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This article is not a substitute for getting the advice I’m an attorney licensed in the jurisdiction in which your property is located.
The banks are counting on the fact that the claims of securitization are so complex and convoluted that nobody will be able to state a claim with clarity. Foreclosure defense lawyers across the country are seeing constant fabrications, forgeries, uttering false instruments (assignments, Powers of Attorney), and perjury. Nowhere is this more evident than in the case of J.P. Morgan Chase claiming rights in connection with it’s acquisition of certain assets and liabilities of Washington Mutual (WAMU).
At this point J.P. Morgan Chase has taken so many different positions that are inconsistent with each other that you can find a brief or pleading from J.P. Morgan Chase to support virtually any position that you want to take.
You really need to drill down into these articles and decisions in order to see the fundamental error and illegality of the reporting by the major banks and their actions seeking to enforce defective mortgages despite blatant irregularities at closing and nonexistent transactions where JP Morgan Chase, like other banks, claims to have acquired a particular loan or that a nonexistent or nonperforming trust somehow acquired a loan.
If you look at this article in the link above you will see that JP Morgan Chase has taken multiple inconsistent positions on exactly the same issues. Despite clear language to the contrary, they wish to escape liability for the defective and predatory loan practices directed at unsuspecting homeowners and borrowers; and despite clear language to the contrary, they wish to assert ownership over loans that were already sold into the secondary market and then subjected to claims of securitization that in most cases were false claims.
Josh Rosner wrote an article asking whether the false claims of securitization and violations of the prospectus and PSA would make might dwarf the “Lehman weekend.” The answer is yes. From my perspective it appears that most of the money that went through the banks that were too big to fail, was it illegally and fraudulently collected and then hidden offshore. Many trillions of dollars have been advanced to these Banks that are too big to regulate.
TARP was initially created to prevent massive Bank closings related to losses on mortgage loans. But that didn’t work out because the losses on mortgage loans were not sustained by the mega banks. So they expanded the definition to include mortgage-backed securities. But those losses were not sustained by the mega banks either. So they expanded the definition to include virtually anything in an excuse to pump money into the same banks that had caused the crisis; very few critics were allowed to speak. The critics knew that pumping money into banks that were falsely reporting losses what is going to cause an even greater negative impact on the economy. The economy is driven mostly by consumer spending. This was not rocket science. Countries like Iceland simply reduced household debt and threw the bankers in jail. The result was a robust economic recovery. The cost of reducing the household that would simply accomplished by forcing the banks to absorb the loss that they themselves had created.
The problem we have in our country is that the banks have purchased the government. And those politicians who have not been purchased, Have been scared to death with the prospect a complete failure of government, society and economies. The entire premise of such a crash is completely wrong. While the immediate impact of such a policy inevitably leads to volatility in the securities markets, those movements even out as the outcome becomes clear. More than 7000 Banks and credit unions currently use the exact same backbone four electronic funds transfer and payments; all the banks use the same technology and all of them have access to that technology right now. The fall of the mega banks would simply result in a correction in the marketplace where certain banks have become too large to regulate at had become far too influential with people who call the levers of power in all three branches of government.
The other part of the problem is that we seem to hold those with his enormous wealth in high estimation without regard to their actual character. Most of the people in the mega banks are completely contemptuous of the citizens of our country and the politicians that we have elected. In my opinion, it is urgent that we begin to separate normal commercial depository functions of a bank from the risks taken by investment banking departments. And when those risks turn to wrongful, illegal or criminal behavior the individuals, not just their companies, should be held strictly accountable.
Taking down the mega banks is much simpler than it might appear. The extent of our continuing economic problems is equal to the liability of these banks for damages and to repurchase both loans and alleged mortgage-backed securities that were neither securities nor were they backed by mortgages. If the securities and bank regulators actually performed the due diligence and audits that they were supposed to perform, It would be obvious that the mega banks do not have the assets that they claim to have, and that’s the mega banks have liabilities that are far in excess of what they have reported. In short, the mega banks are insolvent which is exactly why we have the FDIC. An orderly transition of the function of the mega banks to smaller banks that are more susceptible to regulation would end our current crisis and ensure a recovery of our economy.