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I’ve been receiving emails from many candidates for public office, including one recent email calling for the break-up of the big banks — a theme picked up from Elizabeth Warren. They are right. But Bernie isn’t telling the people why that should happen and he isn’t taking the opportunity to resonate with what tens of millions of people already know about our economy, about Wall Street and about government. The system is rigged and people who run against the banks will win if they get specific and demonstrate their knowledge such that the people who are voting have actual confidence that the candidate knows what he or she is talking about and will actually do something to bring this nightmare to an end, restore the American middle class that is the engine of the US economy, and restore social order.
This message is too vague. You are underestimating the knowledge and intelligence of the American Public. More than 17,000,000 people have been displaced by the process of foreclosure. And there are another 17,000,000 people who will be displaced over the next 5-8 years. In order for that to happen the banks hide the real transactions and have been submitting documents that are fabricated, forged, robo-signed and supported by robo-testimony from people whose only job is to testify — thus insulating the the real players from committing perjury.
Talk about how and why millions of black, Hispanic and under-educated, unsophisticated borrowers were targeted for absurd loan products that ‘reset” to payment levels higher than their household income has ever been. You will cut across all demographic lines from far left to far right and everything in between.
Tens of Millions of people know this. You don’t need to do much teaching. If you want to touch a nerve, talk about how the mortgage process jumped from 4-5 loan products in in the 1970’s to around 450 loan products in the mortgage meltdown period. Talk about how disadvantaged people were targeted for loans because the failure of those loans made the most money for the banks.
Talk about the Miami suit where the city was stuck with brunt of the cost of ZOMBIE HOUSES — phenomenon throughout American cities where hundreds of thousands of homes have bull dozed because the same banks that interfered with a modification, forced the foreclosure then abandoned the property.
Talk about how no prospective borrower could understand the intricate lending process that emerged and that the Federal disclosure laws were inadequate to alert borrowers that they were being lured into loans they could never repay. Talk about how borrowers were lured into “default” with the hope of modifications by the famous “You must be 90 days behind to be considered for modification”, and lured into bankrupting their lives and households by spending every penny they could get their hands on to save their home — all to pay banks who had no interest in their loan and who had no actual authority.
Talk about the great shift (theft) of wealth from the American middle class to the banks who now have the money parked off-shore. Question why the banks supposedly suffered huge losses but are now bigger than ever with reporting earnings that are out-sized compared to any other activity in the our economy —a sure signal that they are cooking the books. Wall Street’s job is to make capital available for business activity. We have had our great recession where GDP for actual goods and services was reduced from 84% of GDP to only 52% of GDP — with the entire balance going to financial services. How could there be a need for more paper (securities) for business activity that declining? Talk about the nearly $1 Quadrillion in the shadow banking market where the illusion of economic activity is kept alive.
And why are the banks going to court relying on paper instruments that talk about transactions that never existed? If the transactions were real, then why don’t they show it? Why do they stonewall easy questions like “who is my creditor?” Why are they winning? Why are judges saying that they don’t care whether the borrower owes money to the party suing him; all that matters, say the judges, is that the borrower stopped paying. Really? If I mistakenly pay you $100 per month for a debt that doesn’t exist TO YOU, under what theory of law, morality or ethics can I be sued for withholding payment when I realize my mistake?
The all inclusive message should be that all the players should be forced to the table and all of them must share in the losses and risks that arose with the tactics employed by banks. Nearly all requests for workouts and modifications are being rejected by banks who have no authority to reject them. But the banks stand to gain billions, perhaps trillions of dollars by forcing homeowners into foreclosure because THEY, not the investors, get the proceeds of the sale through “recovery” of “servicer advances” that (a) completely eviscerate the false claim of default on the loan (the creditor was paid) (b) were never “advanced” by any authorized “servicer” (The money for servicer advances came from the investors’ money in a slush fund accessed by the servicer).
Talk about how virtually all borrowers who have applied for modifications have had their paperwork “lost” or “never received” or “incomplete” and how when the paperwork is sent again, it is now too stale and the process must be started over again — all the while the bank is forcing the homeowner deeper and deeper into a default that does not and never did exist. Talk about the tens of thousands of modifications that were approved and then ignored in order to force the foreclosure of a home that the bank would then abandon..