"SUDDENLY, LAST SUNDAY"...That Is When The Big News Broke!

By
Real Estate Agent with Douglas Elliman Real Estate 30HA0800896
https://activerain.com/droplet/7Zb

"SUDDENLY,  LAST SUNDAY"....That is when the big news broke!--It broke on 60 Minutes when a "Fraud Investigator" was interviewed and she shed some light on the mortgage mess for us mere mortals! Take the time to see the whole report right here: (I had to remove my link because it did not work) so here is Tni's link--it works!:

176,789 Points 31 Featured Posts Outside Blog Hit Router Called Shot Master

Here is the link

I would love to hear what all of you have to say about this outrage. The scenario goes like this now:

  • In '92, the "Community Re-investment Act" was instituted by the government and banks were told to help the poor unfortunates who could not afford the down-payment on a house, to accept low or no down-payment. Everyone should have a house!!!
  • Some young "brainiac" sat in a back room of a big bank and came up with the idea that the best way to sell these less desirable mortgages was to "hide" them by rolling them into a log of all mortgages, cutting them up and selling them that way...what a great idea! And Investors clamored for them and banks sold them! 
  • The banks, seeing an opportunity to make a killing on these "MBS" or Mortgage-Backed Securities couldn't produce them fast enough...they were selling like hot cakes.
  • In order to speed up the production of these "traunches", they cut corners.
  • They did not take the time to fully research and in fact, could not find the legal documentation that they needed to prove ownership of the mortgages.
  • So they skipped that part of the process and sold the MBS as if they were above-board investments
  • When it was discovered, sometime in '08 that they were going to be a problem, (Probably after the meltdown when it was apparent that the Housing Boom was crashing) the banks began to hire thousands of people to sign fake mortgage instruments to cover their fraud.
  • After the crash of the house market, and after the big "bail-out" that failed as well, the banks went after the little guy like they were criminals in hiding.
  • Foreclosures were started on the homeowner who had been unseated by the crash and in some cases the houses were auctioned off while the owner still lived there!.
  • Now our government is trying to help the banks out of this Holy mess by "creating a fund that will pay off the homeowner so that they will not sue the bank for fraud when the bank can not come up with the legal proof of ownership"...or some such scheme.
  • The American Dream of home ownership became the American Nightmare..."SUDDENLY LAST THE SCHEME OF THE CENTURYSUNDAY"

AND HERE IS A LINK TO MY POST IN JULY 2010, WHEN I MADE A PLEA FOR ANSWERS: http://actvra.in/85W

I am sick to death of schemes, aren't you???

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Re-Blogged 4 times:

Re-Blogged By Re-Blogged At
  1. Bryan Robertson 04/08/2011 05:56 AM
  2. Dawn Maloney 04/09/2011 02:09 AM
  3. C. Lloyd McKenzie 04/09/2011 06:22 AM
  4. C. Lloyd McKenzie 04/09/2011 06:23 AM
  5. Maria Morton 04/09/2011 05:15 PM
Topic:
ActiveRain Community
Location:
New York Suffolk County Southampton Southampton Village
Groups:
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"Whacked"!!!
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Tags:
mortgage fraud
mbs
after the housing boom crashed
suddenly last sunday
american dream of homeownership becomes the american nightmare

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Ambassador
2,005,321
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Paula - There's so much here for such a short post and so much to absorb.  It just keeps getting worse.

 

Apr 09, 2011 02:16 PM #120
Rainmaker
564,942
Jordon Wheeler
The Jordon Wheeler Group - Fairburn, GA
J W Group Real Estate Sales and Service

Paula - thanks for the post.  Very informative and the comments are great as well.  Best of success to you!

Apr 09, 2011 02:58 PM #121
Rainmaker
471,520
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

Katherine: Well, I wouldn't say that they have been in their dream homes---I call them nightmare homes now!

Patricia: You can say that again!!!

Christine: It would be interesting to see how people will respond to this post a year from now...I wonder if things will change??? NOT.

Jordon: Well, thank you for reading it and commenting! I do love the comments---makes for very good reading does it not???

Apr 09, 2011 03:11 PM #122
Rainmaker
302,767
Liz Lockhart
Riverbend Realty, Cape Girardeau, MO - Cape Girardeau, MO
GRI, Cape Girardeau Real Estate

"60 Minutes" also reported that the selling of "derivatives" was behind the housing meltdown. The Bet That Blew Up Wall Street.

Last week's installment of "60 Minutes" reminded me of the earlier report. You have inspired me to put together some thoughts for my blog, as well.
Apr 09, 2011 03:52 PM #123
Ambassador
850,353
Brenda Mullen
RE/MAX Access - Schertz, TX
Your San Antonio TX Real Estate Agent!!

Wow.  How unbelievably sickening!  Seems pretty sad that the ones at fault won't suffer anything and could be set up in the future to do the same thing.  Greed makes one do silly things, this time at the expense of the American People.  Thank you for this insightful post.

Apr 09, 2011 03:58 PM #124
Rainmaker
471,520
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

Liz: I remember that one too---"derivitives" was the name given to that segment of the financial markets that offered the MBS for sale...I believe that was how it fit. Can't wait to read your post.

Brenda: It is sickening--I have spent most of the last few days feeling just that! 

Apr 09, 2011 04:04 PM #125
Rainmaker
630,597
Maria Morton
Chartwell Kansas City Realty - Kansas City, MO
Kansas City Real Estate 816-560-3758

This is a good bullet point synopsis of what happened, Paula. The comments and your post were enjoyable reading. Someone mentioned that they didn't believe the $10/hour employees hired to sign documents did not know what they were doing. The banks required that the people hired had no finance, mortgage, legal, or real estate background. Why would they do this? Maybe because the employees could then deny knowledge and culpability?

Also, the banks have set up 'systems' that include very compartmentalized departments which do not communicate with one another. People who own and run banks are not dumb. Do you think the lack of interdepartmental communication is just an oversight? An accident?

The book about Jekyl Island will curl your hair. Is it possible that there is a conspiracy going back to the late 1700's? The idea sounds like a fiction novel, doesn't it? Totally impossible! Couldn't be true! Or could it?

Apr 09, 2011 04:50 PM #126
Rainmaker
302,767
Liz Lockhart
Riverbend Realty, Cape Girardeau, MO - Cape Girardeau, MO
GRI, Cape Girardeau Real Estate
Paula~ My post is up now. I was outraged when I saw both segments. While the robo-signing is scandalous, the state of bank regulation, de-regulation, and the entire securities industry is the living, breathing monster of our economy.
Apr 09, 2011 05:36 PM #127
Rainmaker
471,520
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

Liz: Good. I will go and read it---it will be interesting to see what happens now. I am not holding my breath, however! In the case of the SEC--how comfortable was Madoff when he did what he did and he started doing the dirty deed in the 1980s!!! The "living, breathing monster" is an apt description by the way....

Apr 10, 2011 02:04 AM #128
Rainmaker
471,520
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

Maria: Thank you  for reading it--the comments that came through are the best! I have the book you mention on my list to buy and read--I have heard of it before and it sounds like a must read for any one who wants to fully understand what is going on here! I don't know if would be considered a conspiracy---but then I may have a different take after I read the book...

Apr 10, 2011 02:22 AM #129
Rainmaker
471,520
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

David: Thank you--I am not sure I know how to embed it but I will try! :)

Apr 10, 2011 07:22 AM #131
Rainer
135,683
Linda Humphrey
Humphrey Home Connections Realty, Reno, Nevada - Reno, NV
CRS, Broker/Owner HHC Realty

Hi Paula - Great post and great comments! I didn't see the 60 min episode, but have been following this through a legal bulletin board I subscribe to, as well as Gasparino's book mentioned by one of your commenters, and another highly recommended one by Michael Lewis (of Liar's Poker fame) called The Big Short, an excellent read. One thing Lewis clarifies is how Goldman Sachs in particular was busily packaging and selling MBSs, and the derivative CDOs and CDOs squared, at the same time they were buying credit default swaps hand over fist to bet against them. (Primarily from AIG, which you'll recall we also bailed out. That was a revolting handover of taxpayer dollars directly to Goldman Sachs.) Meanwhile, for that stunt (not disclosing their contrary bets on the securities they were selling) Goldman got a little swat on the hand (bad Goldman, go in time-out!). They also bamboozled the credit rating agencies by reverse engineering their algorithms and masterfully creating MBSs with just the right mix of loans to get the good ratings. For example using people with NO credit history (for good reason), so-called "thin-file" loans, in fact ordered them up like pizzas, to fill out their MBSs just so. Where are the perp walks? The jail time?

Meanwhile ,in the frenzy of securitizing, many of the actual loans backing the MBSs were never transferred into the trusts created to hold them.  Because of the rules of these REMIC trusts (which I don't claim to understand, but has something to do with them being bankruptcy remote), all loans must be transferred within a short time period, I think six months. Didn't happen, often. Now who has standing to foreclose? Not MERS, they aren't a party in interest. Not the trust, they don't hold the note. Not clear to me! All this back-dated signing to make it look like the loans WERE timely transferred, robosigning of foreclosure paperwork by people alleging they have confirmed the particulars when they haven't done squat, notarized by notarys that weren't present, may not have even been in the same state, and NO REPERCUSSIONS is enough to make you suspicious of anything that comes out of banks or the govenment. To paraphrase the old joke about teenagers: How do you know a government official is lying to you? His lips are moving.  

Apr 10, 2011 08:47 AM #132
Rainmaker
471,520
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

Linda: Very well put--and I would suggest to you too: write a supporting post as Tni did so that the members here at least, will have the benefit of knowing, as much as we possibley can, about this horrifc scam on the American public!!! Tni's post ended up to be about the direct implications on the public's use of the credit that became available to them BECAUSE of the huge amount of revenue in the pipeline that was generated in the late 90's early 2000's by this scam! Your comment above could be a great post in and of itself! I look forward to it....

Apr 10, 2011 12:03 PM #133
Rainmaker
2,368,611
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

I came back for a standing ovation...well done Paula

Apr 10, 2011 02:37 PM #134
Rainmaker
135,600
Paul Francis
Francis Group Real Estate - Las Vegas, NV
Las Vegas Real Estate Agent - Summerlin Homes

Paula,

Well... glad a lamestream media outlet finally ran this news.. All of this has been known for quite some time when you follow some other blogs such as Calculated Risk..

Now, get out there and do some research on QE1, QE2 and see how Printing up a Trillion or two (devaluing the dollar) has raised gas and food prices ... all to keep the MBS musical game going to shore up the big banksters balance sheets.

I'm happy to see that this news is being shared on AR... not so happy that it's only after 60 Minutes reported it.

Better late then never... hopefully more agents catch on what is really going on and start demanding some real changes in D.C. that have allowed all of this to take place.

...

 

 

 

 

Apr 10, 2011 08:33 PM #135
Rainmaker
135,600
Paul Francis
Francis Group Real Estate - Las Vegas, NV
Las Vegas Real Estate Agent - Summerlin Homes

Ouch... I just realized that many of the Banksters that helped all of this happen may have homes in your neck of the woods.

Kudos to you for writing a post like this..

Apr 10, 2011 08:56 PM #136
Rainmaker
471,520
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

Richie: Thank you so much!!! I can hear the roar!

Paul: Well you are the 2nd person who mentions that we have not been talking about this on AR--so just to show you: http://actvra.in/85W  This is a post that I wrote in July of 2010---when there was still a lot unknown about what had happened. I wrote it as a plea to any one to explain why the government was not doing something about what the banks were doing to the "Little Guy", the homeowner--they were being chased down in the street for God's sake!!! In fact I should add this to the post!

Apr 11, 2011 01:40 AM #137
Rainmaker
471,520
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

Paul: You are right---this is where they live--sometimes.

Apr 11, 2011 02:02 AM #138
Rainer
107,144
TERI LINDSAY
Reno, NV
STAGELIGHT HOME STAGING CO.

Well, we are trying to really understand the problems of our economy, and how and who created them. But, what is the solution..... what needs to be done, or WHO will do it? There are so many factors: implicating government at federal and state levels.... The Banks..... does everyone really understand WHO and What is behind the "running" of THE BANKS..... I mean, come on......most "first world"governments have been  manipulated into debt (excluding Norwary and Sweden) by "the BANKS" and those that operate them., The US debt along with the devaluation of the US Dollar (it will not be the standard for world currency soon) will create more chaos for our economy (that continues to just print money as we need it) .....The Banks control entire countries by the debt that has been created..... The Chinese hold "the Note" for the US Government, and when the dollar fails, well, you'd better be prepared for just about anything.Geeze...... I need a drink!

Apr 14, 2011 06:16 PM #139
Rainmaker
471,520
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

Teri: I think the the old "put your head in the sand" trick is what is afoot with most people who just can't get the bigger picture--If we were to get the housing market back on track--the whole deficit situation would start to improve too....it is just too simplistic and the BANKS really do hold the bag. I just read a news alert from WSJ saying that they are very close to working out a deal with the banks regarding the mortgage fraud that they have committed---will heads roll? will someone finally pay for the crime??? I doubt it..thanks for your comment, Teri!

Apr 15, 2011 12:54 AM #140
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...The Most Informed Agent In The Hamptons!
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