Follow the Money: From MERS to Fraudclosure
Even 60 Minutes seems to be sugarcoating the motivation for fraudclosure:
“Banks so poorly handled documentation on millions of mortgages that many today cannot prove that they own the homes they want to foreclose on. The resulting rash of lawsuits from people seeking to save their homes has one of the government’s top banking regulators worried that the torrent of litigation will delay the real estate market’s recovery.”
Understand this precisely: This was not a case of slipshod handling, of sloppy paperwork, or bad management. This was a willful decision to break the law in order to save expenses and be more profitable.
Follow the money: MERS to subprime lending to automated underwriting to securitization to robosigning to fraudclosure — its ALWAYS been about saving a few bucks regardless of the consequences.
The good thing about this Sunday’s 60 Minutes piece (which I have not seen yet) is that it will apply more popular pressure to the State AGs for some legal action on Fraudclosure.
But they are missing the bigger picture here: Reckless disregard for property rights and the rule of law. And exactly where are all of my Libertarian friends on this . . . ?
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April 2nd, 2011 at 10:19 am
The rise of civilized societies and quality of life for the average citizen correlates with adherence to accepted laws and social norms. What happens when business leaders AND government intentionally or unintentionally undermine adherence to the law on a grand scale?
April 2nd, 2011 at 10:38 am
BusSchDean asked:
“What happens when business leaders AND government intentionally or unintentionally undermine adherence to the law on a grand scale?”
Well, we get this:
http://gonzalolira.blogspot.com/2010/06/corporate-entities-as-modern-day-street.html
and it evolves into a dystopia we never thought possible, but alas, is upon us as we speak:
http://gonzalolira.blogspot.com/2010/06/is-us-fascist-police-state.html
April 2nd, 2011 at 10:41 am
Mish, when not busy ‘Shark Jumping’, has been covering MERS ..
“…Janet Tavakoli Blames the SEC as a “Failed Regulator”
The one thing we have not discussed about this mess is who to blame. I received an email from Janet Tavakoli on Thursday laying the blame smack on the SEC.
Janet Writes …
The SEC is a failed regulator.
Checking documents to make sure the paperwork is in order is not an optional step when securities are created and underwritten, and underwriters should be held accountable.
Unfortunately, flawed paperwork is far from the only problem with the securitization process.
The preponderance of evidence indicates a massive, widespread, interconnected Ponzi scheme with various types of concurrent fraud.
So far our regulators, court system, and Congress have all failed in their duties…”
http://globaleconomicanalysis.blogspot.com/2010/10/sec-failure-to-regulate-mbs-resulted-in.html
to say nothing of Denninger..
http://market-ticker.org/akcs-www?singlepost=2186350
http://market-ticker.org/akcs-www
April 2nd, 2011 at 10:43 am
“And exactly where are all of my Libertarian friends on this . . . ?”
I don’t know about your “little el” libertarian friends but the “big el” Libertarian’s are either being co-opted by the Tea Party who in turn is being co-opted by the Republicans or they are too busy fretting over that someone, somewhere, may be awarded a free house and is perfectly willing to let the vast majority be gang raped by Wall Street to prevent it from happening.
April 2nd, 2011 at 10:47 am
@bschooldean: Ecosystems find a new balance. I think it’s vanity to ascribe any particular importance to the present in terms of historical sweep. Just another era in which some animals are more equal than others.
I do think it’s sad how little we all learn from history.
April 2nd, 2011 at 10:47 am
I agree, The BIG PICTURE is: “Reckless disregard for property rights and the rule of law.” Yes, those who willfully, intentionally, sincerely, deliberately, and solemnly assured and promised the lenders they would repay the money they asked for, if the lenders would only lend it to them, have broken their promises. Since non-payment is evidence that the borrowers never intended to keep their promises when made (which is fraud, and criminal) or, at the very least, they unilaterally changed their minds, conveniently after and not before they got what they wanted, the owners of the money, the lenders, were cheated and defrauded by the very persons, who on the basis of their assurances and promises, the lent their money to. The AGs and the DAs should prosecute those who sought out lenders and fail to keep their promises. The borrowers honored the contracts to buy, why shouldn’t they honor their contracts to repay the money they borrowed? You went to law school, what is your legal opinion?
~~~
BR: Professionally, I would say that you do not understand the difference between civil law (such as contracts) and criminal law (such as perjury or fraud).
Personally, I would say you are trying to mislead readers by conflating civil contract default with criminal fraud. And that sort of disingenuousness is the fast lane to my shit list . . .
April 2nd, 2011 at 10:54 am
Since the financial corporations seem to have effectively captured most regulation, and US lawmaking is sold or influenced by the highest lobbyist bidder, why is this a surprise? If property rights or existing rules of law are inconvenient then the corporatocracy has the influence to change them or effect a relatively minor settlement. It seems ‘too big to fail’ means they are somewhat above the law if a succesful prosecution could cause failure.
April 2nd, 2011 at 11:08 am
I’m not a libertarian myself. But, in my opinion, sincere libertarians believe in the the rule of law, they just think there should be less laws in the first place.
Many libertarians would agree that fraud should be illegal, and bank CEOs who commit fraud should be in jail. Even if that results in a weaker economy. Contrast that with actions of the Obama administration. I wouldn’t be surprised if we see Jamie Dimon with a medal of freedom soon. (I’m only half kidding.)
Many of the so-called libertarians who inhabit Wall Street are more like self serving anarchists. They don’t believe in laws that prohibit fraud, because they want to commit it.
We should only pass laws that we are willing and able to enforce. Otherwise, we weaken respect for the law, and punish the rule followers.
April 2nd, 2011 at 11:27 am
A note and mortgage is a contract between 2 parties.
To insist, as Mr Dobbs seems to, that only one side is to be held accountable would be laughable if it weren’t so sad.
As for insisting the bank has to do a complicated work around, banks are in the money business. I would be just like them(and am with the subject of late rent) give me the money or move.
April 2nd, 2011 at 11:49 am
Understand this precisely: This was not a case of slipshod handling, of sloppy paperwork, or bad management. This was a willful decision to break the law in order to save expenses and be more profitable.
_______________
It’s more and worse than that, BR. It was an attempt to quickly and illegally put distance between the perpetrators of crime-fest that was the mortgage process and the law by destroying the evidence of the crime (committing a murder and then accepting the risk of being charged with the crime of littering by throwing the murder weapon into the river before the body was discovered, is a fair but incomplete analogy). MERS is cover for the greater criminal enterprise. Worse, still, is the fact that MERS-cleansed toxic byproducts (labeled as “Extra-Virgin, Can’t Lose, Pure as the Driven Snow” by the Ratings Agency arm of the enterprise) were then foisted onto the securities market. Crime, upon crime, upon crime.
April 2nd, 2011 at 11:51 am
CulturalEngineer and this “Chagora” .. now I didn’t just fall off the wagon yesterday – assure us that if things get a little thin – you don’t (can’t) go in an add a decimal place to the primary file.
~~~
EDITOR: That was unpublished as spam
April 2nd, 2011 at 11:56 am
The banks loaned money to people who couldn’t afford it. About five years ago I was offered a loan that today I wouldn’t be able to afford.
Why would the banks do that? Maybe because they were going to sell the loans off as mysterious securities, get their money back and then come in and foreclose on a loan that was no longer owed to THEM. And as far as those securities go, didn’t some company get a bailout because they had to pay out on credit default swaps i.e. insurance on aforementioned securities.
The Ancient Egyptians had a similar system. But instead of taking your money as taxes to benefit the people at the top, they just cut out the paper work and made you build the rich guy’s pyramid.
Libertarianism is just another name for Anarchy for the rich.
April 2nd, 2011 at 12:00 pm
I would like to see Sen. Rand Paul and kin spend NO time on small potatoes like energy-efficient light bulb mandates and spend *all* their time on big fish. Don’t get bogged down with petty stuff. For heaven’s sake, go after the property-rights-violating, bad-loan-making/credit-currency-counterfeiting banksters. And nothing else until you’ve shrunk this leech industry.
April 2nd, 2011 at 12:15 pm
The “willful decision to break the law” has resulted in how many people in jail? The settlement by the AGs and FDIC chair Bair suggestions for a payoff all speaks to the obvious: GUILTY! I real that state law govern land ownership but US Attorneys should go after the larger banksters as well. This blog has posted lists of most overpaid executives. What about a list of big scoundrels that absconded with mortgage money and should be in jail? No more pictures of Mozilo with that bad tan, unless it was taken on Rikers Island.
April 2nd, 2011 at 12:21 pm
Where’s the response from the just pay your bill’s crowd? Is it Ostrich season again?
April 2nd, 2011 at 12:37 pm
>> Libertarianism is just another name for Anarchy for the rich.
Without somehow resetting everyone’s wealth (one time or periodically), “libertarianism” is a misleading term. In a world with finite resources, the bottom 80% ends up with *less* liberty when Walmart heirs own everything. And, if people don’t think we end up with a lopsided wealth accumulation, then they know neither that “compound interest is the most powerful force in the universe” nor what’s happened in the last 30 years.
I’m beginning to prefer the term “propertarianism”, because they want government to pay to enforce nothing but property rights, not to tax progressively or to tax wealth, and to refrain from legislating anything else. It’s “socialism for property rights” and nothing else.
Propertarian rhetoric has some appeal because most people (including me) believe government HAS grown too big.
April 2nd, 2011 at 12:56 pm
“Where’s the response from the just pay your bill’s crowd”
Because the topic is bank fraud ?
April 2nd, 2011 at 1:08 pm
btw
If you want to know what is happening on the ” pay your bill front” google “mortgage fraud conviction”
April 2nd, 2011 at 1:35 pm
Ron Paul is busy trying to gain control of your wife’s uterus and any zygotes it may contain.
April 2nd, 2011 at 3:04 pm
Barry,
You wrote:”Even 60 Minutes seems to be sugarcoating the motivation for fraudclosure:”
May I strongly suggest to modify this sentence for:
Officialdom has been sugarcoating the motivation for fraudclosure; therefore 60 Minutes, as an über-member of the establishment media, dutifully and slothfully did the same.
April 2nd, 2011 at 4:59 pm
Francois,
I agree with you. 60 minutes has a recent history of doing infomercials for the establishment. To say that Scott Pelley did a softball interview with Ben Bernanke is putting it lightly. The entire segment might as well have been a prepared statement from the FED.
April 2nd, 2011 at 6:03 pm
“Just pay your bill…?”
Are you kdding?
What happened when Goldman, JP Morgan, Merrill Lynch, et al could not just “Pay Their Bills?”
They went to Uncle Sam for $1 Triilion of US taxpayer money. So that they could “Just Pay Their Bills.”
SO why should poor sap homeowner upside down on mortgage, and working two jobs (or none at all) “Just Pay That Bill?” Some might say the poor sap “already has paid” his bill.
That was (and still is) the Taxpayers’ money those banks got, ya know.
.
April 2nd, 2011 at 6:23 pm
well i can’t say much about the legal end of this, but i can give an observation of the business end. it was all about cutting costs and nothing else. and this time it appears they have cut their own throat in doing do. while the owner of the contract can foreclose, the problem they have created is identifying just who is that? the party that can, can’t be identified since they have so badly managed the required paper work.
April 2nd, 2011 at 6:28 pm
we call it riding the gravy train
April 2nd, 2011 at 7:23 pm
“Because the topic is bank fraud ?”
Your so close, keep thinking it will come.
April 2nd, 2011 at 7:40 pm
OMG
I tink Louis just tried to do an insult
LOL
April 2nd, 2011 at 8:40 pm
Work your way from the outside in, If you shoot to high, your F&c^ed. It’s all related Jack. You have not been following along have you?
But what do I know, that’s just what I tink.
http://www.youtube.com/watch?v=NVNU5jkOwzU
April 2nd, 2011 at 8:54 pm
Louis
insulting my typos now?
Things may be related but I didn’t see BR discussing the relativity. He was narrowly focused, where as you were not. Which does make your comment amusing
April 2nd, 2011 at 9:49 pm
MERS to subprime lending to automated underwriting to securitization to robosigning to fraudclosure. Reckless disregard for property rights and the rule of law.
Sounds narrowly focused to me.
My comments are what they are and you picked them out. Why is that? What comment do you find amusing? If you have followed my comments for some time you would know that the ostrich is related to all of these discussions on housing.
I am sorry for picking on your typo.
April 2nd, 2011 at 10:10 pm
1. I thought that the “United Corporatocracy of America” had worked out a (Lowball, of course) Federal settlement for the Banks, Ooop, I meant for the people. So can the States now overide such a settlement? It gets more interesting by the day.
2. In any democratic society, the rule of law is a pillar. And let’s make no mistake, we are talking here about the rule of law. Without this, look out third world banana Republics, here we come. Meanwhile, Congrees “Fiddles” while the US burns?
3. For what it’s worth Barry, I’m still here with you from afar, enjoying a Bloody Mary and brunch on the beach..;-)
April 2nd, 2011 at 10:24 pm
Ok, you’ve got my interest
Where does
“Where’s the response from the just pay your bill’s crowd?”
Fit in this string you lay out
“MERS to subprime lending to automated underwriting to securitization to robosigning to fraudclosure”
April 2nd, 2011 at 10:37 pm
One the topic of snark.
When you come from a thread where many are blaming CRA for the housing bubble and bust, it becomes difficult to identify snark and irony.
So Louis if your aim was snark then I appologise for my thick headedness.
I do take comfort in the fact that I was not the only one to miss it.
April 2nd, 2011 at 11:14 pm
[...] Follow the Money: From MERS to Fraudclosure [...]
April 2nd, 2011 at 11:58 pm
Might I suggest a private “Pissing match” whilst the adults discuss the issue?
April 3rd, 2011 at 7:20 am
The only people who believe in the rule of law are either those who have the power to make it or those who realize that, through some quirk, it may actually speak for them in a particular instance. Obviously, there is a divide between those two groups, with the first being foremost practical minded and deciding to change things before the second gets on base. You have no libertarian friends. You are an idealist, with a certain sense of absolutism, and libertarians are very much in the first category of practical law abiding citizens. Unfortunately, I’m cut from your cloth. I can only hope that the law abiders get points on the board before the law makers. There is a very healthy chance that the law you and I were taught years ago from the mouths of earnest and learned folk will not be the law our children learn.
April 3rd, 2011 at 7:42 am
“This was a willful decision to break the law in order to save expenses and be more profitable.”
Your point is precisely the problem with the mainstream media in this country. They never delve into the underlying causes of problems and just accept the explanations of the players involved. The whole point of MERS was to get around paying recording fees to states and municipalities. You have to question the motivation of some of the news outlets in this country. Especially those like CNBC in its GE days where the parent company was in desperate need of financing. That or they are just plain incompetent; which isn’t that surprising.
I would advise anybody owning a mortgage in foreclosure to make the bank go the full legal process. You have rights. Whether or not you have money to pay the mortgage and choose not to pay is up to whether or not you can live with yourself. Keep in mind Lloyd Blankfein, Jamie Dimon, and the rest seem to be living with themselves rather well with all the help the government gave them when they got in over their heads and they even had “risk” managers advising them before they got into trouble:)
April 3rd, 2011 at 9:20 am
Where are your Libertarian friends, you ask?
Most of the ones I know are preoccupied with Obama’s birth certificate, ending the Fed, killing the EPA and generally going back to the era of the robber barons.
In this matter, as in so many others, their sympathies lie with the corporations. God forbid that indebted deadbeat homeowners should avoid fulfilling obligations undertaken as a consequence of bad decisions! That would be like welfare!
April 3rd, 2011 at 9:52 am
The court (quite properly) required the parties in the foreclosure suit to prove that they have standing in the matter. Apparently the party representing the creditor could not prove that they, in fact, did represent the creditor. Fine. You have no standing. Do not pass Go, do not collect $200.
However, may I suggest that we look at two things. MERS was created to centralize and control the ownership of these instruments. This is much like a transfer agent would be to common stock. They apparently did a poor job keeping track of ownership, to say the least. On the issue of recording ownership at the county level, that can be remedied and perhaps should be remedied as part of the foreclosure process.
The debtor apparently did not pay on their mortgage. There is nothing here to suggest that the debtor was a victem of fraud or deception when they took out the mortgage loan. Yes, they might have lost their job, become ill, divorced, or a thousand other unfortunate things that can lead to payment default. Or, they may have defaulted in other respects. They may have failed to pay their taxes and the taxing authorities may also be foreclosing. They may have severely damaged the property (failed to keep it in good repair.) They may have caused waste to the property (such as using it as a garbage dump.) We don’t know.
Quite likely the creditor WHOEVER THAT MAY BE does have cause to foreclose. Absent any information to suggest that the creditor did something that should mitigate or remove the debtor’s obligation to pay, or that the basic facts of the matter (relating to default) are incorrect, let’s not romanticize the debtor’s standing here. Let’s not forget that the debtor IS in default and they have no right, drawn from some perception of national matters, to default any more than I have the right to not pay my income taxes because I disagree with how the money is being spent or I dislike Lloyd Blankfein.
April 3rd, 2011 at 10:14 am
@ francois and luois: Nice comments. Keep the war going. Need some more gas? It’s become a little more expensive. But still worth it for the right cause.
@philipat: I hate your guts. :>)
You are exactly where I’d rather be. And doing exactly what I’d rather be. So is sex part of your equation? A one airfare is not that unaffordable for the right benefits.
AND your comments, when they arrive are quite good and insightful. Guess there’s something good to be said about sun and sand.
Enlighten me O great wise one.
April 3rd, 2011 at 10:37 am
MERS assisted MEW which assisted everyone (sorta) GWB knew it was so
“Where’s the response from the just pay your bill’s crowd?”
here’s a line from the days I used Dome Books for accounting “to avoid is legal to evade is illegal”
the answer is a funny HOL (huh huh huh out loud)
April 4th, 2011 at 8:38 am
“Understand this precisely: This was not a case of slipshod handling, of sloppy paperwork, or bad management. This was a willful decision to break the law in order to save expenses and be more profitable.”
This was POLICY………no accident.
By the way…..Karl DENNINGER was the first one out there on this. This was the reason he created his blog in the first place… Well, this and the fraudulent dividends that WaMu was paying. (Oh yeah…..he heit that one out of the park to….)
April 18th, 2011 at 11:47 am
[...] Other examples in this vein surround us daily. Housing bubbles that took years to form don’t solve themselves within a quarter. Price discovery is a function of time. The disruption in housing (e.g. price discovery, excess inventory work-off, foreclosures) will take years to work itself out. Attempts to short circuit that process lead to further disruptions – see fraudclousre. [...]