We have been covering the systemic Foreclosure fraud that has gone viral through out the US banking system over the past few days, months and year.

This is a perfect example as to why bailouts are so ill advised: The government becomes reluctant to prosecute firms when they have a vested interest in their financial success.

Less than 4 weeks before the election, a game of chicken has broken out: Which of the two parties will throw their banking friends and overlords under the bus in the mad dash for votes? Stay tuned!

Meanwhile, here is some midweek reading:

• Florida foreclosures continue; Banks’ moratorium claims called ‘farce’ (Florida News-Press)

• How The Controversial Foreclosure Bill Made It Through Congress With No Public Debate (Huff Po)

• BOMBSHELL- New Subpoenas Issued by Florida Attorney General to Lender Processing Services and Docx, LLC (Matt Wiedner Law)

• The MBS mess from the beginning – the deal docs (FT Alphaville)

• Robo-signers Wanted: Mortgage experience not necessary (Yahoo/AP)

• A Primer On The Foreclosure Crisis (CNBC.com)

• All 50 States Start Inquiry Into Foreclosures (Reuters)

• Title Insurers in Talks With Lenders on Warranties (Bloomberg)

• Michigan: Real Estate Officials Call for Halting Some Foreclosures AG’s Office Says Call for Investigation is Politicizing Issue  (Legal News)

• Daily Show On Foreclosure Fraud (TDS)

• White House Supports Mortgage Probe (WSJ)  This Wall Street Journal reports something hard to believe. What government officials are saying this? Is this true — or just poor reporting?

“Government officials said they haven’t uncovered evidence any homeowner was inappropriately evicted, but are probing further to assess the extent of the banking industry’s problems. State attorneys general are expected to announce their investigation on Wednesday.”

WTF? Banks Breaking Into Occupied Homes (Not In Foreclosure) To Change Locks (Huff Po) They could start with Nancy Jacobini, to whom JP Morgan Chase actually apologized after hiring a contractor to break into her home when she was not in foreclosure.

• Two Faces: Demystifying the Mortgage Electronic Registration System’s Land Title Theory, (University of Utah – S.J. Quinney College of Law)

• Misbehavior and Mistake in Bankruptcy Mortgage Claims (University of Iowa)

• Florida’s AG seeks meeting with major lenders (Miami Herald)

• New PR from the Banks: All Is Well (YouTube)

• JP Morgan Leaves MERS (Yahoo/AP)

• JP conference call transcript (Calculated Risk)

• Obama Supports State AG Suits (Bloomberg)

• Citigroup Stops Using Foreclosure Law Firm Facing Florida Probe (Bloomberg)

• Why Foreclosure Fraud Is So Dangerous to Property Rights (TBP)

Foreclosure Mills:
• Rep. Grayson’s letter wrote a letter to Fannie on this subject: (PDF)

• It’s not clear if Fannie/Freddie are going to stop using foreclosure mills, as the letter asked.  The mills are still in their Retained Attorney Network (eFannie)  See also Wash Post)

• Bank of America Stops Foreclosures Nationwide (Fox Business)

• Memories of September: Fox Business News Attacks Grayson, Sanctions Foreclosure Fraud (YouTube)  Surprisingly weak reporting  . . .

Did I miss any good ones?

Category: Bailouts, Financial Press, Foreclosures, Legal

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

71 Responses to “Foreclosure Fraud Linkfest”

  1. Robespierre says:

    Barry:
    “The government becomes reluctant to prosecute firms when they have a vested interest in their financial success.”

    Shouldn’t that be:
    “Firms that have a financial interest in The government are only prosecuted reluctantly to avoid a shortage of campaign contributions and other perks”

    My theory is that this will blow up before end of the year and will drive the financial down. Any other of the same theory out here?

  2. Transor Z says:

    Linda Green, please call the Florida Attorney General. Paging Ms. Linda Green…

  3. dead hobo says:

    1). My mistake. I just read a piece at ZH about the flotsam hired to sign foreclosure papers. I had no idea anyone could be that stupid. Again. Who the fuck is running billion dollar operations? This is much different than having old Shirley sign for her overworked boss. Say goodbye to the real estate market for a while.

    2) On to the securitization fraud. This is going to the real show. When will that one break out to the headlines? Perhaps the Fed should save its ammo for this problem as QE3 will be completely ineffective by that time. And if MERS is deemed illegal, then apologies in advance for having any faith in the system at all.

  4. wngoju says:

    “All 50 States Launch Investigation Into Mortgage Fraud” http://tinyurl.com/2fu2z33

  5. dead hobo says:

    BTW, even if turns out that no valid security interest is on file for a large number of lots, all that means is that foreclosure is not an option. Banks, or the nice people owning the note via their derivative, will have the option of filing a common lawsuit or may be able to turn the note over to a collection agency for maybe a 50% haircut. Anyone know how a collection agency would proceed against real estate with no valid security interest?

  6. Al_Czervik says:

    None of this would have happened, but for the CRA.

  7. melo says:

    For those who bought a foreclosure…might answer a few concerns.

    http://www.creditslips.org/creditslips/2010/10/the-finality-of-foreclosure-sales.html

  8. bergsten says:

    @DH – “anyone know how a collection agency would proceed…”

    Perhaps like this? (Investigation: Debt Collectors, the N-Word and Bank of America
    Bank Fires Collection Agency After Operators Caught Using Racist, Obscene Phone Calls to Collect Debts)

  9. jeg3 says:

    How many employees does it take to process title to property?
    Apparently ZERO.
    http://www.washingtonsblog.com/2010/10/what-is-mers-and-what-role-does-it-have.html
    At least those jobs can’t be outsourced.

  10. VennData says:

    Big Al states,

    “…None of this would have happened, but for the CRA…”

    Yes it’s clearly Bill Clinton in they’re doing the foreclosing. In fact he Robo-signed the CRA, right AL?

    …a few days later…

    Next up, Rassmussen Reports new poll shows 42% of Americans know people who Bill Clinton has foreclosed on.

  11. Andy T says:

    Maxine Waters on CNBC talking about the massive fraud and how we need a national moratorium for some indefinite period of time. She’s also talking about write downs and modifications that won’t be a cost to anyone.

    Good stuff here: http://www.businessinsider.com/maxine-waters-cnbc-foreclosures-2010-10

    I’m pretty confident that with this kind of leadership, we’ll get out of this mess.

  12. Al_Czervik says:

    @VennData

    Regarding my comment at 5:54, it’s pretty obvious that none of this has anything to do with the CRA. That was the point.

  13. RR111 says:

    DeadHobo – How would they be able to turn to a collection agency? Who are you assuming the collection agency would be collecting from and on what grounds? I think that I know where you are going with this, and I might be able to answer your question.

  14. Tarkus says:

    Securitization fraud? Followed by foreclosure fraud? Isn’t that like papering over one bubble by blowing another bigger one? Seems like the same old tactics.

    If not for the integrity of the system, you’d almost think these big companies were criminal enterprises now.

  15. willid3 says:

    RR, what makes you think collection agencies care that they have any grounds at all? they have been known to call some one who has the same name, but had nothing to do with the debt, demanding payment.

  16. VennData says:

    Al,

    I figured. I was going for the “Little GOP Meme that Could” routine.

    Maxine Waters fans,

    Tell Maxine that they do offer a modification, it’s called re-finance me out of it, which she should know about with her corrupt husband on the board of a corrupt bank.

    Maxine Waters, what you get with gerrymandering. Use a computer to draw straight lines across the state.

  17. RR111 says:

    They do not have grounds. I was going to respond to DH’s question, but I wanted to make sure that I understood what he was trying to ask.

  18. Mike in Nola says:

    Al_Czervik: you need to smilie when you say stuff like that.

    BTW, haven’t been around, but has anyone theorized how the banksters are taking advantage of all this with the voluntary foreclosure moratoriums? As long as they don’t foreclose, they can play extend and pretend with the loans. Once they foreclose, they have to write them down. This allowed Jamie and others to keep loss reserves artificially low after cutting them earlier this year to manufacture earnings.

  19. Andy T says:

    I once met a mortgage guy from California back in the “hey day.” His job was building systems that would pump out/approve mortgages faster and faster. So, it seems the entire bubble was built on speed and output. I guess it makes sense that the reverse is also true.

    A moratorium on foreclosures would be a disaster all around. There might be an elegant solution here somewhere…like maybe some sort of rule that states a homeowner wrongly foreclosed upon has XXX dollars of remedies from the bank who improperly foreclosed on him/her. There needs to be some sort of financial deterrent here to

    a) Make sure the banks do the best job the can;
    b) There is some money it for lawyers to take on the cases of individual homeowners who may have gotten the shaft.

    In all the hysteria, do we have any real numbers on the folks who have been wrongly foreclosed on? Note, there is a distinction between being wrongly foreclosed while you were current and being foreclosed on in a “sloppy manner.”

    I’ve only read about a few actually cases of people really being foreclosed on who definitely should not have been foreclosed on. Perhaps I’m missing an article somewhere in all that “linkfest” that highlights the actual numbers of WRONGLY foreclosed.

  20. cheparro says:

    Fox Business News Attacks Grayson, Sanctions Foreclosure Fraud …

    Barry,: You continually and wisely deprecate commentators and so-called experts who let their political bias color their commentary…Here, you are guilty of the same sin with your editorial comment about the Fox News video. I watched the you tube video and no where do they sanction foreclosure fraud..to the contrary, they deplore such actions…what they complain about is Grayson’s grandstanding during an election campaign when the Fla attorney general is already involved in the investigation. Fox may be biased in attacking Grayson and it may be justified to condemn for that, but your characterization of the piece, is just wrong.

    Shame on you! (otherwise a great post!)

  21. ReadingFundamental says:

    Several years ago I was the chief credit officer for a commercial lending operation. Those of us on the credit side were basically told to “shut up and sign” when it came to approving loans. All the emphasis was on volume. Also, we were constantly being pushed to get loans closed faster. I was so disgusted that when I held loan committee I kept quiet and let other people make and second and third the motions to approve the loans so that no one could ever come back at me for those stinkers. I truly don’t think anyone ever noticed that I was just writing it all down and not voting.

    It will be great to see at least the residential loan origination companies have to live with the consequences of their dismissal of basic credit principles. On the commercial side lending has dried up but I don’t see anyone taking any hits over the “best practices” that were forced on the credit/risk mgt folks. [snark]

  22. call me ahab says:

    AT @ 6:37-

    best laugh I had today-

    cheparro-

    any news source is fair game in my book- would it make any difference if it was CBS and BR referenced them?

  23. FrancoisT says:

    Barry,

    This link http://www.nakedcapitalism.com/2010/10/explaining-the-mechanics-of-the-foreclosure-mess-on-bnn.html is an interview @ BNN where Yves explains the whole shebang in 10 minutes.

    Pretty good.

  24. JustinTheSkeptic says:

    Yep, the Banksters and the Political Hacks, get another freebee – Extend and pretend, and this time they don’t even have to ask. Either they are extremely lucky or they are extremely in the know. You figure it out.

  25. call me ahab says:

    AT @ 7:34-

    no doubt- manny insinuated (not in a bad way) the other day that I was being a hypocrite (of sorts)- because I said that the foreclosure mess should be done as swiftly as possible so we can get it all behind us-

    and he reminded me that 2 years ago I was advising folks (who lived in non-recourse states) to stop paying and walk away (because the banks had zero recourse outside of taking back their collateral).

    But I never advised anyone to stay in the home once they chose to default- only to hand back the collateral (deed in lieu of foreclosure) and find new living arrangements.

  26. contrabandista13 says:

    Barry:

    You sound like you’re bored with this already…. To be perfectly honest so am I……

    Yves deserves a great deal of credit for staying on top of this from the very beginning.

    Let’s see what happens, in the end, there’s some very good leverage that could be extended here, however, I think that the states are going to be the big players on this one with a full court press. It’s starting to look like a mutiny…… Imagine, all 50 states are in this hand, that don’t look too good for the banks, that’s an awful lot of jobs for cousins, in-laws, pets and I’m sure a couple of burros, you know, from the Southwest…

  27. Mannwich says:

    @ahab: I hope you don’t misunderstand me. I’m not in any way saying that people who aren’t making payments and cannot afford the homes should stay in those homes. I’m just saying it’s a slippery slope we’re on (yeah, I know we’re WELL down the slope at this point, but….), so where does it end when big, powerful interests are not only continually bailed out for their bad actions, but they also get to continually break the law in the process of protecting its own interests, and often brazenly. Where (and how) does it all end? Why can’t everyone adhere to the rule of law or suffer the consequences? Is that, accountability for one’s actions, only for “the little people”? Am I simply being naive?

  28. Mike in Nola says:

    Andy T:

    Another problem caused by sloppy foreclosures is a bad title if the property is sold after a defective foreclosure. You can only transfer a title as good as you have. Whether or not the debtor was behind, only the true mortgageholder can foreclose; if anyone else forecloses and sells the house, they cannot transfer title. This is going to cause title insurance companies to back off. And, without title insurance, knowledgeable people won’t buy and banks won’t make a new loan on the property.

    Which brings up another problem that can affect even those not in default: if you have a mortgage and sell the property, how does the closing attorney know he is paying the real mortgagee?

  29. Mannwich says:

    This is exhibit A, B, C, D, E, F – - – - Z as to why we should let FAILING, corrupt, criminal enterprises (and those individuals responsible) drown when they do it to themselves and their actions cause great harm to others. Obama basically lost the majority for Congress and likely his second term when he didn’t understand that point last year. There were clearly other better ways to hold those reponsible, bury failing entities, while saving and truly reforming the system and letting our economy start anew and truly flourish again if there was the will to do it by those in leadership positions. No guts, no glory.

  30. Mike in Nola says:

    An example of what I’m talking about is in this video on Financial Armageddon. Chris Whalen starts talking at about 1 hour and 7 minutes into it and is very good. Roubini’s last 5 mins are pretty good too.

    http://www.financialarmageddon.com/2010/10/and-you-thought-last-time-was-bad.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+financialarmageddon+%28Financial+Armageddon%29

    The point I’m using this for is that Whalen checked his own mortgage record and found that the mortgagee in the land records is not the one it’s supposed to be.

  31. call me ahab says:

    This is going to cause title insurance companies to back off.

    M in Nola makes a great point-

    hey man- how is Houston? still trying to make my way back down to New Orleans- I love that town

  32. call me ahab says:

    manny @ 8:30-

    wasn’t trying to frame your thoughts per se- just relaying how I remembered our conversation

  33. Mannwich says:

    @ahab: I hear you. Not labeling you a hypocrite either. I just think the whole deadbeat homeowner thing is a distraction from the bigger issue that I outlined above. I just think it’s silly to get all fired up about deadbeat homeowners while the MUCH bigger criminals continually break more important laws.

  34. Andy T says:

    Mike in Nola:

    Understand that’s an issue and a problem for sure. But, is it a “dangerous” problem initiated with criminal fraud and intent in mind? I just don’t quite see it here, despite the rants from Barry to the contrary. It sounds like these banks and processors were mostly sloppy as hell in order to deal with this massive wave of people who weren’t making payments any more.

    It seems like the private sector is already addressing the issue as per one of the links above where title insurance companies are demanding warrants from the banks. And the banks, seem to be issuing said warrants in order to keep the process going.

    So, it seems the like the private sector is already working out solutions to make sure that new foreclosures are being handled properly and title will be warranted.

    So, the main issue is in dealing with the claims in process that were done sloppily/poorly. The burden should be on the banks to go back and review all that documentation. Once they’ve done that, then the foreclosures should proceed again.

    @Mannwich– Yeah, we’re on plenty of slippery slopes. For the first time in American history, the Government forced Americans to buy a product whether they wanted to or not (the Health Insurance Bill). In the last decade, we also fought a “pre-emptive” war…something that had not been done before. We also passed the “Patriot Act” which did a good job of taking away liberties. We circumvented the Geneva convention with the Gitmo prisoners. We fostered mammoth credit pushing organizations, the GSEs, that helped promulgate the largest real estate bubble of all time. We allowed tax credits on mortgage interest, another form of incentivizing debt over savings. We created a Department of Energy in 1977 to end our dependence on foreign oil–it did none of that. We created a Department of Education to improve the education standards in the US–it did none of that. I could go on and on and on…..

    This issue here….banks that wanted to process as many foreclosures as they possibly could because they’re in the middle of the largest credit bubble implosion of all time is pretty bad. But, in terms of all the “slippery slopes” we’ve already gone down, this one is probably more of a mole hill with some nice political timing and texture.

  35. call me ahab says:

    Dept of Education-

    what a joke- after all these years- where are the results (and WTF do they even do exactly?)

    the whole agency should be disbanded (never happen).

  36. Mannwich says:

    I hear you, AT, but where (and how) does it all lead to? It’s like a bad nightmare.

    On another note, after putting it off or months since getting the book for my b-day, I started reading “The Big Short” by Michael Lewis last night. The headache I woke up with this morning made me wish I hadn’t started it. Not the best bed-time reading in the world, mind you, but it’s definitely very well written, compelling stuff.

  37. Mike in Nola says:

    Andy T: Itdoesn’t need to be criminal to cause a lot of problems. Wasn’t even thinking criminal when I wrote those comments.

    Title attorneys, at least good ones, are anal retentive and can come up with more issues than I can.

    As for warrants, how many of us here would accept warrants from one of the big banks? Don’t see many hands up.

  38. Mannwich says:

    @Mike: Great point. I’m not entirely sure this was intentional either but all of this corner cutting that goes on in the banking (and other big industries, by the way – the operational “blocking & tackling” stuff at big companies is an utter joke these days) seems to have caught up to them in spades. What other boogeymen lurk around the corner? Sadly, I’m guessing there are many and not just in the banking industry either.

  39. tradeking13 says:

    Cramer seems to think this is all being blown out of proportion.

    This Too Shall Pass

    Here’s an apt analogy: I believe the mortgage contretemps will prove to be similar to the BP contretemps — something that was blown out of proportion vs. the facts and that sucked a lot of us in and freaked us out.

    ~~~

    BR: At least he is consistent — recall he did not think subprime would be a problem either . . .

  40. willid3 says:

    Andy T
    This issue here….banks that wanted to process as many foreclosures as they possibly could because they’re in the middle of the largest credit bubble implosion of all time is pretty bad. But, in terms of all the “slippery slopes” we’ve already gone down, this one is probably more of a mole hill with some nice political timing and texture.

    I don’t think they wanted to do the foreclosures. this is the same as house prices don’t go down always go up. they never thought they were ever going to need the documentation. so when it came time cut costs (to fund say bonuses maybe ?) they looked to see where they cut cut. and low and behold there was all that money spent on keeping track of the paper work. well, they cut that in a hurry.
    while it only became noticeable in foreclosure, I am thinking it may also have happened when the borrower paid off the note too. they didn’t have the paper trail for that either.
    and this affects more than just older houses it affects new ones too as land is on that title,

  41. Tarkus says:

    Sloppy? It’s pretty sloppy when you hire hairdressers and bigbox floorwalkers as foreclosure experts.

    http://finance.yahoo.com/news/Robosigners-Mortgage-apf-382327091.html?x=0&sec=topStories&pos=main&asset=&ccode=

    “Robo-signers: Mortgage experience not necessary”

    False affidavits filed in court amount to perjury. And not just once – over and over again. And now some of these signers admit they knew they was lying.

    So “being sloppy” is looking like a lame, or sloppy, answer.

  42. Transor Z says:

    IMO everyone should watch Yves Smith’s 10-minute explanation on BNN of exactly what this crisis is. It’s not really a “foreclosure crisis”; it’s a securitization crisis. Dovetail her explanation with Chris Whalen’s description of the loan repurchase reserves currently being carried by the big banks and the fact that they just aren’t lending, especially to deserving homeowners who should be getting refi’s at the current rates but aren’t. Also note his efficiency analysis as # of REO properties increase. Banks don’t want to own foreclosed property!

    People who say it’s just paperwork mistakes or laziness don’t understand real property at all. They also don’t understand perjury and fraud on the courts. Trial judges are like the mafia. You think you’re going to embarrass them by having them sign off on orders backed by forged evidence and actually think you’re going to get away with it — in 50 states??? Just watch what happens to DOCX/LPS and some of their affiliated law firms.

    FWIW, people who really understand how title and recordation works in the dusty corners of your local registry of deeds are all in a daze over this right now. That’s a big reason why all 50 AGs are in on this. If you don’t get the impact on property records and chain of title, sorry but you really don’t get the scale of what’s going on here.

    /s/ Linda Green
    VP Wells Fargo
    VP Option One
    VP AMHA
    VP Deutsche Bank
    VP MERS

    http://4closurefraud.org/2010/01/19/fabrications-forgeries-comparing-signatures-titles-on-mortgage-documents/

  43. Thor says:

    I love how so many of the very same people who screamed bloody murder about the sanctity of legal contracts when the Feds rescued GM are now saying this isn’t all that big a deal.

  44. Mike in Nola says:

    willid3: good point about those who’ve paid off the notes possibly not having clear title. Homeowners have been paying the mortgage servicers and don’t really know who gets the money after that. Could be going to someone who doesn’t hold the mortgage. This defect possibly could be remedied by getting whoever is the mortgage holder in the local government records office to file whatever document that jurisdiction requires saying that they were paid off.

  45. RR111 says:

    @AndyT – Please reread Transor Z’s post. He is one of the few people that is able to see the true implications of this situation. This is much bigger than just a foreclosure problem.

    This impacts anyone’s mortgage that was not assigned properly or lacks clarity regarding title. Research the process of securitization. Then, you will see this situation from a wider perspective.

  46. ezrasfund says:

    And yet again: http://www.nytimes.com/2010/10/14/business/14mortgage.html?hp
    Al Capone on tax evasion, Nixon for the cover-up, it’s the American way. Like the other part of MBS, the model only works when prices are going up, which they always…were. Why should it be easier to unwind a mortgage than it is to write one?

  47. cognos says:

    BR – Sorry, but your main comment on this above is idiotic. The govt being “out to lunch” and “hands off” on this has NOTHING to do with bailouts or its investment.

    That is how the govt has FAILED from the very beginning.

    Spring of 2008 — Those who understood mortgages and banking (Bill Isaac, former head of FDIC for example) were begging for Sheila Bair and Paulson to “guarantee all bank creditors”. A classic crisis provision of available to them.

    They did nothing.

    Later in the crisis. A few smarter people were begging for a national bottoms-up solution to the quagmire of housing, mortgages, and securitizations that benefits NO ONE. The right to “foreclose” and get 10 cents on the $1 is NOT a helpful right. Versus the ability to get 30-50-70 cents in a broad negotiated solution. ALL PARTIES would’ve been BETTER OFF. This is what happened in CMBS, bc the market is easy. The only body that could’ve solved the mortgage thing was the govt.

    They did nothing.

    Even today. Many people simply beg… “Why cant Fannie and Freddie REFI mortgages that are underwater… but current (!) into todays 2.75% rates on 5/1 ARMs? Lots of these mortgages are at 5-6% rates from 2007. Why not refi them? In foreclosure… Fannie/Freddie pays anyway?

    Still they do nothing.

    They (Sheila Bair, Elizabeth Warren, and even many Fed govenors, Obama economic advises, most Senators)… are simply stupid, lazy, and unhelpful. Trapped in a silly principled dogma. The banks and large institutions are at fault too… GS, C, JPM they have not effectively proposed any solid solution. When many solutions are available.

    Eh, its over anyway. SPX will be 1300+ before year-end. And the mortgage thing is headed to the history books.

    ~~~

    BR: Totally disagree — watch Turbo Timmy on Charlie Rose. They know EXACTLY what they are doing.

  48. DM RTA says:

    And now in the center ring, Wells Fargo headlining the FT as having revealed in a deposition to using robosigners….Pure speculation but this feels like it is going to turn into another monster bailout for the GSE’s eventually when it is finally labeled for what kind of problem it really is underneath the initial posturing.

    http://www.ft.com/cms/s/0/ed4aa856-d70b-11df-9cd5-00144feabdc0.html

  49. ezrasfund says:

    By hiring the “Burger King” foreclosure specialists and giving those deadbeat homeowners the bum’s rush, how much money did they save? Enough to pay all of their bonuses?

  50. soloduff says:

    Cleverly phrased: “Which of the two parties will throw their banking friends and overlords under the bus in the mad rush for votes?” (1) The author needs to spell out what he means by “throw their banking . . . under the bus . . . .” (2) Whatever it is supposed to mean specifically, it is obviously phrased as a campaign PROMISE, not an executed policy. As such, I think if either party (or the Tea Party) rages against the “banking friends,” etc., BEFORE the election, it will prove to be the sort of faux rage we have seen from both parties (and the Tea Party), which never turns out to be anything definitive contra the “banking friends” when it comes time to deliver on the promises. Lying, of course, is de rigeur in what passes for electioneering discourse in contemporary America. And the “banking friends” have proven quite adept at regulating the regulators of whichever party is running the government.

    ~~~

    BR: Simple: Who is going to make Bank Fraud a political issue ?

  51. Mannwich says:

    @willid3: I actually think you may have nailed it. They never prepared for this happening because they stupidly thought it would never happen, so why spend the time, money and resources on it? After all, using that money would be cutting into the executive bonus pool. Cutting corners has become the norm in the corporate world. Do you think that will change now when anyone with any kind of influence and power gets a free “get of jail free & with a bonus” card every time they screw up royally?

  52. beaufou says:

    Andy
    “Note, there is a distinction between being wrongly foreclosed while you were current and being foreclosed on in a “sloppy manner.””

    No, I don’t know what you were taught, but two wrongs never make a right.

  53. Mannwich says:

    Amazing, isn’t it, Thor? It wreaks of elitism if you ask me. It’s so blatantly obvious too. Contracts are “sanctified” when the elites are asked to take a haircut but when it comes to asking (no, demanding it of) the Sheeple, they become mere toilet paper. So which is it? Do contracts and the law matter or do they not? Or does it depend?

  54. Mannwich says:

    And, I mean, shit, if not for Fannie, Freddie, and the CRA, none of this crap would have happened. The free markets always work things out.

  55. Thor says:

    Manny – Yes, it’s laughable. Let’s let the oil companies and banks just regulate themselves. We’re just standing in the way of progress. We’re regulating our selves into oblivian. Why just look at California, companies are leaving in droves, hell, I even heard they’re losing population. We all know what happens when a society starts losing population!

    Sorry, couldn’t resist ;-)

  56. Mike in Nola says:

    Manny: Think your last comment requires a smilie, too :)

  57. Mannwich says:

    :-)

  58. holulu says:

    Is this (foreclosure fiasco) the begining of something big?

    I clearly remember when two BearStearn hedge funds went bust, and I thought it was the begining something big and shorted the hell out of bank/mortgage co. and etc.

  59. Dr. Goose says:

    “Today, to the evident sorrow
    Of the lot who can’t pay what they borrow,
    We’ll discreetly foreclose
    On a hundred châteaux,
    And we’ll do it again come tomorrow.”

  60. cheparro says:

    Tradeking…I remember Cramer saying, when the wheels were starting to come off, that since residential mortgages represented such a small fraction of overall economic activity significant defaults would not create a serious problem for the economy or the market.

    I hope is isn’t as wrong now as he was then..

  61. holulu says:

    Mr T talks about gold video

  62. [...] – Further, further, foreclosure reading. [...]

  63. Dima says:

    Real Estate Valuation for $1000.

    What value does a parcel of real estate have when no clear title can be established?

    Answer?

  64. rktbrkr says:

    Dima,

    I’d hazard a guess that the value of residential RE without a title is worth roughly the rental value of the property for the length of time you could occupy the property until evicted less legal costs.

    So if you bought the property on day 1 and someone with better claim challenged for the property on day 2 and it would take 24 months to be foreclosed and evicted and the fair (rental) value of the property was $1000/mo and the legal expenses to fight the eviction was $5000 then the worst case purchase price would be 24x$1000 – $5000 = $19000. If nobody brings a claim then you win big but you need to have the stomach of a vulture (maybe seagull if it’s FL) to operate like this – but there will be big, fat happy seagulls & vultures when this is over

  65. rktbrkr says:

    The resale value would probably go up each year that no challenger arose but it would never equal an unclouded title.

    Instead of buying one condo unit with clear title for 190K you bought 10 at 19K each then you make out if not every unit is challenged on day 2. Maybe you need to budget for some maalox too – but some people thrive in this gamesmanship situation – just not normal people.