Naked Capitalism | The Legal Lie at the Heart of the $8.5 Billion Bank of America and Federal/State Mortgage Settlements

The Legal Lie at the Heart of the $8.5 Billion Bank of America and Federal/State Mortgage Settlements

Once in a while, you can discern a linchpin lie on which other important lies hinge. We can point to quite a few in America: the notion of a permanent war on terror, which somehow justifies vitiating not just the Constitution, but even the Magna Carta, or the idea of an imperial executive branch.

Now the apparently-to-be-filed-in-court-today Federal/state attorneys general mortgage settlement is less consequential than matters of life and limb. But it still show the lengths to which the officialdom is willing to go to vitiate the law in order to get its way.

HUD Secretary Donovan, the propagandist in chief for the Federal/state mortgage pact, has claimed he has investor approval to do the mortgage modifications that are a significant portion of the value of the settlement. We’ll eventually see what is actually in the settlement, but the early PR was that “no less than $10 billion” of the $25 billion headline total was to come from principal reductions. Modifications of mortgages not owned by banks, meaning in securitized trusts, are counted only 50% and before Donovan realized he was committing a faux pas, he said he expected 85% of the mods to be from securitizations, so that means $17 billion.

Bear in mind that investors, analysts, and commentators have objected to the very premise of this arrangement. A settlement involves a release of liability, and in anything other than the through-the-looking-glass world of rule by banks, the party that did the bad stuff is the one that pays for the settlement. This deal is like stealing your neighbor’s gold watch and using it to resolve charges of embezzlement.

Rest here…


6 Responses to “Naked Capitalism | The Legal Lie at the Heart of the $8.5 Billion Bank of America and Federal/State Mortgage Settlements”
  1. flex says:

    Can you take one more lie and swallow your pride that we had been fooled again? How is your American Dream now? This is like waking up from a nightmare after 50 years thinking we are living on the land of the free and home of the brave. Where is Rip Van Wrinkle to pinch me and wake me up? I cannot wait to see how the American People will react in a week after all this settled down and we hear more propaganda by the media. This is another Deja Vu all over again. What ever happened to the emperor has no clothes? How many times can the government get involve with high rank players, like the movers and shakers of the economy, wall st, the bankers, big oil, big pharma, and big corporations to rule the people and the country.
    Is there a dancing with the stars or American Idol show on TV so we don’t need be disturbed by this news today? Do you ever wonder why HDTV is so cheap and cable TV is so cheap in America? How many people do you think know what is going on in America about the Frauds committed by the banks and all their allies? Last time I check with average people, they tell me they are working so hard just to pay their bills and their mortgage so they don’t lose their homes in Fraud closure. How little they know they don’t own their homes. They are paying rent to the servicers, the debt collectors.
    Millions of homeowners don’t ever read their loan docs and they don’t even know who is MERS. Much less what is securitization or PSA, CDO, or anything related to the biggest Ponzi scheme in American history. Imagine one day the kids of our kids asking what happened in America 50 years ago with the financial crisis cover up. Of course, we will not be here to tell our grandkids what really happened. Imagine teaching in the schools how to buy a home and how to get a legal loan from a bank? Well, maybe by then, there will not be any banks doing business in America the way they do business today.
    For now, I only need to wonder what the real American will do.

  2. gregory says:

    Just wait until all these retirement accounts come up with all zero’s then America will get it!!!!

  3. It is impossible for any bureaucrat or politician to establish the potential liabilities that the banks and Wall Street have caused the American people. Additionally, almost all legislation or government determinations provide either protection or some level of monopolistic power to special interests, to the detriment of the majority. You can almost guarantee one or the other or both in every situation. The DOJ, of course, is part of the collusion and does quite a bit of their dirty work and has since the inception of our great nation. Just think, a nation founded on limited government and individual rights has turned into what all governments appear to do. A fascist oligarchy run through a collusion of banking, multinational corps and government. Fascism is best described as the use of high taxation and regulation to control the means of production and guess who controls it?

  4. So, do you mean to say that the bank will steal from my retirement dollars to pay for their wrongdoing and then refuse to pay me because they did not “own” the mortgage? End result all servicers get to steal (again) from the investors and then refuse to pay the victims?

    • lvent says:

      The media reports this stuff all of the Fox reported that Fannie Mae just asked for another $4.5 billion dollars in U.S TAXPAYER MONEY…and Warren Buffet told CNBC that FANNIE MAE has already received $99 million dollars in U.S TAXPAYER dollars to cover up for the fraud of their last 3 or 4 CEOS…FOX NEWS reported that the truths is the GSE’s will get whatever they want because they have a direct pipeline to the U.S. TREASURY DEPT ever since the U.S. GOVERNMENT nationalized them and all of their fraud…

      What makes me angry is the fact that millions of Americans still dont get it, and are still blissfully ignorant to all of this…Millions of Americans do not want to see or fail to see that the 1% are robbing all of us from every direction in order for the 1% to keep their ponzi scheme rolling..for the benefit of themselves …How millions of Americans do not get it and are still participating, complying and conforming to this manufactured tyranny and oppression is what appears to be mostly fear and maybe a bit of arrogance and selfishnes…they may think this will never happen to them….but they do not realize they are one paycheck away from all of us……they also have a false sense of security… think they are the responsible ones because the President told them that they are….and many do not realize their pension plans and all of the SOCIAL SECURITY money has been stolen by the 1%…and the day we all stop participating…will be the day they will be forced to wake up…that includes the retired cops and the fireman..who without our participation…will not be getting those checks in their mail boxes… They may not realize the truth is that they are being deceived and lied to on a daily basis by being told stuff by the PRESIDENT…OF ALL PEOPLE… like… this country is in this mess because the victims of this mess were irresponsible…People for the most, part will only make sacrifices if they are forced to. Little do they know, if they continue to participate in this fraud, they will be forced into bankruptcy by job loss or other factors that are out of their control and the truth is all being very deceptively hidden from them .

Leave a Reply