It was an honor to be in the studio with you while you spoke to America Lisa.
It is also great to see us “activists” being taken seriously by the mainstream media…
>>> good monday afternoon. mounting evidence against the mortgage lenders. they’re saying, trust us, and for the most part — bank of america admitting to at least a dozen or so errors in the first few hundred foreclosure documents. our friends did the math assuming 500 files reviewed so far. they found between 10 and 25 errors, which gives you a rate of about 4%. doesn’t sound that bad, right? with more than a hourks thousand, their kids taken out of school. it’s a mistake though. bank of america could resume foreclosures as early as this week despite finding those mistakes. again, try to explain that to the 4,500 homeowners getting evicted by injecting their bad loans into our government as they have been for years and covering it up with money printing and avading an investigation. while the lenders make their so-called mistakes, washington makes believe we don’t have a problem in a way to try to keep their jobs. joining us now, someone who does get it on this issue, lisa epstein has been described as a foreclosure nurse. jump-started the fire storm over this controversy through our blogging. lisa, you’ve called these weapons of mass destruction. what do you mean?
>> well, i mean that the mortgage-backed securities, i think they omitted the mortgage-backed part so they’ve created these securities. they used the average american family to bomb. they managed to take every cent from the american citizen, whether it’s through a fraudulent mortgage, a fraudulent origination, whether it’s lying to the pension funds or 401(k) investors. whether it’s packaging it up and getting insurance because it was a bunch of junk to begin with and then we bail out aig. whether it’s our jobs and our economy. whether it’s grading us on credit scores they have decimated and then they went out in the world and spread this scourge. mortgage-backed securities is the wrong waste. there’s no mortgages backing these securities. they didn’t put them in. i think we should call them malicious bankers with syphillis. we need to take our medicine. these bankers need to be taken out.
>> are you surprised, a year into this, and if you’re free at 4:00, i may want to take a couple of days off. you seem to have a good handle on this situation. we’ll be in touch. if you look at the government’s failure to respond, failure to investigate, effort to cover it up, the language from our president, the t.a.r.p. lie, tim geithner with one lie after the other, how many longer do you think the federal government can get away with lying and covering it up before it blows up.
>> right. well, you ask an excellent question. i believe we are at a critical point. it’s amazing we are just a few weeks away from an election and not a word from many, many candidates. alan grayson is a notable example. what i believe will happen is one of two things. we will decide to prop up this — this fake economy that the bankers say their balance books, i don’t know how many banks are claiming the same mortgage over and over. it’s fakery, it’s fraud. will either prop it up after we have taught our citizenry, don’t trust the government. the judiciary holds now recourse for you. protect your own. there will be — i’m sorry. there will be —
>> i’m so sorry. it’s a little nerve wracking.
>> you’re doing great.
>> there will be vigilantes across america just defending the home they have their children in because they are predators coming in to take the property of americans, so in ten years, it will be a much dangerous time for this to fall apart as opposed to let’s take our medicine now. we have dark days way head. we have allowed perpetrators and predators who are abusive and dangerous to take over and infiltrate the very fabric of me america. we need to rest whatever we have left of the democratic republic out of the hands of these criminals.
>> bill black joins us. you’ve been listening to lisa epstein, who runs a blog and is a register nurse and really captures the soul of the american awakening. all too familiar with the structure of american finance and how riddled with fraud it is and how self-serving it is to the politicians and executives in charge. what can be done at this point by someone in my position, in lisa’s position or any other positi position, to prevent ten more years of pretending and fraud so that we end up with the total dismantling of the social contract in this country and intervene now when there may still be an opportunity to begin a restructure?
>> well, you can continue to do just what lisa and you and folks like us have been doing because it’s starting to work. last week, for the very first time, joe stiglitz said this crisis is all about fraud. now, krugman still can’t bring himself to use the “f” word very often, but empirically, we know lisa isn’t the sole. geithner’s are wrong. here’s some numbers. credit swiss says that by 2006, 49% of all mortgage originations in the united states were liars loans. the lowest incidents of fraud is 50% an that’s when the fraud fraudsters study it themselves. when independent folks study it, it’s in the 80 to 90% range. that means there were millions of acts of fraud. those frauds occur not because there’s some clever person making 20,000 a year who is able to deceive the banks, but because the banks created incentive structures for the loan brokers to bring them the absolute worst of the worst loans and to lie on the application forms to hit the magic ratios on loan devalue and things like that that a homeowner wouldn’t have known what number to put in. so these frauds came from the banks and they propagated through the system through a series of what we call echo epidemics in which they got appraisers first to give them grossly inflated values. there are excellent numbers on that. to give outside auditors opinions on ludicrous financial statements. and every sing m l time virtually, they were able to get a triple rating. so this fraud did in fact spread through the system and that’s why we have a crisis in foreclosures now. this is not a random, unrelated fraud. this stems from the underlying fraud by the lenders in mortgage loans to the tune of more than — well over a million cases a year by 2005.
>> so, if we were to look at the two ends of the spectrum that most affect americans, the homeowner, which we’ve been discussing and then — what i would argue the secondary, all of the taxpayers who are being asked to support this corrupt and fraudulent banking system through fannie mae, freddie mac, the federal reserve and direct expenditures authorized by our congress. in addition to what we’re doing on foreclosure, what can we do to amplify the demand to see what percentage of the paper given to the guts of the american taxpayer in 2008 by george bush and hank paulson and perpetuated by barack obama and tim geithner, what percentage of that is fraudulent and why don’t we know that two years later?
>> that’s exactly what we’ve been calling for. why didn’t we know it at least five years ago when this was done. bernanke has just announced they’re going to do an intensive review of the assets up to this collateral. so, you wait a year and a half and then look at your collateral. now, what would happen if you were the most junior vp at a small savings and loan if that’s what your approach to business would be. this is supposed to be the most sophisticated guy in the world. we should look on a scientific basis. we have the ability because of fannie and freddie, the federal home loan banks and federal reserve taking all this money in collateral, to do a superb samueling job that will tell us what happened in the market. it cannot be done by the fed. the fed cannot admit it took over a billion and a half dollars in toxic garbage and didn’t recognize the losses on it. it’s led the cover up. it’s the feds through bernanke delibera deliberately, working with the chamber of commerce and the american bankers association, who got congress to extort the financial accounting standard board to pervert the rules so they wouldn’t have to recognize the losses because they don’t have to recognize the losses. they report false income. all of those things need to change. we call for bringing in the fdic, which is the best of the worst. have you had a chance to look at barofsky’s report?
>> yes, exactly. where ever we look, we find massive froaud. and fannie and freddie have started to look. blackrock. pimco. and one of the major monolines looked. said that 97%, this is amback, said that 97% of the loans that country wide provided to it were sold under false reps and warranties.
>> i’m going to wrap this up on the bases of time, but i have to really start to wonder how much longer this president or any president can get a — or any political party, can get away with the turn the page and we’ll just move on and be friends concept of economic policy when fraud is at the core of the system.
>> no convictions. versus over a thousand in the savings and loan debacle. fire holder, geithner, bernanke. get people in who will enforce the rule of law.
>> professor black —
>> and stop the foreclosures.
>> we look forward to having both of you back to the extent to which you’re making it easier for everyone to understand this problem. i thank both of you and come to really understand the scope of the problem. people understand why a very deliberative and real response to this is what’s in order. for