No movie, unless it was the length of Shoah, would be able to catch both the gross behavior, much less all the nuances, caused by Wall St6reet corruption and incredible greed. But a number of movies have made some pretty good attempts at capturing parts of the largest financial crime in human history. Rarely do we see economic crimes lead to changes in history. But this time we did see that result, as more than 20 million people thus far have been displaced from their homes, their investments and their lives.
The enormity of the crime seems to be captured by the latest film, “The Big Short.” The movie itself seems to be provoking more outbreaks of rage that has been seething ever since the world found out that the banks had effectively taken over world control. To see the distortion of our electoral politics, domestic and foreign policy is to experience a kind of revulsion that is difficult to convey in words without graphic language.
I have not seen the full movie yet but I read the book and was astonished that there were people out there who would actually tell the truth about what happened.
As a primer, just keep this in mind.
The banks created empty trusts and then sold shares in those trusts to investors (i.e., pension funds). Instead of funding the trusts, they kept the money from the investors and made as few loans as possible to cover their tracks. And to make sure they would make even more money they made the worst possible loans that were certain to fail and thus gave themselves a sure thing on which to place multiple, layered bets.
In order to tie the knot they needed as many loans as possible to be foreclosed, regardless of whether the property owners were current in their payments or not and in order to make that a very certain thing, they arranged it so that “servicers” with contracts with the empty trusts, stepped in and acted like servicers and are taking money that nobody owes them or the trust, because the trust never bought the loan because the trust was never funded.
They used modifications as a lure to get homeowners deeper and deeper into the illusion of a default. The default never existed because like in any Ponzi scheme the real owners of the debt (the investors) were always getting paid regardless of whether the “borrowers” ever made a payment. They were getting paid from a slush fund. Each payment was labeled a servicer advance, when the servicer was not authorized as a servicer, didn’t make the payment, and didn’t even cause the payment to be made — that was the job of the hidden Master Servicer who was the bank that created the fake trusts and conducted fake sales of shares in the fake trusts.
But that didn’t stop the banks from foreclosing in record numbers, so confusing the borrowers and courts that everyone thought it must be true that the banks were the lenders — until everyone found out they were not lenders. They were brokers at best and thieves at worst.
I’ll leave the rest to the movies……..
Filed under: foreclosure