Editor’s Note: Eric Mains, a former FDIC auditor, has written a provocative article. He is taking on the political issues as well as the legal ones. And the biggest political issue from my point of view is why the foreclosures are continuing. Given that law enforcement, regulatory authorities and the Courts know that that there was very widespread fraud, fabrication and forgery, why is the resolution steering toward monetary settlements, most of which do not reach homeowners in time and most of which do not give homeowners any meaningful relief.
In a nutshell, if we know that the mortgages are, at a minimum, suspect and that the foreclosures are based upon false premises, why is it OK to make homeowners bear the brunt of the losses through foreclosure? This is a good year to hold political candidates’ feet to the fire.
And on a legal issue, why are the banks continuing to enjoy the benefit of legal presumptions of false, fabricated and forged documents? If they didn’t get those presumptions, they would actually have to prove every element of their nonexistent case. The point of those legal presumptions is to allow cases to proceed expeditiously. But they are only available if there is no evidence or question about authenticity and validity. The banks should not be considered as credible sources of assertions. We already know that. And the presumptions are rebuttable. Yet courts have been regularly denying discovery re quests that would show that the presumed facts asserted by the banks are untrue and further applying them as proof of the matter asserted when the only basis for that finding is the presumption itself.
Fertilizer For The Garden Of a Proposed New Eden
Editorial by Eric Mains
The late comedian Sam Kinison once did a sarcastically painful skit imagining the apparent apathy of people filing past Jesus on the cross, bemoaning the tragedy of his pending death. Jesus yells down to them in response, “Maybe I wouldn’t have to die if someone would just get a ladder and a pair of pliers!”
This same apathy seems to be true of the politicians, DOJ, regulators, and media who would eagerly point to downtrodden homeowners on their public crosses, and who would use them as a platform to decry Wall Street greed-yet instead of helping them down from the crosses and saving them, instead choose to resign them to death as useful martyrs for a cause, moving on with their own agendas. This isn’t for lack of homeowners yelling down to them that they indeed CAN and NEED to be saved, it results from a conscious lack of willpower and courage on their ends to use the resources at their disposal to save the homeowners.
True enough, one can expect the Roman-like legions of Wall Street and their political allies to retaliate against those who take action to protect and help homeowners in need- including political intimidation, sanctions or other means of “persuasion”. However, one has to ask in a year where Bernie Sanders and Donald Trump have made it painfully clear that people are sick and tired of politics as usual, and the cycle of corruption and inaction, If our elected representatives are afraid to act NOW then WHEN do they intend to help? Do they plan to use the fallen after the fact to promote their own agendas? For use as fertilizer to grow a supposed reformed and better foundation for this country’s broken financial system, a new Eden?
The help homeowners in default or foreclosure need most pointedly right now is to be saved from the blatant and ongoing use of forged and fraudulent documents presented to courts across the country in order to foreclose on them. The sheer and utter hypocrisy of those who would proclaim that we need to stop future fraud and Wall Street transgressions, while doing absolutely nothing about this current fraud, is inexplicable. The existence of this current fraud and forgery is not speculation, but fact, as many of the attorneys representing homeowners will attest to, and has been written extensively about( See http://www.salon.com/2014/04/23/massive_new_fraud_coverup_how_banks_are_ pillaging_ homes_while_the_government_watches/ed).
This activity has continued unabated despite the much ballyhooed National Mortgage Settlement, and the dozens of other ubiquitous settlements like it. All of these investigations, settlements and fines have amounted to the sum total of a big “So What?” to Wall Street banks. The fines paid are the equivalent of a parking ticket to be paid until the next time they get caught. As a former federal bank regulator I try not to chuckle every time I hear about another fine being levied (mostly to no avail). What good does a monetary fine do when the institutions who are also supposed to INVESTIGATE and PROSECUTE those committing the fraud say, “You know what? That’s just TOO much work, we probably wouldn’t get a conviction anyway, so why try?” Usually these institutions refer to this criminal conduct as a “civil matter”. When did forgery and submitting fraudulent documents into a court proceeding become a ‘civil’ matter?
Ever wonder what would have happened if we took that stance with organized crime back in the day? Imagine the U.S. Attorney General saying, “We were going to go after the Gambino crime family for racketeering and murder, but that all seemed too futile…instead, we fined them for their illegal activities and gave them a stern warning. How’s that for deterrence folks!? Bet they won’t have the stones to try that again!” Unfortunately for homeowners, the shock and laughter such a preposterous statement would elicit turned out not to be imaginary- as we saw Lanny Breuer, Eric Holder, and others give pass after pass to Wall Street using much of that same logic, and on President Obama’s watch (See http://www.huffingtonpost.com/rj-eskow/7-things-about-prosecutin_b_3722188.html ).
2016 however is turning out to be one of those rare points in time where homeowner’s voices can be heard, and where those in power, and those who want to BE in power, are forced to listen willingly or not. For one thing, it is presidential election season, and those who would claim they have the credentials to help run the country and fix its wrongs are under scrutiny. For another, we had a recent rash of films about the housing crisis, from “The Big Short” and “99 Homes” to the upcoming “Money Monster” https://www.youtube.com/watch?v=va-0o_xBVnU reminding people of the damage from past fraud that is still with us, and will CONTINUE to be with us, for DECADES.
This is not an overstatement by the way, banks and servicers without proper paperwork have already proven they will continue to use forged documents to try and foreclose on homes, and for the typical 30 year mortgage spawned by WaMu, Countrywide, IndyMac, etc., that’s a lot of forgery for a very long time to come (Hint: If the FBI ever got motivated and wanted to test this theory, all it would require is chemical/laser testing of either the paper, or of the ink from the endorsements on mortgage loan documents, most of which would be 10-12 years old at this point if they were indeed the “originals” as held out to be in court by banks. If they bothered to do so, they would get a surprise- and more than a few convictions as well.) Lastly, we have recent court decisions Like Yvanova vs New Century and Jesonoski v Countrywide bolstering the legitimacy of aggrieved homeowners who are simply saying to the courts, “This is fraud, this is illegal, and you can’t sit idly by and let this happen.”
Those in the trenches have learned not to expect ABC, NBC, or CBS to come running to cover this story. For that matter don’t expect MSNBC, FOX, Frontline, 60 Minutes, PBS, The BBC, Bill Maher, or even Jon Oliver to come running to cover the story either. Why? Well for one thing, Wall Street pays for a big chunk of ad revenue. For another, we have an $8 TRILLION MBS market chock full of forged, fraudulent, or missing documents, and everyone charged with trying to resolve the problem is too corrupt or scared to deal with the situation. If you want an investor report from Freddie Mac with easy to read graphs and charts showing you the size of the mess go here: http://www.freddiemac.com/investors/pdffiles/investor-presentation.pdf
Pay special attention to the sections discussing single family MBS, REMIC’s, RE-REMIC’s, GMC’s etc. Most of the political players, the regulators, the courts, the media, have all decided that this festering pile of injustice and fraud is just too big to tackle and too far gone. Banks will get bailed out, investors will get bailed out, and the economy will be given a quick spritz of Febreze, but the damaged homeowners must go to the back of the bus. Michael Shannon’s character in “99 Homes” said it best, “America doesn’t bail out the losers, America was built by bailing out the winners… by rigging a nation of the winners, by the winners, for the winners.”
This being noted, again, your voices can and should be used at this rare time to be heard, and I would urge you to utilize social media, mail, phone, voting, etc., to make it is heard. While it pains me to say this, as much as I admire the work of Elizabeth Warren, the CFPB, and California Attorney General Kamala Harris’s office for writing an amicus brief in support of Yvanova, they seem to have lost their voices when it comes to the issue of the ongoing forgery and fraud. They damn well know it exists and is being used in courts across this country in foreclosure actions, however you won’t see them eagerly attacking or speaking of it, or at least we have not seen it yet. Unfortunately, that is EXACTLY what we SHOULD expect of them. What we SHOULD expect them to say is, “WE are aware this fraud is STILL going on with EXISTING homeowners, WE are calling for immediate prosecutions where forgery is used to secure foreclosures , WE are calling for a TRANSPARENT and PUBLIC investigation into the REMIC’s who claim to hold these loans, and WE are asking the IRS to release all records of the REMIC’s for investigation as well”
Politically unpopular? Yes. Difficult issue to raise? Yes. But the problem is once again, if you are willing to sacrifice existing homeowners, to let their most basic civil and constitutional rights get stomped on without raising a fight, what kind of wonderful utopia do you propose you will build on the foundation of their bodies? Fighting a long drawn out court battle is a losing proposition for most, and a ridiculous burden no one person should have to bear when the government and media should be helping to solve the problem. So in any event if you agree, feel free to Tweet this story, or directly send messages to: Elizabeth Warren, the CFPB, Bernie Sanders, Hillary Clinton, Kamala Harris, Donald Trump, and anyone left in major media who isn’t an unapologetic gimp for Wall Street and its ad revenue, and send them a simple message:
Take action now, no more words. You can’t build our future by sacrificing us in the present, and if you intend to sit idly by while this happens, then to Hell with you. Existing homeowners are not your compost to be used to seed the future and your politics, and the people and history will judge very harshly your inaction as you let those you were charged to help be ground up and spit out by Wall Street…..and Oh Yes, think of us come March 25th.
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