Foreclosuregate Could Force Bank Nationalization

The piece you are about to read is from our friend, Ellen Brown.  Her posts are on the long side, but heavy on detail and fact.  This is what I love about her—she backs up her work.  This piece is a great addendum to the post I did Monday called “The Fed’s Biggest Fear.” Their biggest fear is, also, the biggest financial problem facing America.  It is the mortgage mess and the layers of fraud, taxpayer rip-offs and the extremely leveraged banks. 

Ellen Brown lays out why all the Fed money printing won’t save the big banks and what needs to be done is to declare them bankrupt!  I wrote about this very scenario almost 2 years ago in a post called “Default Option.” Back then, I said, “My question is, if the banking system is “insolvent” and it’s unknown how much this will cost, then why is the “Default Option” not in play here?  Famed investor Jim Rogers says the insolvent banks should be “allowed to fail.”  Then, the assets would go from the incompetent to the competent. There are hundreds of small and medium sized banks that did not invest in toxic securities and are financially sound.   In short, the incompetent banks would be liquidated and competent banks would take over the assets that are left behind.  Instead, the pundits of Wall Street are basically telling America, “You make us (the banks) whole first, and then we will lend you your money back!”    That is simply outrageous because we are rewarding the incompetent!!!!!!!”

I think the Fed is doing everything in its power to save its deeply indebted banking syndicate.  I agree with Ellen it won’t work, but it will cause great pain for the common man.  Enjoy Ellen Brown’s post: Foreclosuregate Could Force Bank Nationalization.  –Greg Hunter—

———————————————————————————

Ellen Brown Guest Writer for USAWatchdog.com

For two years, politicians have danced around the bank nationalization issue, but ForeclosureGate may be the last straw.  The megabanks are too big to fail, but they aren’t too big to reorganize as federal institutions serving the public interest.

In January 2009, only a week into Obama’s presidency, David Sanger reported in The New York Times that nationalizing the banks was being discussed.  Privately, the Obama economic team was conceding that more taxpayer money was going to be needed to shore up the banks.  When asked whether nationalization was a good idea, House speaker Nancy Pelosi replied:

“Well, whatever you want to call it . . . . If we are strengthening them, then the American people should get some of the upside of that strengthening. Some people call that nationalization.

“I’m not talking about total ownership,” she quickly cautioned — stopping herself by posing a question: “Would we have ever thought we would see the day when we’d be using that terminology? ‘Nationalization of the banks?’ ”

Noted Matthew Rothschild in a March 2009 editorial:

[T]hat’s the problem today. The word “nationalization” shuts off the debate. Never mind that Britain, facing the same crisis we are, just nationalized the Bank of Scotland. Never mind that Ronald Reagan himself considered such an option during a global banking crisis in the early 1980s.

Although nationalization sounds like socialism, it is actually what is supposed to happen under our capitalist system when a major bank goes bankrupt.  The bank is put into receivership under the FDIC, which takes it over.

What fits the socialist label more, in fact, is the TARP bank bailout, sometimes called “welfare for the rich.”  The banks’ losses and risks have been socialized but the profits have not.  The bankers have been feasting on our dime without sharing the spread.

And that was before ForeclosureGate – the uncovering of massive fraud in the foreclosure process.  Investors are now suing to put defective loans back on bank balance sheets.  If they win, the banks will be hopelessly under water.

“The unraveling of the ‘foreclosure-gate’ could mean banking crisis 2.0,” warned economist Dian Chu on October 21, 2010.

Banking Crisis 2.0 Means TARP II

The significance of ForeclosureGate is being downplayed in the media, but independent analysts warn that it could be the tsunami that takes the big players down.

John Lekas, senior portfolio manager of the Leader Short Term Bond Fund, said on The Street on November 2, 2010, that the banks will prevail in the lawsuits brought by investors.  The paperwork issues, he said, are just “technical mumbo jumbo;” there is no way to unwind years of complex paperwork and securitizations.

But Yves Smith, writing in The New York Times on October 30, says it’s not that easy:

The banks and other players in the securitization industry now seem to be looking to Congress to snap its fingers to make the whole problem go away, preferably with a law that relieves them of liability for their bad behavior. But any such legislative fiat would bulldoze regions of state laws on real estate and trusts, not to mention the Uniform Commercial Code. A challenge on constitutional grounds would be inevitable.

Asking for Congress’s help would also require the banks to tacitly admit that they routinely broke their own contracts and made misrepresentations to investors in their Securities and Exchange Commission filings. Would Congress dare shield them from well-deserved litigation when the banks themselves use every minor customer deviation from incomprehensible contracts as an excuse to charge a fee?

Chris Whalen of Institutional Risk Analytics told Fox Business News on October 1 that the government needs to restructure the largest banks.  “Restructuring” in this context means bankruptcy receivership.  “You can’t prevent it,” said Whalen.  “We’ve wasted two years, and haven’t restructured the top banks, but for Citi.  Bank of America will need to be restructured; this isn’t about the documentation problem, this is because [of the high] cost of servicing the property.”

Profs. William Black and Randall Wray are calling for receivership for another reason — the industry has engaged in flagrant, widespread fraud.  “There was fraud at every step in the home finance food chain,” they wrote in the Huffington Post on October 25:

[T]he appraisers were paid to overvalue real estate; mortgage brokers were paid to induce borrowers to accept loan terms they could not possibly afford; loan applications overstated the borrowers’ incomes; speculators lied when they claimed that six different homes were their principal dwelling; mortgage securitizers made false reps and warranties about the quality of the packaged loans; credit ratings agencies were overpaid to overrate the securities sold on to investors; and investment banks stuffed collateralized debt obligations with toxic securities that were handpicked by hedge fund managers to ensure they would self destruct.

Players all down the line were able to game the system, suggesting there is something radically wrong not just with the players but with the system itself.  Would it be sufficient just to throw the culprits in jail?  And which culprits?  One reason there have been so few arrests to date is that “everyone was doing it.”  Virtually the whole securitized mortgage industry might have to be put behind bars.

The Need for Permanent Reform

The Kanjorski amendment to the Banking Reform Bill passed in July allows federal regulators to preemptively break up large financial institutions that pose a threat to U.S. financial or economic stability.  In the financial crises of the 1930s and 1980s, the banks were purged of their toxic miscreations and delivered back to private owners, who proceeded to engage in the same sorts of chicanery all over again.  It could be time to take the next logical step and nationalize not just the losses but the banks themselves, and not just temporarily but permanently.

The logic of that sort of reform was addressed by Willem Buiter, chief economist of Citigroup and formerly a member of the Bank of England’s Monetary Policy Committee, in The Financial Times following the bailout of AIG in September 2008.  He wrote:

If financial behemoths like AIG are too large and/or too interconnected to fail but not too smart to get themselves into situations where they need to be bailed out, then what is the case for letting private firms engage in such kinds of activities in the first place?

Is the reality of the modern, transactions-oriented model of financial capitalism indeed that large private firms make enormous private profits when the going is good and get bailed out and taken into temporary public ownership when the going gets bad, with the tax payer taking the risk and the losses?

If so, then why not keep these activities in permanent public ownership? There is a long-standing argument that there is no real case for private ownership of deposit-taking banking institutions, because these cannot exist safely without a deposit guarantee and/or lender of last resort facilities, that are ultimately underwritten by the taxpayer.

Even where private deposit insurance exists, this is only sufficient to handle bank runs on a subset of the banks in the system. Private banks collectively cannot self-insure against a generalized run on the banks. Once the state underwrites the deposits or makes alternative funding available as lender of last resort, deposit-based banking is a license to print money.  [Emphasis added.]

Nearly all money today is created as bank credit or debt.  (That includes the money created by the Federal Reserve, a bank, and lent to the federal government when it buys federal securities.)  Credit or debt is simply a legal agreements to pay in the future.  Legal agreements are properly overseen by the judiciary, a branch of government.  Perhaps it is time to make banking a fourth branch of government.

That probably won’t happen any time soon, but in the meantime we can try a few experiments in public banking, beginning with the Bank of America, predicted to be the first of the behemoths to be put into receivership.

Leo Panitch, Canada Research Chair in comparative political economy at York University, wrote in The Globe and Mail in December 2009 that “there has long been a strong case for turning the banks into a public utility, given that they can’t exist in complex modern society without states guaranteeing their deposits and central banks constantly acting as lenders of last resort.”

Nationalization Is Looking Better

David Sanger wrote in The New York Times in January 2009:

Mr. Obama’s advisers say they are acutely aware that if the government is perceived as running the banks, the administration would come under enormous political pressure to halt foreclosures or lend money to ailing projects in cities or states with powerful constituencies, which could imperil the effort to steer the banks away from the cliff.  “The nightmare scenarios are endless,” one of the administration’s senior officials said.

Today, that scenario is looking less like a nightmare and more like relief.  Calls have been made for a national moratorium on foreclosures.  If the banks were nationalized, the government could move to restructure the mortgages, perhaps at subsidized rates.

Lending money to ailing projects in cities and states is also sounding rather promising.  Despite massive bailouts by the taxpayers and the Fed, the banks are still not lending to local governments, local businesses or consumers.  Matthew Rothschild, writing in March 2009, quoted Robert Pollin, professor of economics at the University of Massachusetts at Amherst:

“Relative to a year ago, lending in the U.S. economy is down an astonishing 90 percent.  The government needs to take over the banks now, and force them to start lending.”

When the private sector fails, the public sector needs to step in.  Under public ownership, wrote Nobel Prize winner Joseph Stiglitz in January 2009, “the incentives of the banks can be aligned better with those of the country.  And it is in the national interest that prudent lending be restarted.”

For a model, Congress can look to the nation’s only state-owned bank, the Bank of North Dakota.  The 91-year-old BND has served its community well.  As of March 2010, North Dakota was the only state boasting a budget surplus; it had the lowest default rate in the country; it had the lowest unemployment rate in the country; and it had received a 2009 dividend from the BND of $58.1 million, quite a large sum for a sparsely populated state.

For our newly-elected Congress, the only alternative may be to start budgeting for TARP II.

———————————————————————–

Ellen is an attorney and the author of eleven books. In Web of Debt: The Shocking Truth About Our Money System and How We Can Break Free, she shows how the Federal Reserve and “the money trust” have usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are webofdebt.com, ellenbrown.com, and public-banking.com.

Comments
  1. Hoppe

    You mean the National Banks are not nationalized already? When the banks are told to whom and how they must make mortgages, when they must accept bailout funds, when they can forclose, it sure sounds like it to me.

    Maybe some banks should be liquidated. Then again a better scenario would be to liquidate some (many) parts of our failed government.

    Thanks for the enlightening piece and the reminder of what you said two years ago. Maybe some will start listening.

    • Greg

      Hoppe,
      We should take them to bankruptcy and stick the Fed with the losses but that is not going to happen anytime soon. Thank you for your comments.
      Greg

  2. Hoppe

    On second thought Greg, maybe we should just nationalize “THE” bank. I mean the Fed, and quit dancing around with these half measures of nationalizing loss and privatizing gain at the consumer lending level.

  3. T M Colon

    How do you “force banks to start lending” if no-one wants to borrow? Are we to force people to borrow as well? Should we nationalize any business that won’t borrow? If a business can’t increase business with borowing are we to force people to buy from them? Should we nationalize households to force them to spend?

    • Greg

      Very whitty comment TM Colon.
      Greg

  4. Robert

    Hoppe,

    No bank was told they had to give loans to people who couldnt pay them back under the full terms of the loans they were sold, nobody, no legislation, no entities… That’s anecdotal story line about the Community Re-Investment Act from 30 years ago that rightwing pundits spread around to lay blame anyplace but where it belonged… the loans that went into default were loans given to anybody who breathed between 2002 and 2008 and have more to do with Clinton disabling the Glass-Stegal Act and then getting a republican administration in power in 2000 that believed government and regulations are the problem and proceeded to use Clinton/Rubin/Sommers bad judgement against them and told the SEC and all the oversight agencies do whatever you want that makes money… There were no rules with the Bush administration and Im tired of people trying to lay blame on 30 year old legislation… Did dems and repubs participate in the enabling of this mess not to mention profit from it (that guy at Fannie May named Raines made off like a bandit but so did lots of others), hell yes…But this mess with the banks is a result of bad loans given out in the past 10 years… Nobody told banks they had to give loans to people who couldnt pay them back under the full terms of the loans.. and to add insult to injury, those bad loans were then packaged into securities fully well knowing they would not be the value they were sold as, then they were rated AAA by the corrupted ratings agencies, and then sold to buyers such as state and local, police and fire pension funds as safe investements…(that’s why all 50 state AG’s offices have launched investigations into the banks behind this mess)

    On a different but similar note, there’s a strong movement by the republicans to control state legislators and governorships as the more control of these legislatures the conservatives have the more of chance they can offset any roque State DA’s that launch investigations into this banking mess, thus protecting the banksters… Am I critical of the repubs in this mess more so than the dems, hell yes… do I think the dems are the answer.. hell no… both parties are corrupt to the core..

    We need electable 3rd, 4th 5th, et al party candidates.. the current crop in place are not going to do whats right for the country, only whats right for their wallets and purses and the corporations that fund their election campaigns…

    for the record, Im a registered non-party affiliated voter…

    • Greg

      Robert,

      You are correct this is a world where donkeys and elephants are exactly the same. One side note, the repeal of Glass-Steagall was pushed by Greenspan signed into law by Clinton and Republicans 100% supported the move as financial innovation. Bush (43) fought 2 wars on credit and allowed the banks to leverage to 40-50 times capital. Obama is now out doing Bush with QE2. This is a giant mess and it will produce some very big inflation at the very least. Thank you for you spirited comment.
      Greg

      • Ridiculous

        I don’t buy the whole argument that Glass Steagall being repealed was the main reason for the crisis. If that is true, then please explain the S&L scandals. Additionally, you can’t blame Commodities Futures Modernization Act by itself. These reasons are just more smoke. The truth is that there was rampant FRAUD at every level and there is still rampant FRAUD in the markets today. If we want to fix this crisis, the first thing to do is bring justice back to the system and arrest the thousands of individuals involved in this fraud. secondly, This is what happens will you allow private banks to control the issuance of money with TAXPAYER backing and no RISK to failure. This power of money issuance should be put back to the people in their local states and decentralized away from NYC and the power elite that have destroyed the middle class.

        • Greg

          Ridiculous,
          It is not the only reason but certainly part of it. Why do you think the Fed and Greenspan pushed so hard to repeal Glass Steagall? I do agree with you about “rampant Fraud.” You are spot on with this analysis. Thank you for the comment.
          Greg

    • PatriotWatch

      Nice comment but not totally true. they were fined for making these bad loans. SUBSTANTIAL. There is plenty of video on youtube showing Acorn and SEIU out front of these banks unwilling to make these loans. Is Fannie & Freddie a liberal corporation or did I miss something? i have viewed dozens of videos from 1995 forward of Conservatives holding congressional hearings on Fannie & Freddie

      I like the comments but they are only half right. YES both party have alot of blame but the housing crisis was lead and pushed by liberals

      • Robert

        PatriotWatch, the loans that caused the banking crisis were all made from 2002-2008… how does 1995 come into play here? Please explain the connection…

        • Geofizz

          Laying the groundwork for the 2002-2008 crisis started in the decades leading up to this period. What PatriotWatch describes was part of it. In addition to pressuring banks via protesting outside their doors, ACORN in conjunction w/ other entities also lobbied to insert provisions into the S&L bailout of 1989. These provisions had the Federal Home Loan District Banks shunting funds to ACORN and other similar home mortgage related entities. It also gave low-income loan counseling groups access to homes the government acquired from the S&L mess. Lastly, the provisions made changes to the Home Mortgage Disclosure Act, increasing data collection so that it included race (thereby allowing ACORN to file discrimination claims — yet another means used to pressure banks). There were those in congress who made noise about this in the 1990’s, but ACORN prevailed. See comment below — 1992 is when ACORN essentially got the GSE Act passed, which further impacted the mortgage industry via Fannie and Freddie.

          Stanley Kurtz spent years tracking down, researching and digging into ACORN and other records. Read his recently published book to get a full picture of ACORN’s involvement in the housing issue. Getting folks into homes was a huge part of their recruiting efforts and spreading their influence both at the neighborhood level and nationally. ACORN has a pretty impressive lobbying force in the government, although not as impressive as Wall Street’s.

          • Greg

            Geofizz,
            The mortgage mess is a lot more than ACORN. There are 60 million homes in MERS with no clear title or Promissory Note. Waaaay bigger than ACORN but ACORN is certainly part of the problem. I do appreciate your passion and intellect.
            Greg

          • Geofizz

            In reply to Greg…

            Completely agree!

    • Geofizz

      This doesn’t dispute what Robert says… However, there are records that demonstrate the role ACORN played in 1) pressuring banks to not only provide loans to anything that could fog a mirror, but in particular to provide loans to low-income folks, and 2) passing legislation whereby Fannie and Freddie had to securitize the bad loans that other banks were being forced to issue due to pressure from ACORN. ACORN put together legislation to address Fannie and Freddie uncooperativeness, which ended up getting passed by Congress as the GSE Act in 1992. This is all in ACORN records.

      Having pointed this out, this doesn’t change the fact that the TBTF banks are rotten to the core, committing fraud and ignoring the Rule of Law all in an effort to extract wealth from Main Street. Indeed what ACORN did seems to pale in comparison. But we do have ACORN to thank for being a catalyst in this; it’s not 100% the banksters fault.

      This isn’t about left vs. right, but about stepping back far enough to see the games various entities are playing at the national level via using our government as the tools they are — all at our own expense (i.e., Main Street and especially at the expense of the poor). Socialists are playing against the financial elites, and vice versa. The left has its special grievances against bankers and corporations (not without merit) that the right refuses to acknowledge, while the right has it’s grievances against government and socialists (not without merit) which the left refuses to acknowledge. It is a tactic of all these folks to muddy the waters and to sow divisiveness so as to keep things polarized at the politically pungent level.

  5. M SMITH

    Greg, this is a lot worse than Ellen has put forth. After reading & researching; “Fiat Money” at http://www.gutenberg.org/files/6949/6949-h/6949-h.htm, & the needless years of pain,deaths & suffering the French people endured because of the elites grew so fond for Fiat money they would find away to get the little people to go along with more of the same with the same results.

    The TBTF banks should had be let to fail, file bankruptcy & broke up, but just like in 18th century in France, politicians,bankers had grown so use to the status, power & new found wealth they acquired by ruthless means, they dreamed up more ways to get the common folks to go along with more printing, seizing private property for gov to use for more bonds issue.

    The out going congress may fast track a bill that favors the TBTF banks & the Fed has only QE left as a weapon. This more of the same MOPE, Jim Sinclair’s name for todays economic follies. When Silver was making major moves up the CME change the rules in the middle of the trading session & it will happen again as the Naked Shorts have their butts handed to them.

    Nationalizing I don’t know? Bankruptcy has been forced on millions of folks due to job losses, the same should be done the TBTF banks! What a mess we are in! Greg, the lawyers will make out big time, they helped the big banks & will help them get the loop holes to hide their ill gotten profits, we get crapola!

    • Greg

      M Smith,
      I agree this is very bad. I just want folks to get Ellen Brown’s perspective.
      Greg

  6. John Reed

    Excellent article.

    Nationalization doesn’t fix regulators, or put scoundrels in jail. We have a mess on our hands courtesy of fraudulent, corrupt government and their regulators. Punishment of crimes must be swift and certain. As in “The Mikado”, make the punishment fit the crime.

    However, things may be as dire as in ancient Rome – Cincinnatus came out of retirement, took control, fixed things,and — went back into retirement. If we have no Cincinnatus, then we will enjoy “the final collapse of the boom brought about by credit expansion.” This we are beginning to see.

    • Greg

      John Reed,
      Thank you John. We need a Cincinnatus for America now–you are spot on with this comment.
      Greg

  7. FamilyForce6

    Greg, I normally love your articles, but I strongly disagree with Ellen’s assertion that we should nationalize our banks.

    Ellen’s personal economic beliefs are shaky at best- she supports government getting out of debt by printing more money (hello, isn’t that what we’re doing now!). She doesn’t support free market capitalism and thinks price controls are a good idea. She’s a Keynesian- inflation is a great thing.

    Greg, you hit it dead on in 2009 saying let the inefficient banks fail and good ones pick up the assets. Nationalization would continue the same failed policy of allowing these corrupt and inefficient organizations to continue and usurping free-market principals.

    There was a reason our country’s founders wanted no part of a private national bank (i.e.Federal Reserve) controlling the printing of money. It’s why many of them left England in the first place.

    I encourage readers of this article to do a little research on Ellen and consider the source before entertaining the idea of a nationalized banking system. You know free-market principals are in trouble when you have Wall Street holding out their hand for government assistance- how far we have fallen.

    • Greg

      Family Force6,
      There is nothing wrong with your disagreement with this article. As you read in the intro for the piece I feel the big banks should have been allowed to fail. Ellen is just giving a perspective that is different that is a little different than ours. I feel the path taken will be closer to what Ellen Brown is talking about and that is sad for America. Thank you for your comment and perspective.
      Greg

  8. lostinmissouri

    So, we have William Black saying “There was fraud at every step in the home finance food chain,” and again, He says “One reason there have been so few arrests to date is that “everyone was doing it”.

    All these TBTF banks should have been shut down, 2 years ago! Who is the idiot, that came up with TBTF??? Where were the regulators and policemen of Finance??

    Hang them all!

    NO!, we will just let them take another $100 billion, out in bonus’s. After all, we have been told over and over, they are America’s brightest and smartest. This honestly chaps my ass. Grrrrrrrr!

    • Greg

      Lostinmissouri.
      The bonus pool thgis year is a record $144 billion and it chaps nmy ass too!! Thank you for the comment.
      Greg

  9. Art Barnes

    Don’t delude yourself, the government is going to make the banks whole and wall street as well. Do you remember when Bush, McCain, and O’bama ran back to Washington to bail then out (Oct. 2008)? They will do it again and the Fed. is leading the campaign! We, the little guys on the otherhand are expendable, we never complain, just gripe at the local coffee shops in the morning; and they know it. In other words, since we never stand up, take it to the streets, or stop going to Walmart or paying our taxes until we get responsible change,
    our friendly government will continue to destroy the middle class with impunity.

    • Greg

      Thank you Art.
      Greg

  10. M SMITH

    Greg, here’s a great source of insider truth that explains how Wall Street & gov works, it’s a story that Americans must know,the link is at The Silver Bear Cafe. http:://www.silverbearcafe.com/private/11.10/looting.html. Looting of America by Cathrine Austin Fitts, Formal Assistant Secretary Of Housing under George H.w. Bush. It’s a 5 part series where she gives the inside story of working for the gov. I hope all will take the time to hear her story & send to others to hear also.

    • Greg

      M Smith,
      Thank you for the comment and link.
      Greg

  11. William Dziekanowski

    Hi Greg,
    It saddens me that it seems as though we a being pushed off a cliff
    while we have the world betting against “US”.
    When you think really deep on the facts of our financial crisis,and then the decisions made to “course correct”, Someone like myself finds it crystal clear that this is not only a intentional destruction of the US dollar and banking but also the reason why anyone would want to do this.
    This is all a ponzi scheme . The only way we can fulfill all our financial obligations , The SSI, Medicare,Foreign aid,US Debt etc,
    Pension Obligations ,
    Is to either earn more money, or make the money worthless.
    What happens when we default on Bonds?
    What will the world peacefully except for payment on Treasury Bills when a loaf of bread costs $500 Gold is at $100,000 a gram
    and Mc Donalds in NYC has a sign that says
    “We only accept Euro’s ”
    The Weimar Republic , no one who recommended nationalization
    knows its story .I suggest if you are unfamiliar with it ,and
    think bank nationalization and world peace is a great idea, realize
    bank nationalization, always leads to war.
    When China has 4 trillion invested in the USA , and they can have
    a Ship Filled with beans for payment of that 4 trillion, They will
    demand, OIL, Coal,Gold, Iron Ore, including the resources under your home,your land, your country and anything of value in your country.
    They will come by the millions, and we have no industry left, so modern chinese tanks jeeps,and jet fighters will fight Americans
    with station wagons, and on horseback….ok maybe I went too far,
    but so does Ellen Brown.
    “Be courageous! Whatever setbacks America has encountered, it has always emerged as a stronger and more prosperous nation….”
    “Be brave as your fathers before you. Have faith and go forward” —–Thomas Alva Edison”
    “If thats the only thing that keeps the peace, You Thank God
    for the bomb”
    -Ozzy Ozbourne

    • Greg

      Thank you William. I still thank God everyday.
      Greg

  12. Bob

    It’s just crazy, been watching a buck all day chase this doe around. It made me think of the Kings deer and how in life somebody in the higher ups are always putting the boots to the little people. When the revolution starts do the insiders think the police will side with the people who have rob them. These fake so called news TV shows think what is going on in England with the riots won’t happen here. The ivory towers here in America could fall,over night without a riot. I can see the police giving guns out to the people to go after all the 6000 dollar suits. The best an brightest lol. peace

    • Greg

      Thank you Bob, and Joshua.
      Greg

  13. aman

    Greg,

    Thank you for your reporting on the sad state of Affairs of the once great US. It’s the end…PERIOD!
    NAFTA, GATT/WTO, Nationalized Healthcare, CAP and Trade, VAT, Carbon Tax, MBS fraud, Derivatives Fraud, Unemployment, Social Security, Military expenses aka, Nation Building, Corporate Fascism, Banksters, Hussein Obama aka Where’s the birth certificate??? Constitutional Crisis, Forclosuregate, etc!

    Here’s the really truley only solution. And you’re a smart man so try to prove me wrong. Please! A new revolution where the Generals of the United States Military gather to discuss and implement the Declaration that the US Government has committed Treason and that the Military will no longer be complicit! Lower ranking Generals will be assigned to head each of the fifty states proteim. The leading Generals will declare martial law with the help of the National Guard; Not to imprison the citizens, but to protect citizens and private property from anarchist! These anarchist will be imprisoned in the interment camps.

    Another interment camp to house ALL government officals, retired and active, to include banking and corporate players including Wall Street Firms.

    These Officals will have all their wealth and assests seized and by a speedy trail of some fair justice system, be tried for Treason. If found guilty all assets will be deposited in a specially assigned People’s Bank. I can only estimate that in total all assests recovered will total some many trillion dollars!

    The funds recoverd will by some fair and equitable system be redistributed to the citizens. This is the difficult part to determine but it can be done fairly. All Personal Debt will be forgiven. Social Security will be shored and healthcare will be nationalized for the time being. The IRS will be banned and a new system of fair tax collecting will be developed by leading economist.

    Outstanding Debt to foreign debt holders will be paid through precious metals purchased by personal holders and any bars recoverd by the defunct previous illigedimate government.

    Finally, NAFTA/WTO and any importing of foreign goods and services will be suspended. We will re-establish manufacturing and services here in this country and sell our goods proudly to the rest of the world! No more global retail e.g. BK, Dunkin Donuts, McDonalds, Walmart, Target, etc. All MoM & PoP!

    You know the rest of the story. If your response is ” Good idea but it can never happen” all I can say to you is Make your piece with God.

    Remember, if the good people of Japan rallied from their slumber and their military opposed a conditional surrender defiance of the Japanese government made men, many innocent Men, Women and Children, would of been saved…End of Story.

    Time to start forming and Hastening the Second Continential Congress of the United States. And our Military is our only Hope!

    • Greg

      Aman,
      Thank you for taking the time to comment and ad to this post.
      Greg

  14. ebethea27703

    Greg I have a question. I listened to you on Coast to Coast. If I have a mortgage from a Bank A and I ask them for the Promissory Note. If they can’t produce it, am I still obligated to pay the mortgage if they can’t prove they own the property? What recourse do I or they have?

    • Greg

      ebethea27703,
      That is a sticky question. Do not get into a war with a big bank. You want to find out who really owns your mortgage so you are making payments to the right people. If you are thinking about not paying your mortgage payment if B of A can’t produce the note, then I strongly suggest you get counsel from a qualified real estate attorney in your state. The Promissory Note proves ownership and that is a fact.
      Greg

  15. Jerry

    There should be an investigation on the Bank of North Dakota and the Governor. Obviously something is wrong and they should be imprisoned for it.

  16. Markafeller

    I like to add at least what the bible says it will end up for your interest.
    In bible times they described future events by terms they used at the time. When it comes to sealed scrolls. They were used for property transfers in a legal context under unusual conditions. The outer seals of a scroll were some sort of related description to the content of the scroll. Property is land,wealth and clothes. Not human souls as many try to claim. As Man’s redemption (the scroll itself) 2,000 years ago has nothing to do with “the anti christ making war” (the said 1st. outer seal). as many claim. Unless one views this as a future massive legal act that results in the public striped of it belonging it makes little sense.

    In bible times a thief would ride up at night on a horse to surprise a victim. He would always use a bow so the victim could not defend him self. What he would be interested then was a persons outer garment. Made from wool as without would expose one to high heat and cold a life threatening situation. It was the sign of a persons wealth and status in a community. Often the victim would be in tears and shock then later seek revenge as noted in the second seal.

    The picture seen in Rev. 5 is a court in heaven that the public does not see on earth. Then with the opening of the first seal it is made pubic on earth. Rev.6:1 A man on a white horse. They were used in bible times to show a leader *after* a battle the victor and in fact given a crown. This battle was in court. Regardless of who is on the horse it is just a legal act that results after the stripping of public’s wealth in a sudden legal act and starts the Great Tribulation as the bible calls it.

    What is forgotten today is it takes twenty to thirty years for some massive court cases to come to trial. The first of the S & L cases from the 1987-92 situation start around 2012 if no delays. These latest bank/mortgage cases will likely face these delays.

    I just wanted to add this for your interest.

    • Greg

      Markafeller,
      Thank you for the comment. I found it very interesting and insightful.
      Greg

  17. edgrr

    THE ONLY HOPE IS ALREADY SENT; MIDNIGHT, YESTERDAY… why are you avoiding it ? WINNING IS ALL THAT COUNTS… with no repercussions from the IRS nazis… Any negotiations with Aurora, concedes that you know that you owe the money, and, that, you accept their lie, that, you owe it to them………………. You lose…………… Demand your lieyer proves that the note, conceals from the court, that the note was split off and passed to MERS, who had no authority over the mortgage, once the note was FRACTIONALIZED, [split from its' collateral; the mortgage]…. if, the note/clone/copy/forgery, in that case, is not marked “Paid in full,” that denotes a fraud before the court, proving that since Aurora, is a recent “Buyer,” [to be proven] of the note, they could not possibly have a note that was entered into the MERS scheme, or, it would be marked “Paid in full…” and…. they are trying to put the sold note, back to the mortgage, so as to pretend, that the sold note did not, invalidate, the mortgage, by being skimmed off the mortgage and sold, voiding the mortgage; made so by marking it “Paid in full.” WITHOUT STANDING TO SUE, and, nobody who can prove an unbroken chain of ownership, it, then, doesn’t matter, if, you have a due and owing, note, somewhere, on MERS MARS…. you just don’t owe it to the MERS procession of hustlers… because, MERS had no investment, to sell, what MERS, has admitted, they don’t own, and, never did… Your injunction should be based upon voiding any hand me down, from MERS, as, unlawful, until such time as the legalities Aurora, a pretend lender/note holder, claims, is proven, by AURORA… WHICH ,THEY CANNOT DO… When a hot car is sold several times, each subsequent sale, does not make any unlawful sale, more legal, when, a trial of the issues will prove that MERS sales were illegal, to begin with. If your lieyer wants to continue conning you with his half assed, representation of Auroras’ scam, then that’s that…. Print a hundred copies of what I sent last night, and send them everywhere… to revitalize the defense. If everybody is going to let the lieyers, cheat them, and, keep their CLASS ACTIONS, separated, there’s no way, anyone but the lieyers will win… This is it…. I, give up, if you don’t want to, sue the bastards, to get their fraud on the court, into court, where the injunction, for that reason [not, for bankruptcy proceedings], can be heard; wherein, you can’t lose; either with or without a signed note… Separation of the note, by the Bankster/MERS scheme, VOIDED THE MORTGAGE, and, since, CALIFORNIA LAW, has not licensed MERS to be in any way authorized to hold and pass, OPEN NOTES, MARKED, “PAID IN FULL….” ETCETERA, ETCETERA, ETCETERA…. AURORA IS NOBODY, but, an alleged, Foreclosure Mill, who cannot prove ownership, of any more than, a hot car, passed from hood to hood; crook to crook…. So, make your lieyer prove his representation, or, pass, and, lose a house, marked into World Trade, “Paid in full…. NOW, I’ done with this; it’s getting nowhere, with a crooked lieyer, who’s representing the other side, and, making decisions as to what the judge will order. With such crystal balls, why do lieyers, even need courthouses, and, judges; when they, alone, are scamming their own clients…

  18. JS

    A CHASE BANK LOAN MODIFICATION SAGA:
    (Too Big to Fail, NOT Too Big to Jail!

    They even asked me in writing for my DEATH CERTIFICATE!

    Letter sent to the U.S. Senate Committee on Banking, Housing, and Urban Affairs regarding Nov 16 Hearing on Problems in Mortgage Servicing From Modification to Foreclosure.

    (some formatting lost here)

    Jxxx Sxxxxxxx
    99 XXXXX, XXXX, New York, 999999

    November 13, 2010

    U.S. Senate Committee on Banking, Housing, and Urban Affairs:

    RE: Nov. 16 Hearing on Problems in Mortgage Servicing From Modification to Foreclosure.

    While it is apparent that improper processing of mortgage documents may invalidate many mortgages, and foreclosures, I urge you not to narrow the focus of this hearing to robo-signers and lost paperwork.

    There is a more immediate and easily resolved problem, the problem of deliberate deceit by the banks in their efforts to drive America’s struggling homeowners to foreclosure by abusing the loan modification program.

    Attached is an account of my CHASE loan modification saga. It documents what CHASE promised, and what they actually did. As incredible as my story is, it isn’t unusual. It is indicative of how the banks have dealt with most of America’s struggling homeowners. I urge you, no I BEG you, to ask Mr. Lowman to explain this saga, point by point, rather than allowing him and the other bank officers to falsely testify, as they did in June, that they are trying their best to help. Please caution them that they may be “too big to fail”, but not “too big to jail”.

    We do NOT want our home free and clear because of paperwork errors. We are NOT deadbeats. Our loan was NOT a “liar’s loan.” Our home is NOT under water. We have over $160k equity. CHASE handled our loan modification request in a deliberately dishonest manner. Their behavior is despicable, in essence kicking us while we were down and out.

    CHASE made a commitment that we would get a trial modification if it was justified by our numbers, and a permanent modification if we made THREE trial payments on a timely basis. We complied with all those terms. CHASE should be MANDATED to immediately make our modification permanent! The falsely filed foreclosure should be reversed (not just halted), and all the related fees credited back to our account.

    Every home owner who submitted an accurate loan modification request and made THREE trial payments on time should immediately receive a permanent modification. They have met all the requirements. The very worst that could happen is that some will eventually foreclose at a later date, but millions of hard working, honest Americans, will keep their homes!

    For those whose homes really can’t be saved, they at least deserve humane and honest treatment, and a “soft landing”. This is AMERICA! These are our fellow AMERICANS!

    The financial institutions engineered the current economic crisis. They received bailouts, paid themselves record bonuses, and are moving aggressively to displace as many homeowners as they can. The government failed to protect us despite all the evidence of fraud.

    NOW WE NEED YOUR HELP TO SURVIVE!

    Sincerely,

    Jxx Sxxxxxx
    (516) xxx-xxxx

    November 14, 2010

    A CHASE Loan Modification Saga
    Submitted by Jxxxx Sxxxx

    My Personal Background:

    I have worked my entire life. I worked in my father’s retail store since I was 8 years old. While attending college I managed two coffee shops and then worked as a counselor in an orphanage. After graduating in 1976, I joined Macy’s as a Christmas management trainee, and stayed with Macy’s for 32 years, until they laid me off, in June 2009, just after my 55th birthday.

    I had never collected unemployment insurance, or any other government subsidy, other than a N.Y. State Regents Scholarship, until my layoff in June 2009.

    At the time of my layoff I had 2 children in college. (One has since graduated). My wife and I own a very simple, 2-family, home on Long Island, and I drive a 1998 minivan that I purchased used and that now has 138,000 miles on the odometer.

    My wife is an English teacher in the local parochial school with a salary of $38k.

    In short we were a fairly typical, hard-working, middle-class, American family, not “deadbeats”.

    Our Home and Our Mortgage:

    Our mortgage is not a “liar’s loan.” It is a typical predatory WAMU/Long Beach A.R.M. that we were admittedly foolish to sign, not realizing that the mortgage broker was receiving financial incentives to steer us to a more costly loan.

    Our home is not underwater. We have at least $160k equity at today’s housing values.

    Despite my lack of employment, we paid our mortgage on time for months. Then, just as we missed a single payment, we received advertisements from CHASE stating that they could help struggling homeowners with legitimate hardships such as loss of job.

    I saw this as the “silver lining” to our difficult financial situation, a way to take advantage of the historically low interest rates, and keep our home, so I checked out the government’s “Makinghomeaffordable.com” web site, entered all my numbers, and was told that we might well qualify for a modification, and should apply with our bank.

    My Indredible CHASE saga:

    Following is a point by point account of the abuse we suffered since we applied for a loan modification with CHASE bank. I think it’s an unbelievable story of incompetency, dishonesty, and harassment. Please compare the published CHASE guidelines to their actual actions:

    The CHASE web site

    (https://www.chase.com/chf/mortgage/hrm_loanmodification)

    states specifically:

    “Four key steps in the loan modification timeline”

    1. “Determine eligibility”
    “Use our quick assessment tool to determine if you may be eligible for a loan
    modification.”

    ====> I did, It said we were eligible and should apply, so we did.

    2. “Review & Analysis”

    “After we receive your package, a home retention specialist will review all the information you’ve submitted to confirm your eligibility for a loan modification. This review process may take up to 30 days.”

    ====> CHASE initiated a foreclosure FIRST, then responded… It took MORE than 30 days.

    3. “Trial Period Plan”
    “If your loan modification request is approved, you’ll receive a letter from Chase explaining the terms of your loan, the amount of your new trial period mortgage payments and the next payment date. When you receive this letter, you’ll begin a three-month Trial Plan. Making your mortgage payments during the trial period is essential, because it shows us that the new loan terms will work within your budget.”

    ====> We did receive this letter, only the 3-month trial lasted FIVE months, and it was a CHASE rather than a regulated HAMP trial. They failed to warn us that our credit scores would be ruined while making trial payments, and that we’d be liable for late fees, and foreclosure-related legal costs.

    4. “Final Modification Agreement”
    “If you successfully make your payments during your trial period, and the documentation you provided supports the home retention specialist’s initial review, we will approve your request and your loan modification will become permanent.”

    ====> We made FIVE trial payments on time. All the required documentation was submitted, and resubmitted, and resubmitted again, on a timely basis, with accurate figures. Not one thing changed from the documents we submitted for “initial review”. Nevertheless we were rejected for a permanent loan modification.

    Throughout the Loan Modification process CHASE did one despicable things after another:

    • Falsely stating that 2-family homes are excluded. (1-4 family homes qualify for HAMP).

    • Rejecting us, in writing, for a HAMP modification stating that we failed to meet the requirement that 31% of our income must be less than our housing expense. (31% of our $5,700 monthly income is $1,767, far less than our $3250 monthly housing expense. See attached NPV input values from CHASE) They have since conceded this fact…but refuse to put it in writing.

    • Sending a package marked “FORECLOSURE” in large letters to my former work address, at Macy’s, even though this was not an address used with CHASE, and they knew the very reason for my hardship was that I was laid off from Macy’s 10 months earlier.

    • Sending ANOTHER foreclosure package to Macy’s, marked “Personal and Confidential” in an UNSEALED envelope, after I sent a written complaint about the first package!

    • Telling me that we were probably rejected from HAMP and would probably be rejected from a permanent CHASE modification because we had TOO MUCH equity in our home. When I suggested that this made us more reliable candidates for modification, and asked if they didn’t want to keep us in our home, they (Bonnie) explained that CHASE had no interest in keeping us in our home. She explained that they were a loss mitigation department, and that they could minimize their losses by foreclosing on us, since we had sufficient equity to cover the mortgage commitment.

    • Formally rejecting us for a permanent modification, in writing, because we failed to meet the requirement that 31% of our income must be less than our housing expense, even after having admitted that this was false. (Again, 31% of $5,700 is $1,756, clearly less than $3250.)

    • Sending a modified rejection notice in response to my dispute of the first, erroneous rejection, stating the nebulous reason of “Negative NPV Result”, an essentially meaningless reason, leaving us no room for dispute.

    • Asking for my DEATH CERTIFICATE! Two days after the last formal rejection, CHASE sent a letter stating that we might be dropped from the modification program because we failed to provide requested documents including a DEATH CERTIFICATE and proof of Social Security DEATH BENEFITS !! (No one here has died!)

    • Asking us to re-apply, from scratch, for a loan modification, after they were forced to freeze over 50,000 foreclosures. When I called after the final rejection notice, asking what we could do to keep our home, and offering that I might tap my retirement accounts or borrow from family, CHASE suggested we apply for a Loan Modification! When I explained that we had just been rejected after a 5 month trail, they said that we were rejected by the “Imminent Default” department and should now re-apply, from scratch, with the “Loss Mitigation” department. I explained that all the employees I had spoken with over the many months had claimed to be with the “Loss Mitigation” department, but CHASE simply insisted that we should re-apply.

    I learned 2 days later that CHASE had just frozen over 50,000 foreclosures. Clearly their plan was to squeeze out a few more trial payments, while they cleaned up their paperwork mess, and could complete the foreclosure on our home.

    (Supporting Documents Attached in Exhibits 1-6)

    (END)

    • Greg

      JS,
      Thank you for sharing your story here so others can learn.
      Greg

  19. alan

    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. . .

    • Barbara Ann Jackson

      Alan Gray @ Newsblaze wrote:
      “Foreclosure Fraud Assault – A Cry For Help”

Leave A Reply

Please Note: All comments are moderated and manually reviewed for spam. In turn, your comment may take up to 24 hours to be posted. USAWatchdog.com also reserves the right to edit comments for grammar and spelling errors.

Your email address will not be published. Required fields are marked *