From the Wall Street Journal
New Mortgage Plan Floated
Underwater Borrowers Current on Payments Would Get Help
BY RUTH SIMON, NICK TIMIRAOS AND DAN FITZPATRICK
State and federal officials are pushing a plan that could help some "underwater" borrowers get refinancing assistance in the latest government bid to break a legal impasse with big banks over alleged foreclosure abuses and ease problems in the housing market.
The proposal was raised in a meeting last week between government negotiators and giant lenders as part of an effort to settle allegations of questionable foreclosure practices. Discussions are still fluid and any final outcome is uncertain. Talks between government officials and the banks are expected to continue this week.
subscription required: http://online.wsj.com/article/SB10001424052970204346104576637513972299854.html?mod=WSJ_hp_LEFTTopStories THE RIGHT HAND: The banksters offer a golden nugget to the settlement talks with the AGs. The AGs are hopeful because they want to go back to doing nothing. The banks have already conned the borrower (and AGs, judges, investors, etc.) into believing the bank is the true owner/holder of the original note and mortgage, and they have the original Note somewhere. Offering to refi (only borrowers who are current with their payments) will make the AGs happy.
The bank has a borrower in good standing; except bank, appraisal, securities, mortgage and forgery fraud have put the poor borrower under water. The banks will graciously, and will be sure to express and embellish "at a great hardship and financial loss to the bank", offer to help the borrower obtain a brand new loan that may appear to be smaller than the original. To borrow a phrase from RD, "the borrower will think Christmas came twice this year."
"Gee Wally... aren't bankers swell."
WATCH THE LEFT HAND:
The bank has just created more money out of -- nothing.
Banks create a "new" Note to replace the ORIGINAL Note, which was fraud-laden, unsecured, non-negotiable, non-transferable, nonexistent, noncollectable and intentionally destroyed --- and one the bank paid nothing for.
Important point: The borrower would never be allowed to pay off their original debt, because the original mortgagee has already been paid off through securitization and is probably out of business anyway, which leaves no witnesses to the crime.
The banks will use the borrower's signature to create a debt obligation the borrower didn't previously have, because the debt was paid off when the originator sold it, plus it was legally rendered invalid (VOID) by all the fraud that took place. So how much money did the bank loan? Nothing. Because there wasn't a valid debt to begin with, there is nobody for the bank to pay! A new security is created and money flows all over the laps of the banksters. Free money.