A WORLD OF DEBT
Our money system is not what we have been led to believe. The creation of money has been "privatized." It has been taken over by a private money cartel.
Except for coins, all of our money is created as loans advanced by private banking institutions, including the "private" Federal Reserve. Banks create the principal but not the interest to service their loans. To find the interest, new loans must continually be taken out, expanding the money supply, inflating prices and robbing you of the value of your money. Web of Debt unravels the deception and presents a crystal clear picture of the financial abyss toward which we are heading. Then it explores a workable alternative, one that was tested in colonial America and is grounded in the best of american economic thought, including the writings of Franklin, Jefferson and Lincoln. If you care about financial security, your own or the nation's, you should read this book.
Foreclosure-processing debacle
By NICK TIMIRAOS, JESSICA SILVER-GREENBERG And DAN FITZPATRICK
The unfolding foreclosure-processing debacle is causing bank stocks to slide and putting millions of delinquent borrowers in limbo.
But how disruptive the crisis ultimately becomes—for homeowners, the housing market and the broader economy—depends on how quickly a number of technical problems and legal challenges are resolved in the months ahead.
In essence, fast-paced modern finance is colliding with the much slower machinery of the U.S. legal system. While finance aims for efficiency and maximized profits, the courts demand due process ????.
And that's becoming a growing issue as lenders come under attack for taking short cuts to oust homeowners who haven't mailed in a mortgage check for months.
Banks stocks were hammered on Friday for the second straight day as investors continued gauging the sector's exposure to higher operating and legal costs.
Bank of America Corp. shares lost nearly 5%. Shares of Wells Fargo & Co. also fell nearly 5%, while J.P. Morgan Chase & Co. fell 4% and Citigroup Inc. lost nearly 3%. And the cost of protecting against the default of bank bonds continued to surge.
BofA and J.P. Morgan said they temporarily suspended foreclosure sales as they review procedures, while other big banks have said they are reviewing files but haven't promised to freeze foreclosures. But even here, bankers are having trouble slamming on the brakes.
On Friday, a bank spokesman said that its cancellations only cover foreclosure sales scheduled between Oct. 9 and Oct. 31 because it doesn't expect the review to take longer. BofA's moratorium includes all 50 states, while J.P. Morgan's covers 41 states.
The financial system and legal system have been on a collision course for some time in residential real estate. Both the lower standards for loans and the lax controls involving foreclosures were based on the premise that home prices would never fall, making it unlikely that many loans would go bad at once.????
Lawyers, politicians and consumer advocates, meanwhile, are using the legal problems to stop foreclosures and extract settlements for troubled borrowers that lower their mortgage debt.
There are two different problems. The first resulted after lawyers for troubled borrowers discovered that banks were using "robo-signers," or back-office employees who approved hundreds of foreclosure documents daily without reviewing them, in states where repossessions must be approved in court.
Banks had no choice but to suspend foreclosures in those states because submitting false witness testimony meant they hadn't properly proved ownership of the loans in foreclosure.
The second, and perhaps thornier, issue is that banks could have trouble proving they have standing to foreclose as they go back to correct errors. That problem stems largely from mortgages that were bundled into pools and sold to investors as securities.
One concern is that banks may have lost????, or didn't ever have, mortgage certificates. If that happened, banks will have to pause foreclosures for months as they track down certificates and refile paperwork.
"The best case is this is going to slow the process considerably but not change the outcome," says Joshua Rosner, managing director at investment-research firm Graham Fisher & Co.
For example, in Florida, which requires banks to foreclosure through the court system, the average borrower had spent 678 days without paying before being evicted through foreclosure, according to J.P. Morgan.
Bank of America said it had suspended foreclosures in Ohio while it reviews procedures there.
Still, attorneys for Bank of America moved to take back three homes through foreclosure on Oct. 12 in Franklin County, Ohio, according to a court clerk. In Summit County, Colo, J.P. Morgan on Friday took back a foreclosed condominium unit on the courthouse steps with a bid of $154,278, according to the county treasurer.
A J.P. Morgan spokesman said the bank isn't suspending foreclosure sales in Colorado.
In Lee County, Florida, both J.P. Morgan Chase and Bank of America continued to pursue judgments moving homes through foreclosure, according to court records. April Charney, a Florida-based attorney with Jacksonville Legal Aid says she's been contacted by at least five attorneys across the state who represent borrowers whose homes are proceeding to sale. A J.P. Morgan Chase spokesman said "we have asked our local foreclosure attorneys not to seek judgments."
Except for coins, all of our money is created as loans advanced by private banking institutions, including the "private" Federal Reserve. Banks create the principal but not the interest to service their loans. To find the interest, new loans must continually be taken out, expanding the money supply, inflating prices and robbing you of the value of your money. Web of Debt unravels the deception and presents a crystal clear picture of the financial abyss toward which we are heading. Then it explores a workable alternative, one that was tested in colonial America and is grounded in the best of american economic thought, including the writings of Franklin, Jefferson and Lincoln. If you care about financial security, your own or the nation's, you should read this book.
Foreclosure-processing debacle
By NICK TIMIRAOS, JESSICA SILVER-GREENBERG And DAN FITZPATRICK
The unfolding foreclosure-processing debacle is causing bank stocks to slide and putting millions of delinquent borrowers in limbo.
But how disruptive the crisis ultimately becomes—for homeowners, the housing market and the broader economy—depends on how quickly a number of technical problems and legal challenges are resolved in the months ahead.
In essence, fast-paced modern finance is colliding with the much slower machinery of the U.S. legal system. While finance aims for efficiency and maximized profits, the courts demand due process ????.
And that's becoming a growing issue as lenders come under attack for taking short cuts to oust homeowners who haven't mailed in a mortgage check for months.
Banks stocks were hammered on Friday for the second straight day as investors continued gauging the sector's exposure to higher operating and legal costs.
Bank of America Corp. shares lost nearly 5%. Shares of Wells Fargo & Co. also fell nearly 5%, while J.P. Morgan Chase & Co. fell 4% and Citigroup Inc. lost nearly 3%. And the cost of protecting against the default of bank bonds continued to surge.
BofA and J.P. Morgan said they temporarily suspended foreclosure sales as they review procedures, while other big banks have said they are reviewing files but haven't promised to freeze foreclosures. But even here, bankers are having trouble slamming on the brakes.
On Friday, a bank spokesman said that its cancellations only cover foreclosure sales scheduled between Oct. 9 and Oct. 31 because it doesn't expect the review to take longer. BofA's moratorium includes all 50 states, while J.P. Morgan's covers 41 states.
The financial system and legal system have been on a collision course for some time in residential real estate. Both the lower standards for loans and the lax controls involving foreclosures were based on the premise that home prices would never fall, making it unlikely that many loans would go bad at once.????
Lawyers, politicians and consumer advocates, meanwhile, are using the legal problems to stop foreclosures and extract settlements for troubled borrowers that lower their mortgage debt.
There are two different problems. The first resulted after lawyers for troubled borrowers discovered that banks were using "robo-signers," or back-office employees who approved hundreds of foreclosure documents daily without reviewing them, in states where repossessions must be approved in court.
Banks had no choice but to suspend foreclosures in those states because submitting false witness testimony meant they hadn't properly proved ownership of the loans in foreclosure.
The second, and perhaps thornier, issue is that banks could have trouble proving they have standing to foreclose as they go back to correct errors. That problem stems largely from mortgages that were bundled into pools and sold to investors as securities.
One concern is that banks may have lost????, or didn't ever have, mortgage certificates. If that happened, banks will have to pause foreclosures for months as they track down certificates and refile paperwork.
"The best case is this is going to slow the process considerably but not change the outcome," says Joshua Rosner, managing director at investment-research firm Graham Fisher & Co.
For example, in Florida, which requires banks to foreclosure through the court system, the average borrower had spent 678 days without paying before being evicted through foreclosure, according to J.P. Morgan.
Bank of America said it had suspended foreclosures in Ohio while it reviews procedures there.
Still, attorneys for Bank of America moved to take back three homes through foreclosure on Oct. 12 in Franklin County, Ohio, according to a court clerk. In Summit County, Colo, J.P. Morgan on Friday took back a foreclosed condominium unit on the courthouse steps with a bid of $154,278, according to the county treasurer.
A J.P. Morgan spokesman said the bank isn't suspending foreclosure sales in Colorado.
In Lee County, Florida, both J.P. Morgan Chase and Bank of America continued to pursue judgments moving homes through foreclosure, according to court records. April Charney, a Florida-based attorney with Jacksonville Legal Aid says she's been contacted by at least five attorneys across the state who represent borrowers whose homes are proceeding to sale. A J.P. Morgan Chase spokesman said "we have asked our local foreclosure attorneys not to seek judgments."
‘Foreclosuregate’ and the President’s Pocket VetoBy Ellen Brown
Amid a snowballing foreclosure fraud crisis, President Obama on Oct. 7 blocked legislation that could have made it more difficult for homeowners to challenge foreclosure proceedings against them. In a maneuver known as a “pocket veto,” Obama indirectly vetoed the legislation by declining to sign the bill passed by Congress while the legislators were on recess.
Mr. Obama’s action follows an announcement that Wall Street banks are voluntarily suspending foreclosure proceedings in 23 states. It seems voluntary suspension of foreclosures is under way to review simple procedural errors that the conscientious banks are allegedly hastening to correct.
However, those errors actually conceal a massive fraud and cannot be corrected with legitimate paperwork, which is why the servicers had to hire “foreclosure mills” to fabricate the documents. These errors involve perjury and forgery.
Karl Denninger at MarketTicker is calling it “Foreclosuregate.” The name fits. Three large mortgage issuers—JPMorgan Chase, Bank of America and GMAC—have voluntarily suspended thousands of foreclosures, and a number of calls have been made for investigations. Ohio Attorney General Richard Cordray is filing suit against Ally Financial and GMAC for civil penalties up to $25,000 per violation for fraud in hundreds of foreclosure suits.!!!!!!!
These problems cannot be swept under the rug; they go to the heart of the securitization process itself. The snowball has just started to roll.
Yves Smith of Naked Capitalism has uncovered a price list from a company called DocX that specializes in “document recovery solutions.” DocX is the technology platform used by Lender Processing Services to manage a national network of foreclosure mills. The price list includes such things as “Create Missing Intervening Assignment,” $35; “Cure Defective Assignment,” $12.95; and “Recreate Entire Collateral File,” $95.
Notes Smith: “Creating . . . means fabricating documents out of whole cloth, and look at the extent of the offerings. The collateral file isALL the documents the trustee (or the custodian as an agent of the trustee) needs to have pursuant to its obligations under the pooling and servicing agreement on behalf of the mortgage-backed security holder. This means most importantly the original of the note (the borrower IOU), copies of the mortgage (the lien on the property), the securitization agreement, and title insurance.”
All of the mortgages in question were “securitized,” meaning they were turned into mortgage-backed securities (MBS) and sold off to investors.
MBS are typically pooled through a type of “special purpose vehicle” called a real estate mortgage investment conduit or REMIC, which has strict requirements defined under the U.S. Internal Revenue Code (the Tax Reform Act of 1986). The REMIC holds the mortgages in trust and issues securities representing an undivided interest in them.
The mortgages, experts say, are pooled into REMIC trusts as a tax avoidance measure, and that to qualify, the properties must be properly conveyed to the trustee of the REMIC in the year the MBS is set up, with all the paperwork necessary to show a complete chain of title. For some reason, however, that was not done; and there is no legitimate way to create those conveyances now, because the time limit allowed under the tax code has passed.
Why weren’t they done properly in the first place? Struggling Americans deserve answers.
Ellen Brown developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest of 11 books, she turns those skills to an analysis of the Federal Reserve and the money trust. She shows how this private cartel has usurped the power to create money from the people themselves, and how we the people can get it back.
Mr. Obama’s action follows an announcement that Wall Street banks are voluntarily suspending foreclosure proceedings in 23 states. It seems voluntary suspension of foreclosures is under way to review simple procedural errors that the conscientious banks are allegedly hastening to correct.
However, those errors actually conceal a massive fraud and cannot be corrected with legitimate paperwork, which is why the servicers had to hire “foreclosure mills” to fabricate the documents. These errors involve perjury and forgery.
Karl Denninger at MarketTicker is calling it “Foreclosuregate.” The name fits. Three large mortgage issuers—JPMorgan Chase, Bank of America and GMAC—have voluntarily suspended thousands of foreclosures, and a number of calls have been made for investigations. Ohio Attorney General Richard Cordray is filing suit against Ally Financial and GMAC for civil penalties up to $25,000 per violation for fraud in hundreds of foreclosure suits.!!!!!!!
These problems cannot be swept under the rug; they go to the heart of the securitization process itself. The snowball has just started to roll.
Yves Smith of Naked Capitalism has uncovered a price list from a company called DocX that specializes in “document recovery solutions.” DocX is the technology platform used by Lender Processing Services to manage a national network of foreclosure mills. The price list includes such things as “Create Missing Intervening Assignment,” $35; “Cure Defective Assignment,” $12.95; and “Recreate Entire Collateral File,” $95.
Notes Smith: “Creating . . . means fabricating documents out of whole cloth, and look at the extent of the offerings. The collateral file isALL the documents the trustee (or the custodian as an agent of the trustee) needs to have pursuant to its obligations under the pooling and servicing agreement on behalf of the mortgage-backed security holder. This means most importantly the original of the note (the borrower IOU), copies of the mortgage (the lien on the property), the securitization agreement, and title insurance.”
All of the mortgages in question were “securitized,” meaning they were turned into mortgage-backed securities (MBS) and sold off to investors.
MBS are typically pooled through a type of “special purpose vehicle” called a real estate mortgage investment conduit or REMIC, which has strict requirements defined under the U.S. Internal Revenue Code (the Tax Reform Act of 1986). The REMIC holds the mortgages in trust and issues securities representing an undivided interest in them.
The mortgages, experts say, are pooled into REMIC trusts as a tax avoidance measure, and that to qualify, the properties must be properly conveyed to the trustee of the REMIC in the year the MBS is set up, with all the paperwork necessary to show a complete chain of title. For some reason, however, that was not done; and there is no legitimate way to create those conveyances now, because the time limit allowed under the tax code has passed.
Why weren’t they done properly in the first place? Struggling Americans deserve answers.
Ellen Brown developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest of 11 books, she turns those skills to an analysis of the Federal Reserve and the money trust. She shows how this private cartel has usurped the power to create money from the people themselves, and how we the people can get it back.
