2 Big 2 Foreclose–Is The Subprime End Game Approaching?

Posted by: williambanzai7 Post date: 10/11/2010 – 04:31 After a bad opening, there is hope for the middle game. After a bad middle game, there is hope for the endgame. But once you are in the endgame, the moment of truth has arrived. – Edmar Mednis (Grandmaster) The Heads I Win, Tails You Lose Market. Posted by: madhedgefundtrader Post date: 10/11/2010 – 07:15 Ben Bernanke has privatized the upside of the global stock, bond, currency, commodity, energy, and precious metals markets, and socialized the downside, with his much publicized move towards quantitative easing. While former Treasury Secretary Hank Paulsen spoke about a bazooka in his pocket, Helicopter Ben is hinting that he has a 100 megaton thermo nuclear weapon. Navigation PollsDonate To Zero HedgeRecent posts Shopping cart View your shopping cart. User login Username: * Password: * Create new accountRequest new password Zero Hedge Reads Angry BearBearish NewsBoom Bust BlogChina Financial MarketsChris Martenson’s BlogContrary InvestorCoyote BlogCredit WritedownsDaily CapitalistDaneric’s Elliott WavesDealBookDealbreakerDr. Housing BubbleFalkenblogFibozachiFund My Mutal FundGains Pains & CapitalGlobal Economic AnalysisGonzalo LiraImplode-ExplodeInfectious GreedInvesting ContrarianJesse’s Café Américain Market FollyMax KeiserMinyanvilleMises InstituteNaked CapitalismOf Two MindsPension PulseShanky’s TechBlogThe Daily CruxThe Mad Hedge Fund TraderThe Market TickerThe Technical TakeThe Underground InvestorWall St. Cheat SheetWashington’s BlogWealth.netWhen Genius Prevailed Home williambanzai7's picture Submitted by williambanzai7 on 10/11/2010 04:31 -0500

CDOCollateralized Debt ObligationsJamie DimonNaked CapitalismReal estateRealityTARP

MG

THE MIDDLE GAME QUAGMIRE

After a bad opening, there is hope for the middle game. After a bad middle game, there is hope for the endgame. But once you are in the endgame, the moment of truth has arrived. – Edmar Mednis (Grandmaster)  

 

I have one central thought of where this fraudclosure fiasco could lead, and this is why everyone should watch very carefully how the various players move their pieces in this subprime middle game.

Up until now, the banks have been making sweeping statements that this all reflects a “technical” glitch in foreclosure processes.

Well, having a posse of State AGs band together to commence a joint investigation is no longer a minor “technical” glitch. Allegations of masses of forged signatures, falsified or fabricated notarized documents,  back dating etc., if true, collectively amount to an institutional pattern of criminal behavior. Having the Justice Department announce it is opening a preliminary investigation raises the stakes even higher.

Being forced to suspend all foreclosures has obvious “material” economic consequences to the CDO note holders.

But having title companies pull out of the residential real estate market because they no longer trust the veracity of bank provided documents presages claims by mortgagors who lost their properties as well as the subsequent purchasers of same. The only way to conclusively cure that kind of problem is to get waivers, and releases from the various claimants wherever they may be or pass retroactive curative laws or laws doing things like creating a bailout fund to indemnify those who are injured (yikes!). You cannot simply say this is immaterial, sprinkle in the word MERS and hope this will all go away.

The CDO note holders will have potential claims stemming from the interruption of non-performing loan processing. Think breaches of the trust servicing agreements and allegations of “gross negligence or willful misconduct”, the latter being magical legal hurdle in these types of agreements. However, the much more troubling aspect, is the growing realization that the various pools of securitized mortgages may never have been properly assigned, transferred and recorded at inception. If this turns out to be the case, game over–the noteholders will have to be made whole (here we will be expanding into the universe of securities “underwriter” liability).

How these problems are all handled in public disclosure documents is another key area to watch. The standard for “materiality” is whether a reasonably prudent investor would consider an item of disclosure important in making an investment decision. What would you say is important?

Remember that RICO is what brought down Drexel. RICO claims can be brought by the state or by private parties. Private RICO actions have apparently already been filed by certain litigants. This is a securities and white collar crime litigators wet dream.

Over and above the criminal and civil liability issues, are the regulatory and reputational risks. The damage to the reputation of a bank caught defrauding its customers is serious indeed. However, think of all the regulatory detonators that can be potentially triggered by all of this. 

The list goes on and on.

What this means is that Jamie Dimon and his 2Big2Fail CEO brethren can no longer pretend that this is just a minor technical hiccup. These developments constitute material risk factors threatening the very 2Big2Fail existence of their banks. That’s not hyperbole.

They cannot pretend not to know what happened. They no longer have the luxury of taking the high road. It is now clearly their fiduciary duty to find out what happened and to take whatever corrective measures are necessary to protect the shareholders.

Any fatal mistakes at this point are more than likely to constitute “good cause” for termination. Moreover, as we all know and Messrs Nixon and Clinton will attest, it is often how one behaves in the post facto spin and damage control operation that can lead to ultimate ruin.

They are all spending their Columbus Day weekend lawyering up.

Someone is going to suggest a forensic/legal examination of the documentation. This will take months and months, particularly if they have to look at fraudclosures already processed. 

The good news? Here is a new job class created under Obama, Mortgage Fraud Forensics Specialist. This is not something an accountant is trained to do. This is a legal exercise. Unemployed real estate lawyers take heart. Work is on the way.

The end game may not be here quite yet, but it is approaching very soon, because they will all have to start thinking seriously about how to re-mark these toxic loan portfolios given the stark new market and legal reality.

So where is this great game leading?  Talk of a TARP II rescue would lead to torches, pitchforks and political suicide in Tea Party America.

No, this could very well lead to a 2Big2Fail checkmate. We shall see…

WilliamBanzai7, Esq.

COL D

[I recommend you read the other ZH posts on this subject as well as other excellent Blogs like Yves Smith’s Naked Capitalism. The above is my humble attempt to distill my view of the current state of play for the reader. No one should under estimate the magnitude of this emerging crisis. Particularly, Team 0. File this post under: “A Momentary Lapse of Banzai7 Seriousness”]

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by DirtySouth
on Mon, 10/11/2010 – 05:55
#640477

~Mortgage Bankers Association~

http://web.archive.org/web/20051223071018/www.stopmortgagefraud.com/endorse.htm

 

 

Login or register to post comments by DirtySouth
on Mon, 10/11/2010 – 06:18
#640480

– October 7, 2004 

Congressional Testimony I want to thank you for the opportunity to testify before you today about the FBI’s efforts in combating mortgage fraud. Although there is no specific statute that defines mortgage fraud, each mortgage fraud scheme contains some type of “material misstatement, misrepresentation or omission relied upon by an underwriter or lender to fund, purchase or insure a loan.” The Mortgage Bankers Association (MBA) projects $2.5 trillion in mortgage loans will be made this year. The FBI compiles data on mortgage fraud through Suspicious Activity Reports (SARs) filed by financial institutions, and Department of Housing and Urban Development Office of Inspector General (HUD-OIG) reports. The FBI also receives complaints from the industry at large.

~ Chris Swecker – Assistant Director

   Criminal Investigative Division – FBI

http://tinyurl.com/278dk4j

 

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 06:25
#640490

They are busy chasing liar mortgagors and sleazy mortgage brokers. This has lead to nothing of substance as far as I can see. Just press releases. None of them stopped to think that they should be starting from the other end. If they did think it. Someone told them to forget about it.

Login or register to post comments by A Man without Q…
on Mon, 10/11/2010 – 08:08
#640601

“None of them stopped to think that they should be starting from the other end.”

“The Chinaman is not the issue, here dude” 

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 08:36
#640656

Tell me about it!

Login or register to post comments by MarketFox
on Mon, 10/11/2010 – 06:28
#640491

$Trillions lost …and no accountability ????

Maybe not….

Let’s see how the FASCISTS handle this one….

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 08:05
#640597

William Black is the only one who I have seen say we have purge all the poison from the system before we can restore confidence.

Login or register to post comments by weinerdog43
on Mon, 10/11/2010 – 08:38
#640660

Correct, but boy do you have to dig to find that out.  The traditional media and especially the Journal have been extremely quiet on the implications here.  I think we can infer that Volcker is also pissed judging by his off the cuff remarks a couple of weeks ago.  I’ll be curious to see the public comments from Eliz. Warren.  Will they muzzle her?  This would seem to fall squarely within her jurisdiction.

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 08:43
#640671

Don’t worry, judgement day will come. The market exodus from the HFT pirates is the first sign that all is not well in bailout oz.

Login or register to post comments by Winston Smith 2009
on Mon, 10/11/2010 – 10:35
#640895

Links to videos of William Black interviews. Forward them to everyone you know:

To rob a country, own a bank

http://therealnews.com/t2/index.php?option=com_content&task=view&id=33&I…

William Black on Bill Moyers (April 2009)

http://www.pbs.org/moyers/journal/04032009/watch.html

William Black on Bill Moyers (April 2010)

http://www.pbs.org/moyers/journal/04232010/watch.html

Hammer Forum – The Great American Bank Robbery

http://hammer.ucla.edu/watchlisten/watchlisten/show_id/129363/

Login or register to post comments by ILikeBoats
on Mon, 10/11/2010 – 07:00
#640511

My fear is that a lame-duck session (after Nov elections but before January), with lots of congressmen leaving, pushes through something horrendous.  Assuming many will be voted out, what incentive do they have for acting properly? 

 

Far better for them personally, to do something that benefits big banks, as this means that in 6 months they can then get a lucrative consulting gig with those same banks; or else be considered for a lobbyist position.

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 08:06
#640598

We must be vigilant cadets! The scumbags are scheming…

Login or register to post comments by Careless Whisper
on Mon, 10/11/2010 – 07:02
#640512

the end game as i see it:

the recently passed banking reform bill contains “resolution authority” for large banks posing “grave risk” to the system; determined by 7 out of 10 members of the federal reserve’s “systemic risk council”.

this gives goldman yet another chance to eliminate the competition. bank of america/merrill lynch…….. see ya.

 

 

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 08:10
#640602

Perhaps, it is plausible. Let’s see if the Supreme Committee has the nerve or the brains. I have full confidence that Goldman will find a way to drown in it’s own bespoke cesspool.

Login or register to post comments by Ripped Chunk
on Mon, 10/11/2010 – 10:08
#640827

 7 out of 10 members of the federal reserve’s “systemic risk council”

You just illustrated the problem. The FDIC and Thrift Supervision should be the decision makers.

 

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 10:12
#640836

That council is going to be a farce squared

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 10:12
#640837

That council is going to be a farce squared

Login or register to post comments by Disambiguation
on Mon, 10/11/2010 – 07:04
#640514

The creation process of securitization of mortgages has long been flawed. To quote Worldreport.org:

 

“SUMMARY FORENSIC ANALYSIS PROVING THE ILLEGALITY OF SECURITISATION
From whichever angle securitisation is considered, it is ILLEGAL. For example, the contracts are themselves VOID. This is because the process of securitisation involves several contracts that are either signed simultaneously, or within a short timeframe – many of which are rendered void inter alia because there is no consideration in contracts used in effecting the securitisations.

Many such contracts involve unilateral executory undertakings containing illusory promises. A unilateral executory promise is not a consideration. Such promises typically include a promise made by the Special Purpose Vehicle to pay out periodic interest, whether contingent or non-contingent on whether the collateral pays cash interest.

Collateral-substitution agreements contain a promise whereby the sponsor agrees to substitute impaired collateral. An assignment agreement of future (not yet existing) collateral may well be deemed a unilateral executory promise by the sponsor.

Illusory promises are not valid consideration for a contract. Such promises may be found in the Subscription/Purchase Agreement, whereby an existing asset is being exchanged for a future asset that does not exist as of the date of the subscription/purchase agreement. To make matters worse, none of the agreements typically signed by the investor as part of his/her purchase of the Special Purpose Vehicle’s Asset-Backed Securities expressly incorporates the (typically illusory) promises embodied in the offering prospectus.

OR: The Special Purpose Vehicle’s promise to pay interest and/or dividends on Asset-Backed Securities ‘Interest-Onlys’, Preferreds and ‘Pincipal-Onlys’ are essentially illusory promises because the underlying collateral may not produce any cash flows at all: so there won’t be any interest/dividend payments.

Moreover the lack of mutuality characterising such contracts renders them null and void, by definition. In any such contract, each party must have firm control of the subject matter of the contract and the underlying assets (consideration), and there MUST be a direct contractual relationship between the parties concerned.

But this is not the case, especially as the Special Purpose Vehicle’s corporate documents (trust indentures or bylaws or articles of incorporation) may typically limit the right of each Asset-Back Security investor; while there is typically no mutuality at all between the Special Purpose Vehicle and the sponsor/originator, because both entities are essentially the same, and are controlled by the sponsor before and after the securitisation takes place.”

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 08:24
#640636

One of the product applications of “derivatives” is “regulatory avoidance”. Contracts used to magically allow you to get economically what you can’t get in physical reality because it violates the law.

But you cannot use derivatives in this fashion. Contractual provisions to substitute well established statutory requirements.

I agree the title recording system is an antiquated Rube Goldberg device. But you can’t have one group suddenly say poof, now it works my way.

Login or register to post comments by Moonrajah
on Mon, 10/11/2010 – 07:20
#640529

Could this be the black swan that should take down the current regime?

And what’s the current mentality in Wishington (pun intended):

1. We can spin this, boys. The sheeple will be quited down. Jim Cramer needs more airtime.

2. We need to write up a scapegoat list and make our hard stand on the issues be known to the masses. Uh, what are those issues again?..

3. When is the next flight to Rio?

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 08:01
#640585

There is a schizophrenia caused by the misplaced. repulsion against defaulting borrowers. I don’t think you can just lump them all together…so be it.

But the words TARP II will cause a seething voodoo child to suddenly appear.

I stand up next to a CDO mountain…chop it down with the edge of my hand…

Jimi Hendrix

Login or register to post comments by Widowmaker
on Mon, 10/11/2010 – 07:34
#640543

Having the criminal justice department involved only means as much criminal fraud will be swept under the rug as possible.  This is the slight.

Mark this post, justice be damned..

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 07:54
#640577

The world is waiting for the next Elliot Spitzer to step in. The crazy prosecutor who gets it!

Login or register to post comments by Widowmaker
on Mon, 10/11/2010 – 09:32
#640580

fraud is now guaranteed.

Any prosecutor that gets it also gets a mysterious suicide with two bullets in the head.

Having the federal gov involved means one thing:  The problem is being removed/insulated from the states ability to unmask the systemic fraud and corruption.  

Truth will be thwarted by the DOJ, it ALWAYS is.

“National security” is for protecting criminals only.

Login or register to post comments by Voluntary Exchange
on Mon, 10/11/2010 – 08:09
#640593

+1 yep, that’s what they’re there for. The upper echelon of the crime syndicate will muscle the underlings.  Tea party is no threat where a significant number of votes are “counted” electronically (which is most places last time I checked). The Tea Party folks are gonna get the Aaron Russo treatment (landslide victory in hand-counted regions, huge loss in all electronic precincts in his Nevada contest).

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 08:48
#640682

The first thing they need to do is ditch Palen and Beck.

There are to many sane people who will never stand in the same room with them.

Login or register to post comments by FEDbuster
on Mon, 10/11/2010 – 09:42
#640771

Beck is a shill and Palin is a cheerleader.

The “Tea Party” started (and hopefully will end) with Ron Paul.  I also like Rep. Paul Ryan (R,WI), he has some great ideas to save the Country.  Republicans have done “stupid” already, and it didn’t end well. 

 

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 09:56
#640796

They have to sideline those two if they really want to expand their base.

Login or register to post comments by Cognitive Dissonance
on Mon, 10/11/2010 – 09:57
#640799

Republicans have done “stupid” already, and it didn’t end well. 

That’s why it’s the Democrat’s turn to do “stupid”. That’s the beauty of the one party, two faction system. The tennis court is always busy.

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 10:03
#640816

If you go back an look at history, Democracy has a tendency to breed lunatics.

Login or register to post comments by Bringin It
on Mon, 10/11/2010 – 10:37
#640901

Amen to that – WB

Login or register to post comments by spinone
on Mon, 10/11/2010 – 07:59
#640579

 

Remember, it isn’t just foreclosed houses that may have a grey title due to incompetent or fraudulent assignment.  It is every mortgage in existance from 2004 or so onward.  Every mortgage that was securitized has the potential of a grey title. 

Everyone that has a mortgage may be sending their check to a entity that has no interest in the mortgage.  Everyone who owns a home may have bought it from someone who did not have a title, or has a grey title.

First step is to check here https://www.mers-servicerid.org/sis/search then check your mortgage coupon book and go down to the County building and check your mortgage there.  If the three don’t agree, or you are making out checks to an entity that doesn’t match your mortgage in the County, get clarification.

 

Ask to see the note.  Ask to see the title, and the assignment.  If the bank won’t show you the documents, contact a lawyer.  Make sure you are making mortgage payments to the correct entity.

 

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 08:16
#640616

They are saying this is a hysterical view. I disagree strongly. The minute you say bits of paper no longer matter you open a can of worms.

I don’t recall anyone ever telling the banks they could unilaterally change the whole real estate title recording system. Do you?

They thought they could do it surreptitiously. Bullshit!!!

“Process loans not paper”. This is the MERS motto on their website. I say Due process, not shit for brains.

Login or register to post comments by spinone
on Mon, 10/11/2010 – 08:35
#640654

A mortgage is a contract, and both sides have a responsibility.  If the banks don’t assign title correctly, or lose the note some other way, they blew it.

A contract has to be properly constructed to be enforceable.

Like many have already said, just mentioning mers in a mortgage contract doesn’t make it a properly constructed and enforceable contract in every circumstance.

The banks have made a sausage out of both title and MBS.  Now they have to make a pig out of it.

You can’t make a pig out of sausage.

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 08:39
#640663

That’s our new battle cry!

Login or register to post comments by apberusdisvet
on Mon, 10/11/2010 – 10:19
#640851

The fact that is always overlooked when the FEDGOV is asked to step in, is that the key entity is the County Courthouse, wherein lies the real true paperwork, or a carefully mis-documented or fraudulent version of same.  If the Feds somehow achieve sole jurisdiction, then you will know that the “fix” in in.

Login or register to post comments by JLee2027
on Mon, 10/11/2010 – 08:01
#640584

The banks are in an untenable position.

Login or register to post comments by Widowmaker
on Mon, 10/11/2010 – 08:10
#640603

Not with bullshit Bernanke, king of fraud behind the banks.

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 08:28
#640640

They still have lots of tricks in their bag. But what is really interesting here is signature fraud, back dating and the like always ind in criminal failure.

Login or register to post comments by obelisks
on Mon, 10/11/2010 – 08:14
#640611

Login or register to post comments by SheepDog-One
on Mon, 10/11/2010 – 08:23
#640634

When the banks are in big trouble, very bad things happen. 

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 08:26
#640638

Hank Paulsens words of infamy.

Login or register to post comments by Cognitive Dissonance
on Mon, 10/11/2010 – 08:31
#640639

This entire quagmire will be settled politically, not legally, simply because from a legal point of view the TBTF banks (along with the various other hanger-ons and sociopaths) are on the losing side of the equation.

Nope, if you think the hoop jumping and barrel rolling by the captured and corrupt Congressional critters has been outrageous to date, you ain’t seen nothing yet. This banana republic has many more bananas to go.

BTW WB7, it’s nice to see that your voice is just as biting as your art. :>)

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 08:34
#640650

That will probably be true. But there will have to be some blood on the floor. Otherwise no one will accept it.

If they can’t get the title companies back into the room, the government will have to assume that function. Pretty funny when you think about it.

It’s a drunken orgy of bailout clownism!

Login or register to post comments by Cognitive Dissonance
on Mon, 10/11/2010 – 08:47
#640674

It’s a drunken orgy of bailout clownism!

Sounds like your next art project. Start with a photo of a naked orgy and use strategically placed conversation balloons and name tags, along with some cut and past clowns, to take it from X-rated to R-rated. Then send it to those tranny porn kings at the SEC and make sure to “cc” us here at ZH. :>)

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 08:53
#640687

Maybe we should stage an orgy and make our own pictures?

Toga, Toga Toga!

Login or register to post comments by Cognitive Dissonance
on Mon, 10/11/2010 – 08:58
#640695

If we did so, I suspect we would find that some of our “male” and “female” ZH family members have been cross dressing on Zero Hedge. When the orgy starts, we’ll see who’s wearing falsies and clip-ons. :>)

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 09:05
#640706

That is a funny image. We can call it “A blind date in Kabul”

Login or register to post comments by hardmedicine
on Mon, 10/11/2010 – 08:35
#640653

Sarbannes-Oxley bitchez

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 08:40
#640665

Ken Lay lives!

Login or register to post comments by woolly mammoth
on Mon, 10/11/2010 – 08:54
#640688

Easily understandable and well framed. Very, very well done WB7. 

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 09:00
#640700

Tnx…Wooly Bully! Love that song 😉

Login or register to post comments by bingaling
on Mon, 10/11/2010 – 09:13
#640713

Just curious during the boom wasn’t the same thing going on in comm’l real estate ? if this type of fraud was normal in the residential arm I am pretty sure it will find its way into commercial as well. If commercial real estate gets into the fray I believe with the money backing that industry they will get to the bottom of this . I don’t believe the homeowners will have any effect with out the comm’l real estate “industry” also pushing for answers at the same time .

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 09:15
#640724

I think the quality of the people involved with big CMBS deals is much higher. The closer on a $300,000 home mortgage is not going to be the same as. $300 million building.

I don’t think big commercial real estate deals would use MERS. But I don’t have direct knowledge.

Login or register to post comments by bingaling
on Mon, 10/11/2010 – 09:25
#640743

If this was RE industry wide and there was a rush to close deals and there were fraudulent signatures on comm’l as well during origination of loans: if I am a comm’l RE developer and I can postpone payments for 20 years by paying a lawyer “pocket change ” compared to the mortgage you bet your ass I will do that in order to keep my cash flow much higher. I just think that if this was pervasive in residential it may be just as pervasive in comm’l and if so it would be a wise business decision to hold back payments for loans which weren’t correctly originated .

 

We all know what the value of a dollar will be in twenty years so why pay valuable dollars now ?

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 09:32
#640758

The dynamic is very different in commercial. commercial developers just come out and say I can’t pay, play ball or I walk.

Do you think Trump ever worries what’s gonna happen to his FICO?

Login or register to post comments by Cognitive Dissonance
on Mon, 10/11/2010 – 09:26
#640748

While Commercial Real Estate (CRE) has its own set of very big problems, IMHO this isn’t one of them. Remember that many CRE loans remain on the books of the bank that made the loan and that CRE loans are mostly 5 year notes that are constantly reviewed by the loan officer.

That’s not to say there isn’t garbage there because there is plenty. But the residential real estate problems became exponentially worse when the entire process became a securities factory rather than sensible loans to creditworthy borrowers with the expectation that each and every one will be paid back minus the “normal” 2-3% default rate.

What a quaint notion now-a-days.

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 09:35
#640762

Their problem is they are financing empty boxes on a pre 2008 plan. Contrary to what they want everyone to believe, commercial will not come back as long as the job numbers don’t come back.

You know what that means.

Login or register to post comments by bingaling
on Mon, 10/11/2010 – 10:04
#640818

all I am saying from businessperson’s stand point it might be wise decision to contest loan originations if it can create a 20 year balloon payment

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 10:08
#640830

Yes, a businessman has the tools and leverage to get that kind of a deal even if it is specious in substance. The last thing the banks want now is for the CRE toxic waste pond to burst.

Login or register to post comments by ella
on Mon, 10/11/2010 – 09:13
#640718

From the Big Picture “Our system of private property has developed due to the rule of law. The ability to demonstrate ownership, pass clear title, resolve disputes has worked for 100s of years. The recent frauds we have seen from law firms, process servers, bank legal departments, even drive through RE courts has put the nation at risk of becoming a lawless banana republic.”  http://www.ritholtz.com/blog/2010/10/truth-consequences/

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 09:20
#640734

In 1993 I worked on the first mortgage bank formed in Poland. I remember all the US AID and IMF people lecturing about this. I did as well.

But as it turns out, we are a fat bag of crony hypocrites!

Login or register to post comments by Cognitive Dissonance
on Mon, 10/11/2010 – 09:37
#640754

“…..has put the nation at risk of becoming a lawless banana republic.” 

Nope, there’s no risk of that any more. We are a banana republic. We’re just in denial about it and quite a bit more sophisticated in hiding the fact as well as hiding from the fact. Plus we have plenty of enablers hiding under the sheets with us.

Our huge national ego and swollen pride is preventing the average Joe and Jane from recognizing that banana republics come in all sizes and shapes and aren’t restricted to Africa and South America.

Maybe it’s just a marketing issue? We should approach this like we would when selling a Big Mac. How about an orange republic or apple republic or radish republic?

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 09:38
#640765

Those banana republicos all over the world are laughing at us under the breath.

Login or register to post comments by Cognitive Dissonance
on Mon, 10/11/2010 – 09:48
#640779

I can’t wait until some banana republic operative publishes a memoir of his visits to America as “Confessions of a Banana Republic Economic Hitman”. 

As silly as this sounds, I suggest people read the original book (Confessions of an Economic Hitman) and then tell me the exact same thing wasn’t done to America over the past 10 years. The only question is, who was doing the doing?

http://www.amazon.com/Confessions-Economic-Hit-John-Perkins/dp/0452287081/ref=sr_1_1?s=books&ie=UTF8&qid=1286808122&sr=1-1

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 10:04
#640823

You are right. And I think that Hitman guy is going around saying as much these days.

Login or register to post comments by FEDbuster
on Mon, 10/11/2010 – 09:55
#640793

How about a “Plantain Republic”? 

Plantains are longer than bananas and they have thicker skins. They also have natural brown spots and rough areas.   As the peel changes to brown or black, it has a sweeter flavor and more of a banana aroma, but still keeps a firm shape when cooked.

Login or register to post comments by Cognitive Dissonance
on Mon, 10/11/2010 – 10:01
#640809

Are you talking about a fruit or the promo for your next porno movie because I honestly can’t tell. :>)

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 10:01
#640811

This sounds like an ad in Hustler Magazine.

Login or register to post comments by tamboo
on Mon, 10/11/2010 – 09:25
#640737

this week’s peoplenomics report from george ure’s urbansurvival.com:

Now on our premium content site:  Peoplenomics.com

Globalism Makes Its Play

Will the foreclosure crisis be used as a steppingstone to global government? We can now begin to see the outlines of a moderately probable future shapes up as the US and Europe are heading into another round of financial calamity in November, conveniently at the time of the G20 meetings.  What’s becoming more and more likely is the evolution of a ‘global currency’ which will be used to strip individual nations of their founding independence and force them to demur to a non-elected global government which will not only seize the monetary system, but rule our food with Codex Alimentarius as Agenda 21 which will usurp national planning, land use, and energy agendas.  But first the fun stuff – the banking/foreclosure crisis which will be used as the ‘set-up’ event.

 

and speaking of columbus:

http://www.huffingtonpost.com/eric-kasum/columbus-day-a-bad-idea_b_74270…

i rather doubt he was catholic, more likely another jew getting out of spain due to the 1492 inquisition but jew msm huffpo never mentions the usual suspects.

http://www.coffinman.co.uk/White%20-%20Who%20Brought%20the%20Slaves%20to%20America%20(suppressed%20role%20of%20jews%20in%20black%20slavery)%20(1968).pdf

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 10:00
#640808

Until this subprime fiasco hit 2 years ago, I always thought of the “Globalist Agenda” theory as fringe. Not any more. There are too many pieces leading back to Davos 😉

As for Columbus, everyone from NY knows that the world is one big Ray’s Pizza. 

Login or register to post comments by Cognitive Dissonance
on Mon, 10/11/2010 – 10:12
#640835

“I always thought of the “Globalist Agenda” theory as fringe. Not any more.”

Isn’t it interesting that so many people are forced to reassess “fringe” as suddenly plausible once their worldview has been repeatedly bloodied by reality. I applaud your honesty. Keep going, you’re headed in the right direction.

Notice that nothing changed here other than your point of view. Meaning that it was never fringe except in your mind. The outrageous behaviour didn’t suddenly happen, it was happening all along. And you’re begrudging acceptance of it for what it really is and always was over time was where the change happened.

We dress up the despots and sociopaths in fine dinner wear and extended pinkies so we don’t need to reassess our worldview and belief system. So much easier to see the world the way the sociopaths tell us it is rather than accept the fact that either we live in a world that’s completely contrary to the myth we were taught and so dearly wish to believe in or the game is rigged on every level and we’ve been taking it up the rear end willingly for decades.

Pass the denial please, it’s getting a little hot in here.

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 10:17
#640849

On the other hand, those who know me would never say Bill has been a cog in the wheel all his life.

I am still not sold on a centralized evil conspiracy. I think its like a collective crowd sourced elitist conspiracy. Lets join hands together to rule the world.

Login or register to post comments by Cognitive Dissonance
on Mon, 10/11/2010 – 10:27
#640874

WB7 my comment wasn’t a personal attack. My apologies if it came across that way.

And I wasn’t speaking to a central conspiracy, just that we stop adding to or modifying our world view by the time we hit 25 or 30 and switch to defending that world view at every corner and at all costs. Rigid thinking is our Achilles Heel and the social and economic control system spends the vast majority of its time reinforcing our rigid thinking and static worldview.

This is why our leaders lie to us. The purpose of the public lie is to defend the public myth at all costs. When they can no longer do so, they modify, obstruct, deny and lie again, all for one purpose, to keep us hamsters on our wheels and completely distracted, demoralized and defeated. And we participate in this dance much more than we realize or are willing to admit.

Login or register to post comments by granolageek
on Mon, 10/11/2010 – 10:04
#640821

Dude, Columbus was from Genoa. No one has ever claimed he was Spanish, whether Christian, Moor or Jew.

Login or register to post comments by A_MacLaren
on Mon, 10/11/2010 – 09:33
#640752

Over the weekend, Karl Denninger put together put together a well thought out solution to the problem of mortgage securitization and foreclosure fiasco Gordian Knot.

http://market-ticker.org/akcs-www?post=168722

There is a template for resolving this sort of problem, and The States can implement it right now.  It was used in large part in Florida to resolve the “swampland” mess that arose during the 1920s, and with minor changes we can adapt it to what we face now.

 

The correct, just, and only way to resolve these problems is to force a clearance of the chain of title, which in turn forces proof of provenance of the indebtedness claimed to be owed by the homeowner. 

 

This is no different than what is required in a bankruptcy or any other civil collection action where the person alleging that you owe a debt, and who wishes to obtain a judgment to collect it through garnishment or seizure, must first prove they are the actual beneficial holder of said debt.

Since there can only be one actual beneficial holder of said debt, this provides the necessary and appropriate judicial determination and forces recordation of the chain of title and security interest that should have been done all along.

 

To implement this we must do the following:

 

(details at the link)

I do not know if this path will be taken, it seem to me to be the correct one.  Having been on the creditor side of a number of bankruptcies as a corporate credit manager for over 15 years, and the securities side adds a whole lot of additional complexities.  But the correct solution is to untie the knot, repair the frayed and flawed bits of cord, and recinch the knot.

The expense for this costly set of actions should fall upon those the in paper chain who failed to tie the knot correctly. 

http://www.businesspundit.com/sub-prime/

 

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 09:44
#640775

Eureka! I think you just created another Obamaland job: Real Estate Claims Examiner!

Imagine the bottleneck. Everyone filing proofs of claim on residential real estate.

This is proof the geekism is not automatically a productive pursuit. Look what the quants have done to us!

Login or register to post comments by FEDbuster
on Mon, 10/11/2010 – 09:58
#640805

Obama could hire ACORN to do it!

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 10:10
#640831

Then we can get the Columbian hooker and the pimp to come in and do another expose!

Login or register to post comments by Downtoolong
on Mon, 10/11/2010 – 09:38
#640768
The foreclosure process is a worse solution for dealing with mass scale consumer credit default than adjustable teaser rate mortgages were as a solution to mass home financing demand. These products and processes were never supposed to be anything but extreme solutions, appropriate for only a small percentage of the market. But, big banks and Wall Street continue to ignore this basic fact and insist they can implement and exploit niche products and processes on an unmanageable scale. That makes them the worst risk managers, and therefore by definition, the worst bankers in the history of banking.

 

A huge salary and mega bonus for fundamental and absolute failure. Where do I get a job like that?   

 

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 09:52
#640785

I am thinking of writing something called the Laws of Ponzi Physics.

One of the laws is, make deals to create more banker jobs.

Login or register to post comments by groucho_marxist
on Mon, 10/11/2010 – 09:41
#640770

You cannot simply say this is immaterial, sprinkle in the word MERS and hope this will all go away.

 

It’s the whole immaterial belief in making money from nothing, so of course that’s the response! I guess MERS is the new abracadabra.

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 09:53
#640791

If Ben can do it, why not me!

Login or register to post comments by williambanzai7
on Mon, 10/11/2010 – 10:32
#640885

This just in from Emptywheel blog:

 

The Federal Housing Administration Commissioner, David Stevens, has joined David Axelrod in statingthat the Administration sees no reason to halt all foreclosures. That’s not a surprise in itself–it was pretty clear that Axe’s statement reflected official Administration policy.

But I’m particularly interested in how Stevens justified this position in an email sent to the WaPo.

“We believe freezing foreclosures for all banks in all states, whether we have reason to believe them to be in error or not, is simply not the prudent step to take in this fragile housing market,” he said.

With approximately one in four homes sold in the second quarter in foreclosure, administration officials worry that a moratorium could have a significant impact on the economic recovery.

“While we understand the eagerness to make sure that no American is foreclosed upon in error, we must be careful not to over-reach and apply a remedy that will make the underlying problem of foreclosures worse,” he added.

 

I just know that is Timma talking the little muskrat!

Login or register to post comments by Edwardo
on Mon, 10/11/2010 – 10:40
#640908

“Could this be the black swan that should take down the current regime?”

It’s more like the catalyst for the appearance of a flock of black swans that is going to pulverize what passes for the entire U.S. socioeconomic order. 

 

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