The Predators’ Ball

We love our monopolists with guns.

Watch this video, it is an excellent overview of the cause and how the Congress created this disaster.

http://www.youtube.com/watch?v=1RZVw3no2A4&feature=iv&annotation_id=even

I experienced FIRST HAND for 15 years from 1990-1995 the corruption that took place, especially in the sub-prime arena. It is no wonder whatsoever the financial position the US is in. Loan Officer, Brokers, Wholesalers, the Secondary Market, and consumers themselves are all responsible. Fraud, burying loans, etc., after a while you believed your own lies. it was all about the money. What's amazing is how conservative and stringent the A paper business was and Fannie and Freddie still messed it up??

The FBI and Congress needs to investigate, and property owners need to be WARNED about mortgage lenders??? filing falsified IRS tax form 1099-A's or 1099-C's ???especially for FORECLOSURES. To illustrate, here is a portion of my statement concerning Wells Fargo's false 1099-A, as well as a link to entire actual statement posted at:
http://www.lawgrace.org/2008/08/08/my-august-8-2008-statement-to-the-louisiana-secretary-of-state-office-of-financial-institutions-concerning-wells-fargo-irs-and-mortgage-frauds-sham-foreclosures-and-judicial-collusion-and-national-app/
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This Financial Office mistakenly thought a complaint was filed concerning my property; and on July 30, 2008, Ms. Kathy Drzewiecki responded on Wells Fargo's behalf. . . .As your records show, GE Capital Mortgage Services, Inc., became defunct in year 2002 when it merged into GE Mortgage Services, LLC, its "successor." Therefore, it is impossible for foreclosure auction to have LAWFULLY been carried out in year 2005 on behalf of the non-existent GE Capital Mortgage Services, Inc. Also, contrary to what Ms. Drzwiecki wrote, it is NOT POSSIBLE in year 2005 for Wells Fargo to continue being the "mortgage servicer" for non-existent GE Capital Mortgage Services. Furthermore, if my property was (impossibly) ACQUIRED by GE Capital on May 19, 2005, there is NO LAWFUL REASON for the IRS form 1099-A to exhibit Wells Fargo's name!

Another thing Ms. Drzewiecki's letter failed to state is that I initially acquired my residence property in 1993 through AmSouth Bank. For home improvement in 1999, I refinanced it with GE Capital. I had equity in the property, and I never had a subprime loan. (Marriage failure caused me financial ruin; and crooked deals in Family Court sealed my fate.)

On the other hand, facts overwhelmingly demonstrate that, using defunct GE Capital's identity, debt collector attorney Herschel C. Adcock, Jr., fraudulently seized and acquired more than $80,000 when he flipped my property. Also, contrary to the form 1099-A, the Fair Market Value was not $12,000 -as manifest from the year 2005 sale price for which that property was sold in that same tax year purportedly to a third party.

A lot of foreclosed former property owners will one day discover there is a 1099-A or a 1099-C for which the IRS wants answers. If that 1099 is replete with false information, there could be severe tax effects and a lot of needless untangling to be burdened with.

Across the country, foreclosures have been halted because "real party interest" was absent from those foreclosure proceedings. Yet (in Louisiana), it would not be farfetched for foreclosures to become filed in the name of 'Mary had a little lamb', and judges allow peoples' homes to become seized.

Barbara Ann Jackson
http://www.lawgrace.org

What it all boils down to is greed, isn't it? Not only from the predators but from the users also. People that have been raised with good financial sense and a pay as you go mentality have nothing to fear.

Of the dozens or articles I have read on the subprime mortgage nightmare, this is by far the most disturbing. This implies the need for a wholesale house cleaning at Freddie Mac and Fannie Mae. Perhaps we can retain employees in the mailroom but not muh more... Well beyond the top level head chopping encouraged by the NYT and others. State's rights, my left foot!

akis1159:

Cute, but while I was in the business, before the deregulation, we didn't have this mess.

Well, Republican or not, the fact remains that the Lending market is crashed. What? may I ask, is the solution, besides the immediate band-aid of Forclosure mitigation and Short-Sales? Perhaps the answer would have to come from Washington, perhaps in the form of litigation. Isn't that where it originated? Washington (or Republicans as you say) unleashed this monster. Well then, Washington has to be the one to pull back the Reigns and perhaps begin with legislation that limits, or better still, prohibits predatory lending practices, however not only with mortgage subprime loans but also consumer loans.

Excuse me but who had the audacity to write that we somehow mortgage underwriting criteria that works?
Is that really true...
Please let me take a stab at these "solid underwriting criteria..." we developed....
What gives me the right to question the criteria....? 32,000 loans underwritten between 1990 and 2004..
Borrower's ability to repay the debt , Borrower's willingness to repay the debt, along with the valuation of the collateral.... Yeap that was and still is our criteria...
Problem was and continues to be that Borrowers willingness and ability are ephemeral criteria and strictly contingent upon the Good Lord's sense of humor... And since underwriters are only allowed to view a snap shot of the Borrower's current financial situation The asset and the accurate valuation of such asset is the
only true colateral that the mortgagee posesses...
Since we were not to be trusted to interpret the ambiguous guidelines published by aunt FNMA and uncle FHLMC, In 1994 we were introduced to credit scores.. Consequently in 1996 we were given the Automated Underwriting Systems... DU .... LP.... CLUES.... Asset Wise.... that was great .... And the institutional Investors created a new generation of Underwriters..... Who could not make a decision for them selves or for the financial institution that they managed risk for.... By 1999 the blurb in DU asked for a 1004 for the appraisal and that is all henceforth insuring that this new generation could not read or understand an appraisal... Things got better... Aunt FNMA introduced new forms for the valuation of the colateral 2055 and 2065..... Another words the appraiser was to ride by the hood and see if a structure was standing there....
And we are all sitting here wondering how could it all go so badly.... Of course.... We developed "SOUND UNDERWRITING CRITERIA .....? .

We developed, over half a century or more, underwriting criteria for loans that worked. It was a reasonable balance of risk and regulation that buiit a solid foundation for the mortgage/banking industry. The lenders had a reasonable certainty that the loans would be repaid.

When the tax cut religion failed to deliver for the Cheney/Bush administration, they opened the credit flood gates to spur the economy, and then credited the tax cut program for the strong growth in our economy. That was probably one of the biggest scams in the countries history.

The sub-prime loans were driven by raw greed. A typical mortgage broker's fee for a home loan in the 90s was 1.0 to 1.25 percent of the loan amount. The subprimes generally ranged from 3.0 to 6.0 percent and sometimes higher for those with weak credit who were desperate to get financing for a home.

Had we MAINTAINED underwriting criteria for residential loans and MAINTAINED the limits on the sub-primes, we would have seen an increase in home prices because of the low interest rates, but we would not have had the crisis that we have today.

This is a reapeat of the Reagan deregulation process that resulted in the S&L disasters in the 80s.

The big money players got in and out early, were pulled back in to do the workouts and then bought up the discounted assets at ten cents on the dollar.

Bottom line is that the average Joe got killed while the politically connected with money made a killing. And, it will happen again.

There has to be government regulation of these things. After all, it is the public that end up with the bill after the bailout occurs. Shame on the Republicans for dropping oversight on this.

This was an informative article that ,unfortunately, confirms some of my not fully verbalized psychic yellow alert suspicions that this may not be the best time for a first time home buyer to start the process to buy a house. Now I'm old enough to have lived through one economic "bust" and observe the ripple effects on the national economy from the the fall of the Penn Square Bank in Oklahoma City on July 2, 1982,. The long term effects are still affecting the Greater New Orleans economic network to this very day. I've lived in the greater OKC area most of the year since Jan., 1981, yet I still have a house and live in the GNO area at least once a year. My GNO house has never flooded from the street in 53 years, so far. I've waited over 15 years for this type of housing market to materialize, but if Fannie Mae and Freddie Mac are no longer stable because of non-regulation, I'm just going to sit and wait another 4 months to a year to observe the evolution of the economy objectively, but I may give my portfolio manager a phone call to start discussing estate planning..

Any attempt at regulating the monied interests of our nation are completely futile. There may be good intentions today, but it will not last. Eventually, the snakes and reptiles of the money world always manage to gut any regulation that protects the ordinary consumer, while making certain to present the image that any enhancements of consumer protection will only be an improvemnt. The week-minded politicians who cannot see anything other than the next election victory make excuses for the big money powers. The powers cannot see it now, but every move they make to line their own pockets at the expense of consumers will only dstroy them in the end. Washington is a disappointment; all of its efforts to protect us have been half-hearted and not worthy of discussion. The real problem still exists: The unbridled avarice of the business elite must be curtailed or it will destroy our nation.

Americans are being ripped off big time by corporations completely unshackeled from regulations that would make them accountable for their misdeeds. The subprime mess is only a part of it; the overall credit crisis that allows companies to charge outrageous interest and fees to inflate balances is another. I tried to cancel a Brink's account that I'd held for years but was told I couldn't because I forgot to cancel it when my time was up and so a new contract was automatically put in place. Sure, I could cancel it...if I paid them $600! Threaten them wth complaints, they laugh at you. The law is on our side, fool. Enron signaled this rampant ripoff. Why should I worry about terrorists when the Enrons of this country are doing a much better job of destroying us.

This country's business and corporate network needs to be reigned in, old regulations that worked have been dismantled, oversight that worked has been removed, unrivaled profits at the expense of workers is rampant.

So the mortgage industry and the investment industry are trying to prevent any reforms which might hold them accountable? What else is new in politics? The political influence that helped create this financial crisis will now be applied to free them of any responsibility. As always money will flow to the politicians who do as they are told by industry lobbyists. No legislation that threatens the position of the money men will last. Token reform will pacify the media; sound bites will claim the problem has been solved; business as usual will continue. The political system that favors the few, and makes fools the rest will move on to other pressing matters like the next round of campaign fund raising.