Kudo’s to our Fascist public officials who stand by and watch our nation collapse under financial corruption. This is as bad as the DOJ recovering $2.5 Billion when $100 Billion is stolen from Medicare & Medicaid annually. Democrats can think Mr. Holder for all the prosperity in our nation; I do daily!

https://twitter.com/MSC2007
http://www.MedicalSupplyChain.com/news.htm

Well done, ProPublica.  I am especially impressed that you take the time and space to tell the whole story.  It is such a sad thing that so many people thought making money was their raison d’etre.  My hopes that someone would go to jail will never be realized because there are too many and new prisons would have to be built!

This seems similar to the Panic of 1825.  The bail-out becomes more and more meaningless as the government continues to fail to mandate meaningful safeguards against future abuse. For examples:

• Develop and enact a regulatory framework and a regulatory enforcement mechanism for currently unregulated financial products and derivatives.

• Mandate basic and continuing ethics education in FINRA/NASD licensing.

• Increase fines and penalties for securities law violations, and criminalize repeated or egregious violations.

• Enforce the Sarbanes-Oxley Act as enacted (repeal subsequent relaxed regulatory interpretations such as PCAOB Auditing Standard No. 5 with respect to outside audit).

• Repeal the Gramm-Leach-Bliley Act.

• Repeal the Garn-St. Germain Depository Institutions Act.

• Repeal the McCarran-Ferguson Act.

• For those firms that received federal assistance,
(a) limit their executive compensation schemes.
(b) ban their pre-bail-out senior executives from working in the financial sector.
(c) suspend their pre-bail-out managers within their underperforming lines of business (that contributed to the need for a bail-out) from working in the financial sector.

Carl Southwell - love your comment!! And I agree 100%..bottom line Wall Street and the banking industry MUST HAVE government oversight..no matter which why you cut it!!

How can the Republicans or anybody for that matter be against regulating Wall Street ?? Can’t they see the result of “deregulation”?? Or maybe many of them are benefiting from the windfall of these “ponzi” schemes and lining their own pockets in some way!!

Interesting that no one is in jail.  Wish I were a Tea Partier so I could see some good in all of this.

I have just read about this article on the Slate website. I posted a comment suggesting that everyone who reads it there should send it on to 10 people, asking each one to write ProPublica. I also gave PP’s email address. If each of the 10 goes on to contact another 10 (and so on), there might well be so much demand for a government investigation into who these people were and whether they committed punishable crimes, that the other media will pick it up. In a sense, we would be using the PP site as a means to create a petition. Yes?

In the new sweeping financial reform bill, the only ones paying the price? The street level loan officer….not the CEO’s of the banks or the CEO’s of the investment houses, not the Congress members they own outright.

PONZI scheme all the way brought to by not only the Match King, but insiders who read the Pecora Commission Report and said “hey we can do this” now that Phil Gramm deregulated the industry in June 1999. Would you trust a prostitute ?? So why trust a Banker? We need to fundamentally take away their ability to use other peoples money for their own vicious reasons and reward.

Just remember people, that institutional buying accounts for a large percentage of stock market trades and the same agencies that rated CDO’s rate stocks that your 401k administrators invest YOUR money in.  If you haven’t already transferred your 401K investments out of stocks and into cash equivalent, you might want to think about doing that.

it is revolting to find that such outrageous and criminal conduct has been largely hidden from us. It is worse to reallize that our government is too indebted to the Wall St. Oligarchs and rheir toadies, some of whom are holding the responsible seats in the federal government, to place criminal charges.
I understand that Goldman Sachs has been the largest contributor to Pres. Obamaand he has been back to New York only recently for more contributions.Don’t expect the Justice Dept. to carry out any prosecutions.

Great Job Propublica !
I don’t know how much time you spent investigating this CDO scam,  but I am sure that the SEC and DOJ have more resources, both manpower and financial,  as well as suboena power to uncover much more detail and accumulation of named perpetrators.  There seems to be a enough low hanging fruit in the target rich environment of wall street to fill a few of the white collar prisons. 

There should be disgorgement of bonuses,  debarment from the financial industry,  closing the revolving door between wall street and gov’t and Madoff cell mates from this financial scam/crisis.

*******
Another place to spend some time investigating is the hedge funds participation in the mortgage fraud game—e.g. John Paulson —- The facts in the Goldman case pointing to John Paulson selecting the bonds in the ABACUS deal,  but then not going after him seems to be ignoring justice.

Interesting that some claim we need more regulations. What about Sarbanes-Oxley that came in the wake of Enron? At the time, back in 2004, politicians claimed that the Sarbanes-Oxley Act went beyond addressing scandals to building a durable framework on the foundations of the Securities Acts of 1933 and 1934. New laws and regulations have neither prevented frauds nor instituted fairness.

We are better without the SEC and all the other regulatory truck, which give us a false sense of security. Reputable journalism offred by the likes of ProPublica can do more to alert us of frauds and irregularities than government bureaucrats who are inevitably asleep at the switch – not to mention the billion dollar per annum budget of the SEC. Daily adverts in the media with a government warning that, “You are on your own!” would be money better spent than the current complacency engendered by our costly regulators.

Deserves to be widely read. Excellent.

Gov - Job Creation…

Regulation - Regulate the Regulators - Regulate the Regulators that are Regulating…

Here’s a simple answer - Seize the Properties of the CEOS - Partners - Owners of the major players - like Countrywide - CitiMortgage - Lehmann - Wells Fargo - Chase - Fannie - Freddie - AIG - etc…

Seize their personal & corporate assets - prosecute to the fullest our laws allow…

Regulation is always necessary - but all the regulation in the world is useless against a corrupt gov - that continually aids & abets - professes ignorance - then enslave our children to finance their thieving schemes. 

These criminals are not being prosecuted because they hold hostage the retirement funds of those judges and gov officials.  If they go down, so do their retirement funds.  Conflict of interest - yep - but hey, someone must pay - why not the bottom-feeders… 

When those folks figure out these lenders cashed the mortgage insurance polices - after selling them loans created to fail in the first place - things just might get a little heated…  Countrywide and a host of others have already fessed-up to the selling mortgages to consumers knowing they could not repay the loans.  Countrywide has admitted to 142-billion dollars worth of mortgages - which by using their numbers with the average foreclosure at that time being 147k - that equates to a whopping amount of families - over 965-thousand mortgage loans “deliberately” sold to borrowers that Countrywide KNEW could not repay.  Those families have no idea this was even done yet.  That equates to over 19-thousand families per state being tossed to the streets - for signing a document that was “designed” to fail.  Countrywide didn’t care - they claimed the mortgage insurance - and who-knows what else….

Regulation would be wonderful - but we might want to prosecute those criminals for what they’ve already done…

Just my 2-pence…

Good article - keep this up.
You might find the following fun: “Mad Meat!” is my illustrated parable that explains the meltdown of securitized lending and the entire shadow banking world.

It had a good review and is a link on Naked Capitalism.

https://docs.google.com/fileview?id=0BywoAJkVrGwdMzM0YjM5NjgtMTBmMi00ZmZlLThlZDYtODE4NjY4ZjY0YzBm&hl=en

I am a commercial property mortgage banker and was the President of the California Mortgage Bankers Association during the heat of the market and have been watching “Financial Reform” as a member of the Commercial Board of Governors of the Mortgage Bankers Association of America.

Yes it’s a travesty. But as far as retribution goes, forget it. The administration, Wall st.,DOJ, SEC, judges, etc…..all in bed together.

Great article! 

DJs of disaster—WS remixes bad investments!

Here is how the house on your street may have been part of these CDOs…

http://orgnet.com/meltdown.html

Great article but was confused about one detail.  Perhaps someone can answer this.  What balance sheet benefit resulted from one bank’s CDO buying another CDO’s lower valued tranches?  That is, wouldn’t the bank still have the faulty assets in its portfolio, albeit it would have shifted from one CDO to another?  What exactly did this shifting accomplish?  Would they keep shifting the lower tranches to new CDOs over and over again in order to appear like the older CDOs were sold out?

Th we who have more than a 6th grade education are giving a pass th those who were supposed toank You for the work involved in exposing these apparently well established practices. I agree with many of the respondants that the question remaining is why they aren’t in jail including Dodd who has been able to run out his last term instead of being prosecuted.It seems barbaric to us that someone in past history who may have owed a penny was put in a public stockade and humiliated by passers by but still we have evolved to a society that passively accepts that the very people who are trusted with the mangaement of the financial organizations that fund our lives are being given a pass without consequences and what about those credit rated agencies, what is thier structure and what place do they have in the destruction of the economy

Even Adam Smith said that the Invisible Hand didn’t work with financial institutions—he warned against this very kind of abuse hundreds of years ago. I’m a free-market kind of guy, but we have to firmly regulate financial institutions and fiercely guard against their influence in government.

Thank you for publishing this story. Why are so few people outraged by what these people did?

I’m not advocating the practice, I’m asking why we tolerate excessive abuse by the very people we expect to protect financial stability. I am a free market kind of guy also, but i don’t see these excesses as free market. I see them as “get out of jail free” practices

One commentor wrote:

“Here’s a simple answer - Seize the Properties of the CEOS - Partners - Owners of the major players - like Countrywide - CitiMortgage - Lehmann - Wells Fargo - Chase - Fannie - Freddie - AIG - etc…

Seize their personal & corporate assets - prosecute to the fullest our laws allow… “

I don’t think that’s necessary. The great hordes of poor and unemployed will squat in their McMansions, drive their cars, rape their wives/mistresses and exact retribution. These next few years will be ugly, and rightfully so. The little guys are getting screwed and they’re not going to take it anymore. I’ve never in my 70 years heard as much talk from ordinary people about a revolution.

It is interesting to note that in April 2009, the President invited the three top banksters to the White House, and according to “Politico.com” his first words were something to the effect that “my administration is the only thing standing between you and the pitchforks!”  I don’t think they got it.
If Obama needs to be re-elected he need only stir up the anger over Wall Street.

And for once, I don’t see the Corporate Directors are going to get away with anything. Going after the people who hire (and oversee) the people that actually do these crimes is long overdue.

We live in an American Kleptocracy.

Excellent story. This is exactly what took place during the S&L crisis in the 1980s, but with commercial loans and on smaller scale. (It’s hard to imagine that it’s on a smaller scale but compared to today’s frauds the S&L crisis was just chump change.) James O’Shea wrote the book on The Daisy Chain from that era. Also, Michael Lewis in The Big Short does a great job of reporting on all the fraud in the mortgage business. (He also mentions how the fraud is similar to that in the 1980s, but the financial industry simply created new, complicated investment vehicles which no one understood. - A classic move for scam artists.)

It is hard to believe that no one has gone to jail.
In the early 1990’s - the great Saving and Loan crash,1800 of the people who commit fraud were jailed. We need to have a real economy again, not
the Wall Street dream machine that is just a fraud now. People have no trust in them any more, so they just keep gameing the system to make money for them selves. How sad for American, we are just giving China the spot of being the next Super power over the USA.

The comment above about China strikes a very sentive note. We are not living in a dictatorship; a totalitarian state or a military dictatorship., We are living in a democracrcy ; based on rights and the order of law, a model admired and respected by other parts of the world. “what’s wrong with this picture?

I feel like I missed a step here, could someone please explain.

As a bank, aside from the short term gain of bonuses, why would you invest in your CDOs? If your aim is to get rid of the liabilities and manage risk, why would you buy CDOs based on your CDOs - which are essentially based on the cashflow. Wouldn’t you want to basically get rid of your liability altogether, so sell off your mezannine CDOs to other banks only?

And also where was Moodys/ Fitch/ S&P during all of this? How can a super senior tranch of a CDO dervied from the mezannine of another still be marked as AAA?

Feel like I’m missing a piece here - could someone plz. explain

I like the overall thrust of the report, but one thing is bugging me.  You show cross-ownership of deals rising to just below 20% by 2007, presumably on a unit basis (i.e. a deal taking 10% of another deal is taken as a unit “yes” in the cross-ownership tabulation) and earlier show the cross-ownership of mezzanine tranches going to 70% by 2007.  All well and good, but it remains unclear to me what the actual level of total cross-ownership was.

If, for instance, we take the two above figures to cover the bulk of it, we’re talking about 20% of unit deal owning bit of other deals * 70% ownership of mezzanine tranches * the proportion of a deal which is mezzanine (coming in at below 20% by the definition you use above), which amounts to a few hundred basis points in total.  This doesn’t appear to be large enough to cause the effects you ascribe to it.  Presumably the total level of cross-ownership must be higher, but nowhere do you make it entirely clear what it was or how it increased in aggregate from early in the decade to 2007.

I don’t think we need more regulations over government, I think we need less government. I think we need strong men whos needs are to serve others and not themselves. We have no one to blame but ourselves!  We are no different than the abused spouse who stay with the abuser. We have to take control of our life and OUR country.  One writer wrote where do I put my money if I don’t put it in the bank? The real questions is what would happen if we all quit putting money in banks and buying stocks? WE ARE THE PEOPLE, THIS IS OUR COUNTRY and WE are letting criminals run our country. Shame on us!

Frauds, “Ponzi” schemes, cannot by themselves cheat the public…it takes an undereducated, naive consumer to complete the transaction.
The “markets” depend entirely on this:
“The Greater Fool Theory” of investment…ie….there has to be a greater fool to buy the things/object that you bought and you want to unload….for all those transactions individuals/banks/brokers/financial houses make “fees” that keep a false non-manufacturing economy going….even with the loss of the tens of millions of good paying middle class jobs cause by “globalization”.
We will reap the whirlwind that we created and allowed to happen by continuing to remain “plugged into that corrupt system”
UNPLUG NOW; TODAY!

read about the 20 years before 1776 and you will see where we are going.

I really like to respond to Bill,Matt,and Alan about consequences. I think thier assests and property seized to pay cost to taxpayers and then they should have to reside in shelters and work at Walmart. It seems to good enough for the people who lost everything because of thier greed so it should be good enough for them. And who is there to hold any of them accountable? This isn’t the first time in our history this has happened as reported by Huxley at the tirn of the last century and the American Realists as in “An American Tragedy”

Here’s another thought…

It is fairly common-knowledge now that the lenders were writing the loans regardless of the borrowers ability to repay and in fact, learned that it was much more profitable for the loans to fail…

They collected mortgage insurance - but that was only a small chump-change.  The mortgage insurance paid out 100% of the unpaid balance PLUS 100% of the unpaid interest up-to the time of foreclosure… 

However, those like Countrywide got smart about that…  Per the PSA once the borrower defaults the cash register starts buzzing… That same loan carried - separate mortgage insurance - default insurance - bond insurance - securities insurance - special hazard insurance - etc…

In fact, take Countrywide for example - Pool Trust - CWALT INC - Alternative Loan Trust… There are approx 6-8 separate insurances and who purchases those policies?  Well it goes like this…

•  Countrywide Home Loans - Sponsor
•  Park Granada - seller
•  Park Monaco - seller
•  Park Siena - seller
•  Countrywide Home Loans - seller
•  Countrywide Home Loans Servicing - servicer
•  The Bank of NY - Mellon - Trustee

Of the above “entities” - except for the Bank of NY - Mellon - ALL are wholly owned by none other than - Countrywide…  So, do the math each of those companies are able to purchase how-many separate insurance polices EACH…?  And what is the common trigger that must happen to flip that starving little puppy into a BIG FAT CASH COW - DEFAULT.!!  They needed the borrowers to default before they could cash-in.

Why wait 30-yrs for 350k mortgage to return 400k when they can purchase multiple insurance polices for each loan - write the loan to double the payments in 3-5 yrs - play nice - get tough - toss the family out to the street - file the claims - claims - claims - then tick off the family enough to sort-a make a mess of the house - file the “special hazard insurance” claim - spiffy the house up for auction - sue the deadbeats for deficiency - bust them again for legal fees - even though they are paid by Fannie - Freddie - mini - and other insurances - sell the house - bring in the next victim… 

So, why wait 30-yrs collect a few 100k when they could make 5-10 times that in only a few years and get the house back.  That’s like selling drugs to an addict that hasn’t figured out it was sugar-pill… 

Oh and - what is also interesting is that all that money they made from the MBS Pools - Tax Exempt - yep - REMIC Provision makes it a Pass-Through Conduit (tax exempt) so not only have the RIPPED everyone off - they did it - TAX FREE…

An interesting aspect of the Countrywide MBS - CWALT INC - all those companies list the SAME VP and lead counsel - in fact this guy must be SUPER VP -because he’s VP of all those companies - including Bank of America (except Bank of NY - Mellon) yep - so he’s the VP - Lead Counsel - and it just beckons to ask - how much of the insurance money was HE PAID…  His name is Kushal Bhadka (spell) - and one other interesting note - he just happens to be a partner/owner of Balboa Insurance - which is a big insurance company in India…

Coincidence maybe…? 

Maybe that’s why the BAIL OUT money was paid out mostly to Insurance companies like AIG - Fannie-Freddie - etc…  The fed has paid enough bail out - tarp - money to purchase every home in foreclosure since late 2004 - odd isn’t it?  If the lenders cashed in the insurances (insurance fraud) then the securities insurance (SEC violations) - violated the REMIC Provision (IRS Tax Evasion) - committed Mortgage fraud - defrauded the Federal & State Gov - hmm…?  How could there still be a debt associated to those mortgage loans…?

What happens to all those folks when they learn what has happened and our gov actually tried to hide it - and allowed these thieves to escapte with their money while moms & dads are living in their cars - moving to drug infested section-8 housing projects…? 

When this puppy implodes - McVeigh U-Haulers might common-place for a brief time…  Foreclosure mills are forging documents with their rocket-docket filing…  Missing assignments - no chain of title - cannot prove they even own the loan and the courts are allowing this illegal bs to continue… if the deadbeats can’t pay - the deadbeats must vacate…

The consequences will be only be worse if they continue to ignore these facts and fail to prosecute.  Bernie Maddoff was getting death threats and that affected how many people?  This is MILLIONS of families who have lost everything and are now burned with credit scars - tension - divorce - even suicides - only a fool would attempt to cover this up any longer.  No matter what color - race - creed - religion - Americans will NOT tolerate such horrific injustice for too long. 

Keep the Powder Dry… isn’t that what they used to say… 

Sorry to ramble…

Carlene - I agree - those 20-yrs prior to the Declaration of Independence - one only needs to read it…  The one line that stands out most in my mind…

“...But when a long train of abuses and usurpations, pursuing invariably the same object evinces a design to reduce them under absolute despotism, it is their right, it is their duty, to throw off such government, and to provide new guards for their future security…”

I encourage folks to read Patrick Henry’s speech made to congress that infamouse night at St. Johns Church… It’s only about 2.5 pgs and it is a very powerful speech…

“...It is in vain, sir, to extenuate the matter. Gentlemen may cry, Peace, Peace — but there is no peace. The war is actually begun! The next gale that sweeps from the north will bring to our ears the clash of resounding arms! Our brethren are already in the field! Why stand we here idle? What is it that gentlemen wish? What would they have? Is life so dear, or peace so sweet, as to be purchased at the price of chains and slavery? Forbid it, Almighty God! I know not what course others may take; but as for me, give me liberty or give me death!..”

Um, yeah, great article. I’ve got a better title for it: “Protocols of the Elders of Zion”. When there’s a disaster, let’s blame it all on an unpopular (but rich) minority that was vaguely connected to something or other.

In the meantime, in reality, financial and economic crisis was caused by implosion of the housing bubble, which in turn inflated because of government policies going back to Clinton’s tax cuts for gains on sales of homes. Once the house prices dropped, there was a vast loss of wealth, some of which was suffered by financial system. There you go! No need for vast spontaneous conspiracies spanning continents (US, UK, Spain all had housing bubbles and suffered severe recessions as a result).

A more realistic approach to action:

. 
# 1 - to all - identify the mortgagee.  It is important to expose them.

# 3 - to all the victims:

—-Contact the FTC - they will assign a case #.

—-Write to your State Attorney General; his/her portal has forms that you can print, and attachments are allowed.  Be sure to put the FTC case number in the complaint.  With enough complaints, his/her office will do something: either penalize servicers, or fashion some other kind of punitive action.

—-cc to:

*Corporate Offices of your servicer

*Comptroller of the Currency of your State.  The FTC can give you the # to call.

*Your state’s Department of Savings and Mortgage Lending

*And last, copy the FTC quoting the original case number.

Be professional and do not let your emotions be apparent.

It is OK to vent your frustration here, but the only way that agencies will take action is when they can no longer ignore the issue.  Let us flood them!!!

It may be good to let propublica.org know that you did (mention your state) so that they can keep track.  They have the tools to do so.

My story extends to 17 months of everything everyone is talking about.  No additional debt.  Started with a credit score higher than 820.  Wells Fargo approved me for the 3-month trial, then a few days before the permanent mod was to take effect, I was notified of a rejection over a fact known to them for more than half of the 17 months and was never a problem before.  Wells ordered six credit reports without my knowledge or authorization and my score is down to 791. It goes on and on. This last paragraph was only for the sake of disclosure. Taking action as oppose to reaction is what is needed. 

Please do.

To Lucy, Have you done this? and did it work?
To Ned, I’ve been in real estate 32 years that’s not what I saw happening, you might want to start talking to more people in the business that have been a part of all this not the high ones on the list but the ones closer to the bottom.
to David, thanks for reading it!
Let me share with you one of the many things I have seen.
I had a client call me with a lot he wanted to sell. So after reviewing, I saw that in 2006/2007 he bought it for 157,000 so I suggest based on market conditions that we put it on the market for 50% of its purchase price or $75,000 he says “oh no the bank with the loan suggest I put it on the market at 22,000” I was in shock! why would the bank suggest that? he says because they just sold some lots in that community for $6,000. I said “what I have not seen any lots in that community sell for $6,000” So I decided to research this and get back with him. OK, here goes the rest of the story there were sold lots for 6,000 but they never came out on the open market they were sold in a bundle to another company who seems to have some connection to the bank. So wrap your thoughts around this. If a bank makes a loan for $150,000 then accepts a short sale for $6,000 they do get to write that off as a huge loss right? but what if get to write off that loss and now I still own the lots and hold them now in another entity with only a value of 6,000 until this market changes direction??? which it will, for the one thing we are certain of is nothing stays the same. I’m a broker of my own office, in May of 2006 I told my agents (16) that the market was about to change and I spend the next 6 months teaching my agents FHA, VA, USDA, and all the other types of loan that they were not using at the time. Today that is over 50% of our sales (from 3% IN 2006) What I tell my agents now is not only will most of our loans be “government loans” but most of our product that we have to sell will be owned by corp America or the government. So I ask you to look beyond your own little circle and become just a wee bit of a Sherlock Homes. Because I truly believe that when you pull back those bed covers you will be surprised to see who’s sleeping with whom!

Opacity reduces scrutiny and confers power on the few with the ability to pierce the veil. Although derivatives have indeed become extremely complex, in actuality, they are as old as the idea of finance itself. The credit derivatives market should borrow a thought from Leonardo: “Simplicity is the highest form of sophistication.”

For a clearer understanding of subprime mortgage-backed credit derivatives, visit:

http://donovanlawgroup.wordpress.com/2010/02/19/how-credit-derivatives-brought-the-u-s-economy-to-the-brink-of-a-second-great-depression/

I have been reading these comments and many mention that the banks prefer foreclosure as they stand to make huge profits from the insurance payouts..

Well, that’s may be the case, but doing the math, as I understand it insurance companies are a business too and are looking to make profits like any other business. I don’t know what mathematical formulas they use, but I am sure their profit margin is based on a certain percentage of payouts…if you have mass foreclosures, I don’t see how the insurance companies will be able to pay out! But the banks, real estate businesses etc. do not look down the road for the possibly of collaspe, such as what happened with the CODs, but preferring in their greedy money hungry frenzy to consume as much money as possible until an ultimate crash, creating another destructive blow to our economy!

The Feds should buy out our defaulting mortgages instead of “working with the non compliant banks” . Bail us out! we can pay our modified mortgage payments to them ( after all, I know that HUD is the “mortagage insurance” backing my mortgage through my PMI payments!) When the economy get’s better, sell our mortgage bundles back to the banks or the investors who brought them in the first place, only this time the Feds will be backing these bundles. It should be a more controlled process actually based on real economical principles, not to mention the job creation for this type of program.

BAIL OUT THE AVERAGE AMERICAN…IT IS THE RIGHT THING TO DO!!

Excellent article!
This has been hard for me to understand, ever since I first heard about it and I’m pretty sure I’m only just getting to the point where I might have a hazy idea of what went on.

And to think they used to hang horse thieves.

The biggest question that I have now is “what is the total value of all of it? What’s left, that might be “recoverable” for us?”

From what I can tell, they claimed an extremely high value that never existed, took enormous profits from the false claims…. then defaulted…

There was NEVER any money in them… so what are they really worth? How much money was actually generated in this country for the last several years?

... I think we’re coming-up short on the numbers, now. We have a lot less than we think

Hi Carlene,

BINGO - you got it…!

They have rigged this thing from top to bottom - left to right - corner to corner… 

This did not just start over the past 4-5 years.  This puppy was dreamed 10-15 yrs ago.  These loans were backed by Freddie - Fannie - AIG -

That is why MERS was created - to keep the documents from the TWO key players - the Borrowers and the Investors.  While sending their documents to MERS they sent their minions to help our legislators tweak the laws to eliminate specific criteria “always” considered as critical protections for the consumer.  The UCC regarding recordation & assignments which the states & consumers relied upon are relegated to mere “technicalities” in the mortgage process.

MERS - is nothing more than a tax evasion gimmick with the convenience for these lenders to create and falsify documents & assignments whenever needed. 

False Assignments are being filed in courts across this country in epidemic proportions. 

Geanette - I understand where you’re coming from and it seems to be common-sense.  However, the answer is this - try and get the information from these insurance companies.  I know for a fact that our mortgage does not meet the requirements of the PSA.  I know an attorney that has over 1000 FAKE Assignments in their procession - and insurance claims were filed, yet these companies remain silent. 

Lately, there are several large lawsuits by these companies against lenders for mortgage fraud. 

Follow the investor lawsuits - that’s where the trivia-nuggets are easily found. 

Countrywide’s Underwriting program was called CLUES…  It was a typical program - punch the consumers’ data - it pops out an Approved or Disapproved (my simplified version) - however, to compensate for those borrowers that did NOT qualify for ANY LOANS - Countrywide created a separate “silent” Underwriting program called “EPS”.  That puppy essentially approved whatever was entered. 

Practically all of the lawsuits flying around over the past 3-5 yrs involve MORTGAGE FRAUD - yet, rarely has anything other than chump-change gotten to the families defrauded.  In fact, most of those folks have no-idea what was done to them - YET.  I have spoken with the FBI and several others about this because IMHO - this is going to explode into violence.  When people learn what was done to their families and then the courts allowed these thieves steal their homes after manipulating and humiliating these families - people will flip-out - and THEY SHOULD. 

These lenders controlled the market - inflated the market - drove the market - and did it calculatingly - deliberately and knowing the consequences.  Thus is the birth of - TOO BIG to FAIL…  These loans are tied to the retirement funds of judges - teachers - unions - etc - if they allow borrowers to actually apply the laws it will PROVE the mortgages were fraudulent.

What folks miss is - if the mortgages are frauds - then their can be NO securitization - No Securitization means - NO INVESTMENTS…  That’s the PONZI SCHEME - and like most government systems - these folks aren’t the brightest bulbs on the tree - so they swallow the scheme - HOOK - LINE - & - SINKER - ROD & REEL - and TITANIC with it… 

The irony of this ordeal is that the gov continually pays the thieves that stole the money in the first place.  They pay the thieves and tell them to give it back to the victims - the thieves keep taking their cut and nothing is left for the victims.  So, the FED pays them again - and again, and again…  The thieves can’t believe it - they’ve committed the largest crime in the history of civilization and the Fed keeps paying the criminals - over & over. 

The Fed already bought back the defaulting mortgages several times over already.  This is akin to hiring a junkie as a delivery boy for a pharmacy.  The manager can’t seem to figure out why the customers keep calling and complaining they have not received their prescriptions…  So, the pharmacy sends the junkie with a new batch of scripts.  That’s what they keep doing.  This is so pathetic now the fed should be charged with Aiding & Abetting …  It is that crazy…

Why did ProPublica wait so long to address this issue? Jake and Jesse, this is old news!

For a clearer understanding of subprime mortgage-backed credit derivatives, visit:

http://donovanlawgroup.wordpress.com/2010/02/19/how-credit-derivatives-brought-the-u-s-economy-to-the-brink-of-a-second-great-depression/

So glad that people are in jail for all of the this theft. Wait, I think Obama said that he doesn’t begrudge them their success. Oh well. My family will pay the price for the extra debt and shrunken economy and all the damage that goes along with it.

Excellent article - especially if your audience has no sense for what the real facts are.  So the news flash here is people sold stuff they created to customers?  Wow, I’m certain there’s a Pulitzer in this for someone.

A few facts and observations - There was no shortage of banks underwriting CDOs during this period and as a consequence no single bank had sufficient “leverage” over any manager to force them to do anything.  In addition, the investors (or protection providers) in the super senior tranches had the ability to kick out bonds they didn’t like (a right which was often exercised) - so the entire premise of the article is faulty. 

Now, Were some banks business models predicated on developing new management platforms - of course.  That said creating new accounts or clients is an integral part of any business model.  That’s just smart business.

As for your on the record sources, without getting specifics (name, bank, etc) at least one was part of one of the largest CDO miss-marking frauds perpetrated during the financial crisis - $3bn in intentionally mismarked positions.  Were you aware of this credibility issue?  Do you guys check your sources out??

Pretty shoddy reporting guys - next time understand the facts and get some reputable sources.  Who knows their might be an article out there for you to actually get right!

I spoke to a grown man, a conservative.  I suggested that the crooks who caused this should go to jail.  He almost started to cry.

Does anyone see the problem?  Like dogs they have been trained to love their abusive masters.

I applaud the effort to dig deeper into the causes of the financial crisis, but the article’s premise can not be true.  The US residential real estate is a $17 trillion market.  The CDO deals in question amounted to only $100 billion, about 0.5% of $17 trillion.  It simply makes no sense to believe that these CDO deals affected the trajectory of the housing bubble in any way.

This is a well researched article that shows precisely what’s gone wrong with America’s economy.
Is this self-dealing, smoke and mirrors the only reason our economy has failed? Of course not. But it is one of several examples of how the greed of bankers takes priority over the economic health of the nation.
Those who have willingly participated in this and other schemes should be stripped of their wealth and imprisoned at hard labor for the rest of their lives.
Bankers have become predators, dining on the misery inflicted on the majority.

Yes, people should have known better than to finance a property on a 40 year interest only note (the concept just seems inordinately hilarious in retrospect).  However, when the speculation of the derivative is an over-inflated value and one expects it always will be where greed is a factor, it must fall to us to realize the scam.
  Still, there’s no reason that government regulators should allow banks to set such a ridiculous standard.  “Just sign right here sir or ma’am and you’ll own a piece of the American Dream that’ll triple, no quadruple in value as you walk out the door!!!!!” Please…,
  If our higher educated upper middle class are going to continue to prey on the ignorant then they are building pyramids on mud and they should know it.
  One can sympathize with well-to-doers though on both sides of the political aisle.  How can anyone expect to forge legislation that seeks to regulate an industry that can seemingly redefine itself at will as this article indicates. 
  “Don’t worry guys, we’ll just load all these garbage loans into another CDO and create another CDO to buy it, ad infinitum!  HAHAHAHAHAH!!!!!”
Or maybe they too realized the horror and knew the taxpayer’s would be left holding the bag. 
  It reminds me of the article on the oil eating microbes that are supposed to be taking care of the gulf spill for us.  Apparently, they are a natural product of the Gulf of Mexico cuz there’s more oil there naturally.  So, drill baby drill?  Gotta be an analogy in there somewhere.

The trolls are hitting this blog. Interesting that it took so long for them to arrive. I guess they have nothing else to do in their lives other than be shit desturbers.

Additionally, articles like the links provided below describe the unfair, devastating, sometimes irreparable effects that self-dealing lending schemes had upon [non-subprime] homeowner borrowers:

“Foreclosure mill fraud is exploitive. . .”
http://www.huffingtonpost.com/social/lawgrace/homeowners-rebellion-coul_b_686921_57907192.html

Some Home Foreclosures are Actually Disguised Real Estate Extortions
http://newsblaze.com/story/20100411123047lawg.nb/topstory.html

Case In Point: Foreclosure Mills, Judicial Fraud, Consumer Exploitation. . . .                http://open.salon.com/blog/wwwlawgraceorg/2010/08/18/case_in_point_foreclosure_mills_judicial_fraud_consumer