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Gonzalo Lira on Mulligan Mortgages—The Banks' Only Way Out

Tyler Durden's picture


Submitted by Gonzalo Lira

Mulligan Mortgages—The Banks’ Only Way Out

“Would you give this man a mulligan?”
Photo by Mark Pain of the Daily Mail. The man with the cigar was an actual bystander.

We’ve seen this movie so many times already, we can practically recite the ending: The Too Big To Fail banks are once again in the middle of another crisis—another mortgage crisis—that’s breaking like a bad rash. And this new scandal has so many moving parts!
Robo-signings!—Foreclosure mills!—Forged documents!—Attorneys General huffing and puffing!—Too Big To Fail banks tottering!—Foreclosures suspended!—Bond holders freaking out!—Credit default swaps shooting the moon!—
Aaaaaahhhh!!!!! Again.
As I explained in a long piece discussing the current Mortgage Mess, all of these different issues are all symptoms of the same disease: The Mortgage Backed Securities—America’s Herpes: The gift that just keeps on oozing.

Because of how the MBS’s were structured, there was an inherent ambiguity as to who actually held the mortgage notes. This is crucial, because only the note-holder has standing in court to foreclose and evict a delinquent homeowner. No tickee, no laundry applies doubly to mortgage loans: No notee, no standing.
The banks, MERS and everyone else in the sausage factory that created the MBS’s were sloppy and/or greedy, which led to them failing to cross the I’s and dot the T’s. (Did you catch that? Just checking.)
They realized this screw-up during the current Global Depression. In order to foreclose and evict the massive number of delinquent homeowners, the banks hired “foreclosure mills”—bottom-feeding law firms that specialized in foreclosures.
Since the documentation was either hinky or lost, the foreclosure mills routinely and systematically fabricated and falsified documents: The “robo-signing” scandal is a part of this part of the Mortgage Mess scandal—the thing is as complicated as a Rube Goldberg device on acid. (Yves Smith at naked capitalism has been all over this; the woman should get the Pulitzer—not just for her reporting, but for keeping it all straight in her head!)
Anyway: In the piece I wrote, I argued that we could quite likely be seeing this Mortgage Mess turn into a Foreclosure Crisis, whereby homeowners refuse to pay their mortgages, let alone accept a foreclosure, unless and until the banks produces the note of their mortgage loan. Show Me The Note, Mo-Fo!!, could become the rallying cry of this homeowner revolt.
Since the chain-of-title on many of these notes is broken because of the process that created the Mortgage Backed Securities, and because in many cases the foreclosure mills irretrievably tainted so much of the documentation, the litigation could draw out for years, not to mention multiply like a cancer.
This of course would affect Mortgage Backed Securities. After all, MBS’s got their moniker for a reason: Because they’re backed by mortgages. If the bundled mortgage loan notes that created the Mortgage Backed Securities are no longer legally tethered to them, then the MBS are secured by nothing but air.
All the TBTF banks still have boatloads MBS’s on their balance sheets. There are literally tons of Credit Default Swaps that were written on these MBS’s. So you see, this Mortgage Mess could well get the banks to teetering and tottering once again—it could be the trigger for Global Financial Crisis, Part Duh!: Bigger!—Wider!—Uncut!
Like I said: A movie we’ve seen before, and whose sordid ending—TARP-2 anybody? Maiden Lane CCLXVIII?—we can very well predict.
In the zoo called Washington, everybody’s making loud noises about this blossoming crisis—but nobody in that God-forsaken town is coming up with a practical solution that would actually work.
The pundits are doing no better: Paul Krugman—who advocated a housing bubble back in 2002—can hardly contain his glee at the Mortgage Mess, even as he condescendingly tut-tuts about the bad banksters who caused it.
From the Department of I’m-So-Not-Surprised: The solution Krugman proposed in a New York Times op-ed is a vague lunge at giving “mortgage counselors and other public entities the power to modify troubled loans directly.” In other words, he’s arguing for more government intervention, while blithely ignoring the fact that government regulators—Treasury, the Fed, the SEC, etc.—helped create this mess by not doing their jobs in the first place.
They didn’t regulate before—so now according to Krugman, they’re gonna get bright magic and Solomonic wisdom, and all of a sudden do their jobs right? Puta huevón, please . . .
(And please don’t bother telling me that Krugman’s the smartest economist in the world. That’s like saying, “He’s the smartest moron in the world”: Impressive, until you stop to consider that a bright 12 year-old makes more sense than him.)
From the Department of I’m-So-Even-Less-Surprised: The Left might be putting out stupid ideas, but the Right is putting out no ideas.
Anyway, it’s an open secret that the politicians on the Right are all in the banksters’ collective back-pocket. Who do you think tried to make law the Interstate Recognition of Notarizations Act, which would essentially have made it legal for banks to commit perjury in order to foreclosure on a homeowner?
Talk about violating the Rule of Law! By passing that act (via a cowardly voice vote, so as to collectively hide their hand), the Republican senators and congressmen didn’t just try to violate the Rule of Law—they tried to gang-bang it, murder it, and leave it in a heap by the side of the road!
The American political Right is corrupt—beholden to the banksters and the money men. There’s really no other way to look at it. 
Whatever the politicians might say, no solution is going to come out of Washington. Intellectually, both parties are exhausted—they have no new ideas. The only idea both parties cling to is Spend Money!—and that’s no idea at all.
Washington can’t throw money at the TBTF banks, to fix this problem: Politically, another bailout of the banks is untenable—I think. Actually, I’m not sure. In any other country, I’d say with confidence that another bank bailout would cause widespread rioting. But with the fat, slovenly, slatternly, pathetic American people? Placid as cud-chewing cows, peacefully going through Temple Grandin’s curving contraptions, on their way to their slaughter without a thought in their pretty little bovine heads . . .
Come to think of it, another bank bailout might fly.
But while the pundits and political riff-raff hee-haw and trumpet like donkeys and elephants, but with none of the sense of those fine animals—lo and behold!—the banks themselves are quietly fixing the problem.
They’re doing it through Mulligan Mortgages.
I got a first sense of it with the story of Brian and Ilsa—my retired friends in the Southwest, whose home had gone underwater. I wrote about them here, as well as here.
Brian and Ilsa qualified under HAMP, the Home Affordable Modification Program—yet though they were at first allowed to modify their loan, they had been later denied the benefits of the program after three months.
HAMP in many ways has turned out to be a scam for the banks and servicers to make money off the Federal government: For every mortgage accepted into the HAMP, the banks and servicers received a fee from the government. But after 90 days, the banks and servicers could claim that a person did not qualify for HAMP—and therefore exclude them from the program, while keeping the Federal government fee.
Brian and Ilsa were caught in the middle of this HAMP scam, when they decided to demand to see the note on their home loan—this nice suburban couple said, Show Me The Note, Mo-Fo!!
Suddenly, frantically, a loan officer from their bank appeared, and magically, their problems were solved: They qualified, they qualified! And soon, they were signing a new mortgage loan—and a new note—with a new mortgage payment close to $700 a month less than before the loan modification.
I wrote about this—and a flood of other people wrote telling me similar stories.
For various reasons—occasionally for no reason at all, just out of the blue—the TBTF bank would suddenly expedite a mortgage refinance. The principal would remain the same, but there would be a substantial decrease in their monthly mortgage payment.
One of these stories came by way of Lars Larson, the terrific radio host in Portland, Oregon. A listener of his, Tim Hope, had had the same thing happen with his mother’s loan. As he told it: “No costs, simply fill out the paperwork (I think they offered to do everything), and ‘presto’ new mortgage and new lower monthly payment (I believe by several hundred [dollars] — $200, $300 — per month).”
Tim Hope’s story wasn’t exceptional, but he did come up with a wonderful name for it: Mulligan Mortgage.
The clever turn of phrase captures it exactly: A mulligan is a golf term. It’s when your first shot pretty much sucked—so your golf partner lets you take another shot, with no penalty. It’s the gentlemanly thing to do, as it were. A way to keep a lazy Sunday afternoon game interesting.
Mulligan Mortgages seem to be how the TBTF banks are keeping their own game alive: They seem to be chasing mortgage holders—whether in default or not—and offering them an expedited refinance of their mortgage loan.
In order to convince homeowners to sign on the line which is dotted, the banks have to give them something: What they give them is lowered monthly payments of at least a couple of hundred dollars a month. The banks can offer this without touching the principal of the loan by either refinancing the mortgage at a lower interest rate, or a longer term of repayment, or usually both.
In other words, though the homeowner might still be underwater after signing the Mulligan Mortgage, they’ll still get a reduction in their monthly mortgage payment.
Now there are several advantages to these Mulligan Mortgages:
From the banks’ point of view, the Mulligans automatically fix the chain-of-title issue by creating a new note. The whole problem with the current scandal is that a lot of home loan notes were either lost, destroyed or mishandled, or else irremediably tainted by foreclosure mills’ unsavory business practices.
But all of that goes away, with a new note courtesy of the Mulligans.
(There are, of course, a whole host of administrative and legal steps that must be followed, in order for this to happen. In this post as well as in my previous post on the Mortgage Mess, I skipped a lot of these legal and administrative steps for two simple reasons: One, they add no insight to the issues at hand, and in fact clutter up the view of the overall situation; and two, the administrative and legal steps are often different in each state.)
A new note by way of a Mulligan Mortgage clears up the issue of standing, which would allow a bank to foreclose on a delinquent borrower. So once a homeowner signs a Mulligan, the bank will have clear standing to foreclose, if the homeowner becomes delinquent.
For bond holders of Mortgage Backed Securities, Mulligan Mortgages are also a fine idea: By re-establishing the chain of title, MBS holders are once again holding secured bonds—they’re not holding paper which might well be worth nothing.
This is a non-trivial issue: Considering how PIMCO and the New York Fed started making noises yesterday about the bonds Bank of America sold, I’d say there are a lot of bond holders and CDS underwriters who are very nervous about how this new outbreak of America’s Herpes will affect their MBS positions.
Mulligan Mortgages are the unguent that will keep bond holders happy—until they realize the cost that they’re payng (I’ll get to this in a moment).
These Mulligans are also great from the Federal Reserve’s and the Obama administration’s point of view: Mulligan Mortgages mean people will pay less for their home mortgages, and therefore have more disposable income. There’ll be a bump in consumer spending.
Mulligan Mortgages, of course, can’t fix REO’s that may or may not have been foreclosed illegally—but they’ll get the rest of the housing market back on track.
But it’s not all sweetness and light—there are some issues with Mulligan Mortgages:
First of all—and most obvious of all—the homeowners the TBTF banks are targeting for Mulligans are probably the very homeowners whose original note is lost or irretrievably ruined by someone in the sausage factory that created Mortgage Backed Securities. I’ll bet a buck to a nickel that they’re precisely the ones where the bank likely has no standing to foreclose.
So the banks have to do the Mulligans quickly, before people get wise. Homeowners can’t be allowed to realize what the banks are up, or why. If homeowners understand fully why the banks are suddenly so nice to them, they’ll realize that they’ve got the banks by the short-hairs—and then they’ll realize that they can have their way with them, up to and including doing the Show Me The Note, Mo-Fo!! dance. If that happens, the banks are screwed.
The second obvious issue is, Mulligans represent a severe hit to the TBTF banks’ revenues.
How much of a hit? Nobody knows—at least not yet—because nobody knows how many mortgages are affected by the current Mortgage Mess.
CoreLogic says there are something like 11 million underwater mortgages in the United States as of late August. The Wall Street Journal says about $154 billion worth of mortgage loans could be affected by the Mortgage Mess.
We could extrapolate ‘til the cows come home, but simply put, there is no way to know how many mortgages might be getting a Mulligan. The TBTF banks are completely opaque, ever since the Fed basically rescinded sane accounting rules in March of 2009; when the banks officially turned into zombies.
But any way you look at it, the Mortgage Mess—even with all the Mulligans needed to fix a lot of this mess—is going to take a bite out of revenues—
—and not just on the balance sheets of the TBTF banks: On the MBS bond holders too.
Nobody ever said Bill Gross was stupid: Regardless of how effective the Mulligans are, the Mortgage Backed Securities—and the CDS’s written on them—are all going to take a hit. That’s why PIMCO started making noises, trying to bully BofA into taking back the mortgage bonds: Even with the best solution to the Mortgage Mess, bond holders are going to take a forced haircut. Or a buzzcut, as the case may be.
Since the Federal government really does not have the political will or inclination to go for yet another round of bank bailouts, and since the bond holders have the political muscle in this corrupt system to get their bacon saved (where’s all that bullshit talk about “capitalism’s creative destruction” now, huh?), it’ll be up to the Fed to make MBS bond holders whole—just like they did the last time.
So although a lot of people are predicting that the Fed will start buying Treasuries when QE2 is anounced, I beg to differ: I think they’re going to load up on even more Mortgage Backed Securities. In fact, I think a big piece of QE2—maybe a trillion dollars’ worth—will be directed at Mortgage Backed Securities. And I think the Fed is going to pay top dollar for that garbage.
I think the way the Fed is going to do it is, they’ll go for another round of Stealth Monetization: Buying MBS and other toxic assets off the banks for newly conjured cash, the banks then taking that cash and parking it in Treasuries, thereby funding the Federal government’s deficit.
Because of the Currency Wars going on around the globe right now, I don’t think the Fed wants to be perceived as accelerating any weakness in the dollar. I think Bernanke and the Lollipop Gang at the Fed want to weaken the dollar, sure, but I don’t think they want the perception to linger that they are out-and-out trashing the dollar.
Also, I don’t think Bernanke has the votes on the Federal Reserve Board anymore. I think a lot of Board members are discreetly coming to the conclusion that Benny Boy’s strategy of ZIRP, propping up assets, and extreme market liquidity, is a losing one.
But they’ll be forced to vote in favor of a massive MBS buy, in order to keep the American Zombie banks on their feet. As predicted back in 2008 when they were saved rather than allowed to fail, the TBTF banks really have become “too big to fail”—because they’ve grown, like a cancer.
So you see, it all goes back to the Mortgage Backed Securities. America’s herpes. See, the problem with herpes is, once you get it, you can never be cured. At best, you can alleviate the symptoms—but the disease is always there.


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Thu, 10/21/2010 - 16:08 | 667990 Ripped Chunk
Ripped Chunk's picture

The Mortgage Backed Securities—America’s Herpes: The gift that just keeps on oozing.


Bill Black on....well pretty much everything that is wrong.


Thu, 10/21/2010 - 16:56 | 668123 Mako
Mako's picture

The author is again wrong.  MBS are not the disease, the system from which you need exponential growth or you go down the shitter is the disease.  The current MBS is just the symptom that will be used as the excuse when the system collapses.

Sorry guys, this system was going down if MBS never even existed. 

There are no mulligans, the system will collapse and liquidate just like the last time and time before that, and time before.....

Humans will use every excuse in the book other than to blame themselves for this failure.

Thu, 10/21/2010 - 17:30 | 668246 High Plains Drifter
High Plains Drifter's picture

Yep, hundred years life span max.


Fri, 10/22/2010 - 17:24 | 670538 Tarheel
Tarheel's picture

why doesnt the FED just refi everyone's home for the $1T instead? Thats better use of the money

Thu, 10/21/2010 - 18:19 | 668365 VK
VK's picture

Precisely! All ponzi schemes collapse.

Thu, 10/21/2010 - 19:04 | 668462 SloSquez
SloSquez's picture

Maybe, but damn what a creative way to extend and pretend.  Waiting on the next chapter.

Thu, 10/21/2010 - 20:08 | 668602 FEDbuster
FEDbuster's picture

All any politician wants to do is kick the can down the road, and let some future ego maniac deal with it.

Another problem with "Mulligan Mortgages" that I see is that in some non-recourse states you will lose your ability to "walk away" from the home if you refinance it.  The non-recourse provision applies to purchase money mortgages only.  The "Mulligan" will allow the banksters to come after you for the deficiency for the difference between amount owed and sale price (which could be a big number).  Then you are forced to file for BK to discharge the debt.

Thu, 10/21/2010 - 19:33 | 668517 kathy.chamberli...'s picture

i have never taken a mulligan, i just don't keep score. i really am not cheating anyone. who says you have to keep score of your golf game if your not playing in a tournament. honest not keeping score is a beautiful thing. great read gonzo, really really like your added humor oh especially your inclusion of tiger. i bet be stopped counting his scores of hits or tails or pussy, but the public sure didn't. sick society interested in how many woman tiger bagged. jealousy powerful outcry. i spotted keeping score in a lot of my aspects of life, who counting and who cares if you don't. i did receive a mulligan mortgage but i got a BIG penalty for that one.

Thu, 10/21/2010 - 23:24 | 668945 williambanzai7
williambanzai7's picture

Try using one of these balls to improve your score

Fri, 10/22/2010 - 10:58 | 669667 kathy.chamberli...'s picture

yep your damn funny. F O R E

s p r e a d wide open for that ball. guess if you had that size one, you wouldn't need two.

Thu, 10/21/2010 - 21:52 | 668758 Goldilocks
Goldilocks's picture


Most disingenuous comment of the day.

Fri, 10/22/2010 - 01:40 | 669119 JLee2027
JLee2027's picture

Mako is correct. There will be no bailout, a collapse is coming and quickly.

Thu, 10/21/2010 - 22:20 | 668817 Spitzer
Spitzer's picture

The author is writing the book chapter by chapter, you are not looking like a genious by skipping to the last page.

Thu, 10/21/2010 - 17:02 | 668159 Mako
Mako's picture


Thu, 10/21/2010 - 17:05 | 668172 Pladizow
Pladizow's picture

Sorry to have awaken you, go back to sleep!

Thu, 10/21/2010 - 17:18 | 668204 Mako
Mako's picture

All you are doing is spreading junk.  There are no boiler plate lawsuits, hogwash silver bullet schemes.

All George Tan has perfected is an impending civil storm that will wreck havoc upon his misguided assertions of free and clear in 90 days.

Thu, 10/21/2010 - 17:19 | 668214 Pladizow
Pladizow's picture

Other than the few seconds you spent in between my post and yours, how much time have you spent investigating the subject?

Or are your comments most likely backed up by nothing!

Thu, 10/21/2010 - 17:27 | 668222 Mako
Mako's picture

I have read his stupid crap before.

Who knows, George Tran may fall through the cracks, but given he has successfully slandered the title to his free and clear homes under the color of an alleged default judgment, he will not be able to perfect the statute of limitations for debt collections, as he has committed an overt civil fraud.  So, no matter when the alleged holder in due course, and or the loan servicer wakes up to George's Civil Fraud, they will have standing to first pursue the slander of title, and secondly move to burst Georges Tran's bubble, he coyly wraps within this misstatement of fact, Free and Clear in 90 days.

George Tran is treading in deep water, without a way to reach to the sandy shores of lawful legitimacy.  All George Tran has managed to do, is fool himself, and others who fail to properly address the legal sufficiency of his claims.

If George Tran had been statutorily honest, he would have filed his action in the local county where the alleged holders in due course and or Loan Servicer resides, which would be the location of the corporate headquarters, or he would have filed a federal question in the Federal District Court.  IN either jurisdiction, he would first be required to properly serve notice of his actions to the opposing party.  All George Tran has perfected is an impending civil storm that will wreck havoc upon his misguided assertions of free and clear in 90 days.

You are the worse type of idiot, at least most idiots know they don't know, you somehow think you know, but you have no understanding of the Law.  Stop promoting SCAMS.

Thu, 10/21/2010 - 17:26 | 668237 Pladizow
Pladizow's picture

May be, May be not - but the system should continuously be tested and chalanged.

Thu, 10/21/2010 - 17:32 | 668247 Mako
Mako's picture

Why would you test something that is bound to fail?

I certainly wouldn't jump off a cliff in the hopes I will somehow be lucky and survive. 

He is not only wrong, he is completely wrong. 

All George Tran has filed in the Davis County Office is nothing more than a fictitious claim of Reconveyance, which when challenged will enable the challenger to circumnavigate the statutory limitation for the collection of debt due directly to what appears to be civil fraud.

He will be lucky this only stays a civil action once the holder in due course or sevicer finds out what he has done.

Thu, 10/21/2010 - 17:32 | 668255 Pladizow
Pladizow's picture

Well if a am an idiot, as you accuse, only a greater idiot would argue with me.

The end??????????????

Thu, 10/21/2010 - 17:33 | 668261 Mako
Mako's picture

If it were just a matter of you slamming your own head against the wall, I would just let you continue on... however, you are promoting nonsense that will get OTHERS in trouble. 

Thu, 10/21/2010 - 17:35 | 668264 Pladizow
Pladizow's picture

Thanks mommy!

Thu, 10/21/2010 - 17:36 | 668267 Mako
Mako's picture

I am not your mommy, feel free to follow that idiot and come back here in a few years and let me know what kind of shitstorm is knocking on your door.

Thu, 10/21/2010 - 17:40 | 668270 Pladizow
Pladizow's picture

Top of my list!

Oh and by the way, thanks for making this such a long thread to help promote , like we agreed on!

Thu, 10/21/2010 - 18:53 | 668438 Fed Supporter
Fed Supporter's picture

Agree with everthing MAKO said.  Some guy in my parts just went to prison for fraud on all that UCC sovereign man bullshit, fake lawsuits, etc.  

Attempt at your own risk.

Thu, 10/21/2010 - 19:44 | 668541 spinone
spinone's picture

I junked you because you are passing on bad legal advice.  This UCC stuff wont work for the rabble.

Thu, 10/21/2010 - 22:23 | 668825 Goldilocks
Goldilocks's picture


So that's how pluggin' a website is done. Interesting approach. Will check it out ... thanks.

Thu, 10/21/2010 - 19:15 | 668480 merehuman
merehuman's picture

hi Mako, we "others" thank you.

Fri, 10/22/2010 - 00:09 | 669020 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

Third rule...if someone yells "stop!", goes limp, or taps out, the fight is over.

Thu, 10/21/2010 - 18:32 | 668391 DocLogo
DocLogo's picture

when I saw the title "free and clear" I assumed it was the blood parasite group from Fight Club. I was actually kind of excited. We could all use a good cry.

Thu, 10/21/2010 - 18:29 | 668383 greyghost
greyghost's picture

this is the exact same ponzi scheme that the fed has been running with the chinese and their toxic mbs paper. fed buys worthless paper from chinese with the agreement that the chinese purchase treasury paper. this keeps interest rates low for now. however as has been pointed out here on zerohedge, the chinese are buying only short term treasuries...nothing over 7 years. QUESTION: what happens when the chinese no longer have worthless paper to sell and no longer want to buy u.s. treasuries? now we will have the fed buying worthless toxic paper from our own banks and they in turn buy u.s.treasuries! when the ponzi scheme goes full circle[jerk], what then?

Thu, 10/21/2010 - 21:43 | 668743 Goldilocks
Goldilocks's picture

@Ripped Chunk,

Thanks for the Bill Black link. Good stuff.

Fri, 10/22/2010 - 00:04 | 669015 macholatte
macholatte's picture

RE: Great American Bank Robbery


Very good.   Thanks for the link, Chunk.

I did not watch all of it. However, Mr. Black clearly states that the routine of routine mortgage fraud is nothing new and could very well make the case that the banksters knew exactly what they were doing, building a bubble, and so did the regulators and that all the double talk by Greenspan, Sommers, Dodd, Frank & Co. that "nobody could have seen this coming" is complete, unadulterated bullshit. Very aggravating.



As a white-collar criminologist and former financial regulator much of my research studies what causes financial markets to become profoundly dysfunctional. The FBI has been warning of an "epidemic" of mortgage fraud since September 2004. It also reports that lenders initiated 80% of these frauds.1 When the person that controls a seemingly legitimate business or government agency uses it as a "weapon" to defraud we categorize it as a "control fraud" ("The Organization as 'Weapon' in White Collar Crime." Wheeler & Rothman 1982; The Best Way to Rob a Bank is to Own One. Black 2005). Financial control frauds' "weapon of choice" is accounting. Control frauds cause greater financial losses than all other forms of property crime -- combined. Control fraud epidemics can arise when financial deregulation and desupervision and perverse compensation systems create a "criminogenic environment" (Big Money Crime. Calavita, Pontell & Tillman 1997.)



Thu, 10/21/2010 - 16:12 | 667998 Gloomy
Gloomy's picture

Just asked my real estate attorney whether I should make the bank show me the mortgage papers before I paid anymore. He said don't bother. Although they might never be able to foreclose on me, they could sue me in civil court and that, because I had made paymenys in the past, success would be highly unlikely.

Thu, 10/21/2010 - 16:19 | 668013 molecool
molecool's picture

That's bullshit advice - you made payments on the basis of false information. You could counter sue.

My advice: Find a real lawyer who's able to find his ass in the dark.

Thu, 10/21/2010 - 16:40 | 668087 Almost Solvent
Almost Solvent's picture

Hey, I don't remember signing no stinkin' note.


Even if I did, I owe him the money, not you.



Thu, 10/21/2010 - 19:18 | 668488 Gloomy
Gloomy's picture

 How many of you critics have even bothered to check with an attorney?

Thu, 10/21/2010 - 19:48 | 668555 kathy.chamberli...'s picture

from what i can tell even the most astute real estate attorney's aren't the least bit interested in this paper trail. i don't think can even fathom this type of behavior from other "professionals". honest, engaged many attorney with this topic, they want to sue me for slander against such statements. they can not wrap their heads around,possible corruption exists at the base of title or loan lending. they think everyone is doing their job like they are. which only means everybody is drinking the cruelAid.

Fri, 10/22/2010 - 01:48 | 669122 JLee2027
JLee2027's picture

Most attorneys would be guessing. They don't know. It's new ground for everyone.

But I can't see banks suing tens of millions of people based on past payments. Too many people, and the banks are going down for the count soon enough.

Fri, 10/22/2010 - 02:38 | 669150 Confused
Confused's picture

Wouldn't the original transaction be considered fraud in the inducement? 


Obviously not a lawyer here. Sorry if that is dumb. 

Thu, 10/21/2010 - 17:12 | 668190 The Alarmist
The Alarmist's picture

That's bullshit ... at the end of the day, we're going to look through to the economic substance of these transactions, and most of the mortgages will be foreclosed because the debtors did not meet their obligations.  Most of this crap will be settled out of court. While it is true that gross fraud runs the risk of vitiating some element of the transaction, documentary technicalities merely serve to delay the inevitable.



Thu, 10/21/2010 - 19:02 | 668458 Fed Supporter
Fed Supporter's picture

As Chris Whalen said the loans would become unsecured for the homeowner and unsecured collateral for investors.

Give this scenario some thought.  In Texas home owner exemptions are for the full amount of a homes value, you can not lien them nor can you garnish wages in Texas.  If a Texan successfully got the mortgage lien stripped off of his home, a civil suit by the lender for a money judgment, of the now new and unsecured loan would be very hard pressed to collect.  

Just some food for thought.




Thu, 10/21/2010 - 17:19 | 668211 Gloomy
Gloomy's picture

How many people have the wherewithall to fight lawsuits with lawsuits in court? Not me. Very few, I'd wager.

Thu, 10/21/2010 - 19:55 | 668571 kathy.chamberli...'s picture

i am in a HUGE lawsuit. the defendants don't have squat, except reference to me being crazy. but if i were crazy i should not been able to sign on the dotted line, right? i think i read somewhere if the person is crazy you can't engage in contract signing with them. they sure were eager to have a crazy person buy the half million dollar property from them. senior moments lately.

Fri, 10/22/2010 - 02:41 | 669152 Confused
Confused's picture

"The term incompetency has several meanings in the law. When it is used to describe the mental condition of a person subject to legal proceedings, it means the person is neither able to comprehend the nature and consequences of the proceedings nor able adequately to help an attorney with his defense. When it is used to describe the legal qualification of a person, it means the person does not have the legal capacity to enter a contract. When it is employed to describe a professional duty or obligation, it means that the person has demonstrated a lack of ability to perform professional functions."

Now are you just crazy? Or incompetent? They need to clarify. :P

Good luck.

Thu, 10/21/2010 - 19:17 | 668487 Gloomy
Gloomy's picture

 How many of you critics have even bothered to check with an attorney?

Fri, 10/22/2010 - 01:50 | 669125 JLee2027
JLee2027's picture

As I said above, the attorneys would be 100% clueless in this area. It's still "evolving".

Thu, 10/21/2010 - 16:22 | 668023 -Michelle-
-Michelle-'s picture

Shouldn't your real estate attorney have verified those mortgage papers in the first place?

Thu, 10/21/2010 - 16:30 | 668058 Gloomy
Gloomy's picture

They were verifiedoriginally, but the mortgage has subsequently been passed around a couple of times.

Thu, 10/21/2010 - 16:47 | 668112 OpenEyes
OpenEyes's picture

Bingo!  If this was the same attorney that handled your closing he's just covering his own ass hoping you don't make a big deal of it.  He should have verified the note and mortgage.

Thu, 10/21/2010 - 17:20 | 668215 Gloomy
Gloomy's picture

see above

Thu, 10/21/2010 - 20:01 | 668585 kathy.chamberli...'s picture

i hired and paid (handsomely) my then, family affairs attorney, to go all through my closing docs and condo declarations. no problem. then i hired him to sue to rescind the sale. no problem he told me, TORT law against toxic fumes and the bylaws of the condo declaration and docs outlawed fumes and odors. then he turned on me and went with the defendants with all my client information. very bad and wrong on his part, because it is protected under attorney client privileges privacy. it is just a good ole boys club in some parts of this country and i am a female, steak, not an "it".

Thu, 10/21/2010 - 16:22 | 668028 Teaser
Teaser's picture

Lazy attorney.  Fire him and get one who doesn't have his head up his ass.

Thu, 10/21/2010 - 17:21 | 668219 Gloomy
Gloomy's picture

see above

Thu, 10/21/2010 - 16:23 | 668029 Teaser
Teaser's picture


Thu, 10/21/2010 - 17:12 | 668194 Milestones
Milestones's picture

And you counter by declaring bankrupcy and they have an unsecured loan it would seem to me.

 Your credit rating will be shit, just like 33-50% of the people from here on in.   Milestones

Thu, 10/21/2010 - 19:47 | 668548 spinone
spinone's picture

Exactly.  Without a note, a mortgage is an unsecured loan.


Ahh, but who ownes the mortgage?

Thu, 10/21/2010 - 18:22 | 668376 VK
VK's picture

Get a different attorney. One who is not a clueless jackass. As Molecool said counter-sue the bank if they don't have the note. They don't produce the note, you owe nothing. Who are you exactly supposed to pay with a lost note?

Thu, 10/21/2010 - 18:53 | 668439 Eternal Student
Eternal Student's picture

The problem with this approach is the cost just to step into Court. Last I checked, it was $10K for a decent attorney just to get things prepared properly so that you could step into Court, and goes up after you're in Court. It's probably higher now. Yes, you can probably cut corners. Really sharp guys can do without a Lawyer. The trouble is, really dumb ones try this and get their head handed to them, with possibly attorney fees for the other side to boot.

You want to avoid Court if at all possible. But in any case, interview the best attorney that you can find. And watch the billable hours very, very closely.

Thu, 10/21/2010 - 19:17 | 668485 Gloomy
Gloomy's picture

That's exactly the point. And how many of you critics have even bothered to check with an attorney?

Thu, 10/21/2010 - 20:11 | 668605 kathy.chamberli...'s picture

$10K try many more K's. i hired an attorney who came from title work for a title insurer. she found out sooooo many mistakes. i called it title fraud, oh she was taken back i insulted her and title professionals. guess what? she was bound and determined to defend title closers and insurer against my outcry of title fraud. she said it was all a big mistake that my title wasn't released but that was just a minor error and she would get them to release my title from the bank. it took months and really don't know if it was ever done. she had to defend her profession over defending me. then another attorney used her research and went against me. everybody is in bed with everyone else saving their "HONOR". really don't trust anybody in this industry.

Thu, 10/21/2010 - 20:26 | 668626 Eternal Student
Eternal Student's picture

Or, to put it more succinctly:

She offered her honor.

He honored her offer.

And all night long, it was honor and offer.

Yes, that pretty much sums up the legal industry quite well.

Thu, 10/21/2010 - 20:40 | 668645 kathy.chamberli...'s picture

And all night long, it was honor and offer.

or he was on..her and then off..her, all night long.

well good night, eternal one. ending with a bang.

Thu, 10/21/2010 - 23:05 | 668901 StychoKiller
StychoKiller's picture

Then the MSM "wonders" why anyone would shoot an Attorney in broad daylight?

Thu, 10/21/2010 - 22:19 | 668813 Goldilocks
Goldilocks's picture

@Gloomy, "... because I had made payments in the past, success would be highly unlikely"

Jerry Kane mentioned this in his videos. After you make 2-3 payments you set a precedent & the banks now expect you to keep this foolishness up.

see (search) …

YouTube "Jerry Kane" specifically "JKCH-1 Part 1 of 7" ... "JKCH-1 Part 7 of 7"
and "JKCH-2 Part 1 of 7" ... "JKCH-2 Part 7 of 7"

He (Jerry Kane) was onto something … BIG. Subsequently they (police in West Memphis, Arkansas) gunned him & his son down under suspicious circumstances (many months ago). Please … Look him up

Remember Jerry Kane.

Thu, 10/21/2010 - 16:13 | 668003 Dingus
Dingus's picture

hA hA!

Thu, 10/21/2010 - 16:18 | 668011 molecool
molecool's picture

Honestly, my head hurts after four years of reading about this bullshit. I just want to see someone in motherfucking cuffs one of these days.

The info is out there for everyone to see. No, the MSM is not reporting on anything remotely close to the truth - that includes public radio/TV. Neverthless I tend to agree that the elite is now in the position to squeeze through any bailout they wish. The American public has proven that it is incapable of conducting organized civil disobedience. We should look at France for a quick primer on how to put the squeeze on government. Of course over here you'd be arrested as a terrorist.

How about a tax strike? Simple - we should have a national movement that would encourage everyone to claim as many dependents/excemptions on their tax forms as possible (a minor offense). This would be followed by filing of an extension by April 14. Six months of zero cash should get this administration's attention. I think - but then again they'd probably just print the money.

We are so fucked...

Thu, 10/21/2010 - 16:48 | 668117 economessed
economessed's picture

...and you made the choice to become a citizen member of this sinking ship?  How's that working out for you fellow taxpayer?

Thu, 10/21/2010 - 16:49 | 668120 Larry Darrell
Larry Darrell's picture

Your tax strike idea is one I have tried promoting myself.  Honestly, if the TEA Party people were more than just more political noise, this is exactly what they would have all of their "members" do. 

If the federal government took a loss of tax receipts as severe as would come from a few million actual working, tax paying citizens, this whole farce would end in a month.


Thu, 10/21/2010 - 17:00 | 668154 RichardENixon
RichardENixon's picture

If this idea ever began to gain traction the IRS would remind employers in the strongest terms that employers are required to assure that employees don't cheat on their W 4s under the penalty that the employer will be held liable for any shortfall of  withholding tax.

Thu, 10/21/2010 - 22:57 | 668884 Goldilocks
Goldilocks's picture

"...liable for any shortfall of withholding tax" ... yup, with each passing day that argument/threat means less & less.

Thu, 10/21/2010 - 17:36 | 668268 rumblefish
rumblefish's picture

"Six months of zero cash should get this administration's attention. I think - but then again they'd probably just print the money"

Bingo....inflating the money supply is the governments best friend.

Thu, 10/21/2010 - 18:25 | 668379 VK
VK's picture

Mole, Germany's doing well and so is South Korea ;)

Could always shift there?

Thu, 10/21/2010 - 16:18 | 668012 Teaser
Teaser's picture

In the first months or two of this year, my servicer, JP Morgan Chase sent me 3 or 4 fedex letters asking me to contact them to refinance.  I called, They told me they wanted to refi me because they suspected that my home was underwater, and wanted to refi me before I defaulted.  I was rather insulted, explained I wouldn't default.  They then explained they could off me a better rate.  So, I answered their questions.  Since I had just started my own company and my wife was laid off, we couldn't refi.  They told me that once I missed a few payments, they could help. 

Now I wonder if they were so desperate to refi me because my note originated with First Magnus, then they went belly up, and WAMU became the servicer, then WAMA went belly up and Chase became the servicer.  Also, Mers was the assignee when I originated with First Magnus, and now, according to the Mers website, the FDIC is the owner of the note.  The country property records still only show the first note with the mers assignee.

So, when can I quit paying the mortgage and tell JP morgan to get stuffed? 

Also, Gonzo, hope you wrote Cumberland a nasty email and a had an attorney call them.  That is bogus, and keep up the good work!

Thu, 10/21/2010 - 16:32 | 668071 Ragnarok
Ragnarok's picture

As soon as you go through the motions of formally asking JPM to show you the note.  See what they have to say/show and go from there.

Thu, 10/21/2010 - 16:45 | 668105 Almost Solvent
Almost Solvent's picture

Try a demand letter for a certified copy of the note directed to the office of the president and another to the JP Morgan Chase legal department. Send both via certified mail, return receipt requested.


After no response, try small claims court. You may get a judge to sign a subpoena for that note. Then serve the subpoena on the same parties, but spend a few bucks to hire the local sheriff to serve the parties.

Thu, 10/21/2010 - 16:57 | 668140 Pladizow
Thu, 10/21/2010 - 17:09 | 668183 Noah Vail
Noah Vail's picture

Did you check the new terms? Chances are it throws on five grand in new fees onto the principal and has a HUGE pre pay penalty. THAT is why they are so eager.

Thu, 10/21/2010 - 16:20 | 668019 detersbb
detersbb's picture

What happens when bank or party B come around and demand payment with the original note and you have no record that you paid party B, so they accelerate payment and demand the full amount of the note at once and then forclose and send you packing because there was no satifsification given for the 1st note that is ?, but not satisified, as a matter of law and fact?

I am just saying that all those unpaid refinanced loans are going to bite people in the ass, as the 2nd mortgage lien are starting to bite banks in the ass, (SOVEREIGN BANK v. FLORIDA DEFAULT LAW GROUP 2010)


Thu, 10/21/2010 - 16:27 | 668047 doggis
doggis's picture

wait a frickin minute......"I think the way the Fed is going to do it is, they’ll go for another round of Stealth Monetization: Buying MBS and other toxic assets off the banks for newly conjured cash, the banks then taking that cash and parking it in Treasuries, thereby funding the Federal government’s deficit."

Won't the valueless MBS being held on the B/S of the FED affect the dollar directly as they will be representing the assets/value behind the dollar!! 

Thu, 10/21/2010 - 16:34 | 668073 Careless Whisper
Careless Whisper's picture

1. there are no assets behind the dollar. none. zero.

2. the private federal reserve bank (it is NOT a gov agency) works for the large global bankers, and no one else.

Thu, 10/21/2010 - 18:36 | 668406 unununium
unununium's picture

Per the balance sheet there is $11B in gold valued at $42/ounce.

Thu, 10/21/2010 - 20:54 | 668671 darkaeye
darkaeye's picture

Doesn't much matter whether it's valued at $42/oz or $5000/oz.  Just because they have an entry on the balance sheet doesn't mean that gold is actually there.  Ask to see an independent audit if you think I'm being paranoid.

Thu, 10/21/2010 - 19:28 | 668508 halvord
halvord's picture

Military bases all over the world are the dollar's asset base. And, yes, that does mean that US libertarianism is total bullshit: you pay taxes for your military presence, and that is why we get so much cool stuff for cheap.

Thu, 10/21/2010 - 19:37 | 668529 GoinFawr
GoinFawr's picture

"... you pay taxes for your military presence, and that is why we get so much cool stuff for cheap."


Oh yeah, the PRC are really scared of Uncle Sam and his Jolly Green Giants with guns. "M-i-c...k-e-yyyyy. M-o-u-sssss-e"

And SA seems to be slipping away too... Time for some more Contra's!!

Thu, 10/21/2010 - 17:14 | 668196 Noah Vail
Noah Vail's picture

As with the last time around, if the monetiztion is simply replacing a lost asset value, it amounts to a wash in dollar terms. However, the markets will NOT see it this way and the  dollar will suffer at least temporarily.


Remeber that the great bank credit scheme has been wiped out, so it really hard to inflate without gobs of new credit.

Thu, 10/21/2010 - 17:35 | 668265 AUD
AUD's picture

Yes, but it dosn't seem to matter so far. Foreign holdings of US debt (Treasuries, Agencies etc) at record highs!

Gold down another $20!?

Thu, 10/21/2010 - 16:31 | 668062 gruden
gruden's picture

Any remember what happened when GM went bankrupt last year?  They totally disregarded the law to deny the chief debt holders their say in the bankruptcy agreement.  After the last couple years, does anyone really think nagging little details like legalisms will bring these banks crashing to their knees in 'Foreclosuregate'?  That's naive.  These guys kill and eat their own.  They're not going to let the unwashed masses bring them down.

Now, it WILL be interesting to see if they offer up BoA on their bloody altar.  They might do that to continue the Bread and Circuses, but foreclosures will continue, unabated, legal or not.

Thu, 10/21/2010 - 16:31 | 668063 treemagnet
treemagnet's picture

Look out below!

Thu, 10/21/2010 - 16:31 | 668065 outamyeffinway
outamyeffinway's picture

So how many here are underwater on their mortgage?

How many are going to stick it to the bank and stop paying?

It's the only way to revolt. I've started the process. Fuck 'em. Right in the eye hole.

Thu, 10/21/2010 - 17:02 | 668160 RichardENixon
RichardENixon's picture

They'll be keeping an eye out for you.

Thu, 10/21/2010 - 19:58 | 668580 MsCreant
MsCreant's picture

iHole. There must be an app for that.

Thu, 10/21/2010 - 16:31 | 668067 Bluntly Put
Bluntly Put's picture

I agree the Fed will force "put backs" onto the TBTF banks, then the Fed will monetize the MBS crap from the banks. However, that still doesn't "fix" the pension funds who are getting hosed by the MBS toxicity. They purchased those MBS with an assume rate of return, we know they need a good return on their investments to meet overhead and disbursements. Now the problem will be once they have been paid off for the MBS crap, and they are sitting on hot money there will be no interest worthy investments to purchase since ZIRP is still required to keep the banks afloat.

QED still a fracking mess.

Thu, 10/21/2010 - 16:36 | 668080 Careless Whisper
Careless Whisper's picture

the private federal reserve bank isn't interested in "fixing" the pension funds. couldn't care less. the fed is there to serve and protect the large banks. period.


Thu, 10/21/2010 - 16:54 | 668134 Panafrican Funk...
Panafrican Funktron Robot's picture

The Fed might be willing to buy those MBS's from the pension funds, who would then subsequently have to chase stocks to meet the return targets.

Thu, 10/21/2010 - 16:34 | 668076 DonnieD
DonnieD's picture

If your bank can't produce the note, wouldn't it be prudent to stop paying them not because you want to skip out on your debt, but because you're afraid of Party #2 showing up with your note demanding payment? Paying for your house twice is not cool.

Thu, 10/21/2010 - 16:52 | 668126 SimpleSimon
SimpleSimon's picture

That is exactly where I am confused.

The old note is still recorded at the county clerk's office under the original note holder.  A new note would be simply recorded as a second mortgage with a lien on the house.  Does the bank offering the re-fi have the standing to discharge the first note?  If the first note has a broken chain of title or the county clerk's office does not have records of the assignments of the first note to the bank, they cannot accept the discharge of the first note.

In my case, E*Trade was the original note holder.  This is what is recorded at the county clerk's office.  They sold the note to X, then it went to Countrywide, then BofA and now Fannie.  There are no records of the assignment of the note that I could find.  BofA is servicing my loan.  We are not in default but I am worried that no one may have the standing to discharge the note/lien at the county office after I finish making all my payments.

Thu, 10/21/2010 - 17:34 | 668262 BurningFuld
BurningFuld's picture

Just phone the county clerk's office and tell them you are E-trade and the note has been paid in full. Jeees..

Thu, 10/21/2010 - 17:49 | 668289 wintermute
wintermute's picture

Genius! Love it.

In fact. Ask E-trade to write to you confirming they have been fully paid - then send their letter to the county clerk to get rid of the lien :-)

Thu, 10/21/2010 - 19:12 | 668469 Fed Supporter
Fed Supporter's picture

Better idea, just sign up with MERS as a vice president for $25 and get you own stamp and fill out a Satisfaction of Mortgage and stamp the the thing yourself.

See Bethany Hood doesn't work for MERS either but that doesn't stop her from being a VP for them.  Great system.  Assign mortgages to yourself, no conflict of interest there.

Thu, 10/21/2010 - 18:06 | 668337 Common_Cents22
Common_Cents22's picture

You need to request a satisfaction of mortgage from etrade.  that should have been done with your refi.

Thu, 10/21/2010 - 19:14 | 668481 SimpleSimon
SimpleSimon's picture

I have not recieved anything from any of the parties about satisfaction or assignment of the mortgage.

Fannie's look up tool now tells me that 'there is a loan on this property'.

Thu, 10/21/2010 - 20:12 | 668607 cswjr
cswjr's picture

I'm in a nearly identical situation.  Wish I could find a definitive answer on how to proceed, but so far I haven't come across one.  If/when you do resolve things, please advise the rest of us.

Thu, 10/21/2010 - 22:26 | 668832 Oh regional Indian
Oh regional Indian's picture

Hey CS, if you really want to take some substantial action, I suggest you read the posts on a previous Lira story by a poster named Kayl.

Understanding the UCC system might be the only legal way to discharge your debt. It's been in the realm of conspiracy theory for the longest time but that of course means it's true.


Thu, 10/21/2010 - 16:39 | 668084 notadouche
notadouche's picture

wow the banks saw this coming a couple of years ago.  while my mortgage has always been in good standing wells fargo came to me twice with free refi to lower my rates.  first time i did it i thought it was a good deal.  came around same time next year with same offer i declined because the interest differential wasn't enough for me to waste my time filling out the paper work.  After I declined a month or so later I got a letter from them saying since they got some information from Trans Union they wouldn't be able to offer a no cost refi.  I turned you down jack ass and my ratings are all above 800.  Meanwhile since mortgage rates have gone below 4.5 i've never gotten another offer.  Now it appears the only reason I got the offer to begin with was to start a new paper trail to cover their ass.  

Idea to save America.  Moratorium on congressional activity.  Maybe a decade or two.  How about doing away with house of reps.  It was a necessary evil back when fastest transportation was horse drawn wagon now though, thanks to technology I can represent myself in a nanosecond like every other American.  Think of the cost savings from all of the staff cuts and govt plunder.  Plus lobbyist would be mostly out of work.  

Thu, 10/21/2010 - 17:02 | 668157 DollarMenu
DollarMenu's picture

 "now though, thanks to technology I can represent myself in a nanosecond like every other American"

Neat-o, except that they won't.

Too busy on the IPhone, or watching Dancing w/whatever.

I myself would rather see public funding of elections and term limits.

No exceptions.

Fri, 10/22/2010 - 03:09 | 669169 Confused
Confused's picture

In theory he is correct. We no longer need representatives. But at this point we can assume that just as the market are ruled by machines, any system of real direct political participation would also be manipulated.  


Thu, 10/21/2010 - 16:41 | 668091 Big Corked Boots
Big Corked Boots's picture

Puta huevón

Sure glad for Google language tools.

Thu, 10/21/2010 - 17:02 | 668167 DollarMenu
DollarMenu's picture


Fri, 10/22/2010 - 03:10 | 669171 Confused
Confused's picture


Thu, 10/21/2010 - 16:41 | 668092 jmac2013
jmac2013's picture

I can see the US gov't stepping in to somehow guarantee mortgages.  This will back Wall St. and it's mortgage backed secutity ponzi scheme.  It will also make the harsh austerity measures more palatable, as the gov't will say "we did something for you (homeowners) now you have to give something back (social security, medicare, etc.)"  It would be a win win for bankers.


Thu, 10/21/2010 - 16:44 | 668100 HarryWanger
HarryWanger's picture

I'll put money down that this mortgage story will go away completely after elections. Already been swept under the rug but some people just don't want to let it go. 

Thu, 10/21/2010 - 16:59 | 668143 Mako
Mako's picture

There is nothing to "let go".

Either you are smart defendant and know the plaintiff has no "standing" to foreclose or you are a stupid defendant that will lose your house. 

Most Americans are too lazy to go to the law library to figure out why the moving party has no legal standing to foreclose.

Thu, 10/21/2010 - 17:49 | 668298 traderjoe
traderjoe's picture

I'll take that bet. Say a $100 donation to ZH? What shall our benchmark for winning/losing be? Stock price of BAC below $10? A headline in a major newspaper? A major QE push into MBS? A federal attempt at a law fix?

Thu, 10/21/2010 - 18:20 | 668372 Tall Tree Man
Tall Tree Man's picture

Wanker:  Lawyers are not going to let this story go away.  Come on - man!  You seem pretty rational.  What about billions of dollars do you not understand?  If you thought you were a wronged party, would you just move on?   

Thu, 10/21/2010 - 16:44 | 668103 economicmorphine
economicmorphine's picture

It's a bizarre assumption to think that the banks are encouraging refi's to clear up title so that they can foreclose later.  No, the banks are encouraging refi's because:


a.  They generate significant upfront revenue.

b.  They lessen the likelihood of a refi later.


This may come as a shock to Mr. Lira and his many admirers, but the banks would rather not foreclose.  Another potential shock to the faithful (and of this I have no doubt) is that foreclosuregate will be settled in favor of the banks because that's how everything in Amerika works these days.  So this assumption that somehow, someway, we're all gonna get free houses is completely and utterly absurd.  Next.

Thu, 10/21/2010 - 18:33 | 668393 Milestones
Milestones's picture

The only thing absurd is your assumptions and presumptions about the issue which appears to be over your head. It is greed vs the supremecy of the law in civilization.

You had better pray you are wrong unless you are prepared for the return of the Goths and the Vikings lifestyle.  Milestones

Fri, 10/22/2010 - 02:08 | 669136 JLee2027
JLee2027's picture

Well said.

Thu, 10/21/2010 - 18:34 | 668398 puckles
puckles's picture

I tend to agree.  The TBTF banks as well as  their compadres, the other very large corporations (some of which are virtually banks, and nearly bankrupt ones at that) have spent way too much money on lobbyists over the years, ensuring that the Federal codes reflected their desires and needs (i.e., squeezing out smaller players who could not afford the same ammo), to suddenly give up now.  And anyway, the rule of law no longer applies to the big guys (see Max Keiser on the subject; during a recent broadcast, he noted that when he worked in Wall Street, he and his fellow employees were exhorted by the bank to screw the law, because that's what they paid lawyers--and Congress--for). The rule of law will only apply to those with a net worth under a million $, and the latter better be actively buying gold.

Fri, 10/22/2010 - 02:09 | 669138 JLee2027
JLee2027's picture

Arrogance tends to make people believe that. In reality it stays that way until the lights come on, and the roaches scatter. The lights are now on. People are heading to prison over this.

Thu, 10/21/2010 - 16:44 | 668104 treemagnet
treemagnet's picture

Makes sense - Ben's gonna soak up as much MERS with his "QE2" not notes/equities.  He'll keep the dilution in the U.S. (for a little while) until it leaks out buy hey - who knew it would do that, right?  Meanwhile he plays the QE2 "don't make me shoot you" card until its cards on table time.  He saves the "system" which means the elites and banksters wake up, stretch, scratch their collective fat ass and wonder aloud the same thing my innocent, beautiful daughter says "Its a brand new day"!  The sheeple are, well - thats why we call 'em sheeple, right?  The shit gets shoved to the masses and hey isn't that where it belongs 'cause its really their society that we saved, right?  Why aren't they more grateful......strange creatures those sheeple...

Thu, 10/21/2010 - 16:45 | 668108 Terra-Firma
Terra-Firma's picture

A failure of governance brought on by permissive corruption at every level.

The once mighty US now sucks Chinese cock, (not all bad depending on your orientation) while taking it in the back end by a nuclear powered Iran (see previous parentheses). all the while Russia, China, India and God knows who else lube up an alternative currency trading block while the FED hands out cocaine to the watching crowd.

A nation of cowards governed by crooks, led by gangsters! This is the USA today. A failure.

Did I miss anything? Gotta love the markets though :)



Thu, 10/21/2010 - 17:00 | 668149 1100-TACTICAL-12
1100-TACTICAL-12's picture

I do belive you stand on firm ground little gopher...

Thu, 10/21/2010 - 18:43 | 668421 desgust
desgust's picture

Best finish for the post!

Actually I wonder if these darn reps could name just ONE single honest politician!

I know none in my own dirty country, but I am not a "Patriot" like you, Amis.


Doesn't matter, better for them to get fucked in (American) Dream and not even notice it!

Red-Blue- Red-Blue now comes Redrats! The next change to believe in. And yes,  you can - get fucked!

Thu, 10/21/2010 - 21:13 | 668680 Village Idiot
Village Idiot's picture

deleted - lack of humor

Thu, 10/21/2010 - 16:49 | 668119 Prof Gulliver
Prof Gulliver's picture

When the GOP takes control of the House and maybe the Senate in a few weeks, Wall Street will pull in their chits on a century of backing. This will disappear faster than the, um, dreaded Hindenberg Omen.

Thu, 10/21/2010 - 17:36 | 668269 tallystick
tallystick's picture

I say you are wrong Prof.

Thu, 10/21/2010 - 23:21 | 668937 StychoKiller
StychoKiller's picture

Once we start seeing ads on TV from Attorneys begging for "foreclosure victims" to step forward and get a piece from Citi, Wells, BOA, etc -- then YOU WILL KNOW that the Prof. is wrong!

Thu, 10/21/2010 - 16:51 | 668124 apberusdisvet
apberusdisvet's picture

Two more issues:

1.  Since the "trust" of MERS has broken the chain of title. the banks shouldn't be eligible as a tax free entity.

2.  Since "ownership" of the mortgages may have been transferred numerous times, where are the fees due the local taxing jurisdictions?

Thu, 10/21/2010 - 17:14 | 668198 ATG
ATG's picture


Tax evasion by banks...

Thu, 10/21/2010 - 18:59 | 668453 unununium
unununium's picture

A few more

 - Loans listed in multiple MBS.

 - Rampant fabrication of assignment documents. NOT simply robo-signing.

 - Rampant back-dating.



Fri, 10/22/2010 - 00:40 | 669060 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

I still laugh when I think how fucking convoluted the whole mess is.

Thu, 10/21/2010 - 16:59 | 668151 rumblefish
rumblefish's picture

"Anyway, it’s an open secret that the politicians on the Right are all in the banksters’ collective back-pocket. " - Gonzalo Lira

BS.....both parties are in their pockets.  Dem or Rep there is no difference anymore. Neither is capable of fiscal restraint.


Can someone answer me this. In AZ, a deed of trust s filed with the county so if the bank lost docs, can't they fall back ont this?  This seems to me to be an issue between the banks, bondholders etc and just and another attempted out for a non paying homeowner.  thanks.

Thu, 10/21/2010 - 18:01 | 668325 legerde
legerde's picture

Im not sure about Arizona.  Many states require that real estate transactions be done in writing.  There are historical reasons for this, but mainly its to ensure that clear chain of title is maintained.   The deed of trust is not the piece of paper you are looking for. You are looking for the Promisorry Note.

Anyhoo, A copy of the "Note" from the county is insufficient.  The original must be available per Uniform Commercial Code 3-501.  The reason for requiring the original is because if the "Note" is sold, then the new owner is supposed to be recorded "on the note".  A copy only tells you who was the owner on a specific date, it doesn't tell you who is the current owner.  Only the wet-ink original note would prove who the original owner is.  Unfortunately, many banks destroyed notes after they were transferred electronically so that they wouldn't be confused with the electronic ownership.   Unfortunately that makes it impossible to determine (via UCC 3-501) who is the owner of the note.  Which means no one can foreclose.  The robo signers were recreating documents/notes with signatures.


Whats so funny about this to me is that the UCC was developed by the banks, for the banks.  Its fun to use it agains them.  Enforcing the law should harm no one other than those who didn't obey the law.   Seriously ask to see the original wet-ink note.  They should have it and then you can rest assured that your chain of title is in tact.  You owe yourself the piece of mind.

  • U.C.C. - ARTICLE 3 - §3-301 Right of Enforcement
  • U.C.C. - ARTICLE 3 - §3-302 Holder in Due Course
  • U.C.C. - ARTICLE 3 - §3-501 (b) 2 (1) Presentment of negotiable Instrument upon demand
Thu, 10/21/2010 - 17:05 | 668170 Milestones
Milestones's picture

Golly, all we need to do is solve this one itsy bitsy problem and all in America will once more be cracker jack swell again Beaver.

 Now lets all sit down and eat the meal mom cooked--and for shit sakes, put away the AK47 and the grenades. Milestones

Thu, 10/21/2010 - 17:11 | 668189 wtlf555
wtlf555's picture

Mr Lira

I love your articles. Well written and interesting. Two points I wonder about. First can HR3808 really be pointed to dems or repubs? How could repubs as the minority get the bill thru without dem votes? Are you saying that repubs put the bill together and dems unwittingly voted on it? Also in regards to mods - can't we just take the NPV of the old and compare it to the new NPV to see the effect on a portfolio (sans leverage)? ie if a $200k mortgage with 25 years left at 5% is changed to a $200K mortgage with 40 years left at 3% the NPV has dropped about 10%

Thu, 10/21/2010 - 23:25 | 668946 StychoKiller
StychoKiller's picture

Since BOTH Congress and the Senate put this on Obamatron's desk via voice vote(s), who knows?

Thu, 10/21/2010 - 17:14 | 668197 Traveler-2
Traveler-2's picture

Gonzalo, I thought your hyper-inflation article was superb, really great and opened my eyes. 

I thought that your article about your two dead- beat middle class old yuppies was a dud, and so did most of the respondants. You seemed to miss this (and the point) and are now gloating over their "win." Sure.  This is not over for them. Nor should it be, as they were scamming the system.

This article has degenerated to a rant.  Your last paragraph says it all.  Who wants to see you angst about not knowing what you think or what is to (or not) happen.  We are all in that position.

You need to chose your subject, make a point, and then close and get on.


This article is a rant. 

Thu, 10/21/2010 - 17:20 | 668217 praxiteles
praxiteles's picture

tranch warfare!

Thu, 10/21/2010 - 17:21 | 668220 The Alarmist
The Alarmist's picture

"Anyway, it’s an open secret that the politicians on the Right are all in the banksters’ collective back-pocket. " - Gonzalo Lira

Is that your own brand of Gonzalo Journalism? Explain, please, how the sweetheart deal that Chris Dodd got from Countrywide or how $16m of compensation Rahm Emmanual took out of Freddie Mac over three years are examples of politicos on the left in the pockets of the bank.

When I worked in a bank, I took a look at the FEC website one day to see what my colleagues were contributing to ... significantly more than half of their contributions and went to Democrats.

Gonzo, please deal in a little more serious analysis if you are going to pretend to be a thoughtful contributor.

Thu, 10/21/2010 - 17:25 | 668233 the rookie cynic
the rookie cynic's picture

Why bother with the political fallout with son of TARP? J6P doesn't even know what quantitative easing is. If the banks can't foreclose on all those millions of middle class cud chewers (to borrow Mr. Lira's metaphor), just take it outa their hide via QE and fill up the banks with more cash to "invest" in the next latest, greatest, yet-to-be-perpetrated-on-the-masses, financial innovation.

In the meantime, if someone in a suit calls you up from WFC or BofA to discuss refinancing your mortgage, tell them to jump off a cliff. Repeat after me: "Show me the note dick-head."

Thu, 10/21/2010 - 17:25 | 668234 wintermute
wintermute's picture

Every mortgagor in the US should read the following legal analysis on MERS and how the big banks have attempted to privatize the property title system - without any legislation allowing them to do it.

They have made a complete mess of it so it will now take decades to resolve.

use the one-click-download for the whole pdf. It is worth taking time to read in full.

Mortgagors need to check what their county records say about who holds lien on their title - and write to their servicer for a copy of the note. Then demand that the county records are updated to show the correct lien holder (who must be the note-holder too).

Only when this is done can the lien on the property be removed when the mortage is paid off - and also it will mean the property is saleable without dispute about title.


Fri, 10/22/2010 - 02:12 | 669140 JLee2027
JLee2027's picture

Decades?  No.  The system will reset, wipe the banks and clear the title to the squatter. Done, finos.

Thu, 10/21/2010 - 17:29 | 668243 buzzsaw99
buzzsaw99's picture

Brian and Ilsa are King and Queen of the mulligan. They even live on a golf course. I know they are friends of the author but I still think they are scum. I hope he gets hit in the head with a golf ball.

Thu, 10/21/2010 - 17:44 | 668290 duo
duo's picture


You're giving herpes a bad name.  Syphillis has more ooze, then does dormant for awhile and comes back with insanity and other maladies.

Thu, 10/21/2010 - 17:50 | 668299 masterinchancery
masterinchancery's picture

Hey Gonzalo, let me tell you how the US legal system works--and yes, I am an experienced attorney.  When you screw up, you don't usually get a mulligan, you just LOSE.  So those mean right wingers who don't have any cool ideas for pulling BOA's fraudulent nuts out of the fire, they probably understand that there aren't any ways to put humpty dumpty back together again, and BOA and the other fraudsters will just have to settle with the people they have defrauded. Got that?

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