Monday, January 17, 2011

Mortgage Mess Just Keeps on Going

In one of my favourite reads, Robert Sobel's  Panic on Wall Street chapter 11 is entitled 1929: The Making Of The Myth*. On page 350 of my copy Sobel notes regarding the world myth:

"a myth, according to most sociologists, is a belief which is held by a group to be true, and is accepted on faith rather than on examination of relevant evidence."

We see it every day. 

Like late last week when NJ governor Chris Christie said health care costs "will bankrupt" the state and then the NJ Economic Development Authority cut its tax-exempt school-related bond offering by more than half to $712.3 million.

Now in a world populated by a sober, sane, rational thinking  species the governors candor and forthrightness would be appreciated and roundly applauded. Sadly we do not live in that world we live in one molded and manipulated by the banking and brokering elite as evidenced by the quote below from a senior crumb chaser on Wall St.:

“It doesn’t help to try and sell a $1 billion deal on the same day the governor is talking about the state going bankrupt due to health-care costs,” said Mike Pietronico, who oversees $360 million as chief executive officer of Miller Tabak Asset Management in New York.

“Mr. Christie made a rookie mistake,” Pietronico said. “The market is very sensitive to the word ‘bankrupt.’”

Yes, Mr. Pietronico the market is sensitive to the word bankrupt but not as sensitive as you are to the truth. It appears Mr. Pietronico would rather be lied to, content to sit by and simply accept the myth as Sobel put it, rather than examine the relevant evidence that is as plain on the nose on your face. The $360 odd million to manage and the keeping of fees rolling in might have something to do with this. Keep in mind this is 'smart money' on Wall St. at work managing your money.Lovely, no?

Can you imagine the audacity of Gov. Christie to utter such a word as bankruptcy. Has he never heard of 'keeping up appearances'?

You think he did that for 'hyperbole' or because he has seen the numbers and understands real world math? No, not Wall St. math taught at the finest Ivy league institutions where 2+2 = 6 or whatever number your investment banker, Moodys and the prospectus say it does but the math your 8 yr old studies, 2+2=4.

How dare the governor use that word bankrupt and scare investors, stymie New Jersey's growth and financing needs not to mention throwing a monkey wrench into a perfectly fine ponzi scheme. 

In the never ending 'extend and pretend, delay and pray saga' (exclusive of phantom income and bonus' based on that) that is the mortgage debacle we got interesting and disturbing news out of Utah today in a piece entitled How Accurate Are Property Records.

According to the piece:

A Utah court case in which the owner of a Draper townhouse got clear title to the property, even though he still owed $132,000 on it, raises new legal and financial questions about a property-records database created by mortgage bankers. 

The award of a title free of liens means that whoever owns the promissory note on the Draper property — likely a group of faraway investors — no longer has the right to foreclose to collect on a delinquent loan. Indeed, the townhouse owner has sold the property and kept the money. Those who own the promissory note probably don’t even know what occurred.

Mish, in his piece Utah's "Quiet Title Law" Bypasses MERS, Awards Homes Free and Clear, One Homeowner Had $417,000 Debt Erased is calling it a travesty which he fully expects the judgement to be overturned.

"Some investor just lost $417,000 through no fault of his own. Another person who deserved to lose his house because of default just got one free and clear. Is that justice? In what way?"

Karl Denninger counters and says it is a direct result of an industry run amock or as he states in his post MERS Minus a Few Bricks....

"Deciding to play "go go" during the bubble years was a decision made by the securitizers and lenders; the borrowers had exactly nothing to do with it.  They were no more able to influence that decision than was Mickey Mouse, and to claim that there's something "inequitable" that comes about when someone makes an allegedly secured loan but doesn't bother to do the things necessary under the law to retain the security interest is pure nonsense.

Again, the debt isn't gone - it's just lost its characteristic of a secured note.

And that, my friends, is exactly what the rule of law says should happen when you make an intentional decision to cheat the process for your own pecuniary benefit."

Now I am no legal expert on this but I do not see how non payment of a mortgage can result in the homeowner getting free and clear title to the home simply by filing receiving judgement via a  'quiet title action. I have stated in the past that you default on your mortgage you should get your ass thrown out, no question about it. I also realize that the banks enormous and predatory role in this, with the doctoring of mortgage apps to get them through the process,lying to investors etc, is all just the tip of the iceberg of their transgressions in this arena. The mainstream media will never report it but the blogosphere will. 4closureFraud will. 

Look at this recent piece from 4closureFraud entitled  JP Morgan Chase Loan Officer Lied on Borrowers Loan Applications to Make Numbers Work. Make sure you scroll down the article to see the letter written by the client challenging the JP Morgan filed documents. Sure rogue employee, one off circumstance. Uh huh. 

I thought fraud on a mortgage app was a felony? Obviously I must be mistaken.

Do you understand why I take someone I respect very much, Art Cashin, to task when he states "we have to move on". NO WAY ON GODs GREEN EARTH !

I do hope you are ignoring the mainstream medias repeated arguments that this issue is a big nothing(isn't everything to CNBC when its negative). I do hope you are starting to understand that.....

  • this whole mortgage house of cards was built on quicksand by thieves and thugs who are not only still at large but have kept the loot and use it to buy their freedom from the authorities.
  • this is a direct consequence of allowing Ivy league MBA criminals to use their version of math where 2+2= 6
  • this fraud and malfeasance by the banks were not one off events but rather institutionalized sanctioned ways of doing business by them.
  • this maniacal obsession of simply pretending none of this transpired and it will all just go away total and complete foolishness of the first order, like changing accounting rules will really help.
  • the ratings agencies S&P and Moodys (hello Warren and Charlie) aided and abetted the banks in this ponzi scheme of thievery with the mainstream media too dependent on the banks advertising to admit such. 
  • this arbitrary imposition of justice when it suits us might mean nothing to you until and unless your ass is in the sling it hangs on. The Rule of Law is rule of law, it matters not the net worth of the individual who says it doesn't. 
We cannot move on when this has gone on. People must be held to account for their actions pure and simple, then and only then can we move on Art.

Good speculating to you all and please remember to never forget that "an investor is a speculator who made a mistake and will not admit it".

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