Mortgage Meltdown...the real story is fraud

[realFedUp]

Why are Senators bailing out these people?

http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/12/09/IN5BTNJ2V.DTL

MORTGAGE MELTDOWN
Interest rate 'freeze' - the real story is fraud
Bankers pay lip service to families while scurrying to avert suits, prison
Sean Olender

Sunday, December 9, 2007

....The sole goal of the freeze is to prevent owners of mortgage-backed securities, many of them foreigners, from suing U.S. banks and forcing them to buy back worthless mortgage securities at face value - right now almost 10 times their market worth.

The ticking time bomb in the U.S. banking system is not resetting subprime mortgage rates. The real problem is the contractual ability of investors in mortgage bonds to require banks to buy back the loans at face value if there was fraud in the origination process.

And, to be sure, fraud is everywhere. It's in the loan application documents, and it's in the appraisals. There are e-mails and memos floating around showing that many people in banks, investment banks and appraisal companies - all the way up to senior management - knew about it.

I can hear the hum of shredders working overtime, and maybe that is the new "hot" industry to invest in. There are lots of people who would like to muzzle subpoena-happy New York Attorney General Andrew Cuomo to buy time and make this all go away. Cuomo is just inches from getting what he needs to start putting a lot of people in prison. I bet some people are trying right now to make him an offer "he can't refuse."

continued

[Flabbergasted]

1. fascinating article.

[sam sarrha]

2. W's father pulled a similar Ponzi scheme.. on the SNL'S, THEN BAILED EM OUT TOO

like mafia father like Wet Brain Alcoholic Drug Addict son

[realFedUp]

4. I've been thinking about all the Bush family fraud lately...

Someone ought to do a profile on how the Bush family
has profited from G.W.'s presence in the White House also.

[sam sarrha]

10. here is fertile ground to extend to th whole family on a time line from Nazi days to present, >LINK

AND the family is related to the English Royal Family.. so there is probably war profiteering go'n all the way back to the 300 years war.. if they were involved you know why it lasted that long.. and probably the decimation of Scotland.. the failed Criamian wars.. all the massive failures costing the under class soldiers dearly while enriching the Gentry

[sam sarrha]

15. here is the link for the above comment... >Link>> the best chart of the Bush Fascist Crony network

http://www.bushwatch.com/bushmillions.html

this gang of theves loot taxpayers money.. Shock Doctrone.. got to read it

[Warpy]

2006 was the banner year for real fraud

as people with practically no income were granted those jumbo, interest only mortgages. What that did was cause money to change hands as REO properties were taken off the books and closing costs were paid. That's where the money was made. If the family taking out the loan was able to make a few payments, that was just gravy. A house was off the books, the comps were pumped, and everybody was happy as it bought the industry a few months of breathing time.

When the family defaulted, it still took several months to foreclose, months during which they essentially lived rent free. If they hadn't done something stupid like put mortgage payments onto a credit card, they didn't lose anything but a credit rating which was probably already shaky when they'd gotten the fraudulent loan.

The point is that nobody ever really expected those houses to stay sold, the family to make the mortgage payments, the loan to be paid back. The bank or mortgage lending outfit that agreed to the loan bundled it with a bunch of other loans and sold the risk to a hedge fund as quickly as possible, generating income on that transaction. The hedge funds laundered them into "tranches," often snipping a single loan into parts depending on the risk each payback period of the loan would carry. These were snapped up by mutual funds, pensions, banks, and brokerages who wanted to goose their profits, the hedge funds making their profit on that transaction.

Now we're all left holding the bag, just to keep properties off the market for a few months while keeping the illusion that sales were strong and prices were stable or even rising. We've been robbed and we're just about to find out how much is missing.

[realFedUp]

5. well written post, thanks.

:-)

[Xipe Totec]

3. Did anybody think for one second that George was helping the little guy? nt

[realFedUp]

7. and few will be helped by any of this...listen up Senators. nt

[SammyWinstonJack]

9. No, I am not that easily fooled, especially not by george bu$h.

What rat bastards these greedy creeps are.

[Xipe Totec]

11. Like dealing with a Deveel

"if you think you've gotten a good deal from a Deveel, first count your arms, then your fingers, then your toes, then your relatives"

- Aahz, Another fine myth.

[hobbit709]

12. You got it!

One of my favorite series.

[PDJane]

6. It had to collapse sooner or later.......

And there aren't enough hard assets to cover the paper, which should be interesting.

[realFedUp]

8. Might as well hit this pResident as he's the Big Cheater in

the Big Cheater Era.

[bullimiami]

13. bush and his puke buddies are just trying to run out the clock so they can point their fingers

at someone else.

dirty slimy rotten criminal bastards. all.

[MikeDuffy]

14. Here is a follow-up article from another writer that may be of interest:

http://globaleconomicanalysis.blogspot.com/2007/12/convoluted-mortgage-fraud-theories.html

[earth mom]

16. Of course it's fraud. BIG TIME FRAUD. The money people were playing cut & paste with the documents.

I've posted this a few times already, but this video from PBS's NOW is a must see. And an insider tell how these mortgage companies would play "Arts & Crafts" where they would cut & paste made up figures into peoples W-2s and income stubs.


http://www.pbs.org/now/shows/346/video.html

[HCE SuiGeneris]

19. Wish I could recommend this OP and this thread more than once.

K & R

[TahitiNut]

17. It's also a "handy" way to off-shore wealth.

We might was well be loading C-130s with pallets currency every day and dumping it into global corporations' foreign subsidary accounts. It's a global shell game.

[mdmc]

18. kick