgage scandal dubbed “foreclosuregate” may qualify as the sort of systemic risk that, under the new financial reform bill, warrants the breakup of the too-big-to-fail banks. The Kanjorski amendment allows federal regulators to pre-emptively break up large financial institutions that—for any reason—pose a threat to U.S. financial or economic stability.
Although downplayed by most media accounts and popular financial analysts, crippling bank losses from foreclosure flaws appear to be imminent and unavoidable. The defects prompting the “RoboSigning Scandal” are not mere technicalities but are inherent to the securitization process. They cannot be cured. This deep-seated fraud is already explicitly outlined in publicly available lawsuits.
There is, however, no need to panic, no need for TARP II, and no need for legislation to further conceal the fraud and push the inevitable failure of the too-big-to-fail banks into the future.
Federal regulators now have the tools to take control and set things right. . . .
Originally posted by hinky
There is two sides to this.
No one forced many of these foreclosed people to sign paperwork. In many cases, it was fraud on the borrower claiming income they did not have nor ever able to make. Then, people are too stupid not to have an attorney look over a contact, but it is still the bank's fault the borrower doesn't understand the terms. So then, we pass a law to rewrite some loans, and 60% of them still go through foreclosure a second time.
Yeah, it's the damn bankers fault for the poor people buying houses. Congress wrote the lending laws, the banks were required to follow, requiring loans for anyone and everyone to be made.
There is no "right" to succeed nor a "right" to a free house from action of others or lack of action by yourself. I'm tired of hearing people whine about how they were screwed. Everyone went into these loans with their eyes wide open.
Bottom line, there is a reason for bankruptcy laws. No one, regardless of what our elected officials say, is too big to fail.
American is the land of dreams and nightmares. Easy to get them confused.