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***SPRAYER
07-30-2008, 09:25 AM
Great article, enjoy:

Flawed Mortgage Fix
Bush cave-in to Democrats on bankers’ bailout will accelerate foreclosures.

By Lawrence A. Hunter

The last fortnight has seen President George W. Bush cave into Democratic pressure and withdraw his threatened veto of the so-called “foreclosure-prevention” bill — despite the fact that it retains a $4-billion block-grant program for states to buy up foreclosed properties. Congress promptly passed the flawed bill despite heroic efforts by South Carolina Senator Jim DeMint to slow it down and fix it.

President Bush claimed, rightly, that the program is a bailout for bankers not a hand up for homeowners in trouble. It is measure of Bush’s political impotence that he caved on this new government boondoggle, which not only will fail to solve the foreclosure crisis but actually will exacerbate it. As usual, it will be the little guy who loses big.

Banks have been refusing to sell off foreclosed properties at market-clearing prices, which means they are foreclosing on far fewer homes than the status of their loans justifies.

Instead of foreclosing, banks want to keep even non-performing loans on their books as assets at the loan-origination value, which they are allowed to do under current accounting practices. This allows mortgage lenders to keep a warm body in the house taking care of the asset while they continue using overstated balance sheets to mislead stockholders, regulators, and the public about their true financial health.

For all that’s wrong with this situation, it has had the virtue of attenuating the rate of foreclosures. Therefore, unless the government offers to buy up properties under this new program at prices considerably above market-clearing levels (i.e., above prices speculators will pay right now, which banks are refusing), it will not entice the banks to sell off any more properties than they already are.

Clearly, the president was right before he was wrong on this bill: It is a government handout for the banks, not a hand up for homeowners. But it is worse than simply a waste of taxpayers’ money; it will upset the fragile equilibrium that currently prevents a tsunami of foreclosures from washing across America and drowning millions of American homeowners who are in precarious financial condition and upside-down in their homes.

CONT.
http://article.nationalreview.com/?q=MGE5MzkzN2ZkZmY2NzEzYTY0NmRlNzg0YWE0NGEwNjI=

Stewie
07-30-2008, 12:24 PM
It's the beginning of the long slow bleeding that started about 18 months ago.

Greg Hunter is a great author of all things financial.

The Beginning of a New Era Or The End of the Beginning
Greg Hunter


Everybody knows the date of the start of the Great Depression, October 29th 1929. It was the day of the worst stock market crash in history. Some people confuse the stock market crash on that fateful day as the Great Depression. The Depression was not a single day but rather an era that dragged on through the thirties and into the forties. The picture of what was about to happen to the lives of most Americans in the beginning was opaque at best. At the time, the general public did not realize a major change was taking place. After all, they were being told things like the economy is “fundamentally sound” by then President Hoover. A few other quotes from the beginning of that dark era include:

December 5, 1929
“The Government’s business is in sound condition.”
– Andrew W. Mellon, Secretary of the Treasury

December 28, 1929
“Maintenance of a general high level of business in the United States during December was reviewed today by Robert P. Lamont, Secretary of Commerce, as an indication that American industry had reached a point where a break in New York stock prices does not necessarily mean a national depression.”
– Associated Press dispatch.

January 13, 1930
“Reports to the Department of Commerce indicate that business is in a satisfactory condition, Secretary Lamont said today.”
– News item.

May 1, 1930
“While the crash only took place six months ago, I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover. There is one certainty of the future of a people of the resources, intelligence and character of the people of the United States – that is, prosperity.”
– President Hoover

June 29, 1930
“The worst is over without a doubt.”
– James J. Davis, Secretary of Labor.

June 9, 1931
“The depression has ended.”
– Dr. Julius Klein, Assistant Secretary of Commerce.
(quotes came from Illuminati News Sept. 2005)

Fast forward to today’s credit crisis. I can remember vividly in February of 2007 how all the financial experts and administration officials being brought on to CNN (where I worked as an investigative correspondent) all said that the sub prime crisis (securitized debt or OTC derivatives) would be “contained.” “Contained”? America is now bailing out GSE’s Fannie and Freddie along with every major bank and brokerage house through the Feds “Lending and Auction” facilities. There is no telling what the ultimate tab for all the bailouts will add up to, but trillions of dollars is far from a fantasy figure. After all, this so called credit crisis is not a one day event like the takeover of Bear Sterns or the stock market crash of 1929, but the beginning of a new era. Many financial events and upheavals will serve as mile markers along the road that will undoubtedly shape this new era. What the country will look like in the end will take years to develop. I think where we are now is certainly not the end and not the beginning… but the end of the beginning of a new and dark era in world financial history.

***SPRAYER
07-30-2008, 12:43 PM
I can remember vividly in February of 2007 how all the financial experts and administration officials being brought on to CNN (where I worked as an investigative correspondent) all said that the sub prime crisis (securitized debt or OTC derivatives) would be “contained.” “Contained”? America is now bailing out GSE’s Fannie and Freddie along with every major bank and brokerage house through the Feds “Lending and Auction” facilities. There is no telling what the ultimate tab for all the bailouts will add up to, but trillions of dollars is far from a fantasy figure. [/SIZE][/FONT]

I worked for two banks, Silibank and Doosh Bank, and I was always shocked and amazed at how ****ed up management was in those places.

Nightfyre
07-30-2008, 01:58 PM
Sigh. I feel so helplessly oppressed reading about the absurd bailouts to come. Normally it makes me angry. Today is a landmark because I am just tired; tired of being powerless to stop a bumbling government from ****ing its country in the ass.

***SPRAYER
07-30-2008, 02:00 PM
Sigh. I feel so helplessly oppressed reading about the absurd bailouts to come. Normally it makes me angry. Today is a landmark because I am just tired; tired of being powerless to stop a bumbling government from ****ing its country in the ass.


If it's any consolation, we should have a dictator by 2029.

Programmer
07-30-2008, 02:02 PM
Sigh. I feel so helplessly oppressed reading about the absurd bailouts to come. Normally it makes me angry. Today is a landmark because I am just tired; tired of being powerless to stop a bumbling government from ****ing its country in the ass.

By your tone you are fully blaming Bush II. At the moment the bumbling government is made up of a house ran by democrats and a senate that has more liberal influence than in recent history.

You are helpless and what I find amusing is that you are willing to sit here an moan about the futilness of the situation and not do anything. Have you contacted your senators and representatives and voiced your concerns?

Nightfyre
07-30-2008, 02:06 PM
By your tone you are fully blaming Bush II. At the moment the bumbling government is made up of a house ran by democrats and a senate that has more liberal influence than in recent history.

You are helpless and what I find amusing is that you are willing to sit here an moan about the futilness of the situation and not do anything. Have you contacted your senators and representatives and voiced your concerns?

Hah. No, I blame congress first and foremost. Bush probably should not have caved. I also blame Greenspan, Bernanke, and Paulson as well. Mostly I am blaming all of government here.

As to your second point, I doubt Senator Max Baucus, one of the most liberal senators I am aware of and chair of the finance committee, wants MY opinion on the state of affairs within the economy.

edit: I still don't see where you jumped off the bridge on your first conclusion, however.

***SPRAYER
07-30-2008, 02:07 PM
Have you contacted your senators and representatives and voiced your concerns?

ROFL

markk
07-30-2008, 02:20 PM
Instead of foreclosing, banks want to keep even non-performing loans on their books as assets at the loan-origination value, which they are allowed to do under current accounting practices. This allows mortgage lenders to keep a warm body in the house taking care of the asset while they continue using overstated balance sheets to mislead stockholders, regulators, and the public about their true financial health.


Well that's one way to look at it.

Another way would be that banks realize these houses aren't going to sell, so they keep the 'owner' in the house... then they can possibly foreclose on it later at such a time as they would not have to sell the house at a rock bottom price and lose their shirt.

I mean, what am I missing here? It just seems like prudent business practice to minimize your tax liability and operating expenses. In this market, what would they gain by kicking the rest of their deadbeat borrowers out?

noa
07-30-2008, 02:26 PM
I don't have a good grasp on the whole thing, but I remember reading something in the WSJ about how some banks are having a tough time foreclosing on all of the properties because they can't necessarily prove ownership of the mortgage. Something to do with the burden of proof in bankruptcy courts and how the securities have changed hands so many times, the trail of ownership isn't exactly clear. That might explain why not everything that can be foreclosed right now is. But like I said, I know very little about this field.

Stewie
07-30-2008, 04:17 PM
Well that's one way to look at it.

Another way would be that banks realize these houses aren't going to sell, so they keep the 'owner' in the house... then they can possibly foreclose on it later at such a time as they would not have to sell the house at a rock bottom price and lose their shirt.

I mean, what am I missing here? It just seems like prudent business practice to minimize your tax liability and operating expenses. In this market, what would they gain by kicking the rest of their deadbeat borrowers out?

So who's paying the bond owner (via the mortgage) the money he's owed every month? The banks have become benevolent benefactors? I don't think so.

Stewie
07-30-2008, 04:23 PM
I don't have a good grasp on the whole thing, but I remember reading something in the WSJ about how some banks are having a tough time foreclosing on all of the properties because they can't necessarily prove ownership of the mortgage. Something to do with the burden of proof in bankruptcy courts and how the securities have changed hands so many times, the trail of ownership isn't exactly clear. That might explain why not everything that can be foreclosed right now is. But like I said, I know very little about this field.

Your understanding of this is correct, except it's not necessarily banks foreclosing. When they (the big brokers) bundled these mortgages and sold them to investors they were sliced and diced, so true ownership of the note is hard to determine. There have been several foreclosures that have been stopped because there was no way to determine who actually owned the debt. One scenario coming out of this is that these homeowners may get a free house out of the deal.

SBK
07-30-2008, 04:35 PM
This bailout will just make things take longer and turn out worse. We really need to purge Washington. I'm really considering voting not based upon values, but based upon who's not there now.

***SPRAYER
07-30-2008, 04:38 PM
This bailout will just make things take longer and turn out worse. We really need to purge Washington. I'm really considering voting not based upon values, but based upon who's not there now.

You know, that might not be such a bad idea; vote for whoever the incumbent is.

Programmer
07-30-2008, 05:22 PM
edit: I still don't see where you jumped off the bridge on your first conclusion, however.


With the normal 'government to blame' issues on this board it's been the norm to cry out that Bush II is the blame for everything wrong in the country.

If that wasn't your intent, I will apologize for lumping you in with the others.

banyon
07-30-2008, 06:57 PM
Felons Can't Vote in Florida but are Free to Fleece the Public

http://www.mortgagenewsdaily.com/7242008_Florida_Felon_Mortgage_License.asp

Remember Florida's notorious 2000 election? It escaped a lot of press attention at the time, but before hanging chad and the butterfly ballot there was an effort to purge any and all convicted felons from the voting roles. The right to vote was yanked from some 50,000 alleged ex-convicts. (Many of those disenfranchised were the victims of mistaken identity or other non-felonious problems.)

Thus it is pretty well established that a felon's right to vote may be challenged by the state. So if felons are not allowed to vote in Florida, at least not without legal recourse; what can they do in the Sunshine State?

For little more than a $215 application fee, they could become licensed mortgage brokers in the state.


The Miami Herald's investigative team reported on Sunday that the state has approved over 10,000 mortgage broker licenses for convicted felons :eek:since 2000; over 4,000 were issued to individuals who had been convicted of crimes such as fraud, extortion, racketeering, and bank robbery - crimes that are specifically prohibited by the licensing statute - and a smattering of licenses are held by felons convicted of violent crimes including 15 murders. Collectively these felons were guilty of 2,821 financial crimes, including 922 larcenies, 752 frauds, 327 burglaries, 161 forgeries and 67 robberies. The list includes brokers arrested and convicted in Florida, those who had been imprisoned in other states, and those convicted in federal courts.

The rush for mortgage broker licenses was fueled, at least in part, by the superheated Florida real estate market. As home prices reached the highest levels in history and the rate of new construction, particularly of condominiums, soared, the possibility of easy money lured record numbers of people into the mortgage business. Regulators were hard pressed to keep up with the flood of applications; between 2002 and 2007 the number of mortgage broker licenses tripled. More than half the people who wrote mortgages in Florida during that period did not have any criminal background checks. Despite repeated pleas from industry leaders to screen them, Florida regulators have refused. During the boom period only 29 applicants were rejected based on their criminal records.

The investigative team uses the example of Scott Almeida who admitted on his license application that he had served time in federal prison for cocaine trafficking. Florida regulators asked for a character reference and the name of a reputable supervisor to oversee his mortgage business. He provided a note from his mother and the name of a guy he had met in the prison visitor room. What then ensued, after Almeida was approved and paid the license fee, was a crime spree that lasted three years, and stretched from Tampa to Miami. Almeida arranged nearly $3 million in fraudulent loans and fleeced 30 people.

The Florida Office of Financial Regulation -- which polices the mortgage industry - twice failed to act on information that Almeida was stealing from clients and his scam continued until the police caught up with him and threw him into jail.

State regulators allowed thousands of ex-convicts to enter a profession that gave them access to the most sensitive and personal financial information: credit cards, bank accounts and Social Security numbers. These criminals then went on to commit nearly $85 million in mortgage fraud, stealing customer identities, money, and sometimes their homes. Felons committed fraud which targeted both customers and banks, boosting reported borrower incomes and arranging for complicated sale and resale schemes using straw buyers and inflated appraisals.

The newspaper quoted Don Saxon, commissioner of the Office of Financial Regulation, who said he didn't know why his staff issued licenses to bank robbers and racketeers, but would look into the cases cited by The Herald.

"You're asking me to get into the heads of the people who made those choices," Saxon said. He added: "Certainly we are not proud of the fact that these people have gone on to do bad things."

OFR officials who do the screening said there is no single standard they use to decide who gets a license: The criminal background check is just one of many factors.

"We look at all the facets around, you know, whatever file, and we predicate on the fact that everybody deserves another chance," said Terry Straub, director of the OFR's Division of Finance, which regulates the mortgage industry in Florida.

Florida has been hit harder by the housing crisis than most other states, but the authors of the Herald article, Jack Dolan, Rob Barry, and Matthew Haggman, claim that other states such as Colorado and Alaska do not require a license and have had similar problems with mortgage fraud.

Hydrae
07-30-2008, 06:58 PM
I am getting so sick and tired of these idiots in Washington taking my money to help other people pay their bills. Just once I would like to keep my own money to pay my own bills. Obviously this is simply asking too much though. :sulk:

Calcountry
07-30-2008, 07:27 PM
Sigh. I feel so helplessly oppressed reading about the absurd bailouts to come. Normally it makes me angry. Today is a landmark because I am just tired; tired of being powerless to stop a bumbling government from ****ing its country in the ass.
Who's committees marked up that legislation?

Calcountry
07-30-2008, 07:29 PM
This bailout will just make things take longer and turn out worse. We really need to purge Washington. I'm really considering voting not based upon values, but based upon who's not there now.
Nancy Pelosi, is in favor of free Botox for all women.

Calcountry
07-30-2008, 07:31 PM
I am getting so sick and tired of these idiots in Washington taking my money to help other people pay their bills. Just once I would like to keep my own money to pay my own bills. Obviously this is simply asking too much though. :sulk:Billions to Africa to fight aids, and the warlords probably soak it up.

BTW, we need to get a tune up, that is Husseins answer to the energy crises. Somebody has to get Jimmy Carter out of the Obama campaign.

THe dude is an idiot.

***SPRAYER
07-30-2008, 07:36 PM
[SIZE="4"]For little more than a $215 application fee, they could become licensed mortgage brokers in the state.


The Miami Herald's investigative team reported on Sunday that the state has approved over 10,000 mortgage broker licenses for convicted felons :eek:since 2000; over 4,000 were issued to individuals who had been convicted of crimes such as fraud, extortion, racketeering, and bank robbery - crimes that are specifically prohibited by the licensing statute - and a smattering of licenses are held by felons convicted of violent crimes including 15 murders. Collectively these felons were guilty of 2,821 financial crimes, including 922 larcenies, 752 frauds, 327 burglaries, 161 forgeries and 67 robberies. The list includes brokers arrested and convicted in Florida, those who had been imprisoned in other states, and those convicted in federal courts.

Holy shit, great find!

ROFL F'n Florida!

Hydrae
07-30-2008, 07:37 PM
Billions to Africa to fight aids, and the warlords probably soak it up.

BTW, we need to get a tune up, that is Husseins answer to the energy crises. Somebody has to get Jimmy Carter out of the Obama campaign.

THe dude is an idiot.

You mean like the sheiks in Iraq and the money we are giving them not to fight us?

banyon
07-30-2008, 07:38 PM
Billions to Africa to fight aids, and the warlords probably soak it up.

BTW, we need to get a tune up, that is Husseins answer to the energy crises. Somebody has to get Jimmy Carter out of the Obama campaign.

THe dude is an idiot.

Yeah, that's his whole energy plan! Yep! No doubt about it.

You sure set me straight with this piece of reasoning, I don't know how I ever could've considered supporting such a candidate.

Hydrae
07-30-2008, 07:39 PM
Holy shit, great find!

ROFL F'n Florida!

Speaking of Florida, I was listening to Clark Howard on my way home last night and he was talking about the new tourism industry they have down there now. Seems Europeans are flying over here, getting on busses and are touring foreclosed properties. These people are not even going to the beach or Disneyworld, they are here to spend their euros buying up our properties.

Ain't that just a lovely kettle of fish?

***SPRAYER
07-30-2008, 07:40 PM
Speaking of Florida, I was listening to Clark Howard on my way home last night and he was talking about the new tourism industry they have down there now. Seems Europeans are flying over here, getting on busses and are touring foreclosed properties. These people are not even going to the beach or Disneyworld, they are here to spend their euros buying up our properties.

Ain't that just a lovely kettle of fish?

It is what it is.

Sigh.

banyon
07-30-2008, 07:55 PM
Speaking of Florida, I was listening to Clark Howard on my way home last night and he was talking about the new tourism industry they have down there now. Seems Europeans are flying over here, getting on busses and are touring foreclosed properties. These people are not even going to the beach or Disneyworld, they are here to spend their euros buying up our properties.

Ain't that just a lovely kettle of fish?

That's not even the worst of it, try reading about some of the foreign companies that are outright buying our toll roads. We're goingto get to pay foreign countries for the right to drive on roads that had been built with our tax and toll dollars.

Hydrae
07-30-2008, 08:12 PM
That's not even the worst of it, try reading about some of the foreign companies that are outright buying our toll roads. We're goingto get to pay foreign countries for the right to drive on roads that had been built with our tax and toll dollars.

You do know that the Trans-Texas fiasco is being built by a Spanish company, right? We can't even support our own companies to build the damn road.

***SPRAYER
07-31-2008, 02:48 PM
I got this from somebody's blog (link at the bottom):


The measure passed last Saturday is being described to the public as a "homeowner" bailout. It is nothing of the sort. It supposedly creates an independent oversight mechanism to rein in the excesses of Fannie and Freddie. This, too, is an unalloyed falsehood.


Let us disambiguate the key issue right now. This is a measure to nationalize Fannie and Freddie, plundering the population at large -- through direct taxation, the more insidious tax called inflation, or both -- to bail out two fascist entities that have been used to enrich the politically connected super-rich through the most corrupt means imaginable.


Furthermore, this measure prefigures the eventual nationalization of the entire financial system under the supervision of an executive branch official with practically unlimited power to appropriate and allocate funds without congressional action. OK, sure, he has to file a report with Congress regarding his expenditures. But this takes place after the fact, and Congress will be able to do nothing but complain, if it can bestir itself even to that extent.


http://freedominourtime.blogspot.com/2008/07/big-bailout-america-as-full-spectrum.html

Stewie
07-31-2008, 04:12 PM
Geebus!<tt> </tt>Whats next? Nationalize the Federal Reserve Bank? Then what? Nationalize the US Treasury and US Govt? :)

We can't afford THAT! I don't know about you guys, but I ain't chipping in for it. They can get my share from China.