The Housing Moment Investors Dread Is Here

By Danielle DiMartino Booth

Amid the carnage in the auto sector, economists have sought solace in the comforts of home, sweet home. A recent Census release suggests that Millennials, long sidelined, have finally started to tiptoe into the home-buying market. The reception to the data was so effusive that other reports, suggesting housing has reached a much different sort of turning point, were lost in the fray.

The good news is that the trend is unequivocal, based purely on supply and demand. The bad news is in the actual message. The May University of Michigan Consumer Sentiment survey showed a six-year low among those who think it’s a good time to buy a house and a 12-year high among those who say it’s a good time to sell. Disparities of this breadth tend to coincide with break points and that’s just where we’ve landed in the cycle.

The beginning of May officially marked the advent of a buyers’ market, defined simply as sellers outnumbering buyers by a wide enough margin to trigger falling prices. Yes, it’s the moment buyers have been waiting for. It is also the moment private equity investors, those who’ve crowded out natural buyers, have been dreading.

Three factors determine home sales: interest rates, unemployment and prices.

The recent decline in interest rates has provided some semblance of relief; purchase applications have bounced off April’s levels, when they were down four percent over last year. April and May are obviously critical to the spring sales season.

The low unemployment rate would seem to be a huge plus if it wasn’t for the stress building around thousands of layoff announcements across the retail and auto sectors that won’t find their way into this most lagging of economic indicators for months. That is not to say those getting pink slips don’t know their fate, which should influence home sales going forward.

Price is the one bright spot, with one glaring caveat: Falling home prices tend to be associated with a negative macroeconomic backdrop, which does not bode well for any buyer of, well, anything. Dig into the Federal Reserve’s recently released first quarter Senior Loan Officer Survey and you will see nothing of note on the residential mortgage side — banks reported that both loan demand and lending standards remained unchanged in the first three months of the year.

But that is the here and now. Demand and supply in the auto sector, where pricing has been under pressure for some time, looked quite similar to that for houses several months back.

According to the Fed survey, at minus 13.3 percent, demand for auto loans flat-lined in deeply negative territory, as was the case in last year’s fourth quarter, the worst levels of the current expansion. This data point corroborated the Michigan survey, which showed that those who said it was a good time to buy a car fell to the lowest level since August 2014. Meanwhile, demand for credit card loans slid to minus 10.2 percent from minus 8.3 percent in the last three months of last year. In the event you’re detecting a trend, households are sending out distress signals that have just begun to be picked up in housing, even as household debt levels recapture their pre-crisis highs.

The silver lining in the dynamic that’s just beginning to play out is what pricing pressures on the home front imply for the future of household finances — that is after the recession comes and goes. The cost to rent and buy has never been as high as it is today for the average working young American. The preponderance of apartments constructed in the current cycle has been luxury units. At the same time, private equity investors with deep pockets swooped in and bid up the price of rental homes, leaving many would-be first-time homebuyers and renters alike with no choice but to remain at home with their parents after graduating from college.

A quick glance at the average household budget shows that sky-high housing costs bite more than any other line item. Housing devours a third of average household spending, while auto payments command half that amount. More than any other considerations, these costs matter — where to sleep at night and the means by which to get to and from work.

Hence the good long-term news building in the coming decline in housing costs as record supplies of apartments coming online collide with falling home prices and private equity investors growing increasingly uncomfortable with their huge inventories of overpriced homes. As for cars, a new report from J.D. Power showed continued deterioration in the auto sector, driven by falling used car prices, sliding car sales and a further rise in incentive spending.

There is budgetary relief building in the pipeline for Millennials. It just might not be in the form they’d prefer to see, nor will it arrive in time to offset the broader macroeconomic damage inflicted by two key areas of support for the U.S. economy.

Perhaps most regrettable is that policy makers inside the Federal Reserve were aware of the pitfalls of being complicit in hampering the clearing of the housing market and providing incentives for subprime car lending. The sad truth is the optics of stifling clearing and encouraging borrowing among those who could ill afford payments was better than the alternative. Again.

http://www.zerohedge.com/news/2017-05-20/housing-moment-investors-dread-here

Fake Agreements Between Sham Conduits Try to Preempt Courts from Ruling on Evidence

the parties are creating the illusion that they are essentially entering into an agreement to purchase paper from the seller where there is no original paperwork and no indication that the purchase ever actually took place.

Get a consult! 202-838-6345

https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments.
 
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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Bill Paatalo, a private investigator who has concentrated his efforts on the fraud committed by banks for the past 15 years, has alerted me to a factor that ties in closely with my article yesterday on evidence. He gives a link for an example of an agreement that is designed to pull the wool over the eyes of judges, lawyers and their clients.

Note that the agreement says it is a “Correspondent” Purchase and Sale Agreement. No such thing exists. Either the Seller is a Correspondent in which case the loan “Closing” they originated was for the benefit of the superior bank or the originator was the source of funds, in which case the paperwork is at a minimum defective because it names the wrong party as lender. He writes:

Along these lines, you might find this interesting. I found the following SEC filing by WaMu, FA and one of its correspondent lenders. I can only guess there are hundreds more of these types of agreements.

https://www.sec.gov/Archives/edgar/data/883476/000119312503037807/dex105.htm

CORRESPONDENT PURCHASE AND SALE AGREEMENT

This is a Correspondent Purchase and Sale Agreement (“Agreement”), dated as of March 5, 2003 by, and between WASHINGTON MUTUAL BANK, FA (“Purchaser”), and Crescent Mortgage Services, Inc., a Georgia Corporation (“Seller”).

Section 8.11 Reproduction of Documents. This Agreement and all documents relating thereto, including, without limitation, (a) consents, waivers and modifications which may hereafter be executed, (b) documents received by any party at the closing, and (c) financial statements, certificates and other information previously or hereafter furnished, may be reproduced by any photographic, photostatic, microfilm, micro-card, miniature photographic or other similar process. The parties agree that any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding, whether or not the original is in existence and whether or not such reproduction was made by a party in the regular course of business, and that any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.

Apparently these parties don’t feel that a judge decides what is admissible evidence, they themselves do.

Bill Paatalo

This is indeed interesting. It is easy to over look as boilerplate language that nobody reads.

Might be good to discuss on the radio show. Like the Purchase and Assumption Agreement (see below) between the “originator” and the sham conduit for the Underwriter of bogus mortgage bonds, this is an agreement that anticipates violation of law. It might conceivably be binding on the parties to the agreement, but it essentially preempts the court from ruling on the admissibility of evidence.

The other interesting aspect is that it anticipates that the original will not be found anywhere. This also is like the P&A. Thus the parties are creating the illusion that they are essentially entering into an agreement to purchase paper from the seller where there is no original paperwork and no indication that the purchase ever actually took place.

In all probability the “seller” never had ownership of the DEBT. It only had “ownership” of the paper. The fact that the paperwork was at best worthless and most probably is some evidence of fraud or fraudulent intent, does not diminish the “ownership” interest claimed by the “purchaser.”

They skirt the law by saying that the paper is being sold even though the debt is obviously not being sold because the seller doesn’t own it. But ti creates the illusion and for many judges the presumption that this is facially valid paper even though it violates the best evidence rule. The entire document is thus designed to skirt the best evidence rule and substitute copies of documents that can be changed at any time, since they are copies. As copies, it would be impossible to tell from the face of the “document” how many times the parties or terms had been changed.

This is the sleight of hand pattern that runs through all the “loans” that are subject to false claims of securitization. The illegal and wrongful acts, starting with the “origination” and moving forward through void transfers, assignments and endorsements are buried under what appears to be valid documentation. But like every lawyer knows — if you want copies to be treated as originals, they must all be the same and executed at least by initials and distributed to all parties to the alleged agreement.


The Purchase and Assumption Agreement was first noticed back in 2006. It was the document that gave me the first notion of how the mortgage loan documents were not merely defective, but rather nonexistent in relation to the actual debt. This is an agreement dated before the first loan is originated by the “originator.” It spells out how the consumer should not and will not know the identity of their lender in direct contravention of the entire intent and provisions of the Federal Truth in lending Act. As outlined above, this too is an agreement between two sham conduits. It’s facially validity and the laziness of lawyers and judges who don’t read it leads to the false conclusion that the banks and servicers have dotted their i’s and crossed their t’s. In truth it is just part of the mountain of false paperwork and false claims presented to courts, lawyers and their clients.

Political Lesson: Run Against the Banks

Don’t wait until we find out what Trump really means to do as President. We should make up his mind and express outrage to him and all sitting Senators, Congressman, Governors, State legislators, law enforcement, County and City Government and even the Courts. This election is not over, unless we let it be over and accept more of the same.
Ever since I took my first peek at what was going on in the marketplace for residential mortgage loans, I have been saying that if politicians want to win and be loved, they should run against the banks. The election last night was determined by hatred and disgust. The pundits tells us it was because of bigotry. But if you take the long view you can easily see how most of the population of the U.S., and indeed around the world, has been subjected to the overall view that they don’t matter. If the election of Obama told us anything it was that as a whole we are NOT a bigoted country. We are an indifferent country, if you measure that by who leads us. The arrogance with which average working people have been treated has been virtually unprecedented. The voters were not indifferent last night. Any politician who continues to be aloof and arrogant about the little guy who doesn’t matter should be challenged at the polls in the next election cycle.
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While the politicians refused to see it, comfortable in their world view and talking points, the anger of working class Americans has grown rather than diminished by the recognition that the banks and other big businesses pulled the rug out from under us by patently illegal acts — and price gouging — especially in drugs and medical services. The anger consumers felt when the financial system was portrayed as collapsing in 2008-2009 grew, rather than diminished in time.
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Consumer/voter rage is directly related to the fact that government did nothing about it except to allow working families to bear the entire brunt of a loss created by the banks. People lost their homes, their jobs, their lifestyle while government touted all the progress we were making. That progress never reached tens of millions of Americans. Meanwhile the banks received trillions upon trillions of dollars from the U.S. Treasury, the Federal reserve, and the theft of investor money capped by the bonus of getting ownership of homes that should never have been subjected to foreclosure proceedings.
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If this election is being called an upset, ask Bernie Sanders whose meteoric rise in the polls was only tempered by the view that he couldn’t win. He couldn’t win because the democratic party apparatus had already set up a rigged system that made it impossible for Hillary Clinton to lose. Between the 400 “super delegates” already pledged before the primaries began, and tipping the procedures and scales by the DNC in so many ways, no candidate stood a chance of becoming the nominee against Hillary Clinton.
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Up until now politicians have been largely successful at misdirection: instead of accepting blame for failure to do their job in office, they have succeeded in getting us to blame each other. Between the Trump and Sanders supporters we actually have a vast majority of Americans who are now insisting that the system change for the benefit of all its citizens. The consistent surveys of people who think the country is headed in the wrong direction clearly point to the fact that their lives are not getting better, their hope is diminished and their world view arises from despair over their economic position in the world.
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Trump was right: this was an election of the people versus a corrupt, aloof and arrogant establishment. Despite the obvious advantages of allowing a fair fight in which Sanders could have won the Democratic nomination and possibly the general election, the Democrats chose a candidate who was deeply flawed and deeply indebted to Wall Street. The Democrats may well have selected the only candidate who would lose against Trump. Such is the “wisdom” at the top.
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While Trump was also literally indebted to Wall Street through his loans, he never lost track of the fact that people were mad as hell. The party apparatus of both major political parties ignored that, which made the angry voters even angrier. A review of the numbers shows that in virtually every county and precinct the strength of that hatred resulted in lop-sided support for Trump as high as 80% or more.
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We have all heard the scream. Now it is time to inform those who are still in Washington DC know that the rigged system has expired. It is the follow through by voters that will determine how the country goes- writing to Congressman and Senators, law enforcement and even the courts, will seal the deal. Let them know that you were voting for real change where the average American citizen is priority #1. There is nothing like an active, informed citizenry to make changes that throw out old self-serving ideas and the politicians who espouse them.
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Don’t wait until we find out what Trump really means to do as President. We should make up his mind and express outrage to him and all sitting Senators, Congressman, Governors, State legislators, law enforcement, County and City Government and even the Courts. This election is not over, unless we let it be over and accept more of the same.

Housing Will Make or Break US Economy

Az becomes the second state in recent years to adopt gold and silver coin as legal tender. Utah was first. And over the years several successful experiments have occurred wherein a city or county issued its own currency. This should come as no surprise to sophisticated investors. while there is considerable historical support for leaning on gold and other precious metals to protect one’s wealth and liquidity, we should always be cognizant of the fact that precious metals are only precious if they perceived that way.
The U.S. dollar has been propped up using artificial means employed by the Federal Reserve and market makers. There is little doubt that the dollar has been under intense pressure arising out of decades of foolhardy economic policies.
By substituting debt for wages, the appearance of a healthy economy has been maintained. But a quick look at the underlying fundamentals by anyone capable of arithmetic reveals an economy in trouble and a society in turmoil.
This is the result of two factors: (1) we lost our manufacturing base to third world countries and (2) we are in a state of self delusion. We fail to account for many economic events and transactions when we compute our Gross Domestic Product. And the latest trend is to replace real economic activity with trading activity from the financial services industry.
The trigger for what is now seen as the coming devaluation of the dollar has been the essential housing component. The administration and congress, and now state legislatures are setting the stage for a crash that does not have any bottom. In 1983 the financial services industry contributed about 16% of U.S. GDP. This was a fair representation of actual productivity in the country arising out of tangible goods and services created by banks and insurance companies. Now the figure is around 48% of GDP.
The tell-tale sign is that financial service “revenues” and “profits are going up while median come and household wealth has been declining. The extra 32% of GDP does not come from traditional bank intermediation as a payment service, with hedging and other tools to mimicked risk on the purchase of goods and services. It isn’t fees that have increased the apparent increase of the illusion of economic activity from Wall Street and insurance companies. It is proprietary trading profits claimed by the banks and insurance premiums that are artificially inflated by insertion of both banks and insurance companies into economic activity (such as medical care) into commerce that is essentially utility in nature.
The proprietary profits claimed by the banks were predicted here in 2007-2008 and resulted in a projection of a stock market crash and a prediction of the freezing of the credit markets around the world. It was clear then just as it is clear now that Money was being synthesized by the private sector which only means that banks and insurance companies were in essence printing their own money. The dangers of this predicament were apparent and written about by economists whose credentials far exceed my own.
In plain English the banks were stealing money from the marketplace in off balance sheet transactions. And both the banks and insurance companies have been feeding at the public trough for decades. Thus the sole purpose for the existence of investment banks was turned on its head. They were supposed to create active markets in which liquidity (access to capital) was enhanced; instead they surreptitiously siphoned out the liquidity to off-shore accounts and let the markets collapse when investors stopped buying bogus mortgage bonds issued by non-existent trusts. Like any PONZI scheme the entire marketplace collapsed when investor stopped buying the mortgage backed bonds. The correlation is unmistakable and irrefutable.
The insurance companies have been inserting themselves into markets whey contribute no value like medical services and pharmaceutical products.
The end result is that one-third of our entire economy has been eliminated. Taking into account certain productive activities that are not counted (but should be) the real GDP of the U.S. is around $9 trillion but reported at $14 trillion. Using the same logic I pinpointed in 2007, the DOW is actually worth around 8,000, which is where it will go regardless of any remedial policies put in place.
Throughout the world, which is now heavily if not exclusively monetized, obvious steps are being taken to get out of the dollar and into other currencies or assets. The hyper inflation everyone was worried about a few years back was only delayed. And the economic argument of using the dollar as the world’s reserve currency has not been weaker in recent memory.
Accumulation of gold and fixed assets has been responsible in part for propping up our currency. But for our military strength there would be no basis to refer to the U.S. as a world leader. The remedy is obvious — use the reversal of the PONZI scheme to finance new business, expansion of existing business and job training. If that was adopted as policy we would not face an immediate hit to our GDP, equity indexes, and pentup consumer demand together with actual capacity to consume goods and services without plunging into debt would enable us to create fundamental economic activity that would be the envy of the world.
The banking oligarchy currently running our country has a goal that is the anti thesis of the role of government. The oligarchy has profit and wealth accumulation as its goal. The government is required to assure that the referees stay on the playing field and nobody gets an unfair advantage. Just as separation of church and state protects citizens basic rights under natural, constitutional and statutory law, so too should the separation of the banking industry from the government should be well-guarded, lest the power sought by leaders of church, banking and even military and medical services result in the relinquishment of both our freedoms and our prospects.

Arizona Set To Use Gold & Silver As Currency
http://www.zerohedge.com/news/2013-04-22/arizona-set-use-gold-silver-currency

Student Loans, Housing and Poverty in the U.S.

“Bottom Line: Foreclosures need to stop, student loans need to be modified and return to pre-2005 rules for dischargeability, wages need to rise and the number of people earning wages needs to rise. If you don’t have those ingredients, the economic “recovery” will forever be fragile and will forever be in danger of a much deeper collapse than we saw in 2008 because underlying conditions are worse. That’s why American companies are holding trillions in cash and assets overseas. They don’t trust us anymore.” — Neil F Garfield, livinglies.me

For assistance with presenting a case for wrongful foreclosure and student loans, please call 954-495-9867 (East Coast) 520-405-1688 (West Coast), customer service, who will guide you to our information resources and upon request put you in touch with an attorney in the states of Florida, Tennessee, Georgia, California, Ohio, and Nevada. (NOTE: Chapter 11 may be easier than you think).

Editor’s Analysis: According to the official figures there are around 50 million people living below the poverty line. Surveys show that the number of people who can’t buy essentials for their family actually total close to 150 million people, which is half the country. The unemployment rate, if one were to add the number of people who are underemployed or who have given up looking for work, is probably over 20% — 60 million people!

The chasm referred to as income and wealth inequality is growing daily. $1 trillion in debt burdens students who could be far more productive. Until 2005, this debt was dischargeable in bankruptcy. But the banks managed to get changes made in the bankruptcy code equating student debt with alimony and child support and further requiring means testing in chapter 7 thus inhibiting the discharge of debts on credit cards charging 20% or more per year in interest and medical costs, which if you read Brill’s article in Time Magazine last week, are marked up 3000%.

Some $13 trillion in mortgage loans were faked and the banks continue to lie to the President, the Congress, the state legislatures, governors and Attorneys general.

If you add it all up, it isn’t hard to see why economists refer to the “recovery” as fragile. If you ask me it is unjust, wrong and impractical to continue on the same path we are on in the hopes that down the road somehow we will grow out of the problem we have — an economy that benefits a few people while the number of people falling behind, with lower and lower wages and decreased accessibility to credit increasing every month. Billions are added each month in student loan debt which is fast becoming a cancer on our society simply because of the new bankruptcy provisions.

The 7 year experiment in making student loans non-dischargeable is a miserable failure. It is a major contributor to the impending decline in the credit rating of the what was once the strongest nation on earth in every way. Because we allowed the banks to get the TARP funds and all the other forms of bank bailouts, and because we ignored the real victims — the investors and the homeowners who were tricked into deals that could not possibly work, the foundation of the country has been so undermined that we now rank #10 behind France and Spain in upward economic mobility. That means that the chances are better in those countries to climb the ladder of success than they are here.

This is not a piece suggesting we convert to socialism as our economic path. It is rather a call-out to our government that it cannot continue to bow to the will of the banks and expect the country to hold together. With half the country gasping for air, we must jettison our ideology and go for the practical solutions — most of which already exist or existed until a short while ago.

The problem is not that capitalism isn’t working. The problem is that capitalism is being used as a cover for the creation of illusions of prosperity and the reality of a near fascist state. That is what happens when someone corners the market on oranges and that is what happens when the someone is allowed to corner the market on money. And THAT is why we need government regulators and legislators who are NOT permitted to go through the revolving door from government to business and back again. If you take the referees off the field, don’t be surprised with what happens next.

For better or worse our economy is still 70% dependent upon consumer spending. Yet we pursue policies that diminish the ability of consumers to spend and diminish the number of consumers. The fact that there is still some muscle in the our system is testament to our inner strengths and prospects if we make the necessary changes to our democratic institutions and reign in those who are admittedly too large to govern or regulate.

Despite the obvious fundamental defects in the loan originations and transfers of loans that were the products of imagination and illusion, we treat them as real and even sacred. The playing field has been tilted so that all the benefits roll into one corner while the rest of us scramble to  make ends meet. The risk factors in any loan or program have been pushed entirely over into the public sector when the government should be able to stop the foreclosures, cure the student defaults and renew the progress of wage growth.

The keys to end this nightmare here and abroad is housing, student loans and employment. Students who have unpayable student loans are refused employment because many employers do credit checks. The same holds true for the millions of Americans who have been victims of fake foreclosures by strangers who never put up a dime to fund or purchase the loan and then submitted a credit bid at the “auction.” The private student loans arose because somebody thought it was a good idea to raise the cost of student loans by inserting profit seeking banks as intermediaries. Now that is corrected as to future loans, but it does nothing to correct the problems of past mistakes by government.

This isn’t just theory. Trillions of dollars are being held off shore by companies who legitimately are not convinced that the U.S. will actually pull out of this spiral anytime soon. So they are investing in capital and labor elsewhere. No effort has been made to claw back the trillions of dollars that disappeared in the maelstrom of the mortgage meltdown. Those funds are hidden off shore too.

And even more importantly, no company wants to invest in a marketplace where the laws are not enforced with consistency. If you speak with many CEO’s in private they will tell you that jail time for bankers would be a stimulus to confidence in the U.S. marketplace. What we have is a marketplace without boundaries as to the the fraud and other criminal behavior that was never before tolerated in our system.

Large and medium sized organizations holding trillions of dollars in liquid assets and other investments overseas see this very clearly. They have no more reason to commit to the U.S. economy than they do to any other banana  republic.

Why Student Debt Will Make U.S. Insolvent
http://www.business2community.com/finance/why-student-debt-will-make-u-s-insolvent-0430373

Wall Street turns profit in student loan debt
http://www.wsws.org/en/articles/2013/03/11/loan-m11.html

Student Debt Crushes Borrowers And Threatens The U.S. Economy
http://www.addictinginfo.org/2013/03/09/student-debt-crushes-borrowers-and-threatens-the-u-s-economy/

http://blog.credit.com/2013/03/do-we-need-to-change-bankruptcy-rules-for-student-loans/

Don’t Panic: Wall Street Is Going Crazy For Student Loans — But It’s Not a Bubble http://www.theatlantic.com/business/archive/2013/03/dont-panic-wall-street-is-going-crazy-for-student-loans-but-its-not-a-bubble/273682/

You Know What Sucks? Your Student Debt. You Know What’s Great? The Solution.
http://beingliberal.upworthy.com/you-know-what-sucks-your-student-debt-you-know-whats-great-the-solution-2

Look Who Got thrown Under the Bus for Criminal Prosecution on Banking Crisis

“Furthermore, evidence of the DocX forgery and fabrication process could be used to reach even higher. Who directly solicited the company for fake documents? The foreclosure mill law firms, which then knowingly submitted them into courts. Who directed the foreclosure mills to do that? The mortgage servicers, which are typically units of the biggest banks. Furthermore, there’s no reason to ever request the “entire collateral file” unless you have no other way to generate evidence to prove underlying ownership of the loan. This speaks to a faulty mortgage transfer process, improper securitizations, and generally fraudulent practices at the heart of Wall Street.”

CHECK OUT OUR EXTENDED DECEMBER SPECIAL!

What’s the Next Step? Consult with Neil Garfield

For assistance with presenting a case for wrongful foreclosure, please call 520-405-1688, customer service, who will put you in touch with an attorney in the states of Florida, Tennessee, Georgia, California, Ohio, and Nevada. (NOTE: Chapter 11 may be easier than you think).

Editor’s Comment: In a very good piece written by David Dayen for Salon.com (see link below), he takes the government and the bankers to task for masquerading under the “rule of law” while actually undermining it — something that consumers and homeowners have instinctively known for decades.

The general consensus of those in government and on the bench is that they are so deathly afraid of giving a free house to a homeowner that they are willing to overlook criminal and civil misbehavior — leading to granting a free pass to those pretending to be lenders to get the free house.

Worse than that, we have established a climate that allows for the possibility of taking a crime to some indescribable level where it becomes somehow necessary to allow the crime to stand because of the “risk” posed to the rest of society. That Too Big To Fail thing came directly out of the proposition that if the big banks were allowed or forced to fold,  the credit markets would freeze up. So our government gave them even more money than the ill-gotten and well secreted money they made during the mortgage boom, under the supposition that those banks would start lending.

The reverse happened. People received notices in the mail informing them of decreases in their credit limit on credit cards, HELOCs, and cancellation of loan commitments on small businesses and real estate purchases. The outcome predicted by those on Wall Street as well as Hank Paulson, then Treasury Secretary to President Bush, was a massive recession with millions of jobs lost and a huge demographic of people who are working at jobs for less money requiring less of their their talents. Armageddon arrived and we managed to steer our way of of the roughest waters for the time being, but we also proved that the Too Big To Fail hypothesis was dead wrong.

So they have a scapegoat that they are going to send to prison without involving any of her superiors, affiliates or the actual conspirators who created LPS and DOCX. The case proves, however, that people CAN go to jail for these crimes and that the line we were fed about it not being illegal was incorrect or an outright lie. The truth, as we now know it, is that the actions of the banks were a total fraud and that many entities and companies and institutions aided and abetted the the most massive fraud in human history.

Thus the issue is no longer whether there is a case that can be made, proven and thus sending people to jail and ordering restitution to all the injured stakeholders. Instead the issue of who will get thrown under the bus so that nobody really “important” gets the adjoining prison cells.

The recession was her fault. Meet Wall Street’s scapegoat, the one person to get jail time for the most massive mortgage fraud in history. By David Dayen

“This scheme was part of the giant bundle of illegal conduct known as foreclosure fraud. According to statements of fact from the Justice Department, from 2003 to 2009 DocX recorded over one million fake documents. That’s probably a low number. DocX wasn’t just forging signatures, they were fabricating entire loan files. During the bubble years, they created a now-infamous mortgage fabrication price sheet, where mortgage servicers, who had trouble proving in court that they owned the homes they wanted to put into foreclosure, could purchase, at low prices, whatever documents they needed. To “Recreate Entire Collateral File,” basically the whole set of documents including the promissory note? That would set a servicer back $95.00.”

Shiller: Is Housing Recovery Real?

World renowned economist Robert Shiller, in a candid interview with Drew Sandholm of CNBC, gives a realistic perspective on the housing market. Calling the housing bubble a “once in a lifetime thing,” Shiller says that the outlook is uncertain. The “recovery” even if housing increases by 3% per annum, would in reality be flat, especially after the superstorm that hit the Northeast.

The chilling comment from the economist who showed us graphically how the housing bubble of the mortgage meltdown was so out of whack with history, is that the true recovery could take as long as 50 years. This unthinkable consequence is not so far off if you look at the factors that led up to the bubble and the enormous surge in home prices while “value” of housing was flat or even decreasing. The surge during a 4-5 year period blasted through any charts on the subject, most notably the Case-Shiller Index which removes inflation from the computation.

The long and short of it is that we have years, perhaps decades to recover from the shock the economy received from the Wall Street players who flooded the housing market with money causing a blow out in prices as underwriting standards were completely ignored in favor of “getting the deal done.”

We are left with treating each tragic case of foreclosure on a case by case basis which most of the people cannot afford to do. Having drained their savings and retirement in the hopes of keeping their homes they are without funds to challenge the banks who have all the money the investors gave them and now have all the money from proceeds of sales of foreclosure homes.

At some point someone with authority must demand from the banks an accounting for what happened. How is it possible for the banks to collect federal bailouts, insurance and proceeds from credit default swaps when they were using investor money?

If the loss falls to the investor because of foreclosure and market conditions, why didn’t they get the money from bailouts, insurance and CDS? And why  should we not treat the money the banks got as money received by agents of the investors reducing the obligation of homeowners?

Why are we quibbling about “principal reduction” when the principal has already been reduced by payment? Why did the banks divert the paperwork away from the investors and put “nominees” or strawmen on the notes, mortgages and deeds of trust?

The ugly truth is that Wall Street was playing with deposits from investors and calling it proprietary trades. Heads we win, tails you lose. If we allow that we have condoned theft.

And THAT is why I think the banks can be beaten in court. If you trace the money first and demand to see the money trail from beginning to end from the Master Servicer, Trustee and foreclosing agent the true nature of these transactions will emerge. And when all is said and one, if we don’t challenge this despicable scheme, the banks, having cornered the market on “money” (with over 10 times the amount of government authorized money) they now are seeking to corner the real estate market and become the world’s largest landowner.

Banks are allowed to exist to facilitate commerce, not capture it. They should be regulated like utilities so that when they go off the reservation with obtuse machinations of financial products, they are quickly reined in. That regulation can only come from winning in court since the regulatory agencies, while recognizing the problem are too timid to seek the appropriate relief.

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