Here is part one if you missed it…
Predatory Mortgage Servicing Fraud – First of a Series
Part Two
RISMEDIA, April 13, 2010—I am deeply disturbed by the widespread and effective campaign of financial intermediaries to shift the blame for a plan they implemented onto an unsuspecting public who believed, because of the same unrelenting messaging, that they were doing the right things.
The letters to the editors and mindless blog rants try to reduce the argument to irresponsible sub-prime borrowers who got what they had coming to them. Almost all appear to be written by the same angry person and all express the same simplistic overview. It’s called staying on message which is pretty much the “she deserved it defense.”
None mention the fact that real wages have been declining for a decade or that the impetus for lending wasn’t the consumer but the financial intermediaries themselves who could not stand to see all of that cash sitting in pension funds.
Nor is there any reference to securitization of every form of debt including made up debt, (Synthetic CDOs). And no one laughed.
They do not distinguish that the term “sub-prime” doesn’t refer to the borrower but to a loan product designed for maximum returns on credit default swaps.
The problem is not a greedy borrower but is instead the by product of a massive web of fraud.
We are supposed to believe that the explanation behind securities fraud, predatory lending, insider trading, fixed ratings, inflated appraisals, cooked books, and income tax evasion all leading to huge bonuses is that the consumer wanted more house than they should have, or used it like an ATM machine, or got greedy?
But that would be a lie.
The truth is that all Americans, save a handful of insiders, are the victims of organized crime just as much as if this was implemented by the Cosa Nostra.
They did it because they wanted more than they deserved, they used our houses like ATM machines and nowhere do they ever deny being greedy, arguing instead that “greed is good!”
But, they did not do all of this lawfully; they continue to steal homes to collect on the default swaps, and that is where I have a problem.
The cover-up is in full swing but the crimes continue. Everyone knows about this. Any rational tax payer has to wonder what it is, what the financial intermediaries have over law makers, law enforcers and judges that allows predatory lending and unlawful foreclosures to continue except in those rare instances where the homeowner fights back. What? Was Bernie Madoff supposed to be enough for us?
I think we are closing in on some very interesting revelations, but the truth won’t come out unless someone is pushing for it. Everyday, another little piece of this elaborate fraud comes into focus. As it does, events of the recent past take on greater meaning for what they tell us about our leadership. This did not happen overnight. Legislation was lobbied for and won.
Roll back the clock just ten years to 1999, to the dismantling of the Glass-Steagall Act which had been in place since it was enacted in response to The Great Depression, and would have prevented the financial crisis entirely.
Here is what its supporters said about it at the time:
Larry Summers, now director of President Obama’s National Economic Council:
“Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century. This historic legislation will better enable American companies to compete in the new economy.”
Senator Phil Gramm (R-Texas):
“The world changes and we have to change with it. We have a new century coming, and we have an opportunity to dominate that century the same way we dominated this century. Glass-Steagall, in the midst of the Great Depression, came at a time when the thinking was that the government was the answer. In this era of economic prosperity, we have decided that freedom is the answer.”
Senator Charles Schumer (D-NY):
“If we don’t pass this bill, we could find London or Frankfurt, or years down the road Shanghai, becoming the financial capital of the world. There are many reasons for this bill, but first and foremost is to ensure that U.S. financial firms remain competitive.”
Sen. Bob Kerry (D-NB):
“The concerns that we will have a meltdown like 1929 are dramatically overblown.”
The likelihood of them ever acknowledging this complicity is remote, but so then is the hope that any of these people will be instrumental in affecting remedies for their mistakes.
Two of only seven senators who voted against the bill said this:
Sen. Byron Dorgan (D-ND):
“I think we will look back in 10 years’ time and say we should not have done this but we did because we forgot the lessons of the past, and that which is true in the 1930’s is true in 2010. I wasn’t around during the 1930’s or the debate over Glass-Steagall, but I was here in the early 1980’s when it was decided to allow the expansion of savings and loans. We have now decided in the name of modernization to forget the lessons of the past, of safety and of soundness.”
Sen. Paul Wellstone (D-MN):
“…determined to unlearn the lessons from our past mistakes. Scores of banks failed in the Great Depression as a result of unsound banking practices, and their failure only deepened the crisis. Glass-Steagall was intended to protect our financial system by insulating commercial banking from other forms of risk. It was one of several stabilizers designed to keep a similar tragedy from recurring. Now Congress is about to repeal that economic stabilizer without putting any comparable safeguard in its place.”
So, you see, it was all part of an elaborate plan. Change legislation, implement a credit scoring system, promise investors high return and absolute safety, develop an electronic recording system to hide the paper trail, create predatory loan products, boost appraisals, encourage frequent refinancing, establish predatory servicing companies, and make obscene profits out of massive fraud.
Who coined the phrase too big too fail? Perfectly big and bloated enough too make permanent success impossible would be a more apt description of financial intermediaries but, on the way down, they plan to take a whole lot of our money and as many houses as they can steal until more people fight back.
And, pity the fool who pushes back too hard or asks too many uncomfortable questions as an Arizona woman recently discovered. While considering her refinancing options, she sought to learn more about her existing loan. Having begun to understand the complexities and problems developing around securitized predatory loans, she set out to discover exactly how her payments were being applied to her underlying indebtedness.
That is not only her absolute right, but also a prudent measure for any homeowner with a loan made in the last ten years. However, despite the fact that she had never been late on a payment, the banksters are suing her in Federal court for “intended breach of contract.”
Message, don’t ask too many questions lady.
However, she may get the last laugh. She is not your average docile, helpless victim; she’s Ariz. Rep. Michele Reagan, R-District 8, never missed a payment and was never late, but when she set out to refinance her home she made the mistake of trying to find the note holder of record to payoff. Stay tuned….Arizona may be coming to rescue victims.
Last week I received an ominous email.
Dear Mr. Mantor,
My family and I need your assistance.
We are mortgage fraud victims in the State of DE; and because we came forward and filed criminal complaints against the Realtor, settlement attorney, insurance companies, bank, mortgage broker, Appraiser, etc…We have been literally DRIVEN out of the Good ‘ol Boys State and had to seek shelter in TN as political refugees!
These “white collar criminals” have gone to great lengths to destroy our character, health, wealth and happiness; and HUD/OIG has placed us in a victim/witness “relocation” program.
But, the DE State Housing Authority refuses to give us our relocation voucher!
Please contact me, if you wish; we have been advised to go public…
While I am frightened by “going public”…I am growing weary of this battle against the white collar criminals who have destroyed the happiness and well-being of my family…and I cannot rest until Justice wakes up.
Thank you for taking the time to help my family; it has been a nightmarish two years
I will look forward to hearing from you.
Sincerely,
Heidi
Or, this from a reader of my blog.
Problem is predatory lending was not illegal!
[…] Predatory Loan Servicing Fraud – Part Two in a Series […]
This mans letter should be published on every editorial page across the country and mailed directly to every elected official on the local, state and federal level.