On the eve of Senate Banking Committee hearings into mortgage securitizations and the release of a Congressional Oversight Panel report covering the same terrain, the mortgage securitization industry has a full bore pushback underway.
A story in the New York Times bears all the hallmarks of being a PR plant. Remember the sympathetic New York Times article about health care lobbyist Karen Ignagni while the health care reform debate was in progress?
This time, the “woman who humanizes a supposedly misunderstood industry” ploy goes downscale with tonight’s New York Times piece, “Voices of Foreclosure Speak Daily About Desperation and Misery.” The article’s central actor is Bank of America servicier call center operator Brenda Seymore, who is presented as saving a single borrower from foreclosure, at least for now. Wow! What a cause for celebration!
This pure and simple lie is worked early on into an otherwise lightweight piece:
She finds herself caught between frustrated, anxious homeowners many months behind on their mortgage payments, and investors who hold mortgages and do not necessarily want to modify the loans, or reduce the amount of money homeowners owe.
Seymore is most assuredly not under any pressure from investors, either directly or indirectly. The only people pressuring her not to facilitate mods is her management.
Let’s get one thing clear. Despite the enormous media hype presenting a struggle between banks and borrowers on the mortgage front, the reality is that the overwhelming majority of investors favor mods. And it’s easy to understand why. Loss severities (finance speak for losses as a percentage of original par amount of mortgage) are currently running at over 70%. A principal mod of 50% for viable borrowers should be an easy win-win.
Ah, but there is one party that wins, big time, from foreclosing, and it’s the servicers. Servicing a mortgage that is current is a breakeven, at best a thin profit business. Late fees and foreclosure-related fees pad a servicer’s bottom line. Moreover, if a borrower becomes delinquent, the servicer advances principal and interest to the investors. In normal times, when foreclosure volumes are low and homes can be sold readily, the servicer can recover these outlays fairly quickly. But now, with foreclosures and liquidations attenuated, the amount of these advances have become very large, and the only way for the servicer to recoup is to foreclose. Hence foreclosure isn’t an option, it’s an institutional imperative.
And we also have the fact that deep principal mods to viable borrowers would force the biggest banks to write down their second mortgage portfolios, which means again the banks are putting their interests before those of the investors.
A more obvious bit of propaganda today comes via a short paper from SIFMA. “SIFMA Q&A Regarding Mortgage Loan Transfers and Securitization.” A distilled version of the main argument of this piece, which increasingly appears to be the standard industry defense, showed up in a Bloomberg article, “No Breaks for Robo-signing Computer Stamping Files“:
It doesn’t matter when mortgage assignments and endorsements are recorded because the existence of the pooling and service agreement and purchase sale agreement is proof in itself that the loan was conveyed, said Stephen Ornstein, a partner in the Washington office of SNR Denton, a law firm that represents loan servicers and lenders.
“If the assignment is missing, you can create it by having the old assignee reassign it to you,” Ornstein said.
I’ve heard this argument before, and none of the five experts who advise New York state on trust matters (and virtually all mortgage securitizations use New York trusts) accept that point of view. New York trusts can accept assets only as stipulated in their governing agreement. The pooling and servicing agreement made very specific provisions as to how the notes (the borrower IOUs) were to be endorsed and further required that the process be completed by specific dates, typically no later than 90 days after the trust was closed, with only very limited exceptions. And the trustee, on behalf of the trust, was required to provide multiple certifications that all these steps had been taken.
Let’s put it another way: the industry position is that the underlying contract, the pooling and servicing agreement, can just be ignored if the industry screws up on a grand enough scale. Would any servicer tolerate this argument if someone, say Treasury, tried to cut their fees? Funny how the “sanctity of contract” argument is nowhere to be found when adherence to contracts might crimp industry profits.
Consider:
1. Why did firms like SNR Denton’s predecessor, Thatcher Proffitt, have specific requirements in the PSAs if they didn’t have to be followed?
2. Why did the trustee certify that they had the notes and mortgages endorsed and assigned in the specified form when they appear never to have checked this information? Isn’t this a significant misrepresentation particularly since investors and rating agencies relied on these certifications?
3. While the electronic records of the PSA may indicate that a mortgage loan is part of the trust, what proof is there that another party could not also own the mortgage loan? Isn’t this exactly why there are recording requirements?
4. Were the attorneys and parties unaware that intent to sell the collateral is not sufficient if the steps to demonstrate conveyance were not followed?
5. Doesn’t the failure to have conveyed the notes as stipulated expose the trust unnecessarily to subsequent confusion and challenges in foreclosure court?
There is more clever positioning in the pretending-to-be-impartial SIFMA piece. This document is not worth parsing in detail, particularly since the American Securitization Forum is set to release its longer-form defense tomorrow, and it will likely cover the same ground. But let’s look at a couple of extracts so you get a feel for it:
SIFMA rejects sweeping claims that fundamental flaws regarding the transfer and ownership of mortgage loans are endemic to secondary markets and mortgage securitization, and believes that such concerns are exaggerated and without merit. While each situation may have variations, SIFMA believes that the customary practices utilized in secondary markets to convey ownership of mortgage loans from originators to other parties, and into securitization trusts, are sound and in accordance with generally applicable legal principles.
The use of “sweeping claims” implies that the critics have no evidence for their views, when borrower attorneys all over the US report widespread errors. A group of nearly 100 attorneys who work with bankruptcy lawyer Max Gardner have reported that in their collective experience, they have yet to find a single note that was conveyed correctly in accordance with the requirements of the pooling and servicing agreement. Other investigations show widespread problems. As much as SIFMA tries to dismiss the use of the word “endemic”, all they offer is bluster, when the evidence on the ground to the contrary is extensive.
And you have to love this part: “customary practices…are sound and in accordance with generally applicable legal principles.” This is simple an effort to divert attention from the fact that the contracts that the industry itself devised were often ignored. So a more accurate rendering would be “We did what was convenient instead of what we agreed to do, and if you pretend we didn’t have to satisfy a lot of complicated legal requirements to meet all the objectives of all the parties, we can find a way to justify what we did.”
And the next bit is just as disingenuous:
Q. Please explain the recent press reports that question the validity of residential mortgage loan transfers into mortgage backed securities.
A. These claims generally arise in the context of contested foreclosures. While most of the concerns that have been raised pertain to the technical process of filing for judicial foreclosure, some concerns relate to whether the loan servicer or loan holder is the proper party to bring the foreclosure action. In other words, the question is not whether the borrower defaulted under the loan documents for which foreclosure is a permissible or proper remedy. Rather, the question is whether the party filing the foreclosure documents has sufficient authority to bring the foreclosure action against the borrower and the home.
First, notice how this section pretends that no one is disputing the validity of the foreclosures. While most people losing their homes are indeed over their heads, contested foreclosures are a different kettle of fish. SIFMA ignores the fact that servicers routinely and repeatedly try to break bankruptcy stays, and often submit a bill for additional fees immediately post bankruptcy, when all charges were to be presented during the bankruptcy process. The consequences of forcing someone who is on a strict budget (as a result of agreeing on a bankruptcy plan with creditors) to come up with legal fees he does not have is often enough to put the borrower into a terminal tailspin. Attorneys have also reported that servicers as a matter of policy apply payments improperly, contrary to both the securitization agreement and Federal law, with the intent of compounding late fees and interest charges. And they escalate faster than you would think. One lawyer’s first case in this area involved a borrower about to lose his house as a result of the multiplying charges resulting from a single disputed late fee. This same attorney estimates that servicer error and fraud is responsible for 60% to 70% of current foreclosures in Chapter 13 cases. Even if he is off by a factor of 4 and the level is only 15%, that’s vastly higher than anyone in the industry would acknowledge. And this “we’re perfect, they are all deadbeats” ignores the fact that banks are also foreclosing on people who have signed loan modification agreements and are current on them (the Florida borrower-oriented legal blogs have numerous reports from courtroom observers).
Second, notice that the “proper party” framing suggests that the matter at issue is mere protocol. It isn’t. If the trust is not the proper party to foreclose (as in it is the holder, with the servicer acting as its agent), then that means the note is owned by someone else, presumably earlier in the securitization chain. That party can foreclose, but there is no proper way for the proceeds of that foreclosure to get to the trust, and the trust similarly under New York law is not permitted to accept the note so far after the trust closed.
As we indicated, there is little merit in taking our shredding much further. This piece simply talks past the real problem, in all likelihood because the industry experts know there is no obvious remedy if our evidence is a valid sample.
49 comments
Comments are closed.
Yep, The reader really starts to wonder if the NY Times receives money for articles and if not they should for the dubious reporting this article represents. Has the Grey Lady become a trollop?
The NYT does run advertorials, and has for some time.
Please do not be naive. Newspapers have not shown an operating profit in some time. Therefore their only possible excuse for continued existence must be to promote the ends of their major shareholders and management. This is also a smoking gun for the argument that government does not represent the people.
Let me just preface this by saying I am not Jewish, so I consider the following to be “reverse racism” before all the self-righteous cocks*ckers here start attacking me.
You know Schwartz is usually a Jewish name yes??? And Jews are usually sharp as hell. How could Nelson Schwartz be so damed dumb to buy that bullshit from an obviously extremely biased source??? I mean isn’t a journalist supposed to take a few grains of cynicism with him when he’s listening to this crap from a BANK WORKER?????? What am I missing here people??? It’s been obvious from the getgo these jerkwads didn’t want to modify the loans.
Maybe Schwartz isn’t Jewish. Maybe his mother is Christian and is from Dumbphuckistan.
RH
The reader really starts to wonder if the NY Times receives money for articles and if not they should for the dubious reporting this article represents. Has the Grey Lady become a trollop?
They better be getting real money for them, because I can’t imagine there being a big groundswell of suckers being willing to pay for their online pack of lies come next year. I know I sure won’t.
The entire process is a complete work of crime. The predatory lending in the first place, the fraudulent servicing “industry”, a pointless extraction even in principle, the failure to convey the notes, the fraudulent PSAs, not to mention how the quality of the allegedly conveyed mortgages was often also a lie, the forgeries, frauds, and criminal extortion via compounding “fees”, the embezzlement (control fraud) via the trusts, and of course the robbery of trillions through the government bagman to keep it all temporarily propped up once it collapsed.
We can add to the criminal conspiracy the abetting propaganda fraud of the likes of SIFMA and the NYT.
Servicing a mortgage that is current is a breakeven, at best a thin profit business. Late fees and foreclosure-related fees pad a servicer’s bottom line.
That (and the whole piece) epitomizes what a scam textbook “capitalism” is, and how the whole thing is just meant to legalize theft.
What conceivable theoretical justification could there be for those compounding fees? (Or for the fees in the first place?) Let me guess – it’s supposed to be “morally” edifying. If you fall behind and incur late fees, that must be on account of a moral failing, now rightfully being punished.
(But that still doesn’t explain why anyone deserves to profiteer off the punishment. If it were really chastisement, shouldn’t it be social in nature?)
Man, if we could figure out a way to redirect all that depravedly brainwashed moral energy and will to punish in the direction of the real criminals….
I guess you didn’t get the memo, GWB is walking around in day light, there are tears in the audeance. Colin Powell is on Larry king, he’s mifted at being lied too but, chums forgive and forget.
Skippy…ah spring time in the Alps…is almost here again.
Your’s and attempter’s comments seem to say it all … poor Colin, poor GWB, making scamerica poor …
Deception is the strongest political force on the planet.
Isn’t it interesting how offended most journalists get if you insinuate they paid money for access to stories??? Yet you see major outlets like the Financial Times tilting 99% of stories pro-banker so they can whore out their advertising space. Interesting how which way the cash flows in or out of their hands seems to dictate their chosen moments of “integrity”. I imagine you go out with an FT editor, better make sure he buys the first round.
Yves – The forclosure crisis / fraud seems to be an exstension of the fraud experienced in the original securitization.
Recall Enron precipitated SAR BOX which is all about fraud, risk and transparency. It would appear that no one is getting prosecuted. One must ask the question: why write laws if you have not intention of prosecuting them.
So – could you or one of your legal friends write a article in terms of why prosecutions ( criminal) are not happening. I would think this would be a high priority. Why would any one invest in a US entity if the laws on fraud are not prosecuted. I saw “Inside Job” last week and the case seems to be evident in spades
You’re quite right about Sarb-Ox. I’m convinced that the lack of any indictments for all the off-balance sheet tricks and lies in public company financials is political. There is more than enough in the Lehman bankruptcy report alone to trigger criminal indictments. The mortgage mess is a Sarb-Ox minefield waiting to explode. Not a pop, not a peep.
Signing off on the fraudulent financials or saying that there are effective internal controls when there aren’t, is a crime under Sarb-Ox. And the Ken Lay (“I”m just the CEO nobody told me”) defense won’t cut it because the CEO/CFO certify that internal controls are in place to “ensure that material information relating to the company and its consolidated subsidiaries is made known to such officers [CEO, CFO] by others within those entities, particularly during the period in which the periodic reports are being prepared.”
I and others have said for years tht Sarbanes Oxley served two purposes. Neither was to clean up Wall Street.
It missled investors by giving a false sense of security so that they felt better about throwing their investment dollars into the pit. and it gave the Sec a huge club with which they could go about keeping recalcitrant companies in line and extorting money from everyone.
Sarbanes Oxley became a barrier to entry in American commerce and the largest corporations just paid the “fines” as a cost of doing business. A cheap way of gutting competition.
Interesting thread.
$400b of 2nd lien home equity loans on the balance sheets of servicer banks is the elephant in the room that is missed in this analysis.
Mods on first mortgages that at the same time keep the 2nd mortgages owned by the servicer whole are not in the interest of the first mortgage investors who bear the cost.
In these cases the servicers do not foreclose but instead use the first mortgage principal and interest as a wealth transfer to the servicing bank.
I do mention the seconds in the post….please reread. It’s not a complete explanation, since two of the biggest trustees, in particular Bank of NY and Deutsche Bank, don’t hold large portfolios of seconds. But it is a huge motivating factor for Wells, BofA, JPM, Citi, and even their less exposed bretheren.
Yves, have you provided readers with a pooling and servicing agreement that we could review?
The defense offered by the SNR Denton partner is a Wowzer. His claim — that the “existence” of the PSA is proof that future actions specified in the PSA were taken — is too ridiculous for words. If this is the caliber of legal thinking the loan servicers and lenders are relying on, then no surprise that they’ve got such a mess on their hands.
Thanks for these ongoing breakdowns of the propaganda machine Yves. On its face the SIFMA paper looks incredibly weak.
Richard & Yves, I recently requested, under RESPA section 6, that Bank of America provide me with documentation that they own the Note on my mortgage. They replied that I had “NO LEGAL AUTHORITY THAT SUPPORTS YOUR CLAIM THAT YOU ARE ENTITLED TO VIEW THE ORIGINAL NOTE”!!! Have you ever heard of such a refusal as this??? My gut tells me there is something seriously amiss here!!! What do you think??? lonnie
Lonnie
Ask for a certified facsimile of the original note, certified by the person possessing the note, and stating the present location with address of the original note.
They are playing word games I suspect.
djv
4closure fraud seems to think HR3808 may be back to life…
Action Alert – It’s Back! H.R. 3808 Interstate Recognition of Notarization Act of 2010
http://4closurefraud.org/2010/11/16/action-alert-its-back-h-r-3808-interstate-recognition-of-notarization-act-of-2010/
Moody’s sees minimal risk to RMBS from robo signing, MERS litigaton
http://www.housingwire.com/2010/11/16/moodys-sees-minimal-risk-to-rmbs-from-robo-signing-mers-litigaton
“Moody’s said the practice of robo signing, or when mortgage servicers processed foreclosure documents without verifying information, only affects loans already in foreclosure or real estate owned by RMBS trusts. Still, it could lead to some additional losses on unsold REO, according to analysts.”
Livinglies is also reporting on this, tomorrow 11/17
THIS IS BASICALLY THEIR SHOT AT TURNING WHAT WAS ILLEGAL INTO LEGAL. ALL AMERICANS SHOULD BE APPALLED. THIS BILL IF PASSED WILL MAKE EVERYTHING THE BANKS DID LEGAL. IT IS THE EQUIVALENT OF AN UNCONDITIONAL PRESIDENTIAL PARDON AND WOULD ALLOW FORECLOSURES TO DESTROY WHAT IS LEFT OF OUR ECONOMY.
The fact that this thing passed with a unanimous voice vote in the Senate further reinforces the fact that the stooges are being bought off. Legitimizing MERS should be the ‘straw that breaks the camels’ back. This is war!
Yves
Very nice post.
I was thinking more about the attorneys – I would love to see Denton attorneys actually appear in foreclosure and bankruptcy actions in just a few matter in each of the states where Denton has an office, and see whether Denton attorneys will sign off on the papers filed in the court.
Denton type lawyers and probably most of the law firms rendering the opinions on the PSA agreement probably never appear in court on these individual matters.
Not only do they not want to dirty their hands and risk bar sanctions, but they do not want their firms to have actual knowledge of what occurs.
I bet no one can find a foreclosure or individual bankruptcy related case where Denton was the attorney of record, much less made an appearance.
DJV
Here’s a link to the latest White (wash) Paper presentation from the ASF explaining how it’s all (cough)legal (cough, cough).
http://www.americansecuritization.com/uploadedFiles/ASF_White_Paper_11_16_10.pdf
It’s intent is to put your brain to sleep. Nothing to see here, move along.
Major spy scandal as five Scandinavian governments catch the U.S. watching their citizens
This is good news because it seems that only other countries, those other than the US/UK finance gangsters driving the political economy, can help the US save itself.
sorry -this in the wrong place. I’m going to resend it on links.
“If the assignment is missing, you can create it by having the old assignee reassign it to you.”
How does this work when the old assignee was liquidated in federal bankruptcy proceedings?
Here is the dandy response i got from my servicer when i asked for documentation showing that Fannie Mae owns my loan (in a first email i asked for a copy of my note. when i got that i noticed it listed the original lender, not the trustee that Indymac said owned the note, FannieMae):
“Your closing documents (Note, Deed of Trust) will not be altered in the case of changes to your loan’s investor or servicer. These may change multiple times over the life of the loan. It is possible that Fannie Mae was not your loan’s investor when it originated. We are unable to provide any additional documentation as proof of Fannie Mae’s current ownership of your loan.
When the servicing of a loan is transfered it is typically recorded using an electronic system called Mortgage Electronic Recording System or MERS. This expidites the process but also means that there is typicaly no hard copy of the transfer is ever filed.
Respectfully,
Customer Service”
I love all the spelling errors….
PS. I did find my loan in MERS. It was recorded into MERS right at closing. So would there be a copy of the note transfer? or is the servicer correct that its all electronic? if it is, how can i see a copy of the MERS records?
Dear Yves; Please let us know about your statement regarding Neil Garfield. I find it strange, as I have learned more from his site regarding the alleged securitization of loans than all of the other sites combined. Perhaps because it is the only one that was willing to instruct in the early days of the recognition of the vast fraud. Admittedly, I am only a legal student, but having access to information within hours of its publication is one of the things that makes his site invaluable, just like yours!
I would be very interested in the mistakes for the sake of real facts. I have seen the information on his site repeated by all the people in the industry later that day or the next, but rarely before Mr. Garfield posts it. I am sure there are other attorney’s with MBA’s that comment on the industry from personal experience. Please link to other experts that have more knowledge, by all means.
Habitual Criminals
If this were an unique event there might be some small justification for the errors and ommisions of the Banking Industry.
However, as this mortgage squeeze is merely the latest in a series of similar actions a pattern of intent emerges. I think that if presented with a historical perspective, honest courts would need to conclude that there was consiracy to defraud.
Yves –
A question, and I apologize if you’ve addressed this before.
You said that the investors generally want loan mods, but the servicers prefer to avoid them so that they can rack up fees on what would otherwise be an unprofitable mortgage.
But I don’t quite see how that works for the servicers. On one hand, if they hang onto the mortgage, they can charge fees. But they’re trying to collect money from a bankrupt (or nearly so) individual. So they’re basically trying to squeeze money from a stone. And the stone in question has more senior obligations — the mortgage itself, if nothing else, until or unless foreclosure is complete.
On the other hand, until either a foreclosure or a mod is complete, the servicer is out of pocket advancing payments to the investor. So it would seem beneficial to the servicer to encourage modification, so that they can divest themselves of a losing account and stop having to advance payments.
Whereas the investor really isn’t seeing any harm to his bottom line as long as the servicer is continuing to advance fees, but the investor will take a hit when the mortgage is either modified or foreclosed.
Granted that the investor may lose more from a foreclosure than from a modification (eventually, if and when the foreclosure occurs). Granted also that the second mortgage holder may interfere with the process to protect their own illusion of solvency. But aside from that, I can’t see how the financial arrangement would uniformly motivate the servicer in favor of foreclosure and the investors in favor of modification. I would expect the servicer to prefer the option that lets them stop losing money as fast as possible (probably a mod) while the investor wants to protect the long term value of his investment (which may be best done with a mod, but that may or may not be the investor’s perception).
I’m arguing this subject with someone I know who brought up these issues, and I have to admit that it sounds like he has a point. Can you clear it up for me, so that I can pass it along?
Thanks
Brent, I can answer some of that. Your premis assumes that the mortgage originator and the servicer are separate entities or atleast arms length. This need not be the case. Also, there are so many interlocking obligations, that those entities are unlikely to operate independantly.
My big question mark is hy the Fed is suddenly reaching far down the food chain and taking an active interest in Servicers?
Not really. I talked about the motivations of the servicer and the investor, who are assumed to be separate entities (per Yves’ original point). I didn’t mean to bring the loan originator into the picture at all, and I don’t see that they have any impact on the question I’m asking.
Congressional Oversight Panel’s report now on-line: http://cop.senate.gov/reports/library/report-111610-cop.cfm
The Congressional Oversight Panel’s November oversight report, “Examining the Consequences of Mortgage Irregularities for Financial Stability and Foreclosure Mitigation,” reviews allegations that companies servicing $6.4 trillion in American mortgages may in some cases have bypassed legally required steps to foreclose on a home. The implications of these irregularities remain unclear, but it is possible that “robo-signing” may have concealed deeper problems in the mortgage market that could potentially threaten financial stability and undermine foreclosure prevention efforts.
Thanks for the link. Senator Kaufman’s comprehensive summary of the issue is well worth absorbing.
“Servicing … In normal times, when foreclosure volumes are low and homes can be sold readily, the servicer can recover these outlays fairly quickly. But now, with foreclosures and liquidations attenuated, the amount of these advances have become very large, and the only way for the servicer to recoup is to foreclose. Hence foreclosure isn’t an option, it’s an institutional imperative.”
There’s another institutional imperative perhaps, to mess up current mortgages that are being paid on time.
My brother and I have been comparing notes on servicers. We started because we’ve both received notices from our respective home insurers that the servicer is overdue sending payment although these monies are collected from us into escrow accounts each month and ought to have been available. My brother got so nervous he’s already sent a payment directly to the insurer. The servicers involved are Chase Home Finance and BOA. Surely this is indicative of cash flow problems the servicers are experiencing?
If it isn’t one way or another, it seems we’re all screwed in the end.
LAS yeh the banks and servicers love those escrow fees….seems like they must make some money off of all the escrows that sit in accounts for an entire year or 6 months before payment. I am assuming banks have figured out a way to profit from the escrows, since many loans are approved only if the borrower agrees to escrow for taxes and insurance.
I am sure you are right about cash flow or at least their willingness (the banks)to break their own agreement that says they will pay the taxes and insurance. Seems like it is another case of following laws only when they benefit the banks.
Probably someone else has pointed this out – I haven’t read all the entries – the SIFMA piece is very slick propaganda. Note that it quickly dispatches any consideration that the originators and securitizers did anything illegal. For example, SIFMA dismisses fraud and forgery of documents as “unintentional errors in paperwork.” While informed readers can see through this immediately, the uninitiated, including the majority of Americans, WANT to believe that the American financial system is as rock solid as ever – so they do. Of course there is a battle for public opinion, and of course the banksters have, if not full support, at least tacit support from the majority of major media outlets. It should not surprise us that the criminals on Wall Street are using Bernays, Goebbels, and Lakoff propaganda and cognitive science techniques to sway public opinion. They are masters at it.
To combat the “unintentional errors” and “deadbeat borrowers” memes, those of us who wish to better inform the public, must be willing to use some of the same tools. For example, rather than saying the real estate trusts ripped-off investors, say the banksters ripped-off American pension funds and destabilized the American economy. And to add to their crimes, they are now throwing granny out of her home of 50 years, into the streets. I strongly agree that one does not fight lies with lies, but when the opposition (yes, we are indeed in opposition) uses cognitive tricks to convey its message, we are fools to not avail ourselves of linguistic and cognitive science tools to rebut their arguments.
Notice how allergic the MSM and the propagandists are to the word fraud. That clearly indicates that the word, even in a denial, conjures up images of diabolical banksters dining on the flesh of your children. Use the word, and use it often.
I encourage everyone on this blog to use the term fraud when describing this. And when you discuss the victims of this fraud, don’t call them investors, call them pension funds.
This is an uphill battle. Many, even very bright people, simply refuse to believe that the high priests of finance have indeed, buggered the American people. Indeed, in a cognitive science sense, financial security is almost as highly sought after as eternal life. The financiers (banksters) are the high priests and “true believers” have a natural resistance to seeing their priests as criminals. We must help them open their eyes.
i am of the opinion that a lot of journalists avoid words like ‘fraud’ because they need proof that would hold up in court under libel law.
i also believe many of them have some sort of professional pride in their work, and do not want to become like Jack Anderson, Dan Rather, Peter Arnett, etc etc, having to retract stories after they find out they got the facts wrong.
especially in the international age, the libel law of the UK and Australia and other places becomes important. a great example is the Irving v Lipstadt trial, but there are others, Barron’s getting sued by an Australian for an off-hand implication in one of their articles online is another.
besides, the power of nakedcapitalism.com doesn’t come from invective or epithets, it comes from the curiosity and determination of Smith and others to understand the system and how it works, and their long experience and contacts in the industry. the devastating part of this deconstruction of the NY Times is not from the namecalling it is from the specific examples that prove the NY Times did not provide the public with an objective, fair view of the topic.
my opinion .
Bruce Marks was escorted out of the Senate Banking Committee Meeting for shouting that they should allow testimony from homeowners, from MarketWatch:
“The hearing comes as a group of large financial institutions have admitted to having used the tactic of robo-signing, where institutions assign one person to quickly approve numerous foreclosures with only cursory glances at the paperwork to determine whether all the documents are in order. ”
Again, that doesn’t describe the problem correctly! It’s not some lackey who is slacking on the job before the sig hits the paper.
The economy matches the legal environment. Rule of whim = third world shithole. It really is that simple. Based on the institutionalised lawlessness eminating from Wall Street and Washington, America will end up somewhere between Argentina and Zimbabwe.
Nicely done article Yves. You should write a book….oh wait…
Foreclosure Fraud Assault – A Cry For Help
http://newsblaze.com/story/20101116120222nnnn.nb/topstory.html
A foreclosure that entails savagery, fraud, corruption, greed, intrusion, peril, trauma, desolation, shocking deviation from established law and court rules and procedures, and reprisals for whistleblowing and for not relinquishing one’s home to sham foreclosure is a riveting story worth being told.
The victim’s painful story comes with a plea for humanity to rise to a duty of raising awareness, and not merely for the sake of aiding this one victim. It is for the sake of calling attention – and hopefully “making a difference” by requiring lawmakers to make changes in what appears to be third-world judicial systems of shocking perversion and inequality, harmful to the entire economy.
Encapsulated in the story “Foreclosure Gang Rape,. . .,” the victim’s graphic details of years of harm from lawyers, judges, and banks summed up as ‘gang rape’ is commensurate with defilement, exploitation, humiliation, bigotry, betrayal, invasion, revilement, assault, depredation, torture, despoliation, stigmatization, maltreatment, denigration, ruin, pillage, ransack, intrusion, and racism.
Wells Fargo turned over the modified loan debt to a foreclosure mill debt collection lawyer who used a defunct lender’s identity to foreclose, as well as demand unfair fees. At some point after foreclosure had been filed, the victim discovered that the modification consisted of a contract between the homeowner and a fictitious lender. . .
We need all the activisim in the world to protect the rights of people here, but would we be talking about this if the cash flows justified the book values of the loans?
http://www.freerepublic.com/focus/f-news/1517723/posts
In answer to this question
“1. Why did firms like SNR Denton’s predecessor, Thatcher Proffitt, have specific requirements in the PSAs if they didn’t have to be followed?”
Because it is custom and procedure to legitimate real estate practices and the rule of law is why. Only a fraud artist would disregard the standards set in a business for 100 years and the preservation of the chain of title developed over history.
“Funny how the ‘sanctity of contract’ argument is nowhere to be found when adherence to contracts might crimp industry profits.”
Amen! You can hammer that point to kingdom come and I will be one satisfied reader…
(Got that, Scaramucci?)