Freddie Mac Gets Paid To Obstruct Refinancings [View article]
Thank you for your kind words. Remember, Freddie and Fannie are for profit GSE's. They are quasi-governmental entities, supposedly under Congressional oversight, but they have paid their execs extremely well. They have never been regulators. Their "fraud investigators" are actually employed by them to find fault with others, preferably not the banks who sold them the paper, not to find internal fraud and corruption.
Freddie Mac Gets Paid To Obstruct Refinancings [View article]
Some of what you say is right. I remember watching an interview of Grennspan, in which he said the big banks knew that it would all colapse, but they thought they were smart enough to get out (sell to sucker) first. His answer as to why he did not warn the country was, that he spoke about "irrational exuberance" but as to a clearer warning, "The mood of the country at that time was such that it would not have been well-received." I found that to be very telling in regard to his loyalties to old Goldman Sachs and compatriots..
However, I am pretty sure you are mistaken when you say that the GSE's got in late in the game. Almost exactly ten years ago,my offices closed 8 mortgage loans for a couple who bought rental real estate. The underwritners did a horrible job and the crooked borrowers never intended to pay back the loans apparently and never made any payments on any of these loans. They were sold to Freddie Mac and I had to deal with Freddie's incompetent investigators, whose only concern was to CYA and to clear the names of the two huge banks who had fraudluelntly sold them the loans. It took me four years in our wonderful judicail system to prove the banks and Freddie Mac were the negligent parties. Dealing with Freddie Mac showed me that they were only concerned with protecting their sources of income, and did not give a rat's a___ about the taxpayer or the public. If they had cared, they would have bought the mortages with recourse. Now, they cannot recover without:
(a) parties which are still extant and against which redcovery can be had (one of the biggest, ABN-Amro, for example cannot be found, and their assets have mysteriously disappeared) (b) the desire to prosecute an action in fraud against their former complicitors in crime and (c ) proof, not only of the lenders' fraud, but of their own clean hands
Since the loans weree purchased without recourse and no more than one of these three essentail elements are normally present, the taxpayers have been left holding the bag.
Freddie Mac Gets Paid To Obstruct Refinancings [View article]
Yesterday I posted that MERS was created to hide the ownership of mortgages.
Today, the NY Atty Gen. brought a case against 5 TBTF banks alleging that they created MERS to hide the true owenrship of mortgage loans and had fraudulently submitted thousands of documents in foreclosures commenced by institutions which had no right to commence the foreclosures as they did not own the mortgage loans.
Freddie Mac Gets Paid To Obstruct Refinancings [View article]
Exactly. If you could breathe from @ 1993-@2002 (or whenever Conti-Mortgage, a subsidiary of Continental Grain, got stuck holding $ 500 Million of "D" paper they could not sell, ending the"D" paper market) you could get a cash out refi. It was almost as loose until Thanksgiving of 2005, but "C" and "D" paper had to go to hard money loans. The reason any breathing two-legged creature could borrow money was that they knew the GSE's would not only buy it, but would pay the lender a yield spread premium if they could con the borrower into paying a higher interst rate than they would qualify for at par.
. When Freddie's accounting scandal broke, the SEC gave them a nominal fine but heads did not roll. They continued to appear to make oodles of money. The result? FNMA's CEO owned a $50 million house. He was offerred a choice, resign and take $ 600,000 or be fired. Freddie's CEO was given a similar offer, but I forget the exact payment he received.
They were given these choices because they had dirt on the politicians they had bought, including the Senators who received the greatest amount of contributions, in order, Senator Obama (who was also the Wall Street darling in terms of contributions in his 2008 campaign and again this year) Sen. Chris Doods (then Chairman of the Senate Banking Committee and later recipient of a sweetheart deal from Countrywide under their "Friends of Angelo" program; and their spokesman, Barney Frank (who held up reform and claimed they were "fiscally sound"). On the other side of the aisle, they made lesser contributions, but spread it around so they were off-limits in terms of real oversight and apparently hired gingrich to protect them, much as Corzine hired clinton to protect MF Global.
The game is rigged for govt to serve the financiers who put them in offce and keep them there and take care of them during and after office. Remember Hillary's incredible luck with a one or two day gain of $ 200k on an investment she did not know about?
Stock Outlook: The Final Straw That Breaks The Market's Back [View article]
I love your consideration of a factor I had not considered. I have mulled this around and now ask, in the event of a euro breakdown, how long you think it might take for the gold bull market on gold to turn bear. Would there be an extended time for recognition of the demise of its value or would it move immediately inversely with the value of the dollar or some other scenario? In other words, how would you recognize the signs that your prediction was beginning to come to fruition?
Freddie Mac Gets Paid To Obstruct Refinancings [View article]
I am not saying that all borrowers were without blame. Some knew what they were doing. Some were financially inept and relied upon the lender to advise them as to what they "qualified for". Some were in desperate shape and hoped their finances would trun around. All were knowingly used by the mortgage industry and by the GSEs and by govt to exploit taxpayers. the greatest blame is with the GSEs, then with the industry then either with the citzenry or with govt officials.
Freddie Mac Gets Paid To Obstruct Refinancings [View article]
I forgot to mention that when I discovered a major bank intentionally misrepresented ownershipof a ten acre tract of land to the FHA, I went to the FTC website to report lender fraud. It prominently displayed how to report borrower fraud, but I could not find so much as a telephone number or address, much less an icon, indicating how to report lender fraud. The Congressional (statutory) mandate for the FTC includes regulation of businesses to protect consumers and competing businesses from unfair and decptive trade practices. It does not include investigation and regulation of consumers in order to protect dishonest business practices. Draw your own conclusions.
Freddie Mac Gets Paid To Obstruct Refinancings [View article]
Augustus. Where did that "crazy idea" come from?
What I said was that [many] borrowers did not have a chance to read the application, not the mortgage. The alleged borrower dishonesty was on the loan applications. The mortgage loan documents did not contain certifications by borrower's concerning their personal debt and/or income.
I got that idea from personally closing over 10,000 mortgage loans andmy firm closing over 50,000 mortgage loans over 25 years. Lenders would take telephone applications, then run credit reports, then add the info on the credit reports and delete accounts that did not show on credit reports, then send applications to underwriting, then adjust applications according to underwriting requirements, then send in the final applications with the closing packages, which for Freddie Mac loans averaged @ 100 pages long. Borrowers would oftern come in during lunch breaks, or have no reason to suspect their applications did not match the facts and not read them or, perhaps, skim them. I have been shown applications which were signed initially for the mortgage loan broker and then altered by the major bank lender. I have had lenders ask me to produce "dummy second mortgages" to justify their first mortgage loans, and had them make all kinds of other requests they would not put in writing and I had to refuse. I have had one major lender ask one of our junior attorneys to commit blatant HUD fraud, which I instructed my junior attorney to refuse. Lender fraud started accelerating in the early 1990's and probably peaked in 2004-2005 if my observations are typical of national trends and I suspect they are since most of the lenders I had to deal with were national.
Freddie Mac Gets Paid To Obstruct Refinancings [View article]
I forgot to mention that when the problems hit the fan, the first reaction of Freddie was to blame "dishonest borrowers" What a crock. Borrowers were asked to sign mortgage applications without the chance to read them. The statements thereon were the loan officers stements, coached by the broker liasons on how to pass through underwriting. Some underwriters were paid on commission as well. Who cared if it got paid back? Taxpayers and MIP cos. and PMI will stand behind it.
Freddie Mac Gets Paid To Obstruct Refinancings [View article]
Fannie and Freddie are "for profit" GSEs. If you don't think they were tools of the mortgage industry to rip off taxpayers, then go to FNMA's website and pull up their underwriting guidleines for 2002, for example. If you compare them to the underwriting guidlelines for lenders, you draw the conclusion that if the lender will make the loan, that is good enough for FNMA to buy it. Freddie has no such underwriting guidleines on its website because they simply adopted Fannie's. Why else would the industry set up a system of paying mortgage loan brokers for "production", with yield spread premiums and borrower-paid commissions? It was a system purposely designed by the big banks to promote fraud. Then, MERS was created to hide the true "investor"/ owner of the mortgages. As further camoflauge, the big boys use mortgage servicers to claim to be the lenders and hide the true mortgage-holders. The borrowers never met or even knew the id of the creditors. Borrowers and taxpayers were subject to, and are still subject to, govt sponsored fraud.
I am a private citizen interested in the preservation of liberty in the United States. I have been self-employed as a real estate attorney for 25 years and have invested in residential and commercial real estate for 35 years. My formal collegiate and post-graduate education includes philosophy, theology and law. My business experience has taught me that government agencies and employees, as a rule, betray the public trust, if they understand their obligations to the public, normally cannot be trusted and generally have no interest in the welfare of America's citizenry. Accordingly, I have concluded from both philosophical and pragmatic epistomological bases that the best govt is the least govt. Ergo, I adopted the psuedonym Rousseau SC
Each generation "inherits" the cultural and fiscal environment into which it is born. The question is whether one generation left a more sound and sustainable or less sound and sustainable environment than the one it inherited.
The example I used speaks of one major factor which contributes to the insolvency of this nation. We have left the country in worse shape, requiring more and more families to have two incomes to survive and work more and more just to pay for govt spending. This results in less personal freedom and essentially no leisure time unless you are a teacher or govt worker or independently wealthy or a public charge.
As I understand it, the total assets of this country slightly exceed $ 77 Trillion and the total liabilities, being govt debt unfunded obligations, (excluding contingent liabilities such as Federal housing guarantees such as Freddie, Fannie, FHA, VA and FDIC, etc.) exceed $ 100 Trillion and is rapidly growing. This is in an economy which has historically low debt service costs and slow growth with a historically rapid growth in both debt and unfunded liabilities. I do not believe we have ever seen such an unsustainable situation and it is getting worse by the hour. When the 16th Amendment was ratified in 1913, the Federal debt on June 30, 1913 was $ 2.918 Billion. The average daily Federal deficit alone in 2011 exceeded by approximately double the prior 122 years of national debt (we began with over $ 75 million of American Revolution debt adopted by the First Congress) in nominal dollars. The income tax is perceived to be the solution to servicing the national debt, but history proves the opposite, that it has simply increased the propensity and ability of Uncle Sam to borrow and buy constituents' votes.
Freddie Mac Gets Paid To Obstruct Refinancings [View article]
Freddie Mac Gets Paid To Obstruct Refinancings [View article]
However, I am pretty sure you are mistaken when you say that the GSE's got in late in the game. Almost exactly ten years ago,my offices closed 8 mortgage loans for a couple who bought rental real estate. The underwritners did a horrible job and the crooked borrowers never intended to pay back the loans apparently and never made any payments on any of these loans. They were sold to Freddie Mac and I had to deal with Freddie's incompetent investigators, whose only concern was to CYA and to clear the names of the two huge banks who had fraudluelntly sold them the loans. It took me four years in our wonderful judicail system to prove the banks and Freddie Mac were the negligent parties. Dealing with Freddie Mac showed me that they were only concerned with protecting their sources of income, and did not give a rat's a___ about the taxpayer or the public. If they had cared, they would have bought the mortages with recourse. Now, they cannot recover without:
(a) parties which are still extant and against which redcovery can be had (one of the biggest, ABN-Amro, for example cannot be found, and their assets have mysteriously disappeared)
(b) the desire to prosecute an action in fraud against their former complicitors in crime and
(c ) proof, not only of the lenders' fraud, but of their own clean hands
Since the loans weree purchased without recourse and no more than one of these three essentail elements are normally present, the taxpayers have been left holding the bag.
Freddie Mac Gets Paid To Obstruct Refinancings [View article]
Today, the NY Atty Gen. brought a case against 5 TBTF banks alleging that they created MERS to hide the true owenrship of mortgage loans and had fraudulently submitted thousands of documents in foreclosures commenced by institutions which had no right to commence the foreclosures as they did not own the mortgage loans.
Stock Outlook: The Final Straw That Breaks The Market's Back [View article]
I really like your article and your posts. Readable, thoughtful and courteous even to those of us with less understanding.
Freddie Mac Gets Paid To Obstruct Refinancings [View article]
. When Freddie's accounting scandal broke, the SEC gave them a nominal fine but heads did not roll. They continued to appear to make oodles of money. The result? FNMA's CEO owned a $50 million house. He was offerred a choice, resign and take $ 600,000 or be fired. Freddie's CEO was given a similar offer, but I forget the exact payment he received.
They were given these choices because they had dirt on the politicians they had bought, including the Senators who received the greatest amount of contributions, in order, Senator Obama (who was also the Wall Street darling in terms of contributions in his 2008 campaign and again this year) Sen. Chris Doods (then Chairman of the Senate Banking Committee and later recipient of a sweetheart deal from Countrywide under their "Friends of Angelo" program; and their spokesman, Barney Frank (who held up reform and claimed they were "fiscally sound"). On the other side of the aisle, they made lesser contributions, but spread it around so they were off-limits in terms of real oversight and apparently hired gingrich to protect them, much as Corzine hired clinton to protect MF Global.
The game is rigged for govt to serve the financiers who put them in offce and keep them there and take care of them during and after office. Remember Hillary's incredible luck with a one or two day gain of $ 200k on an investment she did not know about?
Stock Outlook: The Final Straw That Breaks The Market's Back [View article]
Would there be an extended time for recognition of the demise of its value or would it move immediately inversely with the value of the dollar or some other scenario? In other words, how would you recognize the signs that your prediction was beginning to come to fruition?
Freddie Mac Gets Paid To Obstruct Refinancings [View article]
Freddie Mac Gets Paid To Obstruct Refinancings [View article]
Freddie Mac Gets Paid To Obstruct Refinancings [View article]
What I said was that [many] borrowers did not have a chance to read the application, not the mortgage. The alleged borrower dishonesty was on the loan applications. The mortgage loan documents did not contain certifications by borrower's concerning their personal debt and/or income.
I got that idea from personally closing over 10,000 mortgage loans andmy firm closing over 50,000 mortgage loans over 25 years. Lenders would take telephone applications, then run credit reports, then add the info on the credit reports and delete accounts that did not show on credit reports, then send applications to underwriting, then adjust applications according to underwriting requirements, then send in the final applications with the closing packages, which for Freddie Mac loans averaged @ 100 pages long. Borrowers would oftern come in during lunch breaks, or have no reason to suspect their applications did not match the facts and not read them or, perhaps, skim them. I have been shown applications which were signed initially for the mortgage loan broker and then altered by the major bank lender. I have had lenders ask me to produce "dummy second mortgages" to justify their first mortgage loans, and had them make all kinds of other requests they would not put in writing and I had to refuse. I have had one major lender ask one of our junior attorneys to commit blatant HUD fraud, which I instructed my junior attorney to refuse. Lender fraud started accelerating in the early 1990's and probably peaked in 2004-2005 if my observations are typical of national trends and I suspect they are since most of the lenders I had to deal with were national.
Freddie Mac Gets Paid To Obstruct Refinancings [View article]
Freddie Mac Gets Paid To Obstruct Refinancings [View article]
Stock Outlook: The Final Straw That Breaks The Market's Back [View article]
Debt And The State [View article]
2012 Outlook: Anything Other Than The Apocalypse Is A Win [View article]
Debt And The State [View article]
The example I used speaks of one major factor which contributes to the insolvency of this nation. We have left the country in worse shape, requiring more and more families to have two incomes to survive and work more and more just to pay for govt spending. This results in less personal freedom and essentially no leisure time unless you are a teacher or govt worker or independently wealthy or a public charge.
As I understand it, the total assets of this country slightly exceed $ 77 Trillion and the total liabilities, being govt debt unfunded obligations, (excluding contingent liabilities such as Federal housing guarantees such as Freddie, Fannie, FHA, VA and FDIC, etc.) exceed $ 100 Trillion and is rapidly growing. This is in an economy which has historically low debt service costs and slow growth with a historically rapid growth in both debt and unfunded liabilities. I do not believe we have ever seen such an unsustainable situation and it is getting worse by the hour. When the 16th Amendment was ratified in 1913, the Federal debt on June 30, 1913 was $ 2.918 Billion. The average daily Federal deficit alone in 2011 exceeded by approximately double the prior 122 years of national debt (we began with over $ 75 million of American Revolution debt adopted by the First Congress) in nominal dollars. The income tax is perceived to be the solution to servicing the national debt, but history proves the opposite, that it has simply increased the propensity and ability of Uncle Sam to borrow and buy constituents' votes.