Archive for October 7th, 2010
As other state attorneys general around the country step up to bat for their respective citizens, one AG has been noticeably missing – for a long time: Attorney General Mike Cox. While citizens of Michigan will remember his boisterous campaign for the Republican gubernatorial nomination, and his shameless sucking up to Tea Party groups, as well as his perpetually leading in the polls – culminating in reality with a third place finish – what citizens of Michigan will really remember about Mike Cox is his complete and utter failure to protect the people of this state from the rampant foreclosure fraud.
Michigan was hit hard and fast and started earlier than the rest of the country being decimated with foreclosures. We didn’t experience the huge bubble like other states such as Arizona, California or Florida, but we were hit hard more because of our depressed overall economic conditions – a situation we in Michigan had been living with far longer than the rest of the country due to ridiculous and stupid socialist policies enacted by our illustrious Governor from Canada (no offense to our Canadian friends). For nearly 8 years now, the only Republican in a position of power here has been Mike Cox and he has been as big a failure as Governor Granholm. The only thing he has done worthwhile has been to join with other attorneys general around the country in the fight against the health insurance mandate required by President Obama’s Health Care Reform Act, an action I’m pretty sure he only took in order to gain publicity for his campaign.
Since he lost, that race, and is now term limited, we’ve heard nothing from him – well, almost nothing. While other attorneys general like those in Florida, Ohio, Kentucky, and now, North Carolina (see article below) are busy trying to protect homeowners from the fraud that has now become public knowledge, Mike Cox is instead busy telling homeowners desperately trying to avoid foreclosure to beware of ‘scams.’ Yes, Mike Cox is more concerned with the scammers who have moved into Michigan to pray on the thousands of desperate homeowners, instead of helping those homeowners ACTUALLY stay in their homes by addressing the rampant fraud being perpetrated by the banks. Basically, he’s addressing a symptom of the problem, but entirely avoiding the REASON and CAUSE for the problem in the first place.
Michigan is a non-judicial state, and therefore, not included in the 23 states wherein three of the large banks have halted foreclosures due to improper, illegal and most likely, according to at least one Florida judge, fraudulent paperwork. Forged signatures, robo-signers, multiple banks foreclosing on the same property, banks foreclosing on properties where homeowners don’t even have a mortgage, bank representatives forcibly breaking down doors – all of these illegal acts have now been documented in a court of law. Yet, nothing but silence from the Michigan Attorney General – except of course, to admonish us all to be careful of scammers trying to help you stay in your home. Well, Mr. Cox, at this point, a scammer is better than nothing for a poor homeowner who has nothing left to lose.
Michigan, being a non-judicial state, is now on the short list for banks to fast track foreclosures. This is due to the fact that foreclosures can be accomplished here without a bank ever having to set foot in a courtroom for anyone in law enforcement to ever examine their paperwork or question them under oath. The homeowner never gets his day in court. While the non-judicial, procedural foreclosure saves the State of Michigan a lot of money by not clogging the courts, this practice was developed back when one could rely upon a mortgage lender to actually BE the entity with standing to foreclose on the collateral to which they LEGALLY had rights. This is no longer the case. It is likely that a majority of foreclosures all over the country are in one form or another ILLEGAL. And you can bet that we will eventually discover that some of the most grievous frauds were perpetrated in states, like Michigan, where the banks knew darn well they would never have to prove a thing in a court of law.
At least one non-judicial state attorney general isn’t about to let the fact that no court has looked at the banks’ paperwork hold him back from protecting his citizens:
N.C. Attorney General Roy Cooper is giving Bank of America until Friday to halt foreclosure proceedings in the state amid concerns the Charlotte bank and other lenders haven’t properly reviewed documents.
In a letter sent to the bank, Cooper questioned why Bank of America voluntarily suspended foreclosures in 23 states that involve a judicial process but not in its home state. North Carolina requires a “quasi-judicial” process in which clerks of court frequently review affidavits submitted by banks.
“If Bank of America has halted foreclosure proceedings in other states due to flaws in its affidavit process, we do not understand why Bank of America should routinely continue with foreclosures with the same flaws in North Carolina,” Cooper’s office wrote.
The attorney general wants the bank’s foreclosures suspended until it shows its processes are legal. Bank of America said it’s responding to officials’ concerns.
“Our initial assessment findings show the factual loan information underlying our foreclosures is accurate,” spokesman Dan Frahm said, adding the bank continues its “exhaustive efforts to assist our customers who have been unable to make their mortgage payments.”
The statement did not address how Bank of America would respond to the Friday deadline set by Cooper.
Cooper has asked 13 other large mortgage servicers to also halt foreclosures in the state until they prove compliance. Those lenders have until Oct. 12 to respond to the attorney general’s questions.
North Carolina is also seeking more information about practices at Ally Financial, which has halted foreclosure-related evictions in North Carolina and 22 other states.
In an interview, Cooper said lenders could be breaking an N.C. law requiring a good-faith effort to work out loan modifications if they’re improperly handling foreclosure paperwork. One of his main concerns is that homeowners get a “fair shot” at loan modifications, he said.
At the very least AG Cooper wants to make sure the homeowners in North Carolina get a day in court and a fair shot at any mortgage modification. None of these banks servicing these loans have any motivation to work out a mortgage that they do not actually own and have as a liability if it fails to perform. If these banks’ true position is that of merely servicers, they have no motivation whatsoever to work out anything with a homeowner in distress because THEY aren’t owed the money – they were already paid when they sold the note – if they ever had it in the first place. Which leads me to the obvious question: Please, Mr. Cox, do tell me how an entity that has not been harmed (meaning that they aren’t owed any money), has standing to foreclose on collateral they do not have rights to?!
At this point, all I can say is that I’m glad Mike Cox is term limited and we can say goodbye and good riddance -and I’m certainly relieved he didn’t become the only governor of Michigan that could possibly have been worse than Jennifer Granholm. I truly hope that the next Attorney General of Michigan will care just a little bit about Michigan citizens and I hope that the current candidates are reading this.
In the meantime, I’d like to know WHEN WILL MICHIGAN STOP THE LOOTING AND START PROSECUTING?!!
Over at ZeroHedge, they had this to say:
Karl Denninger, who has been tracking the issue of title fraud in the mortgage space for years, was on the Dylan Ratigan show earlier, and not only provided one of the most comprehensive explanations of where we are, how we got here, and where we are going (unfortunately nowhere pleasant) to date, but also was gleefully and sarcastically rhetorical with his closing remarks: “What if we find that of these $6 trillion in securities that are out there, outstanding right now, half or more of them are defective. You put them back on the banks and they all blow up. You know what – we have a resolution authority under Frank-Dodd, how about if we use it?”
We would only add that courtesy of second degree, third degree, and fourth degree leverage, as we presented yesterday, the final amount of net capital at risk, courtesy of numerous other layers of debt, will end up being far, far greater than just $3 trillion. And yes, there is a reason why the OCC keeps a track of the $233 trillion in total derivatives held by US banks.
Also, Chris Whalen from Institutional Risk Analytics gave a terrifying presentation on the foreclosure crisis yesterday: Click here to see Whalen’s presentation > Chris is an expert on banking risk – and is not to be ignored. He is one of the very few who also had all this figured out a very long time ago.
For big banks, “there’s a possible nightmare scenario here that no foreclosure is valid,” said Nancy Bush, a banking analyst from NAB Research. If millions of foreclosures past and present were invalidated because of the way the hurried securitization process muddied the chain of ownership, banks could face lawsuits from homeowners and from investors who bought stakes in the mortgage securities – an expensive and potentially crippling proposition.
And this wasn’t hurried – it was intentional.
MERS allowed big financial firms to trade mortgages at lightning speed while largely bypassing local property laws throughout the country that required new forms and filing fees each time a loan changed hands, lawyers say.
You mean ignore the law, not “bypass” the law. Oh wait – bypass does mean ignore, doesn’t it?
Kentucky lawyer Heather Boone McKeever has filed a state class-action suit and a federal civil racketeering class-action suit on behalf of homeowners facing foreclosure, alleging that MERS and financial firms that did business with it have tried to foreclose on homes without holding proper titles.
“They have no legal standing and no right to foreclose,” McKeever said. “If you or I did this one time, we’d be in jail.”
Indeed, just as if I showed up, busted in your house and changed the locks I’d be in jail too.
But heh, when they do that in Florida, the Sheriff refuses to arrest the perpetrator.
Janet Tavakoli, founder and president of Tavakoli Structured Finance, a Chicago-based consulting firm, said that for much of the past decade, when banks were creating mortgage-backed securities as fast as possible, there was little time to check all the documents and make sure the paperwork was in order.
But now, when judges, lawyers and elected officials are demanding proper paperwork before foreclosures can proceed, the banks’ paperwork problems have been laid bare, she said.
The result: “Banks are vulnerable to lawsuits from investors in the [securitization] trusts,” Tavakoli said.
Darn tootin’ they are.
Gee, if the so-called Trust never took delivery of what it claims it did when it sold those MBS to investors then the investors are holding an empty box, and they’re likely to get a bit pissed when they figure it out.
TIME TO GET PISSED FOLKS – THERE ARE MORE THAN SIX TRILLION DOLLARS WORTH OF THESE POTENTIALLY-EMPTY BOXES OUT THERE!
There are a few people – Janet included – who have been on this for a long time. Indeed, when the light came on in this regard in early 2007 it is what prompted me to start writing The Ticker in the first place!
“Joe on the Street” largely doesn’t understand what happened here. He thinks, and the mainstream media sells to him incessantly, that his was all just “unbridled speculation” or “mistakes.”
It was not.
Janet, myself and a few others – including Bill Black – have said that the essence of what happened here was fraud and deception, not “speculative froth” or “mistakes.”
Until the common man on the street comes to understand that he didn’t get screwed because of bad luck, but rather he was intentionally assaulted, he will not rise and demand that these screwjobs be unwound and the people involved held to account.
Yet until that happens we cannot clear the economy or begin to rebuild this nation’s productive economic resources.
WAKE UP AMERICA!
NOTE: To see Ticker-Guy, Karl Denninger, tune in to Dylan Ratigan’s show today at 4:30 pm Eastern on MSNBC
If you still have a job and you can put food on the table and you still have a warm house to come home to, then you should consider yourself to be very fortunate. The truth is that every single month hundreds of thousands more Americans fall out of the middle class and into poverty. The statistics that you are about to read are incredibly sobering. Household incomes are down from coast to coast. Enrollment in government anti-poverty programs sets new records month after month after month. Home ownership is down, personal bankruptcies are way up and there are not nearly enough jobs to go around. Meanwhile, the price of basics such as food and health care continue to skyrocket. Don’t be fooled by a rising stock market or by record bonuses on Wall Street. The U.S. economy is not getting better. After World War II, the great American economic machine built the largest and most vigorous middle class in the history of the world, but now America’s middle class is disintegrating at a blinding pace.
Most of those who write about the plight of the American middle class believe that things can be turned around and that the middle class will eventually be stronger than it ever has been. But unfortunately, that is just not the case. As a society, we have lived far, far beyond our means for decades. Now the bills are coming due and none of our leaders seem to know what to do.
Meanwhile, the U.S. economy is being rapidly assimilated into the emerging one world economy. Middle class American workers now find themselves in direct competition for jobs with the cheapest labor on the other side of the globe. Of course many multinational corporations have taken advantage of this by moving factories and jobs to countries like China where blue collar workers make about a dollar an hour. This has helped raise the standard of living for workers in those nations by a nominal amount, but it has been absolutely devastating for the standard of living of America’s middle class.
So what does all of this mean?
It means that the U.S. economy is headed for collapse and middle class Americans are in for some really, really hard times.
The following are 27 signs that the standard of living for America’s middle class is dropping like a rock….
#1 Household spending for the middle fifth of all U.S. income earners was down 3.5% in 2009. That was the steepest one year decline since records began being kept back in 1984.
#2 Median household income in the United States fell from $51,726 in 2008 to $50,221 in 2009.
#3 According to one new report, in 2009 residents of New York state experienced their first full-year decline in income in more than 70 years.
#4 Of the 52 largest metro areas in the United States, only the city of San Antonio did not see a decline in median household income in 2009.
#5 Home ownership in the United States declined for the third year in a row in 2009.
#6 In 2009, approximately 4 million Americans fell out of the middle class and now live below the federal poverty line.
#7 The number of Americans enrolled in the food stamp program has set a new all-time record for 20 consecutive months.
#8 In July (the last month for which data is available), 41.8 million Americans were on food stamps.
#9 The number of Americans in the food stamp program skyrocketed more than 55 percent between December 2007 and July 2010.
#10 In 2009, more than 48 million Americans were enrolled in the Medicaid program.
#11 One out of every six Americans is now enrolled in at least one anti-poverty program run by the U.S. government.
#12 According to one recent study, approximately 21 percent of all children in the United States are living below the poverty line in 2010.
#13 According to the Cato Institute, anti-poverty spending by the U.S. government has increased 89 percent over the past decade.
#14 The cost of health care increased a staggering 9.6% for all U.S. households from 2007 to 2009.
#15 It turns out that only the top 5 percent of all U.S. households have earned enough additional income to match the rise in housing costs since 1975.
#16 35 percent of all U.S. households now live on $35,000 or less.
#17 New York state Comptroller Thomas DiNapoli says that Wall Street bonuses for 2009 were up 17 percent when compared with 2008.
#18 According to a poll taken in 2009, 61 percent of Americans ”always or usually” live paycheck to paycheck. That was up substantially from 49 percent in 2008 and 43 percent in 2007.
#19 Today, 28% of all American households have at least one member that is searching for a full-time job.
#20 Nearly 10 million Americans now receive unemployment insurance, which is almost four times as many that were receiving it back in 2007.
#21 A recent Pew Research survey found that 55 percent of the U.S. labor force has experienced either unemployment, a pay decrease, a reduction in hours or an involuntary move to part-time work since the recession began.
#22 In 2009, 43.6 million Americans were living in poverty. Sadly, the number of Americans living in poverty has increased for three consecutive years, and the 43.6 million poor Americans in 2009 was the highest number that the U.S. Census Bureau has ever recorded in 51 years of record-keeping.
#23 A staggering 25 percent of all American adults now have a credit score below 599.
#24 It is estimated that nearly a third of all Americans cannot qualify for a mortgage because of low credit scores.
#25 For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all American households put together.
#26 Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a stunning 32 percent increase over 2008.
#27 According to a new report by the U.S. Census Bureau, the bottom fifth of all U.S. income earners brought in just 3.4 percent of all income in 2009 while the top fifth brought in a whopping 49.4 percent of all income.
So is there any hope that things will turn around soon?
No, not really.
At this point, even some of the top economic authorities in the nation are admitting that we are headed for very difficult times.
Goldman Sachs recently announced that the U.S. economy is likely to be either ”fairly bad” or “very bad” over the next 6 to 9 months.
Not only that, but Federal Reserve Chairman Ben Bernanke now says that the U.S. economy is in a situation that is dire and “unsustainable”.
Not that Goldman Sachs or Fed Chairman Ben Bernanke should be trusted when it comes to the economy.
When it comes to the problems we are facing, the truth can be found in the long-term trends. If you have not done so already, please read “11 Long-Term Trends That Are Absolutely Destroying The U.S. Economy“. It will open your eyes to the true horrors that our economy is now facing.
But statistics alone do not tell the real story.
Sometimes what gets lost in the endless economic statistics is the very real pain of the millions of Americans who are trying to live through this. The following story from the Unemployed Friends website is from a woman named Leetah who is desperately hoping to be able to get through this upcoming winter….
The place I live in right now has no jobs and no places to live. My fiance, Lloyd, and I have been looking for anything but he lost his job from McDonald’s and the factories (the only jobs to make a living off of) consider him an insurance liability. I can’t get hired to a factory because of I was fired from our major factory for attendance (I had to miss 3 days of work because I was sick). So we are moving to the Edmond/OKC region where we are hoping to find a job and a place with running water and heating. We’ve spent the last few years without heat and running water and so having a place with water and heat would be heaven.
Winter is coming up fast and I am so afraid. Last winter we almost died from the cold and now the thought of cold makes my throat close up and my heart pound. But it isn’t just ourselves we are looking out for, we have our dog too. Our wonderful APBT Maggie who is 2-years-old and has been with us since she was 5-months-old. She’s our baby girl and we can’t lose her. We almost lost her to the cold too and it scared me so much. We are going to be living in our car soon with our dog.
I am hoping to be able to keep our food stamps in the new city so we can still eat. I have already applied for ten+ jobs and nothing yet but I am keeping my hopes up. Hopefully it will get easier to find a job once we get there. Then we just have to save up and then we can afford an apartment. Now finding an apartment with my awesome dog is another story.
Please say a prayer for those who are out of work and on the verge of being forced out on the street.
You never know, you might be next.
The poor and middle class are being FORCED to spend more on NON-discretionary items. This is a direct result of monetary policy. Here’s the proof.:
This is why Bernanke’s attempts are doomed to fail in dramatic fashion, and ultimately, if he is not stopped, will destroy the nation:
Notice what’s going on here.
The lowest quintile – the poorest Americans – are spending 23% more on food, 8% more on housing, and 9% more on health insurance.
What’s worse, they’re not spending less on food away from home.
This is the key. They’re not shifting spending (as you can see in the above table) they are being forced to spend more even as their income decreases.
That’s the lowest 20% of incomes in America folks, and it is going to destroy the people who are not wealthy.
There is nothing that redistribution can do to fix this. It is happening as a direct result of the following:
- Intentional debasement of the currency, leading to commodity price ramps. This immediately shows up in the price of things you have to buy. When you’re strapped to begin with, you can’t shift around these requirements – you need the basic necessities. That is, you can’t swap down to hamburger from steak – you’re already eating hamburger, rice and beans. When they shoot the moon in price you’re screwed as there is no “trade down in quality” available to you.
- Intentional distortion and propping up of housing prices. Instead of forcing banks to take their medicine and losses, thereby allowing home prices to collapse (if that’s what is to come), we are instead trying to prevent that supply from coming onto the market at dramatically lower prices. This in turn means that rents for the lower-income people go up because of supply constraints. And those people don’t have the ability to afford it.
- Health insurance costs are soaring. Obama claimed it wouldn’t happen. He lied. It not only was going to happen as I pointed out, we now have proof it did. And guess what – again, the lower class can’t afford it.
Bernanke is directly responsible for this, as is Obama for refusing to put his boot up Bernanke’s ass and eject him when he came up for re-nomination. I have been writing about this for more than three years, and sent a letter to all 535 members of Congress in the fall of 2007 over this exact issue.
They didn’t give a damn, because none of them are poor. But those who are aren’t just losing ground, they’re being destroyed, with their cost-adjusted standard of living falling by more than 10% in two years.
Everyone else can in some fashion or form adjust to some degree, and as incomes fall so do brackets, to a point. But in the lowest quintile there’s no bracket to drop down to, and no way to take advantage of more deductions, because when it comes to income tax you already pay zero (or close to it.)
To be blunt, this sucks, and if we don’t stop it the creep up into the next bracket, the lower-middle class, will occur.
Once it hits there we will be in a position that there will be no clean way to recover from what’s occurring.
Bluntly put, we must remove “The Bezzle” and force those who have bad debt to eat it. System liquidity must be normalized and the bad debt forced into the open where it defaults. Housing prices must fall precipitously - to where the free and open market clears them, without government and banking system distortion. And The Dollar must stop being attacked by our very own government and Federal Reserve – it will, if that ceases, rise back into balance, driving down commodities and thus input costs.
This will promote profits by domestic industry (for those who sell domestically) which will in turn promote employment. A normalized interest system will promote capital formation. And a collapse in housing prices will mean that homes will be able to be bought inexpensively by people who want to live in them, and treated as shelter, instead of being a speculative tool that ultimately screws the people on the bottom of the economic ladder.
Unfortunately, this article just puts in stark relief exactly what I predicted back in 2007, and as such I must do it again:
Now cut that shit out Bernanke and Obama.Discussion below (registration required to post)
Is it any surprise that yesterday we had Democratic Congressmen Alan Grayson and John Conyers issue statements calling for applying the law equally to everyone and initiating prosecution against the big banks that have committed fraud, just as it becomes apparent that the Democrats face the real possibility many of them are swept from office in a landslide next month? Well, hold on, not so fast. Never underestimate the ability of the GOP to shoot itself in the foot – and grasp defeat from the jaws of victory.
From CNBC this morning regarding HR 3808:
Bill Toughening Foreclosure Challenges Passes Quietly
A bill that homeowners advocates warn will make it more difficult to challenge improper foreclosure attempts by big mortgage processors is awaiting President Barack Obama’s signature after it quietly zoomed through the Senate last week.
The bill, passed without public debate in a way that even surprised its main sponsor, Republican Representative Robert Aderholt, requires courts to accept as valid document notarizations made out of state, making it harder to challenge the authenticity of foreclosure and other legal documents.
The timing raised eyebrows, coming during a rising furor over improper affidavits and other filings in foreclosure actions by large mortgage processors such as GMAC, JPMorgan [JPM 39.90 --- UNCH (0) ] and Bank of America [BAC 13.39 --- UNCH (0) ] .
Questions about improper notarizations have figured prominently in challenges to the validity of these court documents, and led to widespread halts of foreclosure proceedings.
The legislation could protect bank and mortgage processors from liability for false or improperly prepared documents.
The law, the ‘Interstate Recognition of Notarizations Act’ requires all federal and state courts to recognize notarizations made in other states. Potentially, this could cure the serious problem of the newly-discovered ‘robo-signers’ that signed tens of thousands of Affidavits for foreclosure each and every day without verifying a single thing to which they were swearing an oath was stated truth.
In issuing a statement about the strange and rapid way this bill suddenly passed both houses of Congress (at this critical juncture in time when we are just uncovering the depths of the mortgage fraud), which required invocation of a special procedure, Senate staffers indicated that ‘constituents pressed for passage.’ Oh really? What constituents might those be? Apparently, it’s a mystery.
The staffers said they didn’t know who these constituents were or if anyone representing the mortgage industry or other interests had pressed for the bill to go through.
These staffers said that, in an unusual display of bipartisanship, Senator Jeff Sessions, the committee’s senior Republican, also helped to engineer the Senate’s unanimous consent for the bill.
More coincidence or irony that the Republican Representative sponsoring this bill, Robert Aderholt, is running unopposed this November in Alabama’s 4th District. Designated fall-guy in case the public catch-on, giving them absolutely no recourse against this guy? Doubtful. Everything Washington does seems to be a calculated political game of poker, with the cards stacked against We The People.
We finally had hope that all the fraud was going to be exposed and those that perpetrated fraud would be prosecuted, but with one bill, the GOP has managed to throw a big bucket of cold water on those hopes. Guess it’s the GOP’s version of ‘hope and change.’
As I posted yesterday about this bill, a plea for help from the public from the Ohio Secretary of state:
President Obama was presented with HR. 3808 on Thursday, September 30, 2010. As of today, he has not signed the bill. Please join me in urging him not to sign the bill by sending an email or calling the White House at 202-456-1111.
Mortgages are now being used as backing for securities traded all over the world by financial institutions. When a mortgage goes into default, a “chain of title” (list of its owners) must be created. It’s being discovered that many financial institutions have taken shortcuts in creating lawful chains of title that allow them to foreclose and take homes when they would not otherwise have the right under the law.
Banks demand we follow every letter of their contracts We must demand they follow the law. It’s that simple. Please join me in urging President Obama not to sign the bill by sending an email or calling 202-456-1111.
The only thing to be done to stop the banks from yet again receiving ‘legal’ ways to commit fraud, is to stop President Obama from signing this bill. If he cares at all about his Democrat majority, he’ll veto it. The next move to change political momentum for November lies with him. It already appears that at least two Democratic Members of Congress have decided that the real issue is to stop the looting and start prosecuting. Too bad the GOP didn’t get the memo that We The People would like to stop being robbed blind by both banks and our government.
UPDATE: As I was publishing this, it came to my attention that the Huffington Post has just put up an article regarding this bill that sums up the intent behind this bill:
Definitely recommended reading….and not lost on me that the HuffPo, a left-leaning media source that has been one of the few media outlets regularly reporting on the mortgage fraud, is all over this like white on rice. Hold on, here comes the Hail Mary pass from the Democrats. Note to Republicans: You’re in trouble.
NOTE: If you need clear, concise reasons to tell President Obama to veto this bill, here’s a great summary as to why: HR 3808: You Must Veto It