Thursday
Oct142010
Forget Foreclosures -- David Faber Says Banks Face HUGE Liability For Fraud In 'Mortgage Loan Pools'
CNBC Video: Faber from earlier today -- Watch this one -- Runs 2 minutes
This is NOT foreclosure fraud. The issue is loan putbacks at par -- MBS investors forcing the underwriters, the banks, to take back ownership of the underlying mortgage. Court cases as early as tomorrow will help determine the extent of the liability, but we're potentially talking about hundreds of billions out of total private label RMBS of $1.5 trillion.
Faber:
- "...Those same banks may face a far higher liability from another issue involving mortgages the banks securitized and sold. Simply put the issue here is fraud. And whether the banks packaged and sold pools of mortgages that did NOT contain the various underwriting characteristics that were attested to when the mortgage securities were sold."
---
Besides underwriting fraud, Felix Salmon points out the huge liability for banks related to mortgage transfers:
- You thought the foreclosure mess was bad? You’re right about that. But it gets so much worse once you start adding in a whole bunch of parallel messes in the world of mortgage bonds. For instance, as Tracy Alloway says, mortgage-bond documentation generally says that if more than a minuscule proportion of notes in a mortgage pool weren’t properly transferred, then the trustee for the bondholders can force the investment bank who put the deal together to repurchase the mortgages. And it’s looking very much as though none of the notes were properly transferred.
Further reading:
Oct 14, 2010 at 5:20 PM
Reader Comments (11)
"Independents are the largest group of voters - 37 percent of registered voters are independents or other non-partisans, 34 percent are Democrats and 29 percent are Republicans. Just two years ago, 34 percent were independents, while 38 percent of voters identified as Democrats and 28 percent as Republicans."
http://www.thebulletin.us/articles/2010/10/03/top_stories/doc4ca0a470eb02c505102001.txt
Now if the Independents could just field a viable candidate and break down the election barriers, instead of continuing the ping pong game.
That is indeed the real question. However, take note of the fact that the outcome is the same, financially, either way. If the fraud is identified and stopped, meaning all fraudulent foreclosures are stopped, the banks are rendered insolvent immediately.
If not, we Americans have confirmed that the rule of law is dead here, and all paper assets--which depend, ultimately, on the enforcement of that dead letter for value--are just trash.
Either way, our financial system is overdue--by 39 years--for collapse.
If you are not in physical possession of what's been money for 5000 years, you are a dupe, and may God have mercy.
Remember the Hunt brothers? always remember that metal markets do move up and down.
http://www.cnbc.com/id/39670564/
http://www.nakedcapitalism.com/2010/10/josh-rosner-could-violations-of-psa%E2%80%99s-dwarf-lehman-weekend.html
http://www.youtube.com/watch?v=_W8fWIQ4SRQ
Remember folks, reality shows are scripted.
I like how Bawbawa Walters plays it like she didn't know they were going to walk off the stage.
Now Bernanke has trillions in trash on the ol Fed balance sheet, and the reality of insolvency, masked by FASB chicanery, bailouts and offsheet voodoo comes home to roost.
The Fed and taxpayers were forced to bail them out before. They'll pull the panic play again, but this time the FED will smoke up the mirrors.
The question is, how does this all play out, medium-term, when America wakes up and discovers the Fed owns the USA, and realizes that Benny and the Inkjets is a lot more like the IMF than Treasury? You can have austerity from one, hyperinflation from the other. Either way, broke is broke.
Long term, what does this do to the model of private ownership in America? Think about it from a trend-line, long-term.
http://www.barefootsworld.net/usfraud.html
http://ampedstatus.com/the-road-to-world-war-iii-the-global-banking-cartel-has-one-card-left-to-play
http://letthemfail.us/archives/6030
There are a lot of eyes rolling, but when you have common sense and can connect the available dots, the real truth, despite massive deceit and misinformation - is moslty intuitive.
If you have good comprehension skills, and can see beyond the fantasies and illusions, you simply, eventually, become a good judge of reality.
"Perhaps the time has come to reinstitute an old custom. Grant them prima noctes. First night, when any common girl inhabiting their lands is married, our nobles shall have sexual rights to her on the night of her wedding. If we can't get them out, we breed them out. That should fetch just the kind of lords we want to Scotland, taxes or no taxes."
Edward Longshanks
"At the coming Omaha Convention to be held July 4th (1892), our men must attend and direct its movement, or else there will be set on foot such antagonism to our designs as may require force to overcome. This at the present time would be premature. We are not yet ready for such a crisis. Capital must protect itself in every possible manner through combination (conspiracy) and legislation.
The courts must be called to our aid, debts must be collected, bonds and mortgages foreclosed as rapidly as possible.
When through the process of the law, the common people have lost their homes, they will be more tractable and easily governed through the influence of the strong arm of the government applied to a central power of imperial wealth under the control of the leading financiers. People without homes will not quarrel with their leaders.
History repeats itself in regular cycles. This truth is well known among our principal men who are engaged in forming an imperialism of the world. While they are doing this, the people must be kept in a state of political antagonism."
excerpt from the bankers manifesto of 1892
"Sometimes the law defends plunder and participates in it. Sometimes the law places the whole apparatus of judges, police, prisons and gendarmes at the service of the plunderers, and treats the victim - when he defends himself - as a criminal."
Frederic Bastiat.