FORECLOSUREGATE AND OBAMA’S ‘POCKET VETO’

By most reports, it would appear that the voluntary suspension of foreclosures is underway to review simple, careless procedural errors. Errors which the conscientious banks are hastening to correct. Even Gretchen Morgenson in the New York Times characterizes the problem as “flawed paperwork.” But those errors go far deeper than mere sloppiness. They are concealing a massive fraud.

Read more here –
http://www.webofdebt.com/articles/foreclosuregate.php

14 Responses

  1. Those largest 19 (insolvent) banks talked about in the article.. those are essentially the Primary Dealers in US Government debt securities. If the Primary Dealers go poof, then the US Government can’t fund itself. Arguably this is less important now that the Fed is the only buyer of US Government debt, and the Fed is just printing money.. debasing the currency at this point, but it’s still something to consider.

    They initially saved all these large banks for a reason, and I think this was the reason.. that they are the US sovereign debt merchants.. without them the US sovereign debt doesn’t get sold. Heh, how’s that for a legacy.. living your life as a debt peddler.

    • If the Fed is just printing money, but the people have little or none, where is all his money, son?

      • Several places.

        First, my hunch, and it’s just that, is that the velocity of circulation has fallen off the cliff. No one is spending unless he absolutely has to. People are scared to death of the next month, the next quarter, their employment prospects. This money is being created and is not circulating. If velocity goes from 2 to 1, we can absorbe a lot of money without any effect, as long as velocity stays low. Heaven help us if it rises without a concomitant increase in the suypply of goods and services. MV=PT still holds.

        Second, take a look at the stock market. No one is borrowing money, yet the banks have money. The increased money is going into the stock market.

        Third, there is a massive disconnect between the real economy of making and selling things and the paper economy of paper shufflers. No country has survived this transition.

        Fourth, banks are building up reserves far in excess of their required reserves, as they did in 1934-1936. Bankers are scared, not of a failure, but of losing their rice bowl of salary, perks, bonuses, retirement packages, etc. This process is helped aoong by the fact that no one is borrowing, whether it’s because they don’t want to or they can’t is immaterial.

        Fifth, in some rough way, the increased money supply is making up for or compensating for the massive destruction on “money” in the past three years. I can’t prove it and I’ve had no help from all the monetary theory I’ve studied, but somehow the wealth that has been destroyed is being replaced, at least in part.

        • The velocity of money is low in the real economy but very high in the derivative dream world, don’t you think? And at the same time the Fed is printing money, M3 is contracting.. This suggests your last pint is right on. There is a black hole in the vicinity. Money goes ex nihilo, ad nihilo, though some of it is accumulating in the banks, while most of it is extinguishing debt, through expropriation of real property and commodities. The situation is evil, not through any risk of inflation, but through a brutal deflation. Our money is debt. When this debt is extinguished through foe3closures, buyouts, bankruptcies, the money supply shrinks, even though the Fed engages in “quantitative easing” and runs the printing presses full tilt. This money is fueling the creditor war on debtors. We’ve ot seen anything like it before. This is the first crisis of the fiat currency regime and it is doing precisely the opposite thing that conservatives always predict. It is creating massive deflation, not inflation.

    • “Primary Dealer” is a free lunch granted to insiders who wouldn’t on their own amount to anything.

      The government can fund its own operations without granting Wall Street a license to steal. The treasury has all kinds of unused potential, such as the capacity to grant government all the credit it needs ( AKA “printing money”) by borrowing against its ow vast capital reserve, namely the productive power of its people.

  2. Events are conspiring to put our Ms. Brown at the center of the storm. She called it, she sounded the alarm about MERS, and here we are! We are living in exciting times! Obama is allowing the crisis to develop and fester by declining to endorse the banking lobby’s quick fix legislation.. This may be portentous, an opportunity to get the upper hand on the financial controllers……if he’s got a plan….like PUBLIC BANKS!

  3. What’s being talked about is the merest tip of the iceberg.

    The real dimensions of the problem are the $1.14 quadrillion in derivatives floating around the world. Probably one half of these are related to the American mortgage fiasco, which is $500-600 trillion dollars.

    If the courts do the right thing and make the “lenders” and “lienholders” prove their absolute standing to foreclose, then a goodly portion of this “value” will go down the drain.

    The fraud started in the 1980s with all the various CMOs and other mortgage-related paper and continued into 2008 or 2009, when things got too hot and the market truly ceased to exist. Now they have to figure out a way to nail the taxpayer with the losses.

    If this had happened in a country like Turkey or China, they would have to run the ammunition factories overtime to supply the firing squads.

  4. The Senate supposedly passed H.R. 3808 “unanimously.” Is that true? We can’t know, since no record was kept of each senator’s position. Meanwhile the House tally was by Voice Vote, so we can’t know which Representatives voted in favor of H.R. 3808. It was all done very quietly. Democrat Patrick Leahy (Senate Judiciary Committee Chairman) and Jeff Sessions (the Judiciary committee’s senior Republican) used a special procedure to ram the bill through the Senate. I’d like to know more about that. Throughout US history the most odious bills (e.g. the Federal Reserve Act) have been passed quietly, just before Congress went into recess.

    The way I see it, H.R. 3808 would eliminate the need for fraudulent servicers, foreclosure mills, robo-signing notaries, and criminal outfits like DocX, since H.R. 3808 would let the foreclosing banks electronically create any document they wish. I have been waiting for the banks to pull something like this since I first heard of the MERS scam four years ago. A fix-all stealth bailout. I don’t understand why Obama suddenly decided to do the right thing for the first time since the banks installed him.

    Fortunately Congress cannot override Obama’s pocket veto, since there is no formal veto to override. Congress will have to submit H.R. 3808 (the It’s-Not-Forgery-if-Banks-Do-It Act) to Obama again, after the November 2 elections.

    One question, as Ellen notes, is how this will affect the MBS market. Did all the MBS investors get paid off through credit default swaps? Or are there still investors who are getting ready to sue the banks that ripped them off? Or are the investors the criminal banks themselves?

    I like how Ellen uses every topic and every article to steer us back to the one solution we need most, which is PUBLIC BANKS — preferably state banks that serve local needs, like the Bank of North Dakota.

    Finally, why do we have this foreclosure mania? Why are banks so eager to steal people’s houses? It seems to me that banks are trying to get liquid and physical assets to back their worthless MBSs. Banks are racing each other. “If we don’t steal that house, then some other bank will, so let’s change the locks and kick out the homeowner NOW.”

  5. Folks, Ellen in all her articles is right on, But I would like more attention forcsed on her last paragraph of what we could do.

  6. This may seem off topic, but it’s not. Have any of you seen South Park, season 13, episode 3? You can view it legally on-line – different places for different countries. It’s about a year old, but very apt.

    It’s all about the recession and MBSs, and the religion of economics. The one character’s dad converts the town to frugality, while his son tries to return the fancy blender his dad bought on credit, and follows the MBS trail all the way past wall street to the very top. The solution comes (with thick religious overtones) from the “young jew” agitator who was given an unlimited credit american express card. He puts all the debts of the entire town onto his card, and everything goes back to normal.

    Anyway, some brilliant humour on a rediculous situation. Those South Park guys probably do a better job of getting important messages out to a wider audience than pretty much anybody else. I say this as someone who never watches TV, but that’s how it seems to me.

  7. Another fine, to-the-heart-of-the-matter explanation.

    Thanks Ellen!

  8. Is HR3808 The Equivalent Of TARP 2 And Obama’s “Get Out Of Bail” Gift Card For The High Frequency Signing Scandal?

    Now that the High Frequency Signing (HFS, not to be confused with HFT) scandal is mainstream, and virtually every single foreclosure in the US in the past several years is under question, with the impact on mortgage servicers (who just happen to be the TBTF banks) could be just as dire as the fallout from the credit crunch, it appears that the get out of jail card for the banking syndicate has once again materialized, this time in the form of bill HR3808: Interstate Recognition of Notarizations Act of 2009, sponsored by Republican representative Robert Aderholt. The bill, it turns out, has passed both congress and senate, and is now quietly awaiting for Obama’s signature to be enacted into law. In summary, the bill requires all federal and state courts to recognize notarizations made in other states. That’s the theoretical definition: the practical one – the legislation, if enacted, could protect bank and mortgage processors from liability for false or improperly prepared documents. In other words, with one simple signature Obama has the capacity to prevent tens of billions in damages to banks from legal fees, MBS deficiency claims, unwound sales, and to formally make what started this whole mess: Court Fraud perpetrated by banks, a legal act, and to finally trample over the constitution. Will Obama do it? Potentially – the banking lobby certainly has enough power over him and his superiors, the members of the FOMC. On the other hand, the populist revolt that will surely follow the enactment of such a law will certainly end any dreams of a second term, and potentially of a completed first one. The drama is now on: will Obama openly side on behalf of the bankers (without a “blame the republicans” fall back this time) or of the foreclosure “victims” (granted, the bulk of whom are deadbeat homeowners who should never have owned a home to begin with). We doubt a decision will be reached before the midterms, although quite a bit now hangs in the balance.

    Reuters explains the situation:

    http://www.zerohedge.com/article/hr3808-equivalent-tarp-2-and-obamas-get-out-jail-gift-card-high-frequency-signing-scandal

  9. Goldman Sachs’s Litton Loan Servicing Unit Halts Foreclosures

    http://dailypaul.com/node/146319

  10. Florclosuregate hit Canada news. I don’t watch TV, so maybe it’s been covered there before, but CBC radio did an good in depth piece on it yesterday. They covered it from the perspective of Canadians who have bought property in Florida. Some right nasty stories.

    It was on The Current, CBC Radio 1.

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