Video: Ex-Ginnie Mae CEO Joseph Murin on housing and illegal foreclosures:
- "It's going to get much worse. Expect delays of 6-18 months."
Excellent detail. Murin says he expects foreclosure delays of between 6-18 months due to the moratorium, which is much longer than most current estimates of 30-90 days.
Here's the nightmare scenario for banks -- more homeowners start to challenge the ownership of their mortgage, and choose to stop paying in the interim, destroying bank profits and balance sheets while they wait for resolution from Congress or the courts. Could get ugly. Quickly.
Both Janet Tavakoli and Chris Whalen said Thursday it could necessitate a 2nd-round of bank bailouts. The outcry from taxpayers would be deafening.
How in Hank Paulson's lost paradise of hell do you sell TARP 2.0 to an already bailout-loathing public, when the need for the new rescue is precipitated by bank losses from foreclosure fraud! You don't.
If you're Obama, you can't even look at the door to the room that has the desk where you would sit, and come to the table with this death-wish. Geithner would hasten his departure to Goldman, so you'd be alone. Buh-bye 2012.
Won't happen. Chances are zilch, less than ZIRP even. The result of which would create a new solvency crisis for banks, and this time it could very possibly be for real, given that no politician outside of Paul Kanjorski and Judd Gregg would even entertain bailout euthanasia. And there would be no more FASB rule-change Hail Mary to save their insolvent balance sheets.
Oh, and one more thing. Has anyone stopped to consider whether a similar practice might exist with securitized commercial real estate foreclosures. That will be for tomorrow. It could be the unanticipated Black Swan event of 2010-11. And this bird will be pissed off.
A surfing bird, probably. Clip from Family Guy included below.
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Update: Janet Tavakoli sent along the following email tonight:
"The SEC is a failed regulator. This step is not optional when securities are created and underwritten, and underwriters should be held accountable.
The result:
- Banks are vulnerable to lawsuits from investors in the securitization trusts.
- This problem could cost the banks significantly more money, which could mean TARP II.
This was far from the only problem with the securitization process. It was a massive, widespread, interconnected Ponzi scheme with various types of concurrent fraud. So far our regulators, court system, and Congress have failed in their duties."
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Get all the latest:
Update On The Foreclosure Fraud Crisis (Links, Latest Developments, New Ratigan Op-Ed, Denninger Video)
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If the Black Swan were a Surfing Bird (choose your version):
Trashmen «Surfin Bird» live 1963 -- the original
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Full Metal Jacket -- Surfing Bird
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The Ramones -- Surfing Bird Live -- 1979
Make sure you're watching at 1:45-2:00 for the break.
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Family Guy -- Bird is the Word
Stewie sticks a gun in his mouth at the end.