Posts filed under “Really, really bad calls”

Foreclosure Fraud For Dummies, 1: The Chains and the Stakes

This is the first of a 5 part series from Mike Konczal, a former financial engineer, is a fellow with the Roosevelt Institute, who also blogs at New Deal 2.0, and is working on financial reform, the 21st century economy, structural unemployment, inequality, risk sharing, consumer access to financial services and more generally what it means to have a social contract in a financialized, post-industrial economy.

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This is a series giving a basic explanation of the current foreclosure fraud crisis: This is Part One. Parts Two, Three, Four, and Five. will all be posted the each day rest of the week at The Big Picture.

The current wave of foreclosure fraud and the consequences for the economy are difficult to follow. As such, I’m going to write a few posts to simplify what is going on so you can follow stories as they unfold.  This is very 101 level, and will include a reading list of blog posts and articles at each stage to help provide depth.   (Special thanks to Yves Smith and Tom Adams for walking me through much of this.)  Let’s make three charts of the chains involved in the process. The first is what is currently going on with foreclosure fraud (click through for larger).

As you can see, in judicial review states like Florida the courts require that servicers, or those who administer the bonds that are full of mortgages (securitization, residential mortgage backed securities, RMBS, are all phrases for them), say that they have everything necessary in order to have standing to bring a foreclosure. They need to have the note for a mortgage, which is supposed to be in the trust – part of the mortgage backed securities – that they administer.

What is breaking down here? In Florida, a judicial review state, it was found that one person was notarizing documents far faster than anyone could reasonably have. Forged documents necessary for the foreclosure process like the note were found. A separate court system was set up to resolve these foreclosures faster at the expense of allowing serious challenges to the documents. Here’s Smith on how kangaroo these courts look up close. Here’s WaPo on one individual and the nightmare of trying to challenge an invalid foreclosure. Keep him in mind when you hear about deadbeats and whatnot: the current system is designed to make it difficult for anyone to challenge their case.

Meet the robo-signer who kicked it off here at this WaPo story. I almost feel bad for this patsy; the real battle here is between junior and senior tranche holders, and this doofus could end up in jail in order to keep John Paulson rich. After reading about this guy I’m asking our elites to take care of their patsies better. (Can we get a Financial Patsy Fordism social contract movement going? If you are going to be a patsy for GMAC, you should be paid enough able to be able to buy GMAC’s services or something.)

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Category: Credit, Really, really bad calls

Shared Profits, Not Losses

> The MSM article of the day is a NYT takedown of JP Morgan’s raping and pillaging of various cities and pension funds. The accusation: Shared profits, client’s losses. When hedge funds do this, the private placement memorandum covers the terms. It is less clear that a brokerage firm can do this legally. This follows…Read More

Category: Derivatives, Investing, Really, really bad calls

10 Questions for Greg Mankiw

Last week, I was surprised by an unusually disingenuous article by Greg Mankiw in the Sunday NYT column – “I Can Afford Higher Taxes. But They’ll Make Me Work Less.” As I read it, I was struck how disconnected it was from the real world. I have been meaning to get to it, but the…Read More

Category: Really, really bad calls, Taxes and Policy

You may have missed this hard hitting McClatchy article over the weekend. It essentially accuses then Treasury Secretary (and former Goldman Sachs CEO) Hank Paulson of “willful inaction in late 2006 and 2007 during a period when lending criteria were disintegrating in favor of so-called “liars’ loans,” for which applicants weren’t required to document their…Read More

Category: Derivatives, Real Estate, Really, really bad calls

Transparent Government: NY

SeeThroughNY is a site run by right wing think tank Manhattan institute. It scrapes publicly available data to show the salaries and pensions of just about everyone in NYS who is on the public payroll, from the Governor to cops & firemen to your local teachers: SeeThroughNY: A place for taxpayers to download, share, analyze…Read More

Category: Legal, Politics, Really, really bad calls

Why Foreclosure Fraud Is So Dangerous to Property Rights

There seems to be a misunderstanding as to why the rampant and systemic foreclosure fraud is so dangerous to American system of property rights and contract law. Some of this is being done by people who are naked corporatists (i.e., the WSJ Editorial Board) excusing horrific conduct by the banks. Others are excusing endemic property…Read More

Category: Credit, Foreclosures, Legal, Real Estate, Really, really bad calls, Regulation, Taxes and Policy

Elections: Money Talks Louder Than Ever

From today’s NYT:

The dominant story line of this year’s midterm elections is increasingly becoming the torrents of money, much of it anonymous, gushing into House and Senate races across the country.

Your Supreme Court, hard at work taking Democracy apart in America:

click for larger graphic

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See video here: Money Talks Louder Than Ever in Midterms

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Category: Digital Media, Politics, Really, really bad calls

The Blundering Herd

> How’s that for an awesome article title? Its from a Vanity Fair article excerpting Bethany McLean and Joe Nocera’s new book, All the Devils Are Here: The Hidden History of the Financial Crisis.  The book is being touted as “The inside story of the collapse of Merrill Lynch — How a “Fantastic Lie” and…Read More

Category: Bailouts, Corporate Management, Really, really bad calls

Do You Wanna Be Right, or Do You Wanna Make Money?

My inbox is deluged with rants and demands from people who are insisting that This. Rally. Must. End. NOW! A composite of their emails would read something like this: “How can you sit there so blithely while the Fed debases the world’s reserve currency? Why haven’t you commented on POMO?!? The entire game is rigged,…Read More

Category: Apprenticed Investor, Investing, Markets, Psychology, Really, really bad calls, Trading

Fed: We Can Support Asset Prices for the Public Good

Consider the following statement: “Nevertheless, balance sheet policy can still lower longer-term borrowing costs for many households and businesses, and it adds to household wealth by keeping asset prices higher than they otherwise would be.” So said Brian Sack, the head of the New York Fed’s markets group. Marketbeat responded with a post titled: Dear…Read More

Category: Federal Reserve, Really, really bad calls