Paula Rush

Freefall Fed Policies?

Finally, someone who actually does understand this entire debacle and the road we need to take to recovery. Can you call Bernie or Paulson, they really need a hand. At the last meeting, under grilling from the Senators, Paulson said, "If you've got any creative ideas, I'd be glad to hear them." Problem is, when you call them, write them, fax them, they ignore you. Believe me, I've tried. Our government doesn't seem to have the backbone to hold the players accountable, and dare we say, the criminals who ran off with all the money. The plan, as it stands now, and you so eloquently stated, is to give BANKS more money (liquidity) and lower their cost of borrowing (fed rate), which is not being passed on to consumers. It's a "BANK BAILOUT PLAN." Everyone's running around saying don't bail out the borrowers, but no one is realizing, they ARE BAILING OUT THE BANKS. The worst part is the banks have no intention of helping the borrowers and are all in save ourselves mode. A strategy ultimately doomed to backfire and fail. Players like Wells Fargo, Deutsche Bank, and Bank of America are using the bankrupt entities to hide behind while all the while they own the loans. Borrowers CAN ASK for the true owner of the note under TILA 1641(f)(2) and the servicer refuses to comply. See Kratz v. Countrywide case in Philly, and read the transcript from the hearing. Go on EPIQ and read the transcripts from the American Home Mortgage hearings on Oct. 31, 2007, and Feb. 1, 2008. The "servicer front" just refuses this information. In June, I attended the HOEPA meeting at the Federal Reserve Board, and I stated at that time the financial markets would collapse. All of the financial types looked at me as if I had five heads and dismissed me as irrelevant. Just weeks later the first two Bear Stearns hedge funds collapsed. I like to say I told you so, and normally it would be fun to do that, but not when millions of families are losing their homes due to this systemic failure in our government to prevent this debacle, failure to enforce the laws on the books, and lack of adequate response to what is argueably their failure. The biggest dirty secret is, they are selling off assets at fire sale prices to each other, pennies on the dollar in some cases (New Century (30Cents), American Home Mortgage(50Cents), but if you're a consumer asking for a loan modification, FORGET IT. So instead of accepting a reduced payment over a period of years which might cost a bank a few thousand dollars over a long period of time, to be made up later from interest paid over time, they prefer to fire sale assets, to other financial players who then turn around and foreclose enforcing those same loans for 100 cents on the dollar and profiting. Due to the incestuous relationships, ultimately they will all profit again. So it's, you help me, and I'll help you. Who's losing is the person whose retirement funds were invested in the fire sale assets, the taxpayers who will pay for all the losses the government is covering, and the taxpayers who will pay for all the social services the bankrupt and homeless will need. But also, don't forget these criminals stole the retirement funds of millions of elderly people, both in the stock market investments, and also in equity in their homes. The ripple will be so severe, it will be felt for years to come. I was sick to learn how many seniors who could have obtained safe reverse mortgages, were put in Pay Option Arms, and lost their home because of it. I, for one, am outraged. I petitioned the bankruptcy court of American Home to offer the same opportunity to bid for borrowers to bid for their loan as the FORMER financing partners get (the ones holding the fruits of fraud, hiding the involvment) and it was denied. Even though the bankruptcy laws clearly state, at an auction free and clear, ANY ENTITY WITH ANY INTEREST CAN BID. I also demanded certain protections be added to the loan agreements which were absent before. 363(O) states if you buy an interest in a consumer loan, you are liable for all remedies which could be asserted against the original holder. That I was successful on. Now if anyone can just find force them to tell who owns the loan, we can all enforce our rights! Who has more of an interest in buying the loan for 30 cents on the dollar then the homeowner! As long as our government allows this sort of illogical and self-serving behaviors to continue, there is no hope for the consumer.

Bernanke's Plan Could Work

It gets very tedious listening to people, including the author of this article who assert they know what will work and won't work. I've spent a thousand hours plus investigating this industry, the practices, and why the lenders, and associated Wall STreet players are NOT MODIFYING LOANS. So, having said that, until you understand the securtized trust, the mortgage insurance on these entire pools, and the credit default swaps, senior and subordinated notes, and other wonders of financial engineering, you should not assert to know what will work. The only thing that is true is the foreclosure costs are rising as borrowers are fighting back in epic numbers, the lenders are having trouble selling the homes they foreclose on, and the MI insurers and credit default swap partners are refusing to pay, accusing the lenders of fraud. Recently Bank of America and TRIAD did this to American Home. However, John Gray, Senior Fraud investigator for EMC/ Bear Stearns has also asserted that it is being discovered loans were "Pledged" in more then one place. So add that possibility into the mix and you begin to get why in many cases loans can't be modified. Loans have even been pledged into CDARS, where a bank gets to borrower money to make loans, the money they borrower is fully FDIC even though it is well over the 100,000 cap, and when all those defaults come down, the S&L crisis will look like a walk in the park. If these same loans were pledged into trust and borrowered against through small banks belonging to this network, then you've got some even bigger issues. So modify loans, that's a joke. Even Paulson said that only 1% of loans are being modified. The dog and pony PR show is about to be unveiled, when the entire financial markets can no longer cover it up. So many borrowers can't be helped, not because the borrower wasn't put in a predatory loan, or because they shouldn't be helped, but because the lenders greed and illegal practices may make it impossible for them to modify loans. The government will have to step in, this is becoming obvious. I believe they will step in by spring or early summer. This topic is much more complicated then what I'm asserting here, and I would need a thousand hours and a book to educate you on these issues. Even Bernake needed a tutorial on the securitized trust. My guess he still doesn't get it. I would just simply like to say, please stop asserting things based on press releases you've read from the industry, or a surface analysis of the situation. Do the research yourself. Dig deeper, or contact me and I would happy to attempt to explain it to you, if you've got a few weeks to spare.