Posts Tagged ‘robosigner’
Killing cultural capital

A casual glance around the net reveals how much of our cultural capital has been destroyed. Trust is integral to our way life and is being undermined in so many ways. Take MF Global for instance, which involves outright theft of customers money. Much has been written on it, but Janet Tavakoli has the best lines:

Too Big To Fail and Too Connected To Jail.

MF Global was the eighth largest bankruptcy in the US, with thousands of customers victimized by theft, and yet one hardly ever hears about it…

I have heard that they will attempt to drag this investigation out until after the national elections in November, but if it comes out before that it will be wrapped up in a “don’t ask don’t tell admit no guilt” settlement….

“Our government…teaches the whole people by its example. If the government becomes the lawbreaker, it breeds contempt for law; it invites every man to become a law unto himself; it invites anarchy.”  Louis D. Brandeis

Corzine is a powerful figure in the Democratic funding machine, and JPM is the biggest kid on the Street.

On MF Global don’t forget:

Feds Key In on $325 Million Wire Transfer Made in Last Hours of MF Global: Keep in mind that customers who had requested their money DAYS before the 31st were sent checks instead of the customary wire transfers which they had requested, and those checks were not honored. And I have heard of at least one instance where a customer’s wire tranfer was reversed a day later by the banks, which I had thought was not even possible.

Barry notes problems with the foreclosure settlement:

As I noted oh so many times before, once we bailed out failing banks, there is a strong incentive to protect rather than police them. This deal is a perfect example.

Here’s an excerpt from the column:

“Before the settlement, we learned that nearly every aspect of the robosigned documents was false. None of the details were ever reviewed. The signatures attesting to the review of the documents were fabricated — made by someone other than the person whose name was on the document. Neither person — the supposed signatory to the document nor the hired forger — ever validated the facts of each case. All of the safeguards put in place to make sure foreclosures were done correctly and legally were bypassed. Even the notary stamps were bogus — they were not real, and not signed by a notary to validate that the signer and the signature matched.

How did this happen? Instead of a careful review, people were hired to rubber-stamp hundreds of foreclosure documents an hour. Former burger flippers were paid $8 to $10 an hour to violate the law, file false affidavits and commit perjury. Some of the information was correct, but much of it was wrong — and none of it was verified for court purposes.

We commented at the time that eroding accounting standards was an assault on part of the bedrock of our capitalist system. Barry has posted to similar effect on the FASB action:

In the height of the financial crisis, the Financial Accounting Standards Board were pressured to pass FASB 157 (“Fair-value accounting”)….

Derided as “Mark-to-Make-Believe” it leads to this unfortunate situation: The same models that led to the unfortunate money-losing purchase decision in the first place are now being used to actually value these holdings. regardless of the obvious flaw in the model in the first place.

As these bad buys plummet in price, investors in banks have no insight into the loss potential — they are hidden from view, along with the true financial condition of the company. This sort of accounting f..kery would never be tolerated in a nation where investors mattered more than insiders and bankers. Instead, it rewards the incompetent and allows near insolvent banks to pretend they are solvent, thereby allowing the granting of huge bonuses.

Almost three years later, we see the results of the Accounting Board’s move. The large bailed out banks remain weakened. Like all wounded animals, they are very dangerous. They have institutionalized fraud, made forgery a business expense. ZIRP exists for the primary reason of allowing these banks to rehabilitate their faulty balance sheets. Savers get punished.

The same could have been accomplished much more quickly and cheaply through prepackaged bankruptcies. That would have required an uncorrupted Congress, an honest Accounting board and a willingness to allow capitalism in America. Instead, we had foisted upon us a convoluted form of Socialism for Financiers.

Socialism for financiers is proving to be no better for society than was socialism for everyone else.

The problem is becoming abundantly clear to all:

The foreclosure fraud settlement has shown a breakdown in the ability of regulatory agencies to deal with the aftermath of fraudulent conduct. They simply have no ability to offer a regulatory response that’s commensurate with the behavior. If the behavior does lead to a negotiated settlement, then it comes with unsatisfying “neither admit or deny” statements that judges have continued to question.

It is good that our views are spreading. A few years earlier and we might now be on the way to recovery. As it is much of the developed world is going to have to hit bottom before it can start to get better. A bit like some alcoholics. Not surprising really as the West has been drunk on debt.

The extent of the regulatory capture is mind blowing. Again the blogs tend to be fulfilling the role vacated by the fourth estate:

The OCC doesn’t want anyone digging too deeply into the solvency of the major banks or into the mess they’ve made of the mortgage paperwork system. Well, now there’s evidence that this is exactly what’s going on. The interview with this whistleblower is well worth reading. Put this one in the suspension of belief category:

Supervisors told his entire group that “Wells Fargo had submitted over 10,000 files to Promentory. Only 4 were found to be in question, and upon final review by Wells, no harm was found.” So, 10,000 homeowners submitted their complaints and all 10,000 were deemed to be models of perfection.

It will be interesting to see the final figures on the reviews…if the OCC releases them.

It appears the entire regulatory and political infrastructure of the US has been captured by vested interests. The nation is living off its cultural capital. While there is a lot of ruin in a nation, it is not infinite.

It is time to return to integrity. In fact it is well past the time. The current devouring of all that made us what we are can not continue. The sooner we face up to reality and start laying down more cultural capital the better. Not every nation needs to hit bottom. Anarchy is best avoided. The US, Canada, Australia and NZ may yet avoid it. I fear there are dark days ahead for UK, irrespective of what it now does.

 
Mortgage settlement gangster capitalism

The mortgage settlement shows that we are indeed moving from the eighth to the ninth circle of hell. Zerohedge puts it rather well:

The Epic Farce Continues – US Attorneys General “Robosigned” A Foreclosure Settlement Which Does Not Exist: It is only appropriate, and so ironic, that a politically motivated settlement whose purpose is to squash any claims of pervasive defective document fraud (and contract law but just ask GM bondholders about that – it’s hardly news) is itself found to be… defective. American Banker reports that the reason why the terms of the so-called historic (just ask the Teleprompter in Chief) foreclosure settlement deal are not public yet, is “because a fully authorized, legally binding deal has not been inked yet.” Wait, so America’s cohort of AGs just all, pardon the pun, robosigned a piece of paper that does not exist? What next: there is a different Linda Green signature on every page of this yet to be produced document making a complete mockery of the rule of law?

Oh and anyone who had doubts that the settlement, which incidentally is paid for by you, dear taxpayers, in the form of bank bailout cash, of which the banks still owe over $10 billion in some capacity, was merely a political ploy to get taxpayers to fund Obama’s reelection campaign by subsidizing squatters with $2,000 per vote in the presidential race come November, using banks as intermediaries to make the administration seem oh so powerful and daring to take on the banks, who in fact are the only ones benefiting from this farce, by holding a gun to the head of the hold out AGs forcing them to sign a piece of paper that does not even exist, this should put all those doubts to rest. Hat tip: Dinkum Wagner.

Read the whole thing. It’s worth it for more examples of robsigning, such as this:

 

There is also another good post on Naked Capitalism:

What the Mortgage Deal Reveals About The Obama Administration: Clearly, the Obama Administration is positioning itself for the 2012 general election. The goal is to do the right things and say just enough to make the Administration’s policies appear successful. The messaging is designed to build up a base from which to contrast Obama from the eventual Republican nominee in order to get out the vote. I doubt seriously that Obama’s people want any of these mortgage fraud initiatives to have teeth. After all, the President is going for the Super PAC money.

This is kabuki theater for the masses. it is designed to give those people inclined to vote for a Democrat a reason to do so in November, nothing more.

Yves Smith summarizes the problems with the settlement:

The Top Twelve Reasons Why You Should Hate the Mortgage Settlement: As we’ve said before, this settlement is yet another raw demonstration of who wields power in America, and it isn’t you and me. It’s bad enough to see these negotiations come to their predictable, sorry outcome. It adds insult to injury to see some try to depict it as a win for long suffering, still abused homeowners.

Yves’ interview on real news network is also worth watching, even though it was filmed before the announcement.

It is also worth remembering the record of the Obama administration in this area:

Will Mortgage Settlement Avoid Repeating Obama’s Foreclosure Failures? As we’ve reported extensively over the past several years, homeowners seeking to avoid foreclosure by gaining a loan modification have often been frustrated by banks’ errors and delays. In the worst cases, the banks’ shoddy mortgage servicing has led towrongful foreclosures. The errors have sometimes continued even after homeowners got an elusive modification.

It’s a good job there is, as Adam Smith stated, a lot of ruin in a nation. It’s sad but the USA seems determined to create a depression followed by inflation. Read the linked posts.

Surely we must be reaching a limit in how much ruin a nation can take. You can undermine a nations foundations only so much before it collapses. The mortgage settlement’s manifest injustice and cavalier disregard of established law makes it abhorrent. It is an affront to peoples sensibilities. As Lenin reportedly said of inflation, so with the mortgage settlement:

Destroy Money to Destroy the Moneyed Class: By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity (or fairness) of the existing distribution of wealth.