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Grayson Sends Letter To Fannie CEO Demanding Explanation To Company's Actions Vis-A-Vis Pervasive Mortgage Fraud

Tyler Durden's picture


Alan "Taz" Grayson is back again, and asks some very relevant questions of Fannie's CEO Michael Williams:"Why is Fannie Mae using lawyers that are accused of regularly engaging
in fraud to kick people out of their homes?  Given that Fannie Mae is at
this point a government entity, and it is the policy of the government
that foreclosures are a costly situation best avoided if there are any
lower cost alternatives, what steps is Fannie Mae taking to avoid the
use of foreclosure mills?  What additional steps is Fannie Mae going to
take to ensure that foreclosures are done only when necessary and only
in accordance with recognized law?  How do your servicer guidelines take
into account the incentives for fraud in the fee structure of
foreclosure attorneys and others engage in the foreclosure process? 
What mechanisms do you employ to monitor legal outsourcing?" He almost asks the correct one: "Is Fannie (and Freddie) a shell operation to willfully and illegally transfer non-existent deeds to servicer banks so they can collect subsequent cash flows associated with misappropriated properties, while receiving tens of billions in taxpayer funding each and every quarter."

Full Grayson letter

September 24, 2010

Michael J. Williams
President and Chief Executive Officer
Fannie Mae
3900 Wisconsin Avenue, N.W.
Washington, D.C. 20016
Dear Mr. Williams,
We are disturbed by the increasing reports of predatory 'foreclosure mills' in Florida working for Fannie Mae servicers.  Foreclosure mills are law firms representing lenders that specialize in speeding up the foreclosure process, often without regard to process, substance, or legal propriety.  According to the New York Times, four of these mills are both among the busiest of the firms and are under investigation by the Attorney General of Florida for fraud.  The firms have been accused of fabricating or backdating documents, as well as lying to conceal the true owner of a note.
Several of the busiest of these mills show up as members of Fannie Mae's Retained Attorney Network, a set of legal contractors on whom Fannie relies to represent its interests as a note-holder.  The network also serves as a pool of legal talent that represents Fannie in its pre-filing mediation program, a program designed to facilitate communication between borrowers and servicers prior to foreclosure. In other words, Fannie Mae seems to specifically delegate its foreclosure avoidance obligations out to lawyers who specialize in kicking people out of their homes.
The legal pressure to foreclose at all costs is leading to a situation where servicers are foreclosing on properties on which they do not even own the note.  This practice is blessed by a legal system overwhelmed with foreclosure cases and unable to sort out murky legal details, and a set of law firms who mass produce filings to move foreclosures as quickly as possible.  At the very least, we would encourage you to remove foreclosure mills under investigation for document fraud from the Fannie Mae's Retained Attorney Network. We also believe that Fannie should have guidelines allowing servicers to proceed on a foreclosure only when its legal entitlement to foreclose is clearly documented.  In addition, these charges raise a number of questions for us about the foreclosure process as it pertains to Fannie Mae's holdings.
Why is Fannie Mae using lawyers that are accused of regularly engaging in fraud to kick people out of their homes?  Given that Fannie Mae is at this point a government entity, and it is the policy of the government that foreclosures are a costly situation best avoided if there are any lower cost alternatives, what steps is Fannie Mae taking to avoid the use of foreclosure mills?  What additional steps is Fannie Mae going to take to ensure that foreclosures are done only when necessary and only in accordance with recognized law?  How do your servicer guidelines take into account the incentives for fraud in the fee structure of foreclosure attorneys and others engage in the foreclosure process?  What mechanisms do you employ to monitor legal outsourcing?
We look forward to your responses and to understanding more about these disturbing dynamics in future hearings.

Alan Grayson                       Barney Frank                        Corrine Brown
Member of Congress            Member of Congress            Member of Congress


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Fri, 09/24/2010 - 13:22 | 602862 Turd Ferguson
Turd Ferguson's picture

I'm glad this prick, Grayson, is pursuing this. However, he is such an unbelievable, douchebag, prick, partisan democrat he make me want to puke.

We will never, ever extricate ourselves from this mess if we keep electing assholes like Grayson.

Fri, 09/24/2010 - 13:26 | 602876 spekulatn
spekulatn's picture

Well said Turd.

Flush 'em all.

Fri, 09/24/2010 - 15:41 | 603222 BobWatNorCal
BobWatNorCal's picture

"Don't Taz me, bro"

Fri, 09/24/2010 - 13:30 | 602882 -Michelle-
-Michelle-'s picture


Fri, 09/24/2010 - 13:28 | 602883 -Michelle-
-Michelle-'s picture

Agreed. Also, I'm not usually a grammar stickler, but is it too much to ask that our elected officials use a simple check on official correspondence?

"What steps are..."

Fri, 09/24/2010 - 14:42 | 603031 libert
libert's picture

Uhh..."steps" is the object of those sentences. The subject is "Fannie Mae," and the verb is "taking," so the singular form "is" is correct. I.e. "Fannie Mae is taking what steps?" The steps aren't taking anything.

Fri, 09/24/2010 - 14:47 | 603040 Cognitive Dissonance
Cognitive Dissonance's picture

Mom, is that you? You promised me you would stay on Glenn Beck's web site. :>)

Fri, 09/24/2010 - 14:58 | 603083 hbjork1
hbjork1's picture


You see we do have people in the US that a conversant with the English language.

Fri, 09/24/2010 - 15:17 | 603139 Cognitive Dissonance
Cognitive Dissonance's picture


I occasionally ask my very old and still sharp as a tack mother to proof read some of my articles. In a word, she's brutal. Thank God she works cheap, usually for twice a month Sunday lunch at her favorite restaurant and twice weekly phone calls, because I would never pay for her abuse. :>)

My biggest mistake was printing out the first article for proof reading in large font. This just gave her more room to fill in with snide comments and corrections. With a red pen no less. Last week on the way to the restaurant she wanted me to stop at Staples. She had me go in and purchase more red pens. She laughed her head off at my misery.

Fri, 09/24/2010 - 15:04 | 603105 Careless Whisper
Careless Whisper's picture


that's right they aren't taking any steps. the lawyers in the florida case were hired for the mortgage note holder, fannie, and the lawyers recorded a fraudulent mortgage assignment to the benefit of j p morgan chase. you would think, at a minimum, that fannie would dismiss those lawyers, excpet maybe they were in on it too, and its another back door bailout (robbery). what happened to all the money collected by the banks from those fraudulent foreclosure notes? did they keep the loot or turn it over to fannie?

Fri, 09/24/2010 - 15:12 | 603132 Bob
Bob's picture

Those are the burning questions.  Something tells me that Grayson already has a pretty damn good idea of the answers . . . he is well connected, after all, and it seems unlikely that he'd risk making a fool of himself with these kind of allegations otherwise.  We'll see.

Fri, 09/24/2010 - 15:47 | 603237 Commander Cody
Commander Cody's picture

The Great Wealth Transfer has many conduits.

Fri, 09/24/2010 - 16:00 | 603261 -Michelle-
-Michelle-'s picture

Hmmm. I would think the phrasing determines the usage.  "Fannie Mae is taking steps."  "Steps are being taken by Fannie Mae."  I'm just being nitpicky, though.

Fri, 09/24/2010 - 13:31 | 602889 Bob
Bob's picture

Fact is that he is the ONLY one taking them to task, including every other sacred cow of the various partisan crowds, even the Great Mr. Paul.

How about some credit where credit is due?  If he's the only prick willing to do this, it would appear that this prick is the best of class at this point.

Fri, 09/24/2010 - 13:33 | 602895 Turd Ferguson
Turd Ferguson's picture

If you don't believe everything he believes, you are "the enemy". Says it himself in this clip.

What's next, Congressman? Re-education camps for anyone who disagrees?

Fri, 09/24/2010 - 13:46 | 602915 Bob
Bob's picture

Charming.  I missed the part about the "re-education camps."  He's honestly calling it as he sees it, however.  You don't think many others would say the same about their "opponents" if they had both the honesty and the balls? 

He's obviously no diplomat.  One thing that is perfectly clear every time you hear him is that he shoots--metaphorically, don't duck--from the hip. 

There's  a weapon for every battle--he would seem to be perfectly suited to this one.  He doesn't give a fuck what anybody thinks. 

I surely don't agree with everything he says, nor even believe that he should have said what he does in that 1 minute video clip, but I do think that he's proceeding the way somebody needs to on this issue.  And nobody else is doing it. 

It takes a prick sometimes--and I hope he stays the course on this. 

Don't you?

Fri, 09/24/2010 - 14:16 | 602980 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

He doesn't give a fuck what anybody thinks. 

Dear God, I hope he doesn't have a hottub.

Fri, 09/24/2010 - 14:32 | 602990 Turd Ferguson
Turd Ferguson's picture

" I missed the part about the "re-education camps." 

Well no shit, Bob. I was inferring the next step in his line of reasoning.

It does not take a village nor a prick. Just because someone disagrees with you politically does not make them "the enemy" and an "enemy of the country". If you truly cannot see the disastrous implications of political leaders using this type of language, then you have efficiently buried your head so deeply in the sand of partisanship that you will never be any help in digging our country out of the mess CREATED BY BOTH SIDES. 

Fri, 09/24/2010 - 14:37 | 603021 Bob
Bob's picture

We've gone way beyond the point where I'm gonna worry about the civility of public discourse.  Or, further examining the comments here, spell checks, facial hair, and party identification. 

What I see is a whole lotta misguided distraction from the single relevant issue: Is this guy doing the right thing here?

The rest is fud, in my judgement.  It has nothing to do with partisonship in my book. 

Fri, 09/24/2010 - 14:50 | 603052 Turd Ferguson
Turd Ferguson's picture

Point taken but you can do the right thing without being an asshole the rest of the time. Whatever happened to "taking the high road"?

Again, enflaming your supporters and your opponents by naming your opponents as "enemies of the state" does nothing to help us out of this mess. Grayson is one prick we could do without in Congress.

Fri, 09/24/2010 - 15:04 | 603104 Bob
Bob's picture

Turd, I have no argument with your vision of the high road, but this country is completely off the tracks at this point. 

What I see in Grayson, on this all-important issue, is a guy who is trying to get the job done.  Hey, when that's taken care of, send him to charm school.  Bounce him out of congress for all I care. 

But if this opportunity to set things right with the banksters and the government is not pursued fully, I don't see much chance for anything left of this country worth worrying about. 

Don't worry, I'll fight right alongside you if "re-education camps" ever get put on the table.  

Fri, 09/24/2010 - 15:28 | 603181 Turd Ferguson
Turd Ferguson's picture

You got it, bro.

Captain Bob and Sgt Major Turd reporting for duty.

Have a great weekend!

Fri, 09/24/2010 - 20:14 | 603770 nmewn
nmewn's picture


Alan Grayson. While I admire his pugnacity...things are not black & white with Mr.Grayson

With Grayson we are asked to believe that a Harvard educated lawyer, whose specialty was contract law (with Fried, Frank, Harris, Shriver & Jacobson) was the victim of a ponzi scheme, in which he says he willfully allocated 29 million dollars worth of IDT stock into offshore accounts. He claims this loss to the IRS as his largest "asset".

This guy doesn't pass the smell test for me, on a host of levels.

Just sayin.



Fri, 09/24/2010 - 14:46 | 603038 apberusdisvet
apberusdisvet's picture

No question; he's an asshole; but I'll cut him some slack on this issue; the MSM don't understand this fraud; most of the articles I've read totally miss the point.  It's a title issue you dumb fuck journalists;  neither banks or any new owner of foreclosed or short-saled property can be secure in their ownership.

Fri, 09/24/2010 - 15:08 | 603117 hbjork1
hbjork1's picture


" What's next, Congressman? Re-education camps for anyone who disagrees?"

TF, how about some "education camps".  They can't be "re-educated" if they were never educated in the first place. 


Fri, 09/24/2010 - 13:33 | 602893 Cognitive Dissonance
Cognitive Dissonance's picture

We will never, ever extricate ourselves from this mess if we keep electing assholes like Grayson.

May I suggest we well never, ever extricate ourselves from this mess as long as we keep this "election" system, along with other key social control systems such as the "rule of law" that is hardly fair and equal.

Of course, that would require that "we" do something about it. However, as long as we can plead and pray that the sociopaths will come to their senses and play nicely, we don't need to lift a finger. The reality is that the system is self regulating (meaning the peons [that's you and me] are regulated using the "rule of law") and self perpetuating, as long as you're in the right minority.

Fri, 09/24/2010 - 13:35 | 602898 Turd Ferguson
Turd Ferguson's picture

I hear ya, CD. 

It may be simple and unsophisticated but term limits may be the only way out.

President: 1 6-yr term

Senate: 1 6-yr term

House: 3 2-yr terms

Fri, 09/24/2010 - 13:46 | 602922 SRV - ES339
SRV - ES339's picture

All improvements Turd, but they do not address the root cause... financial influence. The beast that must be destroyed.

Fri, 09/24/2010 - 14:25 | 602995 MachoMan
MachoMan's picture

I'm thinking there are quite a few things that might help:

1.  Random appointment of governmental positions, similar to jury duty.  We have american idol style appointment striking for presidential elections...  last man standing wins.

2.  States adopt their own similar system of random appointment.

3.  Only warm bodies may contribute to campaigns, and only in a de minimis amount, max ~$100 per candidate. 

4.  All debates/speeches/etc. are broadcast for free on the internet and other television stations and all candidates remaining get to speak in equal lengths.  Questions are unknown ahead of time. 

5.  Limit advertising expenses per candidate to incredibly meager amounts and only allow advertising to state platform and sworn facts of personal background.  The goal is to be uniform and limit the possibility of manipulation.

6.  Any amounts obtained through taxation that do not get used go into a campaign fund for subsequent candidates...  dollar thresholds can be increased depending on the amount in the fund.  Any amount existing in the fund at the beginning of a campaign can be implemented in a way similar to regressive credit/wellfare, with ceilings on the amount contributed to a candidate.

Fri, 09/24/2010 - 13:48 | 602923 crosey
crosey's picture

Back in the day, serving in the federal government was a royal pain in the ass.  You had to leave your home and business, uneasy travel, bickering when you get there, then a long trip home to see what state your life and business was in.  The historical record is replete with such stories from our founding fathers.  Even Jefferson hated it.

Now, it's a gravy train.  If you want to stop the train, end the gravy.  And that goes for the thousands of overpaid government staffers who are living off the languishing taxpayer tit.

Fri, 09/24/2010 - 17:08 | 603439 jmc8888
jmc8888's picture

Term limits would make things worse.

So instead of holding people to account, we just file them in and out.

You see, bad politicians are term limited to 1-2 terms usually anyways, but good ones can last a long, long time.  Of course we don't see many of these, but it can take only 1 person to change things.

If that person was term limited, looks like we're screwed.

FDR had ~3 1/4 terms.  Had he had 2, or 1 6-year, do you think we would have won wwII?

Well you'd be wrong. Because it was ONLY FDR that kept us building up into a war.  ALl the wall street/ QUeen of englanders wanted us to stop SPENDING. 

Only someone who'd been around the block, was able to get us through WWII.

Since LIFE term limited him, what happened?  Well just like TERM LIMITS, we got another president, except Truman was a dumbass, lying, corporate wall street monetarist whore.

Had FDR lived a couple more years to finish out that 4th term, we would not have gone down this road.  No vietnam, No military/industrial complex, no monetarist bs, because FDR was going to CRUSH them.

But a new guy, like with term limits, or a death, altered things.

So let's just all be idiots and want to try to use a SOPHISTRIC NOTHING to make a bs case that we'd be better off with term limits by constantly having rooks in there.  Easily controlled rooks.

Yeah, like we aren't corrupted enough.  Just imagine if EVERYONE was new, but the lobbyists were 10 termers.  Get it?  Probably not.


You see if you have a problem with who is elected, do what's necessary to wake the people up so that they make better decisions.

Only idiot thinking would point to term limits. Because term limits don't solve anything.  They WOULD get rid of people we don't want to get rid of. 

Is this America?  Term limits, in the country that defines democratic republics, purely founded on our ability to believe we can control our outcome through our elections, is akin to the Queen wanting to ditch her monetary system, for our AMerican credity system. 

So, how many people will be elected that are better because of term limits.  How many will THAT decision bring in?  ANyone? Beuller..Beuller....Frye...

0...that's how many good people will be added to the system by this meausre

Now how many would be taken away?  ALL INCUMBENTS WORTH THEIR SALT after the time is up. 

When we right this ship to get out of this mess, don't we want those people in there, because they'll know what the hell they're doing?

Just because I'm 32, doesn't mean I don't understad and respect the wisdom of sane minded seniors.  Too bad term limits would pretty much guarantee we'll be missing that.

If you are anti-american in spirit, be for term-limits.  Because term-limits by their very nature are antithetical to our U.S. system.

The key is choosing WISER, not more OFTEN.

Meanwhile just because you have to recycle the candidates more often, doesn't mean you'll get quality.  But you damn sure will be throwing out the good ones every election in perpetuity.

How many football teams would be good if you got rid of all players that had played longer than 4 years?

We call that the NFL.  You'd call them, trash. 

But you see, they're term limited in college.  But we have somewhere they can go afterwards, the NFL.  Where the REAL game begins.

So we can have an WNBA level of quality in our congress with term limits, or the actual chance to be at an NBA level without term limits. 

Past is not the future.  Once this is over, and with our tech, no monetarist will ever be able to run the game again. 

But, since we're not there yet, just imagine a bunch of rooks going against all the top lobbyists who not only schooled the last congressman who sat in the rooks seat, but the 5 before that.

In other words, none of them will have a chance to become the type of leader we need, through experience.  SO guess what we won't get.  Leaders we need.

But we'll have a revolving door so the people can feel better because they can't remember who is their congressman because it changes every election or two.  They don't even keep up with their congressman now, this way they'd have to figure out 3x the amount of politicans in the same amount of time?

Term limits will guarantee Sarah Palin's are the norm in congress.  A constant stream of rookie dumbasses who are used like a 3 dollar hoe by the lobbyists and TPTB. 

Meanwhile, by the time the honest ones learn, they're out.

Great plan, I can just see how it makes us better, with all the sohpistry lining the pockets, how could it not deliver everything people want.

Especially when the alternative is just to make better decisions to begin with.  Every election is a term limit, potentially, for whoever sucks. 

So this is really about a loss in the faith of the average American to make choices.  While right now that probably is somewhat true, hell very true, it won't always be that way.  We're still in the REPUBLICAN REVOLUTION momentum.  It's slowing down, this crisis will be it's death knell.  Once that is gone, this whole bs culutre will change, and we'll make better choices.  We have to get there, but by HOOK or by CROOK, we'll learn.

Term limits are a shacklel, that accomplishes nothing, and prevents much.

It's about as smart as trickle down economics, or green ideology, or they hate us for our freedoms.


If the GOAL is BETTER congressman, what DIRECT benefit for getting better congressman would we have from being implemented? NOTHING.

YOU DON"T GET SHIT from it.  You definitely stop alot of good people.  Maybe not right this second, but past and future are different.

People just don't understand when you find a good strong reliable horse, you ride him until he's dead.  You don't retire him at 5 years old, you get a good 20-25 out of him.  What do we get for losing all that extra stuff?  Nothing, but the sohpistric impact on our minds that we might get better candidates because more will go through the system.

Color me a BIG SKEPTIC, because it makes NO SENSE.



Fri, 09/24/2010 - 22:09 | 603900 StychoKiller
StychoKiller's picture

The key is choosing WISER, not more OFTEN.

Kinda hard to "choose wiser", when the incumbent is paying id10ts for their votes (indirectly, of course!)

Remove the advantages of incumbency, such as gerrymandering & franking, then restore the number of voters represented by one congress person to the 32,000 or so mandated by the US Constitution.  Given the current population of 320,000,000,

each congress person currently represents around 735,000 or so, making it easier to stay in office -- after all, it's easier to get a majority of 32,000 to agree that an incumbent is doing a lousy job than to get a majority of 735,000 to do so.

Next, publish a public record of EVERYONE that donates over $1000 to anyone's campaign -- no more anonymous donations, period!  Once we KNOW just who the congressman from Exxon is, we can watch for any quid pro quo voting and act accordingly.

Fri, 09/24/2010 - 14:33 | 603013 BobPaulson
BobPaulson's picture

I think until we see that we need fewer people, organized in smaller groups, there can never be anything remotely close to democracy. It's simply outside our evolved capacity to care about too many other people and juggle the relationships.

Fri, 09/24/2010 - 14:45 | 603035 goldfish1
goldfish1's picture

Of course, that would require that "we" do something about it.

Or get out of the way as it self destructs.

In the meantime start your own local community economy, barter, kinship outside the system, outside the "law", outside the dollah. 

Fri, 09/24/2010 - 13:41 | 602911 SRV - ES339
SRV - ES339's picture

Don't worry Turd, another few weeks and you'll have Sharron Angle, Christine (can't touch that) O'donnell, and the rest of the gang riding into town to replace the Graysons (you know... rich guys that stand up for the less fortunate) in Congress.

Good luck with that!


Fri, 09/24/2010 - 14:33 | 603010 Turd Ferguson
Turd Ferguson's picture

Whatever. I don't know anything about Sharron Angle. Nothing. But I know all about Harry Reid and he deserves to be FIRED. Period.

Fri, 09/24/2010 - 15:17 | 603151 AxiosAdv
AxiosAdv's picture

Could not agree more Turd.  I can't stand this guy.  He's everything that's wrong with DC...and that's a lot of stuff.

Fri, 09/24/2010 - 18:56 | 603677 SRV - ES339
SRV - ES339's picture

Ax (and Turd)

You just don't get him then. He is the ONLY one on the left that isn't too worried about his job to get down and dirty with the right... he's going after them with their own playbook.

He's the real deal, and I'm sure if you took the time to understand him, you'd get it. Don't know about you, but anyone that can make Ben squirm like this is OK with me!


Fri, 09/24/2010 - 16:29 | 603339 Handle with care
Handle with care's picture

We need an asshole.  We need someone who is mad as hell and isn't going to take it any more.  We need someone who treats the Wall St criminals and their Washington lickspittles with the contempt they deserve.


We need someone who has no time for the polite pablum that sooths the masses and eases the collapse of the Republic.


We need a bull in the china shop.  We need an enraged lion tearing everything apart.  We need a rabid dog attacking and tearing at everything.


Unless you believe that the corrupt kleptomaniac sociopathic oligarchs will relinquish their privileges if asked politely?

Fri, 09/24/2010 - 17:08 | 603434 weinerdog43
weinerdog43's picture

Thank goodness diaherra gobbling, anus nibbling, douchewater drinking pussholes like you are not in charge either.  Fuck you very much and have a nice day!


My that came out pretty harsh.  Sorry, Turd, but your mom spilled her water bowl over here and I was kind of upset.

Fri, 09/24/2010 - 13:24 | 602868 Boilermaker
Boilermaker's picture

I hope Michael Williams doesn't 'commit suicide' accidently.  It seems to be a thing with the GSE executives.

Fri, 09/24/2010 - 13:24 | 602869 sweet ebony diamond
sweet ebony diamond's picture

Grayson going for the votes.

Barney right behind him.

Fri, 09/24/2010 - 13:26 | 602879 Dr. Engali
Dr. Engali's picture

Grayson might like Barney behind him. They can take turns Franking each other.

Fri, 09/24/2010 - 15:00 | 603097 aheady
aheady's picture


Fri, 09/24/2010 - 15:20 | 603163 MsCreant
MsCreant's picture

I'm sorry, but I think Barney would be a bottom, not a top.

Fri, 09/24/2010 - 16:27 | 603311 Miles Kendig
Miles Kendig's picture

His reason for frequenting Chez Shalom .. and nice one on the dome as what we're seeing is precisely how it's structured to operate.  With deep forethought and everything.  Simply amazing.

Fri, 09/24/2010 - 13:24 | 602871 MsCreant
MsCreant's picture

Did Barney come kicking and screaming to this party? Does Grayson have pictures? Or is it all election Kabuki Theater?

Fri, 09/24/2010 - 14:18 | 602974 Bob
Bob's picture

We all know that in hierarchical organizations, we must share credit for our work with the people "above" us, in this case the senior Bawney Franks.  It even strikes me as a good move, because it shows the Fanniecrats not only that it's more than just the rantings of a freshman senator, he is backed by a powerful committee chairman whom they know very well.  It's the right move for effect, though for selfish political considerations he's do better to go it alone, IMO. 

Is it all election theater?  We'll see if Grayson stays the course.  But is it not good to have a congressman putting these issues out before the public--kicking ass and taking names?  If that sets the standard for future politicians, I really can't find the downside here. 

Fri, 09/24/2010 - 14:15 | 602976 SWRichmond
SWRichmond's picture

I think you answered your own question.

Fri, 09/24/2010 - 13:26 | 602880 Cognitive Dissonance
Cognitive Dissonance's picture

He almost asks the correct one:"Is Fannie (and Freddie) a shell operation to willfully and illegally transfer non-existent deeds to servicer banks so they can collect subsequent cash flows associated with misappropriated properties, while receiving tens of billions in taxpayer funding each and every quarter."

The secret is to appear to be defending the public interest without actualy doing so. Mission accomplished.

Fri, 09/24/2010 - 14:28 | 603002 MachoMan
MachoMan's picture

This applies to virtually all governmental workers.  I would change "defending" to "working in"...  applies to shovel leaners too.

Fri, 09/24/2010 - 13:30 | 602886 CheapKUNGFU
CheapKUNGFU's picture

Grayson needs to shave that prison pussy off of his face ASAP.

Just sayin...

Fri, 09/24/2010 - 15:10 | 603129 Ned Zeppelin
Ned Zeppelin's picture

Perfect. I was thinking the same thing.

Fri, 09/24/2010 - 17:42 | 603517 halvord
halvord's picture

A little too close to "Evil Spock".

Fri, 09/24/2010 - 18:58 | 603682 SRV - ES339
SRV - ES339's picture

I'm thinkin' Photo Shop... he's never looked like that as far as I know.

Fri, 09/24/2010 - 13:33 | 602892 Azannoth
Azannoth's picture

You know if you dont pay your mortgage, who cares who owns the deed, youre just a squatter anyway, you only own the home as long as you pay for it

Fri, 09/24/2010 - 13:48 | 602928 Dr. Richard Head
Dr. Richard Head's picture

So what does that make the banks who are collecting these mortgage payments for notes of which they don't own?  If the servicer doesn't know who the note holder is, then is it right for the banks (who don't own the note) to add to their deposits with these mortgage payments to fractionally fuck us up the ass?

If I find out my bank is not the note holder and the servicer cannot show me the owner of the note, then they can stick their insolvent fingers up their ass.

Fri, 09/24/2010 - 13:49 | 602929 MsCreant
MsCreant's picture

The question is "who does own it?" Until that is settled, the whole process should be frozen, even if a so called squatter gets to sit in a house free for a while.

Fri, 09/24/2010 - 14:38 | 603023 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

There are a couple of great questions like this posted to Reggie's ZH posting from yesterday AM.

Then Reggie jumped in and commented on what he called "Perverse Incentive."  Hell, the comment is so good I just gotta paste it.


These questions are what will make the future so interesting. I don't have all of the answers, but don't assume the norm of the past will be the norm of the future. For instance, many are assuming the bank will have title but if you were the bank, and you KNEW that there was absolutely NO recovery to be had in foreclosure, why you even bother to take title, along with all of the liabilities that will go along with it.
this is what I mean by perverse incentives. when it's cheaper to leave defaulters in a property and simply turn the other way, what does that portend for the future of the mortgage and housing markets in terms of pricing. I don't know, but I doubt very seriously that it will be a positive. can the municipalities force a lien holder to take over a property? I doubt so very seriously, but I am no lawyer and there is probably no precedence for this

While this makes me very uncomfortable and a bit fearful, I could not stop laughing my ass off when I read Reggie's comment.  It was a good long hard gut-laugh. 

What a predicament...We are living in very strange times. 

Fri, 09/24/2010 - 14:58 | 603085 Henry Chinaski
Henry Chinaski's picture

Squatting would be no picnic, but this perverse incentive makes a fool out of the man who plays by the rules and meets his obligations.  Perverse incentive is most definitely the offspring of moral hazard.

Fri, 09/24/2010 - 15:16 | 603150 MsCreant
MsCreant's picture

No one will enforce the rules because:

  • So many don't understand them. 
  • Others can't agree on what they even are. 
  • Some are benefiting and have no interest in enforcement.
  • The small number of us that have a clue are just that, a small number.

The uglier truth is that the complexity may weave such a tangled, mangled, ripped up, balled up, spit out web, that it is unresolvable, in court, or anywhere. Maybe in Thunderdome!

Fri, 09/24/2010 - 16:04 | 603267 MachoMan
MachoMan's picture

No, state and local governments cannot force lien holders (presumably federal entities) to "take over" a property.  However, if the "owner" has not paid taxes on the property, the city/county will certify the parcel to the state, which will then attempt to be auctioned at a mass auction, held in the locale of the foreclosed property (possibly courthouse, but not necessarily).  Generally, the auction price is the perceived market price with a slight haircut.  Properties not sold at auction will fall into a "negotiated" sales bin...  basically giving the state land commissioner the right to sell the property for merely the taxes owed.  The purchaser gets a commissioner's deed and will need to hold on to the property for a set amount of time before the owner's right to redeem has been extinguished.  (~6 months).  If the sale is conducted properly, the mortgagee will receive a notice of the pending sale, which will be utilized to hold its feet to the fire if it does not contest the sale.  The buyer then will begin a quiet title action and get a judicial decree setting forth all parties' rights (and attempt to boot out the homeowner in the process)...  most everyone will default after service.  The buyer will then own the land free and clear.

Couple of points.  (1) whatever the sales price of the property may be, someone will have to pay the property taxes and they will be withheld from closing, thus effectively reducing the sales price/ensuring the mortgagee eats the taxes (despite attempting to get a deficiency on the turnip homeowner); (2) although the mortgagee should have a chance to contest the tax sale, they often don't as this, like everything else, gets lost in the mix...  presuming they even care and want the property...; (3) with color of title, the buyer's statutory time for adverse possession will start to run and any error of formality or ability to otherwise redeem the property will likely be extinguished upon reaching the requisite time period (~5-7 years).

Also, practically speaking, the mortgagees will get zero sympathy in state courts.

Fri, 09/24/2010 - 22:14 | 603905 StychoKiller
StychoKiller's picture

Short answer:  1000s of CDO "investors!"

They either do not know, or really don't want to do the work required to find out!

Fri, 09/24/2010 - 14:07 | 602953 stollcri
stollcri's picture

The sheriff and I will be visiting your house to evict you tonight because you have not been paying me what I say you owe me. Don't give me that crap that you don't know who I am, just get off of my property you squatter.

Fri, 09/24/2010 - 15:41 | 603219 hbjork1
hbjork1's picture

Show me your paperwork!

Fri, 09/24/2010 - 16:56 | 603419 stollcri
stollcri's picture

One of my lackeys are forging it right now.

Fri, 09/24/2010 - 13:49 | 602932 kaiserhoff
kaiserhoff's picture

Why should fannie avoid the use of foreclosure mills?  Does it help to drag this out forever?  Maybe we should ask the Japanese.

Fri, 09/24/2010 - 13:50 | 602935 williambanzai7
Fri, 09/24/2010 - 14:01 | 602940 Segestan
Segestan's picture

I have not supported Mr Grayson , have thought he was a fraud ... I'm starting to change my view.

He's right.

Fri, 09/24/2010 - 14:08 | 602956 Hephasteus
Hephasteus's picture

He's just trying to walk the line. Once he goes full retard. Watch out.

Fri, 09/24/2010 - 14:16 | 602977 beastie
beastie's picture

Now that's funny

Fri, 09/24/2010 - 14:14 | 602966 Miles Kendig
Miles Kendig's picture

"Is Fannie (and Freddie) a shell operation to willfully and illegally transfer non-existent deeds to servicer banks so they can collect subsequent cash flows associated with misappropriated properties, while receiving tens of billions in taxpayer funding each and every quarter."


Fri, 09/24/2010 - 21:20 | 603001 Bob
Bob's picture


It's absolutely amazing that he just came out and said it, no?

Whatever this guy's on, I hope he keeps taking it. 

EDIT: Damn, he didn't actually say it. We gotta get Tyler in there! "Let the chips fall where they may . . . it's all goin' down."

Fri, 09/24/2010 - 22:15 | 603908 StychoKiller
StychoKiller's picture

Corruptol is a very powerful drug!

Fri, 09/24/2010 - 21:51 | 603886 nmewn
nmewn's picture

''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''...Sept. 11 2003 NYT

Atta boy Barn. one paid attention.

Now we have Stephen Colbert invited by Chairwoman Zoe Lungren to testify before her panel to make a mockery of themselves and justice while the real story is across indictment of the Justice Dept. itself.

Pure Kabuki.

Fri, 09/24/2010 - 14:14 | 602969 beastie
beastie's picture

You guys want this to end as in set the value of homes to what they are really worth?

Write a step by step, easy to read essay on how to default and avoid losing your house.

1. How to determine who holds the note. No note no contract.

2. How to determine if they have the original loan documents. No original docs? No Foreclosure.

3. Any other loopholes that can be used by the home owner.

This will reset everything quicker than anything. If people have a simple to read step by step how to. It's done.


Start a class action lawsuit on behalf of all the people foreclosed on that had MERS representing the note holder or using othere fraudulant practices.The banks will panic and dump their inventory.


Plan B: Go project mayhem on their asses


Plan C:

1. Steal underwear

2. ?

3. Profit






Fri, 09/24/2010 - 14:25 | 602994 dot_bust
dot_bust's picture

Well said. I agree wholeheartedly. MERS is the one thing the banks don't want folks to mention.

Fri, 09/24/2010 - 15:14 | 603141 Henry Chinaski
Henry Chinaski's picture

Plan D:

1. Steel underwear.

I can see the late-night commercials now.  "Home underwater?  The Grayson law firm guarantees mortgage forgiveness, or you pay nothing.  Our operators are standing by for your call." 

The emergence of this new market for legal services will dovetail nicely with Mr. Grayson's return to private practice in Central Florida. 

Fri, 09/24/2010 - 14:18 | 602983 ReallySparky
ReallySparky's picture

That picture of Grayson creeps me out.  That beard needs to go.

Zerohedge Female Opinion.

Fri, 09/24/2010 - 14:30 | 603008 Bob
Bob's picture

So we're all agreed that he's not lookin' for pussy.

Fri, 09/24/2010 - 14:24 | 602991 Buzz Fuzzel
Buzz Fuzzel's picture

Tyler, next time you use that picture of Grayson see if you can draw in some horns to make it complete and accurate.

Fri, 09/24/2010 - 14:31 | 603011 Bob
Bob's picture

So, you work for a bank???

Fri, 09/24/2010 - 17:47 | 603527 halvord
halvord's picture

Health insurance.

<a href=''>"And if you do get sick... DIE QUICKLY!"</a>

As Grayson said: "people come up to me and say 'you're saying what i'm thinking but could never say".

Fri, 09/24/2010 - 22:18 | 603915 StychoKiller
StychoKiller's picture

What I'm thinking AND saying could cause spontaneous combustion of Congress/Senate critters!

Fri, 09/24/2010 - 14:26 | 602996 willien1derland
willien1derland's picture

He almost asks the correct one: "Is Fannie (and Freddie) a shell operation to willfully and illegally transfer non-existent deeds to servicer banks so they can collect subsequent cash flows associated with misappropriated properties, while receiving tens of billions in taxpayer funding each and every quarter."

Tyler - Could you get Marla into the next White House Briefing to ask this question?!

Great Post & Feedback - One of the GREATEST travesties of Justice in US History - I pray that this issue gets the attention it deserves...

Fri, 09/24/2010 - 14:53 | 603064 Bob
Bob's picture

And that's the irony of the criticism of Grayson here: He's doing and saying everything that Tyler and Marla would if they had the chance! 

Fri, 09/24/2010 - 15:49 | 603171 Henry Chinaski
Henry Chinaski's picture

So Tyler and Marla not just supported Obamacare, but championed it? 

Okay, I get it.  He's scoring election-season points by grilling Fannie.  Grayson also championed Audit the Fed.  And how did that work out?

He has taken admirable postions on a couple of issues, but look at the actual results.

Fri, 09/24/2010 - 16:24 | 603322 Bob
Bob's picture

My remark was addressed to the present matter, on which we've already read multiple posts by Tyler making the same point; it has nothing to do with other issues, past or present.  When I learn mind reading or bug Grayson's bedroom, I'll be in a position to argue or agree with your assertion about his motivation wrt Fannie.

It remains to be seen what the outcome of Grayson's current actions will be, but surely you would not argue that they will necesarily define the sincerity of the effort?  If that were the case, you'd have to disqualify every politician--every human being, for that matter--for having failed at one time or another.  Alot of people use that attitude to justify never trying to do anything.  Grayson doesn't seem to be one of those guys.

Fri, 09/24/2010 - 16:36 | 603357 Waterfallsparkles
Waterfallsparkles's picture

He seems to imply that the Money from the Forclosure will not go to the CDO Holders.  It will be confiscated.  Then let the Mortgage Insurers like AIG pay the CDS Holders.  Sounds like Fraud to me.

Fri, 09/24/2010 - 15:14 | 603143 Ned Zeppelin
Ned Zeppelin's picture

 I commend Grayson for raising hell, and could care less about the rest of his politics.

Fri, 09/24/2010 - 19:01 | 603686 SRV - ES339
SRV - ES339's picture


If only there were more like him.

Fri, 09/24/2010 - 15:24 | 603172 CheapKUNGFU
CheapKUNGFU's picture

ReallySparky, its a prison pussy... read my note above.

Fri, 09/24/2010 - 15:56 | 603250 Waterfallsparkles
Waterfallsparkles's picture

"" The legal pressure to foreclose at all costs is leading to a situation where servicers are foreclosing on properties on which they do not even own the note. "

They have to put all of the pieces of the CDO's back together again to find out who the real Owners are.  They may find that they have too many pieces of the pie.

Fri, 09/24/2010 - 16:10 | 603284 Dr. Richard Head
Dr. Richard Head's picture

You are probably dead on.  If the paper market can sell 100 contracts for each oz of gold, I would assume the same held true for MBS.  So I guess foreclosures would technically have to be class action by the 100 holders of the same property?  HAHAHA.  I can't wait to see how this all ends as it has to sooner or later, right?!?!?!  Please end this. 

Fri, 09/24/2010 - 16:42 | 603375 Waterfallsparkles
Waterfallsparkles's picture

I think that the Nationalization of FRE, FNM, AIG was to cover up the Fraud where there were more pieces of the pie than existed in the original mortgage.

They sliced and diced a $100,000. into a Million dollars worth of pieces.  They took the Money and ran.  Thinking no one would ever be able to put the pieces together again.  When the S*hit hit the fan they Nationalized the Players so no one but the Government would know the real truth. 

Now they need to find all of the CDO Owner and put the Pie back together to
Forclose.  This will expose their Fraud.  As in my opinion there are more pieces of the pie than the Original Mortgage Note.

Fri, 09/24/2010 - 22:21 | 603919 StychoKiller
StychoKiller's picture

Michael Lewis, in "The Big Short", already pointed this out.

Fri, 09/24/2010 - 16:06 | 603274 SmittyinLA
SmittyinLA's picture

Well actually Mr Grayson, the institutionally systemic loan fraud (that your party protected and proliferated for years) is so extensive we could use an "expedited foreclosure process", we dont need politcal hacks placing more barriers to unwinding massive state sponsored fraud for political expediency.

We literally have millions of so-called "homeowners" that not only can't make their loan payments, they can't pay the insurance or even property taxes or even maintain the home they "stole", even if we gave them the home for free.

Why you choose to protect and defend loan fraudsters in keeping them in their stolen homes is beyond my comprehension.

The best possible action for American homeowners, and mortgage investors, local government is to clear these scores of fraudulent home loans as fast as possible with the least amount economic friction as possible and to prevent loan fraud in the future-neither of which you've done or suggested, in fact pricks like you are the problem.




Sat, 09/25/2010 - 10:07 | 603353 Bob
Bob's picture

But what kind of process to clear the home thieves from the banks' houses as soon as humanly possible? 

Why wait to change the laws?  This is clearly a National Emergency.

I'd suggest tear gas shot through the front window followed by firehosing them off the property and rubber bullets to drive them up the street.  Hopefully things won't have to get seriously nasty.  But, then again, it might be good to make a real example of a few to give the rest of them a clear message of where we stand and the kind of country others have fought and died for.

I hate it when people try to actually use the law--at least when it's not in favor of the banks.   

God Bless America. 

Fri, 09/24/2010 - 18:43 | 603655 theworldisnotenough
theworldisnotenough's picture


Fri, 09/24/2010 - 22:23 | 603921 StychoKiller
StychoKiller's picture

Once we see even one Bankster arrested for fraud, then maybe you have a reason for being outraged, until then, get your priorities straight!

Fri, 09/24/2010 - 16:53 | 603409 Waterfallsparkles
Waterfallsparkles's picture

The real question is can any Buyer of a Forclosed Property get a clear Title?  Or will they find out when they go to Sell in a few years that there is a Title Problem that cannot be resolved.  In that case do they actually Own the Property or does the Prior Owner Own the Property?

I would not buy a Forclosed Property on a Bet.

Fri, 09/24/2010 - 18:26 | 603618 BGO
BGO's picture

Grayson's facial hair display does a fantastic job of demonstrating why rocking the "prison pussy" look is generally not a smart move for someone who wants to be taken seriously.

Fri, 09/24/2010 - 18:33 | 603634 Smokey1
Smokey1's picture

When things really went south for Fannie Mae was when they put that boothead Franklin Raines in charge. It was damn near solvent until he came in. That black Mcgrack left with what,$ 95 million on the way out? His worthless ass should be doing hard time for the rest of his life in Pelican Bay.


Fri, 09/24/2010 - 18:42 | 603652 theworldisnotenough
theworldisnotenough's picture

This is not serious. Fannie Mae was pressured politically to ignore lending standards and securitize the ever more risky loans. He wants a Fannie Mae exect to admit this? Come on this is theater and Grayson if serious is even more of an ignorant tool than I thought.

Fri, 09/24/2010 - 19:27 | 603717 Bob
Bob's picture

Are you making this shit up as you go along?  Read the letter again--it says nothing like that.


Sat, 09/25/2010 - 22:43 | 604953 CL1
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