Mozilo Goes free

Someone needs to go back to the Declaration of Independence. Government exists only by consent of the governed. People are withdrawing their consent on a daily basis now. Where do you think that will lead?

see http://www.housingwire.com/articles/37308-countrywides-mozilo-reportedly-off-the-hook-for-all-those-subprime-mortgages?eid=311685972&bid=1437193#.V2RJhpGUqsU.email

Revenge is not the point. But justice is important. Mozilo was, in my opinion, just a bag man for the mega banks, making Countrywide into a giant holographic image of an empty paper bag.

DOJ is continuing to follow the rules set informally by the Bush administration and later ratified by the Obama administration in which it was assumed that the foxes would help “find” the chickens and put them back in the hen house. It was absurd to all of us who were even reasonably well versed in the language and culture of finance and economics.

Here is what we missed: a DOJ prosecution would have enabled the free flow of information back to the White House where decisions could be made about (1) what went wrong (2) who did it and (3) how to claw back trillions of dollars in ill-gotten gains. Instead both Bush and Obama went to the foxes to ask where the chickens were. The foxes still had chicken blood dripping from their mouths when they said “I don’t know but we’ll help you find out.” Both the Republican President and the Democratic President were clueless about finance. They had to rely on people who at least said they understood what was going on. They went to people from Wall Street who were fat, happy and getting more jovial with each passing month.

Here is what COULD have happened: the absence of a clear definition of a real creditor could have been exposed, making all the mortgages essentially unenforceable. The notes would have been unenforceable because they named parties who did NOT give the loan nor did those parties represent anyone who did give a loan. An announcement of this sort would have toppled the derivative market which is all based upon smoke and mirrors and would  have stopped the progression of the current derivative markets being used as a free zone for theft from investors.

The DEBT would still have been enforceable in favor of the investors, instead of the unused Trusts and other conduits and “originators.” But the real debt owed by homeowners would have been the value of the home, not the imaginary price of the home. All those crazy mortgage products were a cover-up for what the Wall Street banks were stealing from investors. The investors were not just some financial institution; they were managed funds for people’s retirement and savings. In a cruel irony, Wall Street cheated the same people against whom they were foreclosing. They stole the retirement money, covered it up in impossible loans, and then foreclosed saying they were doing so on behalf of the investors — i.e., the same people who were losing their homes, their pensions, retirement and their savings. In short Wall Street banks’ schemes resulted in the middle class suing itself for foreclosure, thus losing both their retirement, pension and savings and then their home.

Wall Street Banks could have been pushed aside as investors and homeowners figured out creative ways to remove the bad mortgages from the title chain and replace them with real mortgages that were based upon principal balances that were economically realistic. Neither the investors nor the borrowers knew that the banks had created a culture of false appraisals creating the illusion of a spike in land VALUE by manipulating the PRICE of  real property. Foreclosures could have been reduced to nearly zero. And the stimulus of maintaining household wealth would have made the recession a much milder affair. Instead there was an epic transfer of wealth from the vast population of people who were sucked into investing in the scheme to provide the food, and vast population of people who were duped into accepting the illusion of mortgage loans whose value was zero.

Somehow the media has concentrated on transfer of wealth as though it means the rich must give to the poor. But anyone with a high school degree can do this arithmetic — the transfer clearly went from the populous to the fraction of the 1% who had concocted this epic fraud. Our population went from middle class to below the poverty line while Mozilo and his counterparts made hundreds of millions of dollars at a minimum. Some made tens of billions of dollars that has not yet been revealed. All of that money came from the middle class and then the theft was rewarded with more trillions of dollars from the Federal government. Until we claw that money back our economy will remain forever fragile.

Mozilo earned nothing. He merely followed the instructions of people who had his complete attention. A civil or criminal prosecution would have led to the specific people whose orders he was following and an unraveling of a scheme that even Alan Greenspan admitted he didn’t understand. In short we would have known the truth and we would have had much greater trust in our Government institutions and our judiciary, who blindly accepted the nutty premise that the party suing for foreclosure wouldn’t be in court if there was no liability owed to them. Between the outlandishly cruel and biased criminal justice system and the tidal wave of foreclosures that never needed to happen, people have an historically low opinion of government and the Courts; and it seems that ordinary people have a greater understanding of what happened to the country at the hands of Wall Street banks than the officials who serve in the positions where such banks and such behavior is supposed to be regulated and stopped.

Bottom Line: As long as the Federal government fails to reign in illegal derivative activity (masking PONZI schemes and other illicit behavior) Judges will not reject the erroneous premise that homeowners got greedy and are deadbeats for failing to pay their debts. And as long as THAT continues, our economy cannot recover and our society will continue splitting apart. Someone needs to go back to the Declaration of Independence. Government exists only by consent of the governed. People are withdrawing their consent on a daily basis now. Where do you think that will lead?

9 Responses

  1. Ask not, ever, the value of any home foreclosed illegally. Make homes using the power and motivation of your youth selflessly. Get rid of greed among people who whole lot more than what they need for their lives. Keep this country great also for the poor and the middle class heard from one of such. Don’t get duped into shallow vacuous sloganeering. BE SMART.

  2. The only way to have standing to sue is to have actual injury.
    It seems no one can come forward and point to Mozillo and say, ‘He did this to me and as a result I suffer this injury’.

    Without that, he’s got his hold harmless agreement and board of directors with their immunity, and so it all falls down hill to who didn’t follow procedure and actually caused the harm.

    If the gov’t was bilked out of billions, who signed the docs to get the money from the gov’t.

    If there is no one to be a witness, there is no standing to sue, and no investigation will bring him to justice if there is ‘no body’ [of evidence]; [nobody to provide evidence]

    That’s my opinion.
    Trespass Unwanted, Creator, Corporeal, Life, Free, People, Independent, State, In Jure Proprio, Jure Divino

  3. Sammy, Just what I had said and keep on saying that the Government was involved.  Read this article of Livinglies. Billie

  4. When banks illegally foreclose people’s homes and they get no help from any, then, people could practice what usually goes on in some former third world countries. Picket and block entrances of crooked establishments until they clean up their acts. It was shown to have worked

  5. Here’s a pipe dream…A movie by JZ or world-wide tour like the one Beyonce, and other such superstars who in fact comprise the mass media with their LARGE audience singin’ and dancin’ and subliminally putting forth for all eyes in their audience to see – what really happens to anyone who paid too much for the American dream and lost it to foreclosure, rubber property values, and a spike student loans while the dumb -dumbs in the courts and the politicians who appoint them give lip service and squabble among themselves fiddle as Rome burns.

    A caveat of course needs to be added here: In spite of the above “pipe dream” it is so often the case that superstars such as Beyonce and others don’t give hoot or are simply unaware.

    Neil Garfield as usual nails it here – what we all know.. The message just needs to be carried by those whose audience is a whole lot of vulnerable people paying all that close attention to every thing said and every move those superstars make up on that big stage.

    Does Mr. Garfield sing and dance??

  6. Just started reading, The TWO FACES OF MONEY by Geraldine Perry and Ken Fousek, 2007. Seems to explain it all. I recommend it

  7. The real truth is: it’s only promissory notes folks! It’s only make believe money that they call money. China and Russia are selling off their FRNs, so who is buying? The banksters and other NWO types are turning it into wood stove material. We are now going $2 Trillion a year into debt and nobody wants the debt. Bernie Sanders wants free Education and medical though. We have to tell the truth to everyone we know and change all this.

  8. A sad commentary outlining the truth of the matter.

  9. Yes, we have been thrown under the bus by the banks, Wall Street and our so-called government, and it continues to this day.

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