Democratic Underground Latest Greatest Lobby Journals Search Options Help Login
Google

The Second Leg Down Of America's Death Spiral

Printer-friendly format Printer-friendly format
Printer-friendly format Email this thread to a friend
Printer-friendly format Bookmark this thread
Home » Discuss » Topic Forums » Economy Donate to DU
 
Joanne98 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Oct-16-10 10:05 AM
Original message
The Second Leg Down Of America's Death Spiral

So this is what happened, more or lessthe short version:

In the crazed frenzy to get as many mortgages securitized during the Oughts, banks took shortcuts with the paperwork necessary for the Mortgage Backed Securities. The reason was because everyone in the chain of this securitization mania got a little piece of the actiona little slice of the MBS pie in the shape of commissions.

So in the name of improved efficiencies (and how many horror stories are we finding out, carried out in the name of improved efficiencies), banks digitized the mortgage notesthey didnt physically endorse them, like they were supposed to by the various state and Federal laws.

Plusonce the wave of foreclosures broke, and the holes in this bureaucratic paperwork became evident and relevantsome of the big law firms handling the foreclosures for the banks started doing some document fabrication and signature forgery, in order to cover up the mistakeswhich is definitely illegal.

Long story short (since this is the short version): A lot of the foreclosed properties might not have been foreclosed legally. The people evicted might still have a right to their old houses. The new buyers might not actually own the REOs they bought off the banks. The banks could be on the hook for trillions of dollars, and in the sights of literally millions of lawsuits.

In short: This could become another massive oozing sore, complete with yellow-green pus drip-drip-dripping out of some unmentionable places on the Body Economic.

Nowthe long version:

Read more: http://www.businessinsider.com/the-second-leg-down-of-a...
Refresh | +17 Recommendations Printer Friendly | Permalink | Reply | Top
unhappycamper Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Oct-16-10 10:07 AM
Response to Original message
1. The mortage meltdown is nothing more than a Paulson/Bernake/Geithner ponzi scheme. n/t
Printer Friendly | Permalink | Reply | Top
 
Orrex Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Oct-16-10 10:15 AM
Response to Reply #1
2. Two things about that:
Edited on Sat Oct-16-10 10:16 AM by Orrex
1. It can't be a Ponzi scheme, because rich assholes got richer by it. Social security is a Ponzi scheme because rich assholes do not get richer by it. (See how it works?)

2. Can we throw Greenspan onto that shitpile along with Paulson, Bernanke, and Geithner?
Printer Friendly | Permalink | Reply | Top
 
grasswire Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Oct-16-10 11:00 AM
Response to Reply #2
4. I'm beginning to wonder if it's a plot to totally crash America.
Beyond fixing.

Total FUBAR.

Chaos capitalism.
Printer Friendly | Permalink | Reply | Top
 
barb162 Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Oct-17-10 02:01 PM
Response to Reply #4
21. Jungle capitalism
And I agree, it's beyond fixing
Printer Friendly | Permalink | Reply | Top
 
pokercat999 Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-18-10 08:29 PM
Response to Reply #21
22. It's not beyond fixing...it's actually easy, it's just
GOING TO COST FIVE TRILLION DOLLARS!

Printer Friendly | Permalink | Reply | Top
 
unhappycamper Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Oct-17-10 07:49 AM
Response to Reply #2
18. I must be having short term memory loss.
Of course Greenspan belongs in that shitpile.
Printer Friendly | Permalink | Reply | Top
 
tularetom Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Oct-16-10 10:28 AM
Response to Original message
3. Interest rates were kept artificially low by the Greenspan Fed
To keep money moving and make it appear like the "bush tax cuts" were having a stimulative effect on the economy.
Printer Friendly | Permalink | Reply | Top
 
dixiegrrrrl Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Oct-16-10 11:14 AM
Response to Original message
5. Also, current homeowners who ARE paying the mortgage may not have clear title.
Since title note was not shifted to the bond trusts, as they should have been, and apparently were destroyed.
Good chance my note is gone, MERS popped up on my mortgage papers at the County.

BOA and Fannie Mae...not on the title. But Fannie has the mortgage.
( Fannie Mae has 80% of the securitized mortgages, at least in name.)

I am testing the wind on this one.
My bet:
Congress will pass a law, in record time, clearing the banks of any liability.
Printer Friendly | Permalink | Reply | Top
 
Angry Dragon Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Oct-16-10 11:45 AM
Response to Reply #5
6. "Congress will pass a law, in record time, clearing the banks of any liability."
If they do this there will be a revolution
and I do not think it will be pretty
Printer Friendly | Permalink | Reply | Top
 
dixiegrrrrl Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Oct-16-10 11:59 AM
Response to Reply #6
7. Do you really think so?
Personally I HOPE so, but I am not confident that enough people have a serious clue as to what this mortgage mess really means.
Or enough: ( pick one ) energy. money, time, ability to march.

Fed up, that I am hearing. What to do about it, that I am not hearing.

And we have elections in just a few weeks. After that, lame duck everything.
Printer Friendly | Permalink | Reply | Top
 
Celebration Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Oct-16-10 12:51 PM
Response to Reply #7
10. there is a larger problem
The larger problem for the banks is that there was fraud in their selling of the securitized loans, as they were not what they were purported to be. The problem was not only that the paperwork was not handled correctly, but there often were fewer of the "good" loans in them than claimed. Thus the buyers of these loans have a good case for being made whole.

Of course, Fannie and Freddie (us!!) own a lot of these, and I pretty much feel like they won't be plaintiffs in lawsuits. So that is an under the radar bailout by us.

Printer Friendly | Permalink | Reply | Top
 
Angry Dragon Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Oct-16-10 01:17 PM
Response to Reply #7
12. It is often said
That when a person has nothing else to lose, they are unpredictable.

Printer Friendly | Permalink | Reply | Top
 
bvar22 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Oct-16-10 12:46 PM
Response to Reply #6
8. There is great Bi-Partisan Support in Washington to ensure that...
...the Very Rich NEVER know a day of discomfort.
The Working Class WILL pay for their mistakes once again.

Paulson with Co-Conspirators

Now THIS is Bi-Partisanship !
Better get used to it!!
Hahahahahahahahaha!

Printer Friendly | Permalink | Reply | Top
 
dixiegrrrrl Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Oct-16-10 03:42 PM
Response to Reply #8
14. I remember that pic well.
Dog and pony show , indeed.

My blood pressure STILL rises when I look at it.
Printer Friendly | Permalink | Reply | Top
 
lonestarnot Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Oct-16-10 12:49 PM
Response to Original message
9. Someone took it away and I just gave it back!
K & R
Printer Friendly | Permalink | Reply | Top
 
westerebus Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Oct-16-10 12:51 PM
Response to Original message
11. MBS
Multiple Batches of Shit.

And if the banks are forced to buy back the MBS?

How can the banks do it?

With the reserves the Fed is holding for them.

Pension funds? You guys are going to have to wait in line.

Absolute corruption!

Systemic!

Structural!

Corruption!








Printer Friendly | Permalink | Reply | Top
 
no_more_yesterdays Donating Member (19 posts) Send PM | Profile | Ignore Sun Oct-17-10 02:47 AM
Response to Reply #11
15. yer damned skippy on that! - yahtzee!
the bankers have been at the table too long.

time to let the lawyers eat.

what'd be sweet justice is if the lawyers find a way to turn all the damned mortgages from secured debt, to unsecured debt and then show folks the way to daylight through bankruptcy.

kinda like jamming "Cramdown" right down their throats!

Let's hope for Rule of Law.

Printer Friendly | Permalink | Reply | Top
 
westerebus Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Oct-17-10 04:04 AM
Response to Reply #15
17. Hi. Welcome to DU.
We shall see. Just waiting for the spin cycle.

Printer Friendly | Permalink | Reply | Top
 
blue97keet Donating Member (390 posts) Send PM | Profile | Ignore Tue Oct-19-10 12:01 PM
Response to Reply #15
23. no doc loans and no paper trail for who owns the no doc loans - no doc everything


It's shut down and re-boot time.
Printer Friendly | Permalink | Reply | Top
 
northernlights Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Oct-16-10 02:28 PM
Response to Original message
13. it's also about the securitization process
the owners of the trusts that bought those mortgage-backed securities got screwed too. Can Congress quick pass a law to protect the banks from those lawsuits?
Printer Friendly | Permalink | Reply | Top
 
westerebus Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Oct-17-10 03:55 AM
Response to Reply #13
16. Lame duck on its way.
Not that I would bet on it happening. The Congress passing something in the middle of the night attached to a military spending bill for cover. As if that's never happened.

How's about the US AG decides to federalize the case? They can all settle out of court if they promise to behave, pay a fine and laugh about it all the way to the bank.
Printer Friendly | Permalink | Reply | Top
 
fasttense Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Oct-17-10 08:55 AM
Response to Original message
19. I just don't see how any law passed by lame-duck Congress, or
a Congress that truly represented the people, would make a difference.

Here is the bottom line. You can NOT trust that you own your own property. Are title search companies going to insure a property if they are not convinced that the title is clear? NO

What law can Congress pass? That title companies can issue title searches as free and clear no matter if the note on a property is forged, missing or held by two or more entities? Then the law would be challenged in a heart beat.

What kind of Frankenstein monster law could the evil doctor of a congress pass that would heal this note and property title problem?

I don't see a way out unless every single person who got a mortgage files suite and a judge unwinds every single case.

Even years from now, you could go to buy a home and find out the title is all messed up.
Printer Friendly | Permalink | Reply | Top
 
westerebus Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Oct-17-10 11:23 AM
Response to Reply #19
20. The law of unintended consequences.
Title of the Bill:

The Homeowners Trust Us, We're Here To Help Act of 2010.

3000 pages to tell us: STFU, we own you.

And god bless America.

Printer Friendly | Permalink | Reply | Top
 
DU AdBot (1000+ posts) Click to send private message to this author Click to view 
this author's profile Click to add 
this author to your buddy list Click to add 
this author to your Ignore list Wed Sep 17th 2014, 12:38 PM
Response to Original message
Advertisements [?]
 Top

Home » Discuss » Topic Forums » Economy Donate to DU

Powered by DCForum+ Version 1.1 Copyright 1997-2002 DCScripts.com
Software has been extensively modified by the DU administrators


Important Notices: By participating on this discussion board, visitors agree to abide by the rules outlined on our Rules page. Messages posted on the Democratic Underground Discussion Forums are the opinions of the individuals who post them, and do not necessarily represent the opinions of Democratic Underground, LLC.

Home  |  Discussion Forums  |  Journals |  Store  |  Donate

About DU  |  Contact Us  |  Privacy Policy

Got a message for Democratic Underground? Click here to send us a message.

© 2001 - 2011 Democratic Underground, LLC