CNBC predicts Congress will retroactively legalize foreclosure fraud

[seafan]

Daniel Tencer at Rawstory:

October 16th, 2010

Congress will pass a bill to "forgive" banks the potentially criminal errors made in foreclosure proceedings, a senior CNBC editor predicts.

In a blog column Friday, John Carney argues that lawmakers in DC won't allow the country's largest issuers of mortgages to suffer financial losses following revelations of numerous mishandled foreclosure proceedings, especially when bailing them out this time "won't cost taxpayers a dime."

Here’s what is going to happen: Congress will pass a law called something like “The Financial Modernization and Stability Act of 2010” that will retroactively grant mortgage pools the rights in the underlying mortgages that people are worried about. All the screwed up paperwork, lost notes, unassigned security interests will be forgiven by a legislative act....

The (foreclosure) crisis is not driven by economics. It is driven by legal rights. And there’s simply zero probability that the politicians in Washington are going to let Bank of America or Citigroup or JP Morgan Chase fail because of a legal issue.

Carney predicts that the lame-duck session of Congress following this November's elections will pass the law. "Every member of Congress ... who has been voted out of office will cast a vote for the bill. And the President will sign it."

Major banks' stocks have suffered losses this week as an increasingly large body of evidence has emerged suggesting that banks and their contractors may not have done the most basic vetting of foreclosure paperwork, instead using "robo-signers" to rubber-stamp whatever foreclosure applications were brought forward.

.....

Carney admits that, with outrage growing over unscrupulous foreclosure practices, a second bailout of banks would be politically unpopular.

"Will the public be outraged?" he writes. "Probably. Financial bloggers will scream from the high heavens against another bailout of the banksters. Congress may try to create some cost for banks in exchange for the forgiveness, perhaps requiring more mortgage modifications. But the much feared (foreclosure) apocalypse will be laid to rest."

Another quote from John Carney's piece:

If you’re skeptical about the possibility that this will happen, you have greater faith than I do in the ability of the political system to resist doing favors for bankers.

Who around here is skeptical?

After the pocket veto of HR 3808, certainly not me.

[Skink]

1. Obama is going to have to use the veto.

stand up for us for awhile.

[Bluebear]

64. That could happen.

:rofl:

[maryf]

74. Is that skepticism?

;-)

[Swede]

81. He did just that earlier this month.

http://www.statesman.com/business/obama-vetoes-bill-to-ease-mortgage-firms-paperwork-960352.html?cxtype=rss_business

[DJ13]

2. If they do it will PROVE that theres two sets of laws in our country

If any of us had committed just one instance of fraud we would be in prison.

Changing laws to provide retroactive immunity to corporate entities (and their employees) for committing fraud on this scale will be the end of the illusion that we are all equal under the law in America.

[dixiegrrrrl]

3. My illusion ended before earlier than this.

It ended the day Congress refused to enforce contempt charges against Rove.

[upi402]

57. It had a fork in it

when I saw Obama's cabinet choices. I knew what he was but didn't know it was that pronounced. He has estranged all but the criminal and the deluded by now.

[Individualist]

103. We've learned that "Yes we can" was followed by - but no I won't.

[Jim Sagle]

114. We've also learned that "Make me do it' actually meant 'Shut the fuck up.'

[Junkdrawer]

88. Easily fixed: Keep it out of the news.....

A few bloggers will be outraged, but what else is new?

Propaganda works (at least for a while).

[spanone]

4. CNBC predicts......

:hurts:

[sofa king]

90. If they predicted it, 1) nobody cares what CNBC says, because 2) they're almost always wrong.

[pnwmom]

5. OR we can watch all the big banks fail and wait for a new Great Depression.

We saw how fun the last one was.

I think as many mortgagees as possible should have their mortgage terms changed to allow them to stay in their homes. But I don't think the country will benefit from a general bank failure. Banks should be penalized for their actions, but not to the extent they fail. And regulations must be tightened to prevent this from happening again.

[Dawson Leery]

6. Perhaps another Great Depression is needed.

Clearly, most people are at home sitting in front of the tv complaining about how bad things are but are not willing to do anything about it.

[pnwmom]

10. If you knew anyone who lived through it -- and listened to them --

you would never say that.

The people who are suffering the most NOW would be suffering even MORE. The rich would still be insulated from the worst of it. And we'd be just as likely to end up with a military dictatorship or a fascist government as another FDR.

[Dawson Leery]

12. I do not want another depression, but at times

there is nothing to snap people out of their complacency than true hardship.

[pnwmom]

17. And how do you know that wouldn't send people straight into

the arms of the teabaggers, rather than to progressives?

[Dawson Leery]

19. It would have been better to have McCain right now

as he would have done shit to prop up the economy. In hindsight, it would have been better if he had won 2 years back.
The bottom would have fallen out and we could start to rebuild.
At this time, I am fully aware of the dangers of the far right, which is why I am doing what I can to keep them out of power.

[pnwmom]

27. Do you realize that's the same argument that Nader supporters used in 2000?

They said that Bush would be so bad for the environment that we'd hit bottom and elect someone better than Bush or Gore.

And we all saw how well that worked out. Bush got elected for a second term, and threw us into the hole we're in now.

[Dawson Leery]

29. Different times, different situations.

The economy was in a much better position in 2000.
Anyone who bothered to look under the surface would have seen the just how bad Bush would be.

[pnwmom]

33. Those who don't learn from history are condemned to repeat it.

You need to learn more about the Great Depression, and how millions of ORDINARY people suffered.

[laughingliberal]

43. Yes. Interesting how there was a roadmap as to how the last one was solved and it has been ignored.

FDR did not start out all gung ho for left leaning policies but, as he was moved further left, things improved. I would have thought looking back on his journey of trial and error would have meant we didn't have to reinvent the wheel but no...

[pnwmom]

46. There's always going be the right, fighting back.

We have to fight just as hard now as ever.

[LooseWilly]

72. Fight for what, exactly?

(D) vs. (R) doesn't mean shit, when both back bankers. What're we fighting for, in your mind's eye? I don't see anything, from where I'm standing. Maybe if I worked for a happy corporation I might be looking at a 2 to 8 percent reduction in the costs of my health insurance as a result of the mandate that the poor and un-insured buy insurance with their last dollar, if need be, in order to insure that the insurance company profits continue to grow without having to ask increasing fees, for a while, from corporate recipients of health care benefits... after all, better that those who may or may not be able to afford health care premiums be legally mandated to buy than that my corporate employer be forced to pass along increasing health care costs to me... because it's unjust that I should have to share the increasing fees of the health care companies with my employer, when these fees could be subsidized on the backs of the poor....

That's what's known as "progressive politics"... good times, I tell you what.

[rhett o rick]

111. And you need to learn that the banks operate because we allow them to. We make the rules not them.

Nationalize the banks.

[LooseWilly]

71. Don't you mean- we voted in Obama?...

Alas?... hehe

The problem, of course, is that so many became so traumatized and went so cowardly that no one has the gonads to now hold Obama accountable... as we did Gore in 2000.

Instead the cowards and fools would have us play along with Obama's "reach across the aisle" idiocy that has proven itself ineffectual. But, so few have the nerve to pull a 2000 again.. to try to jitter the masses into awakening... at last. If "us" won't respond and hold Obama to promises to make things better after Bush (transparency, not so much; Guantanamo, not so much; Iraq, using the time frame set up by GWB; Afghanistan, escalating; torture, who really cares?; firing of US attorneys, again no one gives a shit; DADT, filing an appeal of the overturning supposedly supported; ... etc.)

At this rate I'll be voting for Nader again in 2012, whether he's running or not. Or maybe I'll vote Republican... as long as my perspectives are going to be jeered at, I might as well be jeered at by those who will jeer at my supposed political allies too... lest I should be alone being jeered at by those I was fool enough to support... again.

[LanternWaste]

105. It may also work detrimentally on a national level...

It may also work detrimentally on a national level.

Germany's masses went through hyper-inflation after WWI which then allowed the hard-core right movement to co-opt convention and power.

[laughingliberal]

39. With the county I live in at 18% unemployment and #1 in foreclosures, I am living through it now.

And I have seen reports of quite a few survivors of the last Great Depression saying this is as bad, if not worse, than that one.

[pnwmom]

41. I know a number of survivors, including some in Nevada,

one of the epicenters. And they would LAUGH at the idea that it is as bad now as it was then.

[laughingliberal]

45. I'm in Nevada and they can laugh all they want. If it hasn't reached them, yet, it will.

Even in the thirites, there were some who did not feel the effects. There are some of those now but it proves nothing.

[pnwmom]

48. The unemployment rate during the Depression was FAR higher

than it is in Nevada today. And Social Security and unemployment insurance didn't exist. And the Depression lasted for a decade. As bad as it is now, the suffering then and now doesn't compare.

[laughingliberal]

54. I believe in our area, it is just as high. When you take into account those who are unemployed and..

those who are now working for 1/2 or 1/3 what they were 3 years ago, we're there. Over a year ago, 25% of the retail space in Carson City was sitting vacant and it's gotten much worse since then.

I know of no one in the trades here who is still earning anything close to what they were in 2006. Many have gone under. One cabinet shop with whom we worked had 68 employees 3 years ago. Now, they have one FT employee and an IC they bring in for the occasional job. And they are one of about 3 who are still in business. This really is happening and it is really bad and all the happy talk in the world isn't changing it.

[pnwmom]

58. There can be no happy talk about 18% unemployment.

But that's still significantly lower than during the Depression, when the percent of unemployed, just as now, didn't include the millions who were working for reduced pay. And they didn't have Social Security or unemployment insurance during the Depression.

The fact that I don't think we're in a period equivalent to the Depression, even in Nevada, doesn't mean we should sit on our hands and not do anything to help people or to get the economy moving again. For example, I think Krugman is right that we should have another major stimulus involving the repair of our infrastructure. But people who think massive bank failures across the country are a SOLUTION to our problems -- and that things couldn't get any worse than they are now -- are deluded.

[laughingliberal]

60. For those of us who do not have unemployment benefits or SS now, it is just as bad.

A whole hell of a lot of the unemployed here are contractors and self employed tradesmen who do not have unemployment benefits. But, hey, as long as we don't have as many people starving as we did in the 30's, it's OK. Unless you're one of the starving.

At what point do we decide it's bad enough to bail out the American people and let the banks suffer the consequences of their actions? Or is all that 'personal responsibility' we hear about just for the poor, unemployed, hungry, and homeless?

I think we need to rein the banks in. Another massive bailout for the crooks is out of the question. The growth is GDP is pretty much the money we gave the financial institutions. They are moving the money around among themselves, inflating a little bubble to sucker the average Joe back into the stock market so they can steal a little more from them. We would be in far better shape now if we had bailed out the homeowners and small business owners in 2008. We have been on the insane track of trying to run the economy from the top down for 30 years and it does not work. It has never worked.

Infrastructure projects would be great but we've given all the money to the top and it's left us with nothing. No more money for banks and Wall Street to pocket and invest overseas while we starve. None!

[pnwmom]

63. Where did I say that the recession now is OK? Or that millions

aren't suffering?

Most of the TARP money has been paid back, and we COULD use it to stimulate the economy, along the lines suggested by Paul Krugman, if we had the political will. But we should actually spend more than that, for real improvement. Deficit spending is exactly what is needed in this situation, according to Krugman.

[laughingliberal]

66. Krugman is right but it won't happen and the TARP money is the tip of a very large iceberg

of money that has been funneled to the banks and financial institutions. The low end estimates of how much we've actually handed over since 2006 is around $5 trillion and I've seen estimates as high as $23 trillion. There must be some reason the ever so 'bipartisan' Obama administration lobbied so heavily against the deep audit of the Fed that passed both chambers with massive bipartisan support and the overwhelming support of the public. We have given the banks and Wall Street enough money to start a new country, FFS, and the true costs are being hidden from the people who provided the money (that would be us). It is past time for some perp walks.

Any more attempts to prop up the failed financial markets is just another bandaid to keep them going while they con us out of our last dollar. We do need to do some deficit spending but we passed paygo and keep agreeing with the deficit hawks. December will bring the report by the CFC with the decimation of what's left of an inadequate safety net. We can bail out the banks and Wall Street until the cows come home and it is not going to help anyone living outside the top 1%.

[girl gone mad]

91. TARP money was paid back by funneling money through backdoor bailouts.

Please don't insult our intelligence.

[Hydra]

107. The TARP money was peanuts

The Banks and Wall St. have gotten over 16 Trillion in various ways, and they're still asking for more.

The HRC debacle will probably wind up costing us yet more trillions for them.

And you want them to get a free pass on lending fraud to "save us"? Please.

How about they start using all that money they're sitting on and start the economy going, or we switch another economic system and they can keep all of the paper.

[Hannah Bell]

65. The main thing propping up our economy is 1) benefits like SS, SSI, UE, food stamps, housing

vouchers & 2) government jobs (predicted to be cut over the next year) & 3) stimulus money.

We would be in a world of shit without those three things. As bad as the Depression.

It's been three years so far. The depression lasted about 10.

There have already been massive bank failures & takeovers. And if not for the bailouts, there would have been more, as well as insurance & real estate failures.

But the thing is -- the failure didn't go away, it's just being floated. Someone will eventually have to take those losses. And it's either going to be the rich or the rest of us.

15% unemployment in my town, something like 25% underemployment. Three empty houses out of the 10 or so on my street.

[pnwmom]

67. Deficit spending is the way out, according to Krugman.

A much stronger stimulus than we tried a year ago.

Allowing another Depression to happen isn't really going to hurt the rich -- the poor will always suffer the most.

[Hannah Bell]

70. what would actually help is prosecuting the crooks, seizing their assets, nationalizing their banks,

taxing them up the gazoo, & changing the laws.

Contra your belief, however, in the last Depression, rich people *did* suffer. Some of them.

[pnwmom]

75. I'm sure some of the rich suffered. Some of them even killed themselves.

But the poor as a group suffered much worse than the rich. Especially the poor in the cities. Those who owned rural farmland had a chance -- but there are many fewer living off the land these days.

[laughingliberal]

68. +1 nt

[dixiegrrrrl]

79. I was wondering how Seattle was faring.

( I am from that area)

I remember the severe recession in the late 70's, the famous billboard
"Will the last person leaving Settle please turn out the lights".

I wanted to move back in 5 years ago, could not afford it.
How much have housing prices fallen?

[Hannah Bell]

89. i actually don't live in seattle. i live in a small town south of it. we missed

a lot of the bubble because our timber/mill economy is permanently depressed.

maybe prices have fallen a percent or so here, but it doesn't seem like it's that much. i don't think they've fallen that much in seattle either, but that's just an impression -- not a fact.

[pokercat999]

119. You're absolutely right, debt that cannot be repaid must be

defaulted at some point. Right now we are restructuring, postponing, kicking the can down the road, but when the can stops rolling someone will be left holding an empty can and they will have paid for a full one.

Right now solving the housing crisis would cost about 5 trillion dollars and go a long way to getting our economy on the right track. NOT the track we WERE on but on a sustainable working economy. Ten years from now the costs to repair housing maybe double. As I see it there are a couple of solutions available to us within the next two years, one; millions of great paying jobs....not gonna happen, two; debt forgiveness or at least a good portion of mortgage debt, marking down mortgages to the current (or even as much as 20% below) market value could overnight solve most of the crisis. Who takes the loss? A combination of the banks, investors and the federal govt. If no action is taken the whole economy may or more likely will collapse anyway.

In the next 2 or 3 years house prices will continue to decline and the result will be that over 50% of all mortgages will be underwater. The default rates and resulting bankruptcies will continue to climb at record rates. At some point we will act, sooner would be much better than later.

[Change has come]

59. But, things are looking up!

We're getting a Carson Tahoe Clinic at Wal-Mart !!! :hi:

:puke:

[laughingliberal]

61. Silly of me to fail to celebrate that! Lol. nt

[Jakes Progress]

108. My mother did.

She left Oklahoma during the depression. When we watched Grapes of Wrath on TV, she asked why I thought the old rickety truck leaving the dirt farm was funny. Said it was how she left.

Later she would watch politics, politicians bowing to the bankers, voters voting in the same crooks and liars over and over. She would shake her head and say with sadness, that it looked like the country needed another depression to remind it of what is good and honest. She wasn't being mean or vengeful. She was full of dread for the suffering, but she thought that people had become too ignorant of what greed and selfishness could do.

[JDPriestly]

62. What do you propose we "do" about "it"?

Marches and demonstrations are ineffective in this country. We are just too large for that.

The only thing I know to do is to conduct a silent strike against certain parts of the corporate media -- by turning off the TV and terminating my subscription to media I do not like -- including cable TV.

I write e-mails to my congressman. What else could I do?

[WillyT]

7. Or We Can Break All The Big Failing Banks Into Smaller More Manageable Banks...

like we should have done in the first place.

[DJ13]

8. + a brazillion

[tkmorris]

11. That's a good idea

But what I think the poster is saying is that if all of those mortgages that have problematic paperwork are deemed to be uncollectable then the whole system will come crashing down. Not just banks either, a lot of entities are heavily invested in mortgage backed securities. I don't like our current financial system any more than you do but if it collapses we are all going to suffer. And it won't be the men and women who make up the banking industry that suffer the most; they are already rich and can weather the storm. I'm not certain I can.

[pnwmom]

14. Thank you for saying it better than I did. n/t

[rhett o rick]

112. In other words, you want to negotiate with the terrorists (banks). Very foolish.

Go ahead and pay the random to keep them from collapse and they will be back next month for more. To save the system you must correct the problems that got us here, not postpone the eventual collapse.

[pnwmom]

13. Making them smaller wouldn't solve the problem of mortgage holdings

that could turn out to be worthless. All we'd have is hundreds of small banks holding worthless paper.

[WillyT]

20. Right Now We Have Several Major Banks Holding Worthless Paper...

If they want the paper to become worth something again, they'd agree to be broken up as the price THEY FINALLY PAY!

[pnwmom]

26. Fine. I'd have no problem with that. But breaking them up

wouldn't have been what made the mortgage holdings worth something again.

[laughingliberal]

34. Breaking them up ends their ability to hold our government and all of us hostage every time they...

see fit. The fuckers brought our world down and are on the verge of doing it again. While they post record bonuses for the execs again this year.

Their game is obvious to all but the willfully blind. Continue this until they've gotten every last penny out of our pockets.

[laughingliberal]

18. So, we bail them out again & they have what reason to quit stealing from us?

This is the precise definition of moral hazard and it was set in motion by the last no strings attached bailout.

No, it's time to let a few fail. The average American is not benefiting from saving the banks.

[pnwmom]

30. The average American would be hurt far more by another Depression

than the wealthy. You don't have to have money in banks to be hurt by a bank failure. If banks go under, other employers will follow. The whole business system is dependent on the stability of banks.

[laughingliberal]

38. That was the rationale for the first bail out. We are heading for another disaster & I don't think..

protecting the thieves AGAIN is the right answer. They're all hanging on waiting for the deficit commission to hand over our SS funds and inflating a new bubble to steal what they can before it all comes down around our heads again. This is a shell game that needs to end now.

Break 'em up.

[pnwmom]

40. Breaking them up is fine with me. But we still have to do something

to stabilize the mortgage system. Breaking them up alone won't solve the problem.

[laughingliberal]

49. Whatever we do now needs to be focused on helping the homeowners. If we had done that lat time...

we wouldn't still be in such a dismal situation. Who thought handing billions to the banksters with no strings attached was a good idea?

[pnwmom]

50. You're right -- I think we needed to lend them that money, BUT

it should have come with iron CHAINS attached.

[laughingliberal]

53. Yes. Under FDR, the government bought up a lot of the bad mortgages and homeowners paid the...

government back. The banks were able to survive, many were able to keep their homes and the government made a profit.

What we have done is hand them all the money we could spare, leaving us with nothing to help anyone, and still let them keep the mortgages, game the HAMP program, foreclose at will, resell the properties, pay themselves obscene bonuses, and leave us in worse shape.

[LooseWilly]

69. If the banks fail, but everyone owns their houses (well, except me)... I'm game to see how it plays

out... are you?

If Banks failed to heed The Fine Print they should be penalized, or shut down, as surely as any citizen would be.

Or, do you endorse a double standard? Banks are better than citizens? Pray, do say so more vociferously... I would love to watch the reaction had you the nerve to Op it... hehe....

Ohh, and if a few banks fail, that will prevent banks from fucking up like this again... just as having the cops stake out a new stop sign and hand out a couple of dozen tickets until people know to be afraid teaches the citizens to stop at an arbitrary intersection... one strategy for all, no?

[pnwmom]

77. This wouldn't be a just few banks failing. The failure of the largest banks

would have a ripple effect, sending shock waves through all the other banks and the rest of the economy. It's NOT that banks are better than citizens. It's that all the banks are closely connected -- the big ones AND the small ones. And the citizens you say you care about are dependent on the stability of the banks. The government and virtually all businesses rely on them for conducting their day-to-day business.

[girl gone mad]

92. The banks have already failed.

Now we are just arguing over who must pay the price of that failure.

So far, only the taxpayer has been burdened with the costs, while bank bondholders, counterparties and shareholders were made whole and executives and top officers walked away from their failures with vast amounts of wealth and their power intact.

Thanks to the bank bailouts, what was a large but containable private solvency crisis is now a massive sovereign financial and political crisis.

But for our limited social safety net, we are in a depression. Bank bailouts have certainly not averted or even lessened the crisis on Main Street. the political backlash to the bailouts may well lead to a removal of that safety net. If that happens, you might finally be capable of seeing what the despicable theft of public treasure by this nation's financial elites has really wrought.

[rucky]

96. Are those our only choices?

I would like to think not.

[rhett o rick]

110. Banks that are defrauding humans should not only be allowed to fail, they should be forced to fail.

The officers should be thrown in prison. Banks are allowed at the will of the people (humans) and not the other way round. If they cant follow the rules they should be seized by the people (government).
It is past time to nationalize the banks.
You must choose if you side with the banksters or humans. Which side do you choose?

[Name removed]

115. Deleted message

Message removed by moderator. Click here to review the message board rules.

[coalition_unwilling]

9. What Carney fails to understand is that the title companies are now

refusing to insure titles on foreclosed properties. Since foreclosure-related sales account currently for roughly 40% of the US real estate market, there is no way that Congress' retroactive lame-duck bullshit will induce title companies to again insure titles on foreclosed properties, as I see it. If title companies won't insure titles, banks will not lend. Hence, bye-bye to 40% of the current real estate market.

The problem is that Congress can't 'quiet title' by some retroactive bullshit. What has happened, as I see it, is that formerly secured loans (secured by the promissory note) have now become unsecured loans, meaning that the Big-5 servicers have no more right than any other unsecured creditor, e.g., credit card issuers, and fewer rights than other secured creditors, e.g, a car dealer who makes a loan with the car pledged as collateral on the loan. Once the chain of title is broken, Congress cannot put Humpty Dumptey back together again.

Am I missing something here? I have been following this story very closely. Got a mortgage in April 2009 that was sold to (I think) Bank of America, to whom I now make monthly payments. I will be consulting a real estate attorney next week to find out whether I have any obligation to continue making payments to BofA, given the current mess. Not trying to get out of my mortgage, just trying to make sure that the entity I make payments to is entitled to receive payments in satisfaction of the promissory note.

Edited for punctuation and clarity.

[dkf]

22. All I see is the congress explcitly acknowledging MERS.

Everything before that can be retraced I imagine. Then it would just be grunt work to get all the ownership papers in order. I'm guessing congress may give the banks the opportunity to trace things as of now instead of invalidating them for not executing in real time.

[coalition_unwilling]

28. Title insurance companies are refusing to issue title insurance policies

on foreclosed properties now, because the chain of title has become 'clouded'. Since foreclosures account currently for 40% of all US real estate transactions and almost every economist agrees that foreclosures have to 'clear' for the housing market (and the larger economy) to re-start.

Congress can retroactively immunize banks from the legal consequences of the banks' fraudulent behavior(s), just as it retroactively immunized telecoms from the consequences of wire-tapping without warrants. However, I doubt Congress can compel title insurance companies to resume issuing title insurance policies on properties whose titles remain clouded. And I don't think there is any act of Congress that can 'un-cloud' titles. However, I am a neophyte on this stuff, so I will gladly defer to anyone with more knowledge and experience that I possess. Maybe Congress can by an act of legislative fiat restore a broken chain of title.

[dkf]

35. MERS has been failing in some cases.

That is the big issue as it is almost impossible to track ownership if you don't acknowledge MERS.

If that gets unstuck a papertrail probably does exist beyond that which should uncloud the title.

[coalition_unwilling]

47. One would hope. I just realized that keyboard problems and general fatigue

are causing me to write semi-incoherently (sentence fragments, typos galore and so on). What I meant to write in the previous post is that I have a hard time seeing the U.S. real estate market re-setting at a new equilibrium of supply and demand when 40% of supply and its potential demand counterpart basically drop out of the market because clear titles cannot be established. I just don't understand how Congress' legislative fiat is suddenly going to make that right. This is starting to feel almost as if the social contract has been irretrievably violated and cannot now be stiched together through mere legislative action.

[dkf]

55. If the titles of foreclosures are clouded so are the titles of everything else with a mortgage.

There is no way we can leave property in limbo like that because it also leaves properties with current mortgages unsellable. So congress is going to have to acknowledge MERS. A country with a collapsed real estate property system is a failed country.

[LooseWilly]

73. A failed country? Like Somalia, yarrr??

Aye, soon me lack of health insurance will lead me to a peg leg as well... yarr- thank you dkf for my Halloween Dream come true— Yarrr!

[pnwmom]

37. If Congress retroactively approved what MERS has been doing,

that could "un-cloud" titles. But I don't think anyone knows for sure . . . we are in untraveled territory.

Where are you getting this 40% figure? That's higher than I've been reading.

For example, this article says that the national figure is less than 34% (34% includes all distress sales, including actual foreclosures).

http://www.delawareonline.com/article/20101017/BUSINESS/10170311/1003/Errors++possible+fraud+put+housing+industry+on+shaky+foundation

The National Association of Realtors reports that distress sales, including foreclosures, made up 34 percent of all existing home sales in August.

[coalition_unwilling]

52. I want to say the '40%' figure came from a column by either Mike Whitney

or R.J. Eskow, both of whom publish regularly on the economy and real estate at SmirkingChimp.com and Counterpunch.org. But I cannot say for sure - just a figure I read somewhere that was floating around in my head that struck me as particularly noteworthy when I read it.

However, I willingly cede to your 34% as almost certainly more accurate :) (Come to think of it, I seem to recall having seen the 34% figure in other articles also.)

[pnwmom]

23. No responsible attorney will tell you to stop making payments

on your mortgage. You can contact Bank of America and ask them to send you proof that they now hold your mortgage. But in the meantime, DON'T stop making your payments. That WOULD put you at risk of foreclosure. And if you happen to find an attorney who tells you otherwise, then get a second opinion.

There have been only a few cases in the country where judges ruled that a foreclosure was invalid because of title questions -- most of the cases so far have been won by the financial institutions. You've heard about the other cases because they are UNUSUAL -- thus, newsworthy. There could very well be a breakthrough case in the future that changes everything, and there are a number of attorneys out there pressing class action lawsuits who hope to make this happen. But it hasn't happened yet.

[coalition_unwilling]

31. I had no plans to stop making mortgage payments. I only want to make

sure that, in making the regular payments to BofA, that I'm paying the place I'm supposed to in satisfaction of the promissory note.

But I definitely appreciate your advice. I am new to this whole thing - first time homebuyer, etc. -- and have no experience or legal training in the field. So I must of necessity rely on others to know how to proceed.

[pnwmom]

36. I completely understand where you're coming from.

Long ago, I had a stint as a legal assistant working for a real estate attorney, and I remember how overwhelming all those papers are. When my husband and I bought our first house, I was very grateful that I already knew something about all that paperwork.

You couldn't go wrong by writing a letter to the new bank, asking for evidence that they really do hold the note now -- that it was assigned to them by the previous note holder. You could also write a letter to your original bank, asking them to confirm the assignment to the new bank. If the answers don't satisfy you, maybe that's the time to consult an attorney.

[CoffeeCat]

83. That's a terrific point...one that leaves me concerned...

We've been paying Wells Fargo since 2005. Does Wells Fargo have our mortgage?

Or does some other company have it? And if so, what are the legal ramifications
for me? Do I owe that other company money? Could they ever foreclose on me?

Are those ridiculous questions?

This situation is worse than the first bank bailout debacle, in my opinion.

[EFerrari]

80. Friday I read, two big law firms in CA are probably going to file

a class action suit in the next week or so.

And, btw, it was lenders who told consumers seeking loan modifications that in order to qualify for the president's program, they had to be in foreclosure. Instead of modifying those loans anyway, they encouraged borrowers to go into foreclosure to get a modification. And then, they foreclosed rather than giving them a workable modification. They used the president's program as a honeypot.

[creon]

99. True

You are correct.

[truth2power]

120. Not to worry. Title insurance will take care of it. NOT!...

On the Diane Rehm show this a.m. a caller asked how she could be sure she had clear title to her property if she bought a house. The guest/shill for the American Securitization Forum said title insurance would take care of that. :rofl:

Sure it will!

ETA> When are these criminals going to prison???

[ArcticFox]

15. My opinion has never wavered

I would be happy to see banks fail. I think that is the only way all this fraud underlying the current system will ever be unravelled.

[Dawson Leery]

16. +1

[dkf]

24. It wont be through the documentation problems.

If anything it will be the fraud perpetrated against investors who believed the majority of the loans purchased were underwritten as described.

[pnwmom]

25. You'd be happy to see another Great Depression?

Wow.

[laughingliberal]

51. I don't think rescuing the banks is the only way to avert it. Especially not another 'no fault' ...

bailout.

[taught_me_patience]

32. You seem to not know the role of banks in the economy

The failure of some of the mega banks would lead to another depression.

[pnwmom]

44. And some people here would welcome that.

Not me -- I've heard enough stories from actual survivors of that era.

[girl gone mad]

94. The banks have failed & we are in a depression, despite $23 Trillion in bailouts & backstops.

save the depositors, put the banks into receivership, force the bondholders to take haircuts, let the shareholders lose, end this ridiculous charade. At this point, we are risking something far worse than a depression and it is not worth it.

[Prometheus Bound]

118. It's kind of obvious isn't it.

What you're saying makes perfect sense.

[Catherina]

42. +1 n/t

[upi402]

56. I'm too broke to leave the country

and too old for a great depression redux


but that is what's for dinner with our current political cattle gates of choice

[Rex]

21. Hey it ain't capitalism without a little criminal behavoir from the mega banks!

They watched the SCOTUS hand over an election to George, the start of a war we didn't need and the wholesale slaughter of 401ks and pensions gone bye-bye so the big guys can get a break in the markets! Serfs you must understand banks own the land.

[adamuu]

76. This makes me very nervous

I feel like TARP was a armed rape of the middle class, "give it to us or we'll blow the place up."
The same situation is coming, again.
What should we do????

[Stinky The Clown]

78. That's sounds completely believable. Will *this* be the event that brings out the . . . .

. . . . torches and pitchforks? Would THIS wake the country the fuck up? Would this show even the most ill informed among us that NO ONE is on our side?



(those were questions, people, not accusations.)

[Subdivisions]

104. Nope. Americans are mostly cowards. The French on the other hand... n/t

[leeroysphitz]

82. So too big to fail is now too big to prosecute? Why not just end the charade

and put the bank CEOs directly in charge of everything.

[DirkGently]

84. Would almost be surprised if they didn't. Everything's legal, if you own Congress.

[Tierra_y_Libertad]

85. And, then they'll tell us, again, that bailing out the banksters, again, is for our own good.

[Junkdrawer]

86. I said that on the 10th....

As soon as the election is over, legislation "fixing" Foreclosuregate will be passed

Bank on it (pun intended).

Because, while the body politic can absorb the idea of trillions going to make banks that made questionable, sometimes fraudulent, loans whole, it cannot stand to see anyone in the lower or middle classes getting a "free home".

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=389&topic_id=9292069

[shanti]

87. what is this??

some kind of new thing, legalizing fraud?? the state supreme court did just that here in california regarding state worker furloughs. i feel like i'm living outside of reality :(

[lib2DaBone]

93. Mr Obama is not a populist.. and not a friend of the left....

We are all in limbo until 2012.. at which point we might get a choice between Hillary and Sarah.

[harun]

95. When the super-rich ask Congress to jump they say how fast and how high.

[McCamy Taylor]

97. Only if Wall Street can give them all jobs--and all their out of work staffers too.

[TBF]

98. Well duh. nt

[creon]

100. A potential disaster.

The banks are holding uncollectable debts as assets. If these debts cannot be collected, the banks will be proved to be insolvent. That will cascade throughout the entire economy. The consequences are catastrophic.

If the banks can foreclose and assume ownership of the property, the banks will have two bad options: try and sell the property for whatever price they can get; or, try to rent the property; with consequences that are a little less destructive.

Property values will fall, whatever happens. This means that tax revenues will fall and the housing market will collapse.


If there is no buyer -- there is no price.


It ain't over.

[pgodbold]

101. Well of course it will be legalized. Doesn't take a rocket scientist or CNBC to figure that one out.

[Samantha]

102. This is exactly the conclusion I arrived at today when reading

more horror stories about the debacle. I think that is why we won't know until after the election, and I think everyone has already signed on. Two wrongs don't make a right. Hate to be trite but that is a true statement and applicable here. I totally expect this will happen. I hope I am wrong.

Sam

[seafan]

106. If we ever needed some courageous leadership for the people, it is now.

Krugman's solution:

.....

What can be done?

True to form, the Obama administration’s response has been to oppose any action that might upset the banks, like a temporary moratorium on foreclosures while some of the issues are resolved. Instead, it is asking the banks, very nicely, to behave better and clean up their act. I mean, that’s worked so well in the past, right?

The response from the right is, however, even worse. Republicans in Congress are lying low, but conservative commentators like those at The Wall Street Journal’s editorial page have come out dismissing the lack of proper documents as a triviality. In effect, they’re saying that if a bank says it owns your house, we should just take its word. To me, this evokes the days when noblemen felt free to take whatever they wanted, knowing that peasants had no standing in the courts. But then, I suspect that some people regard those as the good old days.

What should be happening? The excesses of the bubble years have created a legal morass, in which property rights are ill defined because nobody has proper documentation. And where no clear property rights exist, it’s the government’s job to create them.

That won’t be easy, but there are good ideas out there. For example, the Center for American Progress has proposed giving mortgage counselors and other public entities the power to modify troubled loans directly, with their judgment standing unless appealed by the mortgage servicer. This would do a lot to clarify matters and help extract us from the morass.

One thing is for sure: What we’re doing now isn’t working. And pretending that things are O.K. won’t convince anyone.

Looks like a meeting at the OK Corral is on the docket.



October 18, 2010
10:30 pm

Bank of America to restart foreclosures in 23 states

By Zachary A. Goldfarb and Ariana Eunjung Cha

Just 10 days after announcing a nationwide halt to foreclosure sales, Bank of America, the nation's largest bank, said Monday that it would begin resubmitting paperwork on Oct. 25 to restart foreclosures on borrowers who missed their payments in 23 states.

If judges approve the new filings, the bank expects that the sales of foreclosed properties will start up once again in the states where a court order is needed to foreclose on a home.

.....

But it is unclear whether the courts will accept the new paperwork. Some judges have said in interviews that they are considering throwing out entire cases and making the banks file new ones, which would be costly and time-consuming.

"The companies are overstating the ease of withdrawing these affidavits and then resubmitting them," said Judge Lynn Tepper of Florida's 6th Circuit Court.

Amid reports of forged documents, faulty notarizations and "robo-signers" - who signed off on thousands of evictions every month without reading the files as required by law- Bank of America announced its nationwide freeze Oct. 8 to review its procedures. Lawmakers cheered the move and called on other lenders to follow suit. A few days later, the Obama administration argued that a national moratorium would be harmful to the fragile real estate market.

.....

There may be no way to stop what's coming for the bankers.


It's why they've started arming themselves.

[Jefferson23]

109. K&R what a disgrace. n/t

[sabrina 1]

113. I abslolutely agree with him. IF we let them.

They must not be allowed to do that and people need to start calling them NOW and asking them when the prosecutions will begin.

Where is the DOJ on this massive fraud? Are they aware of the damning testimony in the Florida case which leaves no doubt that this was a pre-meditated crime?

I would hope that since all 50 Attorneys General are planning to investigate this fraud, that the DOJ would be out front representing the American people and starting an investigation NOW.

They have time to defend Ashcroft, to appeal the judge's ruling on DADT. But I have heard nothing about an investigation into this massive fraud. That alone proves him right.

[creon]

116. DOJ

http://stopforeclosurefraud.com/2010/04/18/doj-probing-mortgage-data-processing-firms-lps-fka-fidelity-bk-5-13-09-part-1/

http://theforeclosuredetonator.wordpress.com/2010/09/30/ohio-secretary-of-state-refers-foreclosure-fraud-to-u-s-department-of-justice/


This may be a good start.

It needs to continue: prosecuted to the fullest extent of the law.

[upi402]

121. Rick Santelli would pop

and right on CNBC. Man I wish there was an Oz ... or a Good Witch -that would throw water on these evil doers.

I wish there was an opposition * to the betrayal of democracy.

There is not.

*party on Wayne!

[kenny blankenship]

117. Finally a CNBC prediction that will come true!

This one is a lock.