"At the Root of the Crisis We Find the Largest Financial Swindle in World History", Where "Counterfeit" Mortgages Were "Laundered" by the Banks

George Washington's picture

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George Washington's picture

+1000

Mr. Banzai, you just keep getting better ...

williambanzai7's picture

Tnx...You know my blog is like a vault full of this stuff. And I have all this other stuff waiting to be deployed at the right opportunity. Its fun!

tamboo's picture

"if we don't have fair and honest and functioning financial system, we won't get out of this crisis."

we have a winner!!!

blindfaith's picture

"The issue is not"robo-signed" documents. The issue is that the robo-signed documents are an attempt to cover up for previous failures in the securitization process which have left investors worldwide holding an empty bag, and homeowners with seriously-damaged chains of title."

By far, this is a key element in the mess.  To clear up a defect in the chain of tiles is no easy feat.  A legal nightmare and will cost thousands for each mortgage.  Anyone who has a mortgage less than 10 years old, likely has a "cloud of title" to contend with (when and if they sell their property).

No respectable real estate agent can NOW recommend a property with a mortgage as a safe property to buy. 

"Constructive notice" is yet another area that can rear it's ugly head up to 7 years after you think all is OK.

Lies, upon lies, upon lies and no truth is in sight.  You can not pass a state exam to be a real estate "agent" or mortgage broker, or banker, and not know what the law is...and what is ethical  (And much is rooted in the bible, believe it or not, and goes to show you how many "Christians" don't practice what they preach).

There is no innocence anywhere in all this, just lies and greed.

Page 3, August 2005 issue of Consumer Reports...the shit is about to hit the fan...so how did they know if the bankers didn't.

 

Waterfallsparkles's picture

George,

You hit the nail right on the head.

I remember reading where Countrywide was giving Mortgages to People with Credit scores of 540.  I could not believe it.  I would not rent one of my Apartments to someone with a credit score of 540.  I have seen credit reports with a 540 score and the people usually have at least 2 Judgments and 8 accounts that are 90 days delinquent.

I agree with you that the Banks intentionally made loans to these people knowing from their Credit history they would not pay back the loans.  It is my opinion that these Loans with 540 Credit Score were the ones that were duplicated.

Hypothetically, if you took a $100,000. Sub Prime loan and duplicated it 9 times you would make $900,000.  You could take that $900,000. and buy Credit Default Swaps betting on the Montage to fail.  When it does you would receive $1,000,000.  A total of $1,900,000. on a $100,000. loan.  In addition to the above you would Short the Company (like AIG, ABK, MBI, PMI, etc.) that insured the Credit Default Obligation.  Many of the Insurance Company's were trading for $100. per share and were pushed down to in many cases to less than a $1.  Probably another cool Million Dollar profit.

I also beleive that this is why the Mortgages were broken up into so many Tranches.  The Banks beleived that no one would every put them back together again so they would never be detected.  Kind of like Humpty Dumpty.

When I think about it what comes to mind is that many of these Credit Default Obligation and Credit Default Swaps were originated was when Hank Paulson was CEO of Goldman Sachs.  Now what I am saying is conjecture and not in any way fact.  Just my imagination of what happened.  After, all of these CDO's and CDS's were originated Paulson was Nominated to the Treasury.  That is when everything appeared to fall apart.  It is my opinion that the reason that FRE, FNM were Nationalized was to put all of these Mortgage Duplications into FRE, FNM where the Taxpayer would have to pick up the losses on the Duplications.  FRE, FNM bought all of the alleged Fraudulent Mortgages from the Banks to get them off their Books.  It was in my opinion also that AIG was Nationalized to pay out the winnings of the Banks CDS's.  The other reason for the Nationalization was with the companies (FRE, FNM, AIG) was so no one could force an audit of the Companies once they were 80% owned by the FED.

The Bailout Money that was to be used to buy these Toxic Mortgages was given to the Banks in a lump sum instead of Buying the Assets because with the Nationalization of FRE, FNM the FED could buy those Mortgages from the Banks thru FRE, FNM.  They would then become the Taxpayers Liability.

Doesn't anyone find it interesting that Hank Paulson wrote into the Bail Out Bill a Get out of Jail Free Card for himself?

Ripped Chunk's picture

It's a huge ball of collusion. Subprime deals especially pay-option ARM's generated massive commissions at the originator level and massive profits for the funding banks at the securitization level.

Wachovia required it's in house originators and commissioned brokers to put 45% of business into pay option ARM's. This is a product that works for 10% of the borrowers or less. It is an investor loan not a primary residence type loan. And it only works in a rapidly appreciating (bubble) environment.

http://www.msnbc.msn.com/id/28035238/

http://www.azmortgageguru.com/the-death-of-the-option-arm-and-negative-amortization/

Matto's picture

Your comment has been flagged as incendentry

Matto's picture

Your comment has been flagged as incendentry

I am more equal than others's picture

If you are the cook at a house of prostitution are you culpable? 

Parsing morality is dangerous because it will allow those who were enablers to avoid the consequences.

Careless Whisper's picture

arthur andersen went down for shredding documents... and these banksters have yet to be charged with a single crime.

"a financial coup d'etat? i could agree with that." (marcy kaptur)

VWbug's picture

let me go on record as saying you will be as wrong about this as you were on the GOM disaster GW.

Alarmist bullshit that makes no sense whatsoever.

This is a procedural problem that gets fixed by hiring some clerks, BFD.

Just so I can say 'i told you so' , again!

Imminent Crucible's picture

What a nincompoop.

MERS is not a real company.  It's a shell projected by the participating mortgage and securitization banks:

http://stopforeclosurefraud.com/2010/08/27/exclusive-mers-deposition-of-secretary-and-treasurer-of-merscorp-42010/

Read it all.  By page 55 the lights will be coming on.  By page 72, you will be blushing with shame at your ignorance.

VWbug's picture

i speed read like 2 articles on this and even with that I can tell this is not going to do anything more than make some lawyers a few $$ and keep house prices from falling even further.

I am the laziest trader alive and I still have a better track record than you guys who analyze all this shit to death.

Better to have good judgement and be lazy than to work your ass off reading bullshit I say.

I was right about GWs alarmist nonsense postings on the GOM disaster, and I'll be right about this too.

And I ain't even trying. Imagine if I actually read up on any of this shit.

Panafrican Funktron Robot's picture

Are you actually trading on this prediction, or are you just dick waving?

alien-IQ's picture

What I find most disturbing and disheartening about this is Americas lack of outrage towards it. It is the reaction and behavior of a defeated society.

Imminent Crucible's picture

99% of Americans don't know about it yet. The MSM are all house organs of the banksters.  Bloomberg is refusing to cover it, the WSJ dismissed it as "procedural errors", etc.

When they do find out about it, most Americans will misunderstand it, at least at first.

Events will gradually force awareness and understanding.  The body under the floorboards is beginning to stink.

Give it a little more time.

Bob's picture

OUTSTANDING, GW!

Kudos and thanks. 

reinhardt's picture
eventually, the foreclosure nonsense.. will probably be used as the primary tool of debasement.. and will catch up to the speculative market.. which should have tanked on the foreclosure suspending news

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when the market does tank.. the commonly heard excuse will be.. "well everyone knew - it was the robo-signing" (and that platitude should be ignorant enough to end the conversation)

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then the call for "robo-signing reform"

*

how do you punish a robot?

 

Jake Green's picture

Are you the real reinhardt?

I was on the google finance board when the infamous call, "the negative news of Sept. 15" was made way back when.

dcb's picture

good job, but as usual where is the mainstream media in raising outrage. Nowhere!!!

Cognitive Dissonance's picture

On the contrary, the mainstream media aka the fawning corporate press, are doing exactly what they are paid to do. That is distracting the masses with shinny objects and mind numbing pablum, biased "reporting" aka repeating of WH, Pentagon and corporate talking points and press releases and the all important and scared "Keeping of the Public Myths" the most important of which is that the USA posses a vibrant, motivated and extremely inquisitive "free" press.

Long live the all important primary public myth keepers, the mainstream media.

http://www.zerohedge.com/article/end-empire-%E2%80%93-propaganda-and-american-myth

Bob's picture

Sharing your frustration, dcb, but I do see an evolving wider awareness in what I would call the MSM blogosphere.  Even CNBC is giving credit to ZH and linking to posts here. 

Keep the faith and maintain the effort to get the word out. 

Goldenballs's picture

Even now 2 years later they still fail to acknowledge the system is irrepairably broken,the staff leaving the Whitehouse in recent times attests to how bad the situation probably really is.The ramifications of 2 years ago still haunt the economic system,whilst the politicians openly proclaim business as usual the sheeple realise its only a matter of time before judgement day arriveth.As the dust refuses to settle "confidence" evaporates further everyday.

Precious's picture

Note the latest politicians who were heading the banking charge to hoodwink the public.

http://www.govtrack.us/congress/bill.xpd?bill=h111-3808

How bought and sold are these political frauds?  This time they were cut off at the pass.  Next time maybe not.

MakesMeChunder's picture

Thanks for the link.  When I tried to acces it, here is what came up:


 

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AUD's picture

Hey, if the ratings agencys can give government bonds a.k.a. worthless junk, a AAA rating why not a MBS or any other worthless paper.

It's all the same worthless shit. To measure something you need a standard to measure it against, government bonds are hardly that. And that is the root of the crisis.

zwscott33's picture

The fiat currency makes it all possible

Matto's picture

Great summary of the issues GW