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Is A 90 Day "Mortgage Meltdown" Foreclosure Moratorium Imminent As The RoboSigning Scandal Goes Mainstream?

Tyler Durden's picture




 

The Massive Mortgage Mess as we affectionately call it seems to be getting new names with each passing day - the latest one is, quite appropriately, RoboSigning Scandal (funny how after the stock market, "robotic" technology will soon becoming equated with the biggest mortgage scam in history). During today's Kudlow segment, CNBC's Diana Ollick who is by and far the company's best (and only) investigative reporter, confirms various so far unfounded rumors, that the government is planning to institute a 90 day foreclosure moratorium as it deals with the realization of just how big and pervasive the mortgage problem is, and even worse, will soon be. It is so bad that even a typically ebullient Larry Kudlow is forced to note that this is the "housing equivalent of the credit financial meltdown" and that "this is going to go on for ever." The biggest issue that is now developing, as we noted last week, is the fact that title insurers (firms such as Fidelity National, First American, Stewart Info and Old Republic) are refusing to insure mortgages in foreclosure or otherwise, uncertain as to who actually owns the title. And for all those who believe this will merely keep prices artificially high, we have very bad news - the problem with the title insurers walking away on fears of lawsuits is that no lender will be willing to write a mortgage without title insurance, meaning that suddenly the up-front component of home purchases will either necessarily have to surge, or home prices will have to plunge by a like amount, as there is simply not enough equity (read money) to cover the resulting debt deficiency. Alas, this mess is just starting, and as people realize how bad it is, it very well may lead to a total collapse in the housing market.

For all those hoping on a quick resolution so that Americans can go back to watching Dancing with the Stars, you may wish to reconsider. Quote Kudlow: "We're not talking just a few weeks, or a few months. This sounds like a long, drawn-out, bureaucratic, robotic process with lawyers, and oh my gosh." Another implication: a veritable bonanza for both lawyers and defaulters, the former of whom will end up making billions in legal fees (collected from the same banks which are still sucking off the ridiculously low TLGP-funded, and thus taxpayer sponsored fees), while the latter will be able to live mortgage free for years, while continuing to buy useless trinkets instead of paying what is contractually their duty.

Another important topic discussed is the fact that due to decades of faulty securitizations, suddenly no bank knows who owns what. Courtesy of several trillion in now title-undefined mortgages, which in turn form the basis for thousands of CDOs, which in turn are split up into millions of tranches, and includes the complicity of Fannie, Freddie and private label, it is the banks and their clients that have shot themselves in the foot: as other have noted, very soon, the entire MBS process can and very may grind to a halt (if that happens, goodbye Pimco).

As mentioned earlier, Ollick confirms that according to rumors, the government is going to impose "some kind of 90 day foreclosure moratorium on the banks which would melt down the housing market." In fact Congressman Merkley already indicated he is for a foreclosure moratorium.

At the end of the day: the one true loser, is the law-abiding, conscientious, tax and mortgage paying middle class American, who is now preparing for TARP 2 as the banks will all almost definitely need to run to the bailout through because of this catastrophe.

Must watch 10 minute explanation for anyone who is still confused by any aspect in this massive story.

 

 

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Tue, 10/05/2010 - 13:41 | 626463 hedgie
hedgie's picture

No, this crisis will not help the banks to extend and pretend.  There will be a lot of collateral damage.  For example, many people who have been making payments on their mortgages will not stop paying.  

Mon, 10/04/2010 - 21:07 | 624793 willien1derland
willien1derland's picture

SO I imagine this too is 'baked into' the market - Could NOT happen to a more deserving constituency as the banks will need to be nationalized in order to prevent all out chaos - this is the confimration of the 'Double-Dip' scenario for the US as the financial system is already weak - this will push it & unfortunately the REAL economy into significant contraction - Warm up the printers Bennie - Gonna be a long winter....God Bless the US...Lord KNOWs we will need it!

Mon, 10/04/2010 - 21:36 | 624801 Spalding_Smailes
Spalding_Smailes's picture


..."Green shoots is a term used colloquially and propagandistically to indicate signs of economic recovery during an economic downturn. It was first used in this sense by Norman Lamont, the then Chancellor of the Exchequer of the United Kingdom, during the 1991 Recession.[1] At the time, Chancellor Lamont was criticized for "insensitivity".[2] The phrase was used again by Baroness Vadera, former Business Minister of the UK in January, 2009 to refer to signs of economic recovery during the late-2000s recession, again to criticism from the media and opposition politicians[2]. The U.S. media started to use the phrase to describe domestic economic conditions in February 2009 when the New York Times quoted Bruce Kasman, chief economist at JPMorgan Chase as saying, "It's too early to get excited, but I think there are a couple of green shoots that say we're not going down as heavily in the first quarter [of 2009] as we were in the fourth quarter [of 2008]."[3] The Federal Reserve Chairman, Ben Bernanke, made the first public use of the phrase by a Fed official in a March 15, 2009 interview with CBS 60 Minutes. Since February and March 2009, it has been used increasingly in the media[4] and by a number of commentators[who?] to refer to positive economic data and statistics during the late-2000s recession."....http://en.wikipedia.org/wiki/Green_shoots

Mon, 10/04/2010 - 22:27 | 624942 StychoKiller
StychoKiller's picture

There's gonna be lots of "shoots" alright, but tracer rounds are seldom green!

Mon, 10/04/2010 - 23:00 | 625000 minus dog
minus dog's picture

Sure they are, just not *ours*

Mon, 10/04/2010 - 23:18 | 625023 laughing_swordfish
laughing_swordfish's picture

Wrong - Russian 7.62x39 (AK) tracer is green - ours are orange.

Just sayin'

Mon, 10/04/2010 - 21:08 | 624796 MGA_1
MGA_1's picture

MBS... such a good idea...

Mon, 10/04/2010 - 22:04 | 624888 snowball777
snowball777's picture

...chuckled Satan to himself.

Tue, 10/05/2010 - 05:48 | 625309 SWRichmond
SWRichmond's picture

...and then he whispered in Lloyd's ear: "Do God's Work."

Tue, 10/05/2010 - 06:18 | 625332 snowball777
snowball777's picture

LOL

Tue, 10/05/2010 - 13:56 | 626514 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

+10 (nice comedic assist)

Mon, 10/04/2010 - 21:21 | 624797 bob_dabolina
bob_dabolina's picture

"Alas, this mess is just starting, and as people realize how bad it is, it very well may lead to a total collapse in the housing market."

Should have happened two years ago. Had home prices fallen to where people can afford them, cleansed the debt, and started over, we very well may have been on a long/stable road to recovery. But noooooooo, the powers that be will tinker and molest this cadaver till' there is nothing left. Sickening. Dreadful.

BTW - I hope Diana gets a job at a better news station.

Mon, 10/04/2010 - 22:07 | 624894 dogbreath
dogbreath's picture

i rember reading a description of the bankruptcy resulting from low bidding by a contrator.   The end result is the recievers move in and bayonet the wounded and the lawyer move in after and strip the bodies.

Tue, 10/05/2010 - 08:07 | 625415 Big Corked Boots
Big Corked Boots's picture

But if you are a smart contractor, you strip the bodies before they show up in bankruptcy court.

"Sorry, Your Honor, there are no remaining assets..."

BTDT.

Tue, 10/05/2010 - 08:29 | 625458 dogbreath
dogbreath's picture

I agree but what if you were trying to stay in bussiness. 

Tue, 10/05/2010 - 10:46 | 625850 hedgeless_horseman
hedgeless_horseman's picture

Did you not read the part about the bayonet?  The receiver will fix that little going concern problem.

Tue, 10/05/2010 - 15:11 | 626900 RockyRacoon
RockyRacoon's picture

BTW - I hope Diana gets a job at a better news station.

If this keeps up she can start her own network on cable.  They can also host a new series of "Pimp Dis House", and "Remodeling for Dummies".  It's a whole industry now.

Mon, 10/04/2010 - 21:14 | 624806 Id fight Gandhi
Id fight Gandhi's picture

October meet black swan

Mon, 10/04/2010 - 21:14 | 624807 IrrationalMan
IrrationalMan's picture

i think that if anything this would drive home prices up not down.  First the supply will be kicked down the road and the supply is on the lower end of the price sale.  THen there are just houses left for normal sales.  Lower supply, higher costs.  Also the houses left will probably cost more to begin with.

Rally On.

Mon, 10/04/2010 - 22:36 | 624960 iDealMeat
iDealMeat's picture

We're going to start seeing signs that say "Clear Title" under the for sale sign. Like the "Swimming Pool" sign..

Tue, 10/05/2010 - 01:39 | 625216 LeBalance
LeBalance's picture

but no title company would stand behind that.

Tue, 10/05/2010 - 08:12 | 625420 Big Corked Boots
Big Corked Boots's picture

But, if you have a mortgage that was not divided up and sold in little pieces into the marketplace, you *should* have a clear custody of ownership and a clear title.

Someone want to buy an organic fruit/veg + horse farm? Thirteen acres just 65 miles from Wall Street? Yours for $999,900 or 750 ounces of fine gold.

Tue, 10/05/2010 - 03:58 | 625274 free
free's picture

 

E'ffn' hilarious!  LMFAO!

Tue, 10/05/2010 - 01:03 | 625174 Glass Steagall
Glass Steagall's picture
Are you fucking high or just stupid?   1) If defaulted homeowner stays put, you get no demand for housing from them.   2) If title ins. co's refuse to issue, you get no lending on repo sales.   3) If joe Sixpack gets the next 6 mos. to 2 years rent-free, you get suppressed rents. (See also, #1 above)   4) Mr. "I got a deal @ 40cents on the dollar" investor who can't cover his carrying costs (see #3) now joins the ranks of backlogged foreclosures.   Dude! There is already a minimum (CNBS) 2 year inventory of REO (squat-able, now) homes!!! So where does your increased demand come from again?
Tue, 10/05/2010 - 06:20 | 625335 snowball777
snowball777's picture

He did state clearly that he's irrational.

Tue, 10/05/2010 - 15:13 | 626909 RockyRacoon
RockyRacoon's picture

Are you fucking high or just stupid?

One can be both.  I've done it.  It's a nice place to hide out now and then.

Mon, 10/04/2010 - 21:16 | 624811 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Swans and what not.....

Tue, 10/05/2010 - 00:47 | 625141 carbonmutant
carbonmutant's picture

Under whatnot...

Francisco Everardo Oliveira Silva otherwise known as Tiririca the Clown won a landslide congressional victory in Brazil. Local Politicians are upset...

He campaigned on the slogan “Vote Tiririca! It can’t get any worse.”

http://newsfeed.time.com/2010/10/04/clown-campaign-victory-wouldn%E2%80%...

Cramer was pumping the Brazil ETF today...

Tue, 10/05/2010 - 06:11 | 625329 iota
Tue, 10/05/2010 - 10:46 | 625852 i-dog
i-dog's picture

"I'd vote 1911"

H-o-o-o-o-o-o-o-t!

Mon, 10/04/2010 - 21:16 | 624812 laosuwan
laosuwan's picture

This is why I love ZH. They have been talking about this for over a year and only now is the mainstream press even mentioning it. And they are only mentioning it now because the awareness ZH raised trickled down to one congressman who made a fuss about it enough the press could not ignore it. Now look for the press to water it down, distract and diminish because the mainstream press is not on the side of their viewers and readers.

You may have to wade through the crazy comments of a few armchair jihadists and spam burying survivalists to get at the real content, but its worth it. Thanks ZH for the good work you do everyday.

Mon, 10/04/2010 - 21:38 | 624854 Janice
Janice's picture

Hey! I resemble that remark.  Have shovel and spam, will travel. 

Mon, 10/04/2010 - 21:51 | 624867 traderjoe
traderjoe's picture

Yea, I was trying to figure out which one I was, and then I decided there was no need to be mutually exclusive....

Mon, 10/04/2010 - 22:12 | 624900 Spalding_Smailes
Spalding_Smailes's picture

RELIEF FUND URGED MEMBER BANKS

Out of the experiences of the depression, resulting in the necessity for organization of the $500,000,000 corporation to relieve banks temporarily in distress, may come a remodeled Federal Reserve System that will be so constituted as to meet the requirements of present-day commerce and industry.
-October 9, 1931

Tue, 10/05/2010 - 00:38 | 625131 Lux Fiat
Lux Fiat's picture

Spam?  Spam!!?  No, try Hormel's Chili Masters in a can, tuna (packed with quite a bit of dolphin tonight), canned chicken breast...anything but Spam....  The shelf life may not be quite that of Spam, but then again, I don't have to add quite as many Tums to the emergency pantry, and rotation is not an issue.

Tue, 10/05/2010 - 01:20 | 625196 GoinFawr
GoinFawr's picture

Spork, then.

Tue, 10/05/2010 - 14:43 | 626773 Lower Class Elite
Lower Class Elite's picture

Blasphemy!  Fried Spam on (untoasted cold) generic white bread with mustard?  DEE-frickin-LISHUS.  Kinda sticks to the roof of your mouth, though...

Tue, 10/05/2010 - 15:18 | 626933 RockyRacoon
RockyRacoon's picture

Everybody knows that SeaBond is white bread paste.

Tue, 10/05/2010 - 02:24 | 625241 sushi
sushi's picture

Now look for the press to water it down, distract and diminish because the mainstream press is not on the side of their viewers and readers.

EndQuote

But the issue has just unleashed a pack of hungry hounds from hell otherwise known as lawyers. They smell raw meat and they will not be denied. If FDR could have dreamed up a boondoggle like this he would have had no need for WWII.

Tue, 10/05/2010 - 09:06 | 625547 Bob
Bob's picture

This could go far to rehabilitate the image of lawyers, who in all fairness are the soldiers fighting injustice in the trenches of the legal system . . . though, unfortunately, the majority have reserved their energies for causes that promise riches in return.  But here we have a combination of circumstances that create the Perfect Storm. 

Let us pray that the rule of law holds.

We must pressure our elected officials like never before not to interfere.  No retroactive immunity and no bailouts. 

Tue, 10/05/2010 - 04:30 | 625285 RabidLemming
RabidLemming's picture

spam is heavy and tastes icky, go for freeze dried. tastes great and leaves more room for ammunition!

Tue, 10/05/2010 - 12:36 | 626216 WaterWings
WaterWings's picture

Heh, exactly.

Have M1A + Katadyn, will travel.

Wed, 10/06/2010 - 21:17 | 630956 laosuwan
laosuwan's picture

there is no true food but spam and the day will come when spam will conquor the entire world, spam willing.

 

 

Mon, 10/04/2010 - 21:16 | 624813 Jason Bourne
Jason Bourne's picture

Lets be clear here.

If there is a moratorium on foreclosures.

There needs to be a moratorium on all debt payments of any fucking kind.

There also needs to be a moratorium on tax payments too.

So we save money - don't buy things we can't afford and get fucked anyway by the fuckers that leant people money and the assholes that lied and borrowed more than they can afford.  I don't give a fuck if my entire neighborhood sinks into oblivion because every house except mine and my neighbors is foreclosed on.  Even if the value of my house drops 90% thats fine - we have NO debt.

 

I'm SICK of bailouts for ANYBODY.  Maybe let the market fix the fucking market for a change.  Maybe let us collapse completely and just make sure people are clothed and fed and violence is kept to a minimum.  Maybe from there we have a chance to re-build the country.

 

Is there not one fucking leader who actually gives a fuck about the USA for the long term? With over 270 million people can there not be at least 1000 good people who actually fucking care and are not owned by money?

 

Why are we so fucked up as a nation?

 

Mon, 10/04/2010 - 21:30 | 624837 Spalding_Smailes
Spalding_Smailes's picture

There needs to be a moratorium on all debt payments of any fucking kind.

 

Jamie Dimonjust passed out ...

Mon, 10/04/2010 - 22:14 | 624905 frankTHE COIN
frankTHE COIN's picture

Mouth to mouth is out of the question.

Mon, 10/04/2010 - 22:36 | 624958 snowball777
snowball777's picture

So should I take my boot off his neck or not?

Tue, 10/05/2010 - 06:05 | 625323 Zerohedge fan
Zerohedge fan's picture

AMEN

Mon, 10/04/2010 - 21:32 | 624846 MacHoolahan
MacHoolahan's picture

+ 3 trillion

Mon, 10/04/2010 - 23:57 | 625065 purple
purple's picture

--With over 270 million people can there not be at least 1000 good people who actually fucking care and are not owned by money?--

 

I am not familiar with that nation, sir.

Tue, 10/05/2010 - 00:31 | 625122 Founders Keeper
Founders Keeper's picture

Thanks for your post Jason. 

Am a long time ZH reader.  This is my first post.  I usually avoid posting myself on forums, blogs, chats, social networks, etc.  I like to maintain a low internet signature.  However, I wanted to thank Jason for his passionate post.  And, while I'm at it, thanks to ALL of you at ZH, from Tyler and his Staff to all the forum folks.  You've had a significant impact on family and I.  I hope in the future I can bring a little something to forum in return. 

Jason, I feel your passion and frustration.  As for "Leaders,"  I don't think it's time yet.  For now, we're just moving into the crisis---the storm.  In the bigger picture, things are only beginning to unfold.  A lot is going to happen before true and trusted leaders emerge.  Heck, we probably won't even acknowledge many of them as such until long after their service.  Who knows, you may be one of them.

Tue, 10/05/2010 - 01:49 | 625206 GoinFawr
GoinFawr's picture

Freedom of Informaion Act + Clean Drinking Water Act + 40 years experience scoring wins for mainstreet= I can think of a potential leader like that that ran 2008. Too bad most of you didn't; or didn't even bother at all for that matter.

Just sayin'. It's not like you haven't had opportunities.

Regards

 

Tue, 10/05/2010 - 10:25 | 625775 weinerdog43
weinerdog43's picture

Junked you because NO ONE ran on that in 2008.

Tue, 10/05/2010 - 07:27 | 625372 MsCreant
MsCreant's picture

You and Jason posting give me hope. Not dope hope. Thanks.

Tue, 10/05/2010 - 15:58 | 627080 RockyRacoon
RockyRacoon's picture

Welcome to the neighborhood. 

I'd bake ya some oatmeal cookies but I'm busy burying some gold.

Good luck on that low profile thingie.

Tue, 10/05/2010 - 01:14 | 625189 Glass Steagall
Glass Steagall's picture

Might be time to let it burn brotha'.

 

Be glad you might stand a chance. Ain't gonna bode well for a lot of people out there and let's be honest - some of us are past apathetic compassion for those who've refused to listen.

Tue, 10/05/2010 - 04:02 | 625275 free
free's picture

If there is a moratorium on foreclosures.

There needs to be a moratorium on all debt payments of any fucking kind.

There also needs to be a moratorium on tax payments too.

 

Sweet.  Bring it on!

Tue, 10/05/2010 - 14:06 | 626562 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

 I don't give a fuck if my entire neighborhood sinks into oblivion because every house except mine and my neighbors is foreclosed on.  Even if the value of my house drops 90% thats fine - we have NO debt.

When they won't send out a cop to your "neighborhood" you might stay in the "don't-give-a-fuck" mode but if they decide to turn off the water and the electricity...

I ain't recommending anyone get bailed, I'm just sayin' you may be affected despite the lack of mortgage...

Mon, 10/04/2010 - 21:19 | 624817 Bob
Bob's picture

Simple minded meme: 

Because criminal banks were bailed out by our government against our will, when the deeper truths of their crimes become known and the government again bails out the criminal banks against the will of the people, it will be the fault of sociopathic insolvent homeowners. 

What a crock of shit.   

Mon, 10/04/2010 - 23:10 | 625010 JLee2027
JLee2027's picture

There might be a revolt if another bailout happens.

Mon, 10/04/2010 - 23:56 | 625064 goldfish1
goldfish1's picture

Revolt? By who? Gubmint workers? Hell no.

Welfare recipients? Hell no. Working class? Hell no...too broke, too tired, too busy, too drunk or stoned.

That leaves about 2% of us.

Tue, 10/05/2010 - 02:46 | 625255 blunderdog
blunderdog's picture

FWIW, the gross ratio of Founding Fathers to colonials was pretty small, too.

 

Tue, 10/05/2010 - 10:23 | 625766 TJ_is_annoyed
Tue, 10/05/2010 - 14:52 | 626819 Overpowered By Funk
Overpowered By Funk's picture

Or perhaps the 1%er's. 81 bro.

Mon, 10/04/2010 - 21:18 | 624818 Everyman
Everyman's picture

Yes, but those "EMPTY" MBS need to be investigated by the SEC.  Remember they had to register and prepare a prospectus on how these securities were formed and how they authinticated the porperties in the securitization process.  There are LOTS of people on Wall and Broad that need to go to JAIL FOR SECURITIES FRAUD for MBS formation.

 

BTW, TEXAS just HALTED ALL FORECLOSURES!!!!

Mon, 10/04/2010 - 22:14 | 624904 1100-TACTICAL-12
1100-TACTICAL-12's picture

Good deal now I'll float my payments a couple of months & buy some more PM's. And if I'm lucky I'll pay off my mortgage, with the PM's I bought by not paying my mortgage...

Tue, 10/05/2010 - 06:10 | 625328 Zerohedge fan
Zerohedge fan's picture

I am with Ya!

 

 

100% silver

Tue, 10/05/2010 - 12:38 | 626219 WaterWings
WaterWings's picture

Yes. All in Ag.

(if you don't count dehydrated food and battle packs)

Mon, 10/04/2010 - 21:21 | 624820 bugs_
bugs_'s picture

Only 90 days?  How hard would it be to extend that?  How hard would it be to extend that again?

Mon, 10/04/2010 - 21:24 | 624824 Ieetseelmeet
Ieetseelmeet's picture

The quick answer is 


Eminent domain

 

The municipality takes over the property with compensation to the owner being the value of the taxes owing.

Case closed.  Who wants the property?

Mon, 10/04/2010 - 22:06 | 624891 Hansel
Hansel's picture

Something like this needs to happen.  Have the state/county/local government auction the houses off.  Banks absolutely shouldn't be involved in the resolution.  Bankrupt the financial institutions, and sell of their assets.  One massive garage sale.

Mon, 10/04/2010 - 22:19 | 624921 Everyman
Everyman's picture

RTC, bitchez!

Tue, 10/05/2010 - 00:32 | 625126 TexasAggie
TexasAggie's picture

Remember, the people not paying their mortgage are also not paying their property taxes.  This will severely impact cities and school districts.  Need to by ins for cities, schools and counties defaulting.

Tue, 10/05/2010 - 01:18 | 625194 Glass Steagall
Glass Steagall's picture

DING! DING! DING!

Tue, 10/05/2010 - 00:14 | 625088 quadcap
quadcap's picture

"All your base are belong to us."

Mon, 10/04/2010 - 21:28 | 624825 MacHoolahan
MacHoolahan's picture

Agree - where ownership can't be proved, ownership should revert to the taxpayer.

What (per individual) deposit protection scheme runs in the US, guys? In the UK it's £50k (but was £30k in 2007 when Northern Rock got into such a mess).

Is a US bank run impossible in current circumstances? Who would want their money propping up this shite - even the mattress is better.

 

(Edit: Surely it's "swan time")

Tue, 10/05/2010 - 02:32 | 625245 Real Estate Geek
Real Estate Geek's picture

What (per individual) deposit protection scheme runs in the US, guys?

Each depositor insured to $250,000 (per bank).

Tue, 10/05/2010 - 03:35 | 625266 Jendrzejczyk
Jendrzejczyk's picture

You must have missed this post a few days ago.

 "A Broke FDIC Expands Checking Account Insurance From $250,000 To Infinity"

http://www.zerohedge.com/article/broke-fdic-expands-checking-account-ins...

Mon, 10/04/2010 - 21:27 | 624827 tahoebumsmith
tahoebumsmith's picture

Oh and Ben Bernanke must be so proud of his 1.5 trillion dollars worth of toxic MBS! Ha Ha, I do remember him saying how important it was for the FED to remain private...

Mon, 10/04/2010 - 21:29 | 624835 Everyman
Everyman's picture

no kidding.

 

"Ben, you bought what will those trillions you printed??!?!?!?!"

Tue, 10/05/2010 - 01:35 | 625213 Assetman
Assetman's picture

Don't laugh... those trillions of agengy MBS will have their underlying mortgage debt backed by the full faith and credit of the U.S. government.

You don't think Ben didn't know that when he bought all that junk???

All those potential losses will be transferred to the taxpayer, my friend.

 

Mon, 10/04/2010 - 21:29 | 624836 Bob
Bob's picture

+1.5T . . . +++++

Mon, 10/04/2010 - 21:55 | 624872 Arius
Arius's picture

well...he did not know... how could he??? dont be so hard on him...he just tried his best...probably not good enough but he is a professor what does he know about investing....

Mon, 10/04/2010 - 22:24 | 624936 Uncle Sugar
Uncle Sugar's picture

BB must have been duped by a predatory lender.

Tue, 10/05/2010 - 00:35 | 625134 TexasAggie
TexasAggie's picture

I didn't know BB lived in a red lined low income neighborhood where predatory lenders were behind every bush.

Mon, 10/04/2010 - 21:27 | 624828 Fix It Again Timmy
Fix It Again Timmy's picture

No tickee, no washee...

Mon, 10/04/2010 - 21:32 | 624842 Spalding_Smailes
Spalding_Smailes's picture

 

In all cases, the lack of acquisition of the Class Members' mortgage loans violates the prospectus presented to the investors and the IRS REMIC requirements.

If an MBS Trust was audited by the IRS and was found to have violated any of the REMIC requirements, it would lose its REMIC status and all back taxes would be due and owing to the IRS as well as the state of Kentucky. As previously stated, one hundred percent (100%) of the income will be taxed.

As the Class Members are identified and the identity of the MBS REMICs revealed through this action, the individual "Trusts"/ MBS REMICs will be turned over to the IRS for auditing.

While attempting to circumvent Kentucky recording Statutes, the MBS Trust created for itself a situation wherein it had no legally recognizable interest in the loans for the benefit of the investors. The investors were invested in nothing. The MBS possessed nothing on the date the REMIC closed and perpetrated a fraud on the investors and the American taxpayer through its fraudulent qualification as a REMIC with the SEC.

Yep.  Welcome to the second circle of Hell.  Incidentally, I think both the Federal and State governments have a revenue problem, right?  This ought to help that situation materially.

Mon, 10/04/2010 - 22:08 | 624886 Number 156
Number 156's picture

Its up the the Federal Government to demand taxes from the MBS REMICs. I believe that  If history is any indication of what may come, the government, will look the other way and will not demand that the REMICs pay federal taxes. Don't expect any enforcement. They will look the other way as they have been doing since way back when.

The individual States are another issue, seeing that many of them are running deficits and are dying for revenue.

Mon, 10/04/2010 - 22:20 | 624923 Everyman
Everyman's picture

+100000

Mon, 10/04/2010 - 22:19 | 624918 dogbreath
dogbreath's picture

"The investors were invested in nothing. The MBS possessed nothing on the date the REMIC closed and perpetrated a fraud on the investors and the American taxpayer through its fraudulent qualification as a REMIC with the SEC."

 

OMG  I say that in a good way.  There is an opportunity in all of this.

Mon, 10/04/2010 - 22:21 | 624925 Everyman
Everyman's picture

WHERE IS THE SEC FOR INVESTIGATING ALL THE INSTITUTIONS THAT FORMED MBS???

Mon, 10/04/2010 - 23:38 | 625041 dogbreath
dogbreath's picture

I am not a bureaucrat by nature but this is a crime committed by the nature of bureaucrats

Mon, 10/04/2010 - 23:38 | 625044 dogbreath
dogbreath's picture

is there a job in digging up the dirt

Tue, 10/05/2010 - 02:35 | 625246 Widowmaker
Widowmaker's picture

Ask George W. Bush all about it.

Mon, 10/04/2010 - 21:29 | 624838 TheMerryPrankster
TheMerryPrankster's picture

Is anybody keeping a foreclosure moratorium by state list?

 

If so add Texas

AUSTIN, Texas — Texas Attorney General Greg Abbott is asking loan servicing companies to suspend all foreclosure activities over concerns about the accuracy of foreclosure documents.

In letters sent Monday to 27 companies, Abbott's office demands the immediate suspension of foreclosures, selling foreclosed properties and evicting people living in those properties.

The letter says by Oct. 15, the companies must identify any employees who participated in "robosigning," a practice in which individuals sign thousands of foreclosure documents without reading them or reviewing their contents.

Attorney general spokesman Jerry Strickland says Abbott's office is investigating the companies.

 

http://www.chron.com/disp/story.mpl/ap/business/7231699.html

P.S - somehow Kudlow made it through that topic without calling for an immediate tax cut. Though  I guess the cute little  countdown ticker until the current tax rate expires, might serve as subconscious propaganda 24/7.

Mon, 10/04/2010 - 21:30 | 624840 Id fight Gandhi
Id fight Gandhi's picture

I would imagine the title insurers will, GASP, have to pay to fix any issues they insured to people who recently bought these houses.

Doesn't like 4% of their collected premium actually go to any title issues? I've always viewed this industry as a nickel and dime scam. It would be nice to see them squirm.

Mon, 10/04/2010 - 22:17 | 624912 Number 156
Number 156's picture

Without further adieu, I present to you, the List de squirmage:

 

Market Share 2007

FAMILY                                 SHARE

First American Corporation    30.04%

Fidelity National Financial      26.40%

LandAmerica                         19.34%

Stewart                                11.73%

Old Republic International      05.48%

Other Regional Companies     07.01%

TOTAL 100.00%

Source: American Land Title Assn

Short accordingly.

 

Mon, 10/04/2010 - 23:26 | 625031 Spalding_Smailes
Spalding_Smailes's picture

 

 

WASHINGTON D.C. (LoanSafe.org) – WRITTEN TESTIMONY OF DR. SUSAN M WATCHER Professor of Real Estate and Finance at The Wharton School University of Pennsylvania

Chairman Frank, Ranking Member Bachus, and other distinguished members of the Committee:

Thank you for the invitation to testify at today’s hearing on the “The Future of Housing Finance –

At this time, I request that the two papers referred to the in the previous paragraph be entered into the formal record. Securitizers took advantage of this blind spot for six reasons. First, traders were compensated with a fee for each product sold, encouraging production and not the long run quality of product. Second, the executives monitoring them were compensated with bonuses that emphasized short?term gain over long?term risk. Third, capital requirements were lower for MBS than many other, less risky assets and effectively decreased with growing leverage over time. Fourth, the rating agencies had the same blind spot as the investors, ignoring the increasing risk of the mortgage pools. Fifth, past government actions gave the securitizers reason to believe that they were “too big to fail.” Sixth, these firms hedged much of their default risk with credit default swaps, encouraging them to take more risk. These six factors motivated securitizers to produce as many MBS as possible, which required lower interest rates and riskier mortgages.

 

http://www.loansafe.org/information-and-the-mortgage-crisis-by-the-honor...

 


Mon, 10/04/2010 - 23:44 | 625049 Implicit simplicit
Implicit simplicit's picture

Telling it like it was.

 Now, for your continuing entertainment, the one, the only, Act II - The Return: The Halloween Mortgage Haunt Nightmare.

Tue, 10/05/2010 - 09:15 | 625572 Bob
Bob's picture

Telling it like it was.

Except for the term "blind spot" which is a euphemism for greed and fraud  that was knowingly and willfully pursued in most cases. 

Tue, 10/05/2010 - 01:24 | 625202 Glass Steagall
Glass Steagall's picture

NASDAQ 2275 tomorrow???

Tue, 10/05/2010 - 08:27 | 625456 OldTrooper
OldTrooper's picture

Everyone in real estate/mortgage related business is squiming (if they have two brain cells to rub together).  This is a nice line-up of squirmage de jour, though.

Mon, 10/04/2010 - 22:22 | 624928 TuesdayBen
TuesdayBen's picture

Title biz is a scam.  They won't squirm, they'll just go belly up faster than AIG.

Mon, 10/04/2010 - 22:31 | 624951 Number 156
Number 156's picture

They are a scam, as AIG was, and should be out of business. But the government found a useful idiot in AIG and kept them afloat to become a conduit for a backdoor bailout.  I expect that the title insurers will become the next backdoor bailout for the banks.

Expect it.

Tue, 10/05/2010 - 08:40 | 625478 OldTrooper
OldTrooper's picture

I expect that the title insurers will become the next backdoor bailout for the banks.

Could happen, if one of them gets into trouble.  That may not be as likely as you think.  Title insurers have very low claims rates.  If they refuse to insure sales after questionable foreclosure proceedings they should do ok.  The company that defects - and takes on risk in exchange for market share - that's the one that is going to go belly up (and any others that follow their lead).

They are a scam, as AIG was, and should be out of business.

So next time you buy a house don't get title insurance.  Hire an abstract company (and pay 3-5 times the title insurance premium) for an abstract of title.  Take that to an attorney (and pay 3-5 times the title insurance premium) for a title opinion.  Hope that - if there is a title problem - your attorney is still practicing so you can sue him.

Your call.

Mon, 10/04/2010 - 21:31 | 624843 Akrunner907
Akrunner907's picture

I smell a bond feeding frenzy.........for those that can exit the fastest will win!

Mon, 10/04/2010 - 22:43 | 624973 AUD
AUD's picture

Another frenzy in the bond market? No wonder all the talk of quantitative easying. Still, I think to much fear still exists to see a major fall like last time.

The Fed will buy any USD denominated trash that can't get a bid. What other choice does it have?

Mon, 10/04/2010 - 21:32 | 624845 RobotTrader
RobotTrader's picture

Sheet!!!!

What does this mean?

Another 12 months of no mortgage payments for the "resilient consumer?"

Is that why WSM was down a paltry 14 cents today and Pier 1 down a measly 8 cents?

This market is so perverted, wouldn't surprise me to see yet another run in consumer stocks, now that they have had the luxury of two tax cuts:

- Another moratorium on foreclosures (no mortgage payments)

- Low gasoline prices

What will they think of next?

Mon, 10/04/2010 - 21:34 | 624848 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

At least people can eat consumer stocks.

Mon, 10/04/2010 - 22:41 | 624971 Implicit simplicit
Implicit simplicit's picture

The undeground economy has been growing as more people need to pay in cash so as not to leave a trail. It feeds on itself as the restaurants and shops are not declaring as much of the cash payments. A lot money is going unrecognised than it was prior to the depression.

Tue, 10/05/2010 - 08:20 | 625443 Big Corked Boots
Big Corked Boots's picture

+1

Tue, 10/05/2010 - 11:39 | 626041 kaiserhoff
kaiserhoff's picture

Of course.  Everything happens at the margin.  Most of us are making small, but permanent changes in our lives, so we will be a little less visible to the tax man. 

I'm a life-long recovering quant, but I have less and less faith in the data we are seeing.  This is one of many reasons.

Tue, 10/05/2010 - 00:22 | 625098 doolittlegeorge
doolittlegeorge's picture

i think there's a fundamental disconnect on this issue on this site due mainly to the continuing clap trap from some guy who calls himself "George Washington."  In short "you're missin' the boat here George."  And in many ways so did Mr. Kudlow intrestingly enough.  This is "government suing goverment" and not as is presented here "banks getting destroyed by lawyers et al."  In short banks are certainly gong to be the bystanders on what is and always has been "goobermint business" and from where i sit could be the greatest beneficiaries as a result since "all DC is is lawyers."  What a brawl--and obviously not good for the--who was the Obama money man?  Roykavich or Rothko or something?  In other words you have "Fannie and Freddie vs the Justice Department."  Oooooohhh.  Nasty.  Will the Feds be forced to start selling off huge chunks of actually valuable largesse in this food fight?  One look at those for profit education companies says "the Street has seen this coming for some time." And that IS the tip of the iceberg in what could be an extraordinary transfer of public entities into private enterprises.  Corrupt Democrats.  Have they ever been publicly minded?  The irony that we have to turn to Larry Kudlow to get "public mindedess" is not lost on me.  With any luck it will be lost on him and soon.  He and Tom Keene are not nearly as far apart as he imagines.

Tue, 10/05/2010 - 00:29 | 625118 walküre
walküre's picture

stocks are safer than cash

cash reflects the promise by a nation

stocks are backed by the promise of a corporation

US may go belly up and USD will go turd pile

US corporations earning revenue all over the globe will still be in business

expect the exact opposite of October 2008, like a stock swoon

cash accounts will be drained faster than you can spell b.l.a.c.k s.w.a.n

gold, oils, power, essentials, transportation etc. should see massive runs.

Tue, 10/05/2010 - 02:22 | 625239 AGORACOM
AGORACOM's picture

@ walkure - any thought by you and others to convert $USD into Canadian Dollars prior to purchasing gold, oil, etc?

The Greek .... From Canada

Mon, 10/04/2010 - 21:34 | 624847 ThisIsBob
ThisIsBob's picture

Proper paperwork too expensive.  Cuts into bonuses.

I am tickled pink that many dodgy loans are being shoved right up the wazoos of the institutions who profited from their creation. Something the incumbancies had not the fortitude to do. Power to the people!

I am doubly tickled that the banks are being hoist on a paperwork petard of their own making.

Poetic.

Mon, 10/04/2010 - 21:37 | 624853 zen0
zen0's picture

All the lawmakers have 401k's and other investments. They will support the Ponziata to the last man or woman standing.

 

 

Mon, 10/04/2010 - 21:48 | 624864 Kali
Kali's picture

"last man or woman standing " -on the firing line in front of the Capitol?

Mon, 10/04/2010 - 22:06 | 624892 Conrad Murray
Tue, 10/05/2010 - 00:09 | 625083 Conrad Murray
Conrad Murray's picture

Junked for a Mussolini kill?  Did HuffPo link to this article or something?

Tue, 10/05/2010 - 01:32 | 625209 Glass Steagall
Glass Steagall's picture

Dude...

Mon, 10/04/2010 - 21:44 | 624857 MacHoolahan
MacHoolahan's picture

This new (well very old, but new to the media) hideous mess...

Deflationary or Inflationary?

 

I'll go deflationary - more paper that used to be worth dollars -> less real dollars than they thought.

Mon, 10/04/2010 - 22:24 | 624933 Implicit simplicit
Implicit simplicit's picture

It makes for more risk, which will cost the banks more and the buyers less.

Mon, 10/04/2010 - 22:28 | 624943 snowball777
snowball777's picture

Massively deflationary; no MBS market -> no asset price bubble reflation tricks.

Mon, 10/04/2010 - 21:54 | 624870 grunk
grunk's picture

Governor of Maryland asking for a moratorium:

http://www.baltimoresun.com/business/real-estate/bs-bz-foreclosure-moratorium-sought-20101004,0,1990139.story

Baby Biden from Delaware asking for a moratorium:

http://www.delmarvanow.com/article/20101004/NEWS01/101004039/Biden-asks-for-temporary-Del.-foreclosure-freeze

 

And I thought rats jumped OFF of an unseaworthy ship.

Mon, 10/04/2010 - 22:00 | 624879 Kali
Kali's picture

Yes, but some may be jumping outta their windows on a certain street soon.

Tue, 10/05/2010 - 00:47 | 625156 FEDbuster
FEDbuster's picture

For those who haven't seen it enjoy, "Jump You Fuckers"!

http://www.youtube.com/watch?v=yge311sFhC8

Tue, 10/05/2010 - 01:17 | 625192 Conrad Murray
Conrad Murray's picture

Sending that to BS and GS haha.

Tue, 10/05/2010 - 09:24 | 625596 Bob
Bob's picture

OMG WAS THAT BEAUTIFUL!!!!!!!

I hope to see it go viral . . . and swear an oath to do my part. 

Mon, 10/04/2010 - 21:57 | 624874 Akrunner907
Akrunner907's picture

Get ready for TARP on steroids!

Mon, 10/04/2010 - 22:07 | 624895 plocequ1
plocequ1's picture

I cant wait. it would be nice to see my Gold holdings go to $5,000/ Ounce

Mon, 10/04/2010 - 21:58 | 624875 matthew1182
matthew1182's picture

Lol how is this new news?  The gov't has never prevented any bottom to ANY crisis.  They buy all the way down, they tell you it's turning around hundreds of times before it hits bottom.  There is NOTHING The Fed can do to stop this, debt implosion is a black hole.  All these PhDs and decades of economic research and study and these guys still don't understand it.  They truly think the gov't can "fix" the economy.

Mon, 10/04/2010 - 21:59 | 624877 johngaltfla
johngaltfla's picture

Gang, most of the major banks already have foreclosure moritoriums. Citigroup in many locations, M&I, etc. This just gives the banksters an excuse to extend and pretend a little bit longer until they get what they want. More on that tomorrow.

Mon, 10/04/2010 - 22:21 | 624922 Implicit simplicit
Implicit simplicit's picture

Yeah, but they had some control of the situation before, now they lost control; it will cost them.

Mon, 10/04/2010 - 22:04 | 624878 plocequ1
plocequ1's picture

I would never buy a house with all the bullshit. When you take out a mortgage, You are just another pawn in the Big banks Chess game. I rent, I will always rent. Fuck the American dream.

Mon, 10/04/2010 - 22:01 | 624880 Atomizer
Atomizer's picture

Prices Jump at Wal-Mart & 77% of Americans Barely Making It

http://inflation.us/videos.html

Mon, 10/04/2010 - 22:04 | 624887 Atomizer
Atomizer's picture

The scam is a full tilt

 

World Religions and Norms of War

Release Date: March, 2009
ISBN 13: 9789280811636
Sales Number: 09.III.A.7
352 page(s), 6x9.5
Binding: Paperback
Publisher: United Nations University

Over more than two millennia, the world’s leading religious traditions have provided the guidance in questions of when war can be justified, and of what methods and targets are permissible in war. Linking deep historical analysis to contemporary issues, this volume provides valuable insight, and even prompts us to rethink our understanding of the role and influence of religion in the state politics. The book exposes the norms of war in Hinduism, in Theravada Buddhism, in Japanese religion, in Judaism, in Roman Catholic Christianity, in Eastern Orthodox Christianity, in Protestant Christianity, in Shia Islam and in Sunni Islam, and discusses norms of war in cross-religious perspective.

https://unp.un.org/Details.aspx?pid=18973

Mon, 10/04/2010 - 22:10 | 624897 win
win's picture

How perfect . . .

I was just getting ready to watch

"It's a Wonderful Life"

Remember how George Bailey was trying to explain how "your money isn't here in the bank, it's invested in your neighbors house"

Two words

Money Supply

Mon, 10/04/2010 - 22:51 | 624984 TheMerryPrankster
TheMerryPrankster's picture

I'd recommend "Tokyo Godfathers" its more true to life, even if it  is anime.

 

Our money is invested in Lloyd Blankfein's 24k gold toilet seat and the backside which sits on it.

 

Mon, 10/04/2010 - 22:57 | 624995 ZakuKommander
ZakuKommander's picture

Tomino ending needed.  

Mon, 10/04/2010 - 22:55 | 624991 Id fight Gandhi
Id fight Gandhi's picture

I wish we had more George baileys in the banking system now.

Mon, 10/04/2010 - 22:12 | 624899 traderjoe
traderjoe's picture

Once again, the MSM over-simplifies to make a sound-bite, de-emphasize the real problem, and deflects fault away from the banks. I heard a couple of times today some talking head (including the uber-shill Zandi) say "well, someone's owed the money, and we'll just sort it out in a couple of weeks and everything will be fine". You sure about that?

As I get it, there are at least 4 aspects to all of this:

1. Huge numbers of mortgages may not have been transferred appropriately into MBS's. According to NY trust law, and other factors, this transfer cannot occur after-the-fact. Therefore the underwriters committed (willful) fraud and the MBS buyers will likely be able to receive their money back (after years of litigation of course). The put-backs will bury the banks. The MBS market will be frozen. THIS IS HUGE - and only being alluded to in the MSM. And many of the notes may reside with bankrupt entities, where transfers out must be approved by the judge (and which have not been). 

2. Many foreclosures may be virtually impossible because once the mortgage is properly placed into an MBS, all of the owners need to be brought together in order to have standing in a foreclosure. As has been discussed, a servicer does not have standing to foreclose. I've read in places that much of this might be virtually legally impossible, since some tranches of the MBS will have already been paid off. I'm no lawyer tho.

3. MERS means many of the titles/notes have not been recorded correctly.  

4. In part due to the above document deficiencies, and also their own laziness, the banks have fraudulently falsified affidavits, original notes, proof of service, etc.

The difference between all of the above and earlier actions that required bailouts (I'm being forgiving to the banks here) these actions are clearly fraudulent, pervasive, and WILLFUL. 

If the sheeple understand this, which they may not, any bailout of the banks will be met with much more resistance and uproar. The politicians will use this as an opportunity to finally attack the banks. I can only hope...

Mon, 10/04/2010 - 23:29 | 625034 What_Me_Worry
What_Me_Worry's picture

I can sum out why it will not become a systemic problem in two words:

General Motors

Tue, 10/05/2010 - 00:24 | 625103 doolittlegeorge
doolittlegeorge's picture

you cannot file a "car discrimination suit".....yet.

Tue, 10/05/2010 - 04:43 | 625290 Glenjo
Glenjo's picture

It was always interesting that GM went BK for a bailout, but Geithner pretty much just handed the money over to the banks.

 

Can anybody say "we don't need no stinkin' audits"!?

Tue, 10/05/2010 - 03:30 | 625249 sushi
sushi's picture

If the sheeple understand this, which they may not,

EndQuote

I don't think the sheeple are the active ingredient. The kicker is all of the towns with registry offices which have been denied registry fees due to the banks short circuiting the process. These folks will also hire lawyers and seek to attach bank earnings and obtain payment of fees.

This is going to be a huge. huge mess. Expect nationalization of the banking system and much of the housing stock.

Plus, I believe that Fanny and Freddy can reject MBS that fail to meet criteria. An MBS without a perfected title is sure to be turned back to the bank.

Mon, 10/04/2010 - 22:13 | 624901 contrabandista13
contrabandista13's picture

It appears to be a double edged sword....  Borrowers that have mortgages on their homes will also encounter problems in getting a clear title for the buyer if they want to sell their property...  Therefore, I would suspect that only owners of properties that bought them for cash, will be able to provide a clear title to the buyer once a transaction has been consummated....  Am I correct in this assumption....?  I'm not asking about price, I'm asking about execution....

 

Many thanks,

 

Econolicious

Mon, 10/04/2010 - 22:14 | 624903 Atomizer
Atomizer's picture

Disinformation Techniques 101:

Written by Rusty Shackleford in zero hedge forum

http://www.gulagblog.com/?p=97617

A piece from back in the day

Mon, 10/04/2010 - 22:16 | 624909 carbonmutant
carbonmutant's picture

People paying mortgages need to demand proof of ownership from the banks.

Do NOT follow this link or you will be banned from the site!