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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Subprime or Subcrime? Time To Investigate and Prosecute

Today’s Washington Post:

“Credit Crunch In U.S. Upends Global Markets

The turmoil in the U.S. credit markets turned global Thursday, prompting central banks in Europe and the United States to pump more than $150 billion into the financial system to keep it operating smoothly.”

The Sub-Prime Crisis Is Really A “Sub-Crime” Crisis. It Is Time To Investigate and Prosecute This Scandal.

There comes a time when the frame of a news story changes. It happened in Iraq when the “war for Iraqi freedom” became seen as a bloody occupation, not a beneficent liberation. It is happening as the war on terror is increasingly perceived as a war of error, and when voting problems are reframed as electoral fraud.

And it will happen in the economic arena too, when we see the “subprime” credit crunch for what it is: a sub-crime ponzi scheme in which millions of people are losing their homes because of criminal and fraudulent tactics used by financial institutions that pose as respectable players in a highly rigged casino-like market system.

Suddenly, after years of denial and inattention, the press has discovered what they call “the credit crisis.” Vague words like “woes” are still being used to mask a financial calamity that some analysts are already calling an apocalypse, as lenders go under and the Stock Market melts downs.

A French bank froze BILLIONS Thursday saying, “The complete evaporation of liquidity in certain market segments of the U.S. securitization market has made it impossible to value certain assets.” Translation from the French: We are all in deep shit.

On Thursday morning, President Bush was asked about this at a press conference. He blamed borrowers for not understanding the documents they signed. If you have ever tried to read the documents banks prepare for mortgage closings, you will know that they are written by risk minimizing lawyers to be too long and dense to be understood. (Later in the day, the market reacted to his upbeat assessment with the Dow plunging 387 points.)

The financial insiders who watched were more than skeptical. Here are some quotes from a discussion on the Mi-implode website. One of the discussants calls our fearless leader, “President Pumkinhead:”

“Why’d president pumpkinhead have a news conference in the morning? Probably hoping no one would see it and he wouldn’t have to lie to as many people.”

Another described what he was watching with more than disbelief:

“He’s being hit with a lot of questions on mortgages, credit crisis, and the economy… and of course the economy is ‘in for a soft landing’, he’s been assured by the treasury that ‘there is plenty of liquidity’, yadda-yadda-yadda.
But he is stumbling over his words more then usual, not making eye contact, not finishing his sentences… and when he wonders a bit, he quickly goes back on script. It is very odd to watch, to say the least.”

“Odd?” Not for him, but, of course, there are more than one man to hold accountable. This is a deeper structural problem that implicates a whole industry and the process of “financialization” it promotes. This crisis is an example of what goes around comes around as the companies that suspended their usual “standards” and “rules” and self-styled “due diligence” knowingly sucked money out of people with poor credit records and who now find their own companies imploding and collapsing worldwide. Many of the victims are people of color. They were targeted by predators.

Underscore that this was done deliberately, with forethought and malice, a well orchestrated plan to create armies of “suckers” and steal—yes, I said it—their monies to leverage even bigger deals. Their greed had no limits, until the scheme collapsed.

Behind it all were the so-called “Masters of the Universe,” the wise men of Wall Street who worked behind the scenes to turn mortgage brokers and small lenders into part of what will one day be seen as a criminal network worthy of prosecution under the RICCO conspiracy laws used against the mob and drug dealers.

Read this account from the Wall Street Journal:

“Lou Barnes, co-owner of a small Colorado mortgage bank called Boulder West Inc., has been in the mortgage business since the late 1970s. For most of that time, a borrower had to fully document his income. Lenders offered the first no-documentation loans in the mid-1990s, but for no more than 70% of the value of the house being purchased. A few years back, he says, that began to change as Wall Street investment banks and wholesalers demanded ever more mortgages from even the least creditworthy — or ’subprime’ — customers.

All of us felt the suction from Wall Street. One day you would get an email saying, ‘We will buy no-doc loans at 95% loan-to-value,’ and an old-timer like me had never seen one,’ says Mr. Barnes. ‘It wasn’t long before the no-doc emails said 100%.’”

You don’t read many accounts like this of businessmen bashing Wall Street in the business press. Could it all have been stopped? Of course, if there were real regulators and rules protecting consumers and the public interest. And if there was a social movement that championed exonomic justice.

And also, if there were investigative journalists like the ones who just wrote a series on the “debacle” of the “debt bomb” in the Journal – but after the collapse, not before. And what do they admit now? That this is NOT just a subprime problem but far more serious and global.

They note that “credit problems once seen as isolated to a few subprime-mortgage lenders are beginning to propagate across markets and borders in unpredicted ways and degrees. A system designed to distribute and absorb risk might, instead, have bred it, by making it so easy for investors to buy complex securities they didn’t fully understand. And the interconnectedness of markets could mean that a sudden change in sentiment by investors in all sorts of markets could destabilize the financial system and hurt economic growth.”

Will the rest of the media follow up and explain what is really going on?

This is very serious folks, but far too many progressives, activists and politicians alike haven’t spoken out about the crime behind this rolling scandal. We should be calling for major debt reform in America, like Bono advocates for Africa. We should demand criminal penalties for the profiteers who started out to enrich themselves and seem to have ended up destroying the very system they misused. We should press the Congress to use its subpoena power to investigate the corporate criminals and their government enablers.

When they propose a bailout, we should demand a “jailout.” The Washington Post reports that the US has started a bail out “pumping more than $150 billion into the financial system to keep it operating smoothly.” Where is this money coming from? Not from the military budget you can be sure.

Blogger Carolyn Baker writes that we all must become more engaged with these issues saying she is:

“profoundly aware of the role of economic issues-perhaps more than militarism, healthcare, education, politics, or any other institution, in the dead-ahead demise of empire.

I also notice that few in the left-liberal end of the political spectrum have a firm grasp on economic issues which I suspect comes from a fundamental polarization between activism and financial intelligence.”

She writes about a book by a conservative named Michael Panzner called “Financial Armageddon” criticizing his analysis as limited, and by extension, many of the left’s avoidance of these issues as well.

She writes: “What is most disturbing to me about the book is what appears to be a total lack of perception regarding the role of fraud, theft, and malicious intent in the American and global financial train wreck which has been exacerbating over recent decades.”

Indeed! What are we going to do about this? How about starting with becoming more aware?

News Dissector Danny Schechter edits Mediachannel.org and directed the new film “IN DEBT WE TRUST: America Before The Bubble Bursts.” (Indebtwetrust.com). Comments to dissector@mediachannel.org. To get involved, visit Stopthesqueeze.org

Letter: Jim Millrer correcting my view that a different bomb was used on Nagasaki.

That’s what I always thought (and was taught) too…but actually folks, the Nagasaki bomb was the same design as the one tested earlier that July in the New Mexico desert. The first Hiroshima bomb was the untested design - considered very likely to work because it was considerably simpler than the implosion model. It could not be tested because there was only enough uranium-235 for one bomb. The second bomb, dropped on Nagasaki, Japan, on August 9, was code-named “Fat Man”, and was a plutonium bomb of the type tested at Trinity.

So much for the weak excuse that the reason for Nagasaki was to test a different model. We had it, so we used it.

Sincerely,
Jim Miller
http://www.dreamboxmedia.com

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Still Fighting
A great read!!!
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anon2
I was waiting and wondering if any of the great financial pundits are going to go one step further and realize that this sub-prime mess was a result of institutional greed. I wonder what would happen to the markets if it was common knowledge that these mortgage barons manufactured and manipulated "sub-prime" mortgages in order to maximize their returns. You know  1 or 2 defaults in a mortgage securitization pool just allows them to sell higher risk securities for more money. Or maybe they had to make sure they had those 1 or 2 defaults and helped some people along.

If anyone thinks this is about my puny little mortgage or someone else's puny little mortgage think again. Its all about that $25,000,000.00 mortgage backed security, securitized pool, or what ever you want to call it. And you know when I read about the freeze on BNP Paribas, its even bigger than that.

I am truly amazed that what I thought was impossible to happen, and everyone around me thought I was crazy is actually coming to be. Strange too the big disconnect but this always happens in situation like these. In this instance its the the normal middle American homeowner with the paneled den and the fire place and everything that it represents to that home owner -"home" and there are these guys in Paree invest in a security that consists of the notes for a few of those homes wrapped up in a big package.They sell it for a higher rate of return because this loan portfolio it has some risk say like a defaulting homeowner and they make a better rate of return because they bet on that homeowner to default. Except the homeowner doesn't know he's in the game. The ones who were foreclosed may understand they were in the game because the mortgage company couldn't find the note Because they had sold it long ago so they manufactured the lost note affidavit so no one would know that they had done something a little funny with the note that  they sold  as a security to that guy in gay paree.

Two years ago no one understood that. Today mortgage securitization is talked about everywhere. Its that old Chinese curse "may you live in interesting times"
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I really like the change from: SUBPRIME

TO: SUBCRIME

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