Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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An early estimate of the cost to taxpayers to bail out the savings and loan industry was $155 billion. More recently, a Wall Street Journal correspondent suggested a $1.4 trillion figure. But the most "acceptable" figure for the bailout appears to be $500 billion.

To put that $500 billion in perspective, it helps to realize that the entire cost of World War II, in current dollars and including service-connected veterans' benefits, is about $460 billion - or $40 billion less than the S&L bailout. The cost of the Vietnam war, including benefits, was $172 billion; Korea was $70 billion; World War I was $63 billion. The Civil War was $7 billion. The combined assets of Prudential, Metropolitan Life, Equitable Life, Aetna, Teachers Insurance, New York Life, Connecticut General, Travelers, John Hancock and Northwestern Mutual don't add up to $500 billion. The combined 1988 profits of all the companies on the Fortune 500 list added up to just $115 billion. And the combined 1987 budgets of all 50 states didn't add up to $500 billion.

In fact, the total federal expenditures on one of the nation's most widespread and tragic problems -- the homeless -- is little more than one-tenth of one percent of the amount we'll spend to bailout the savings and loan industry.

This "solution" was engineered by the Resolution Trust Corporation (RTC) - the government's misnamed S&L caretaker which is engaged in a massive giveaway that will make Teapot Dome look like a demitasse cup. The RTC is the nation's largest operator of financial institutions and, according to The New York Times, "quickly becoming the biggest financial institution in the world, the largest single owner of real estate, the largest liquidation company and the largest auction firm." The RTC solution includes a little known $500 million in outside legal fees and $37 million in administrative costs. And the RTC was established without any meaningful public debate nor with any serious consideration of alternatives.

Here's just one example of the RTC solution: an Arizona insurance executive with a history of legal and regulatory problems was allowed to buy 15 insolvent Texas savings and loan associations with $1000 of his own money and $70 million of borrowed money and in turn was promised $1.85 billion of taxpayers' money in federal subsidies. Commenting on this revelation, Senator Howard Metzenbaum said "In all my years in public office, I have never seen such an abandonment of public responsibility ...". Remember, this case was not part of the S&L crisis, but part of the so-called solution.

One can't expect Congress to be seriously concerned about any solution considering that S&Ls gave $45 million to congressional candidates during the past three elections, including more than $1 million to members of current congressional banking committees.

What has taken place involves fraud, malfeasance, misfeasance, and nonfeasance of a scope never seen before. No war, no defense program, no social program, no other scandal has ever cost what this will cost. And yet the media, absorbed in human interest aspects of the crisis at best, relegate important S&L stories to the business pages despite their enormous effect on every American.


SOURCE: THE PROGRESSIVE REVIEW, 1379 Connecticut Ave., NW, Washington, DC 20009
DATE: August 1990
TITLE: "No-Fault Capitalism Meets Lemon Socialism"
AUTHOR: Sam Smith

SOURCE: THE WALL STREET JOURNAL, 200 Liberty St., New York, NY 10028
DATE: 8/9/90
TITLE: "Viewpoint: Biggest Robbery in History - You're the Victim"
AUTHOR: Michael Gartner

COMMENTS: Author Sam Smith said he was surprised when he started his research into the efforts taken to solve the S&L crisis at how little media attention was given to the nature of the S&L bailout and how it was being carried out. "Even investigative reporting tended to concentrate on how the crisis developed and not on how it was being resolved," Smith said. "I think there are a number of reasons for this: the story being too intimidating, a tendency for journalists (like politicians) to downgrade numbers to adjectives (as in "the $300-billion bailout") rather than facts often far more important than some official's sound-bite, ... and so forth." Smith suggests that the primary beneficiary from the lack of coverage given this issue is a select group of financial entrepreneurs and institutions who have the capital, skill, and contacts to take advantage of the government's haphazard fire-sale approach. He concludes "The S&L crisis was a big story, probably the biggest financial scandal of American history -- until the S&L bailout began. Every dollar lost through corruption, sloppiness or fiscal manipulation in the bailout makes the solution $1 more expensive than the original scandal. In understanding and dealing with this new crisis, the public is getting little help from the media."

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The sub-prime crises is the biggest fraud in the history of the world trillions to hundreds of trillions have been looted depending on the method of calculating the losses. The problem with calculating the costs is because the money is leveraged and the the consequential effects are greater than the actual losses. You have a case of hard figure losses which can be calculated roughly  by the devaluation of home prices, bailouts, debt ratio changes etc. so we can see even the hard figure losses are highly subjective such as market value losses, based on what the inflated values caused by the speculative lending boom? the family and borrowers losses caused borrowing against speculative run-ups in housing prices. The point is there is no hard value to peg the index for losses against. The lenders "losses" which are fictitious money laundering losses such as selling a home they "lent" $100,000 and resold for $70,000 at a Sheriffs sale, well the borrower provided the equity to create the collateral for the loan in the first place and the lender storefront merely went out of business and billed the taxpayers for the fictitious losses. Then we get into derrivatives, and monetary valuation losses which are many times greater than the hard figure or direct losses.

The GSE's were a government scam to artificially boost home ownership and create massive cash flow for lenders, Wall street, the insurnance industry etc. We can see in hind sight if we had true free market capitalism which is really a checkbook dictatorship then homes would have been much more affordable and  the lenders would dare not lose thier own money. The lenders, Wall street, insurance companies and note holders, etc. used a government sponsered monopoly to create massive amounts of collaterized capital for themselves used the equity created off the sweat of our brow. So who did the massive housing subsidies and interests rate deuctions to encourage borrowing more money instead of saving it the people who hold the notes and the people who created leverged money, acutually securities.

We don't have free market capitalism and actually true free market copitalism has never existed, and true public ownership or at least majority control of the monetary system since 1913 when the Congress handed control of both the monetary system and the economy to the government sponsered monopoly known as the Federal Reserve/IRS. Why do I count the IRS becuase it feeds the Fed and government debt. Every year we give more money and control to the government and government sponsered and protected private interests we walk one step closer to Fascism, Socialism, Communism, Feudalism, collectively known as statism where all resources are controled by a powerful central government.

The biggest crime of all is using the excuse of public threat to gain central control over private property. It's UnConstitutional to seize the assets of any group, person, company, etc. for ANY reason without due process. People were more than glad to shread the Constitution to fund Social security, public schools, welfare, etc. in the name of social justice and redistribution of assets from more to less fortunate persons or groups but now we can see the hard lesson that the cash flow and transfer of power created the mechanism that can now be used to strip assets from any group and give them to another. Most of gutting of the Constitution has come due to wars and economic crises. Well it's impossible to dig out of a hole and risky at best to get rich by borrowing and cash flow rather than by production and savings.

We sold our freedom for security, the solution is to return to a savings based hard money currency or at the least a low debt ratio, non interest hard money backed fractional reserve system. The problem though is that the dperesion was caused by a combintaion transfering the gold hard money assets of the U.S. to England to artificially prop up thier socialist economy and a sudden credit contraction in the U.S. triggering government intervention of the monetary system. Europe and England in particular came very close in the late 1920's and the early 1930's and to implimenting U.S. patterned hard money and free markets at the same time corporate monopolists struggled to entrench the Fiat money fractiaonal reserve system based on the bank of England and designed to support full time large scale warefare supported by borrowing from the lenders to pay for the military and pay off the debt with high taxes, and cash flow created by interest payments on government debts created by paying for social services.

So if we revise the debt ration and elinate interst payments to the Fed for printing money it can't be a knee jerk reation to "save" the economy" it must take into account the historical recesionary and depresions created by a contraction in credit with no corresponding stimulus. Idealy the whole process should be self regulating and the entire cash flow and economy based strictly on production results and sustainable resource and energy use. Unfortunately we are debt junkies and businesses and the public may lack the courage, fortitude, foresight and persistnce to go cold turkey and let businesses and personal fruits of labor be the sole reward and payment. A savings based economy would be morally and fiscally ideal.

Right now there are only two major countries which the government doesn't grant private bankers a monopoly to use the citizens money to use to create interest bearing debts with those two counties are Iran, and Pakistan. In those countries the Christian and Judeo principle against usery has been relabled  Islamic law. If those two countries are forced into the global financial and politcal structure almost everyone on the planet earth will be subject to the whims of the bankers wishes.

The government and banks could have never abused the system if we did not allow them to gain so much power.

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