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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They broke it and now cannot fix it. Radical intervention appears to be called for now.

Dec. 21 (Bloomberg) -- Citigroup Inc., Bank of America Corp., and JPMorgan Chase & Co. abandoned a U.S. Treasury- sponsored plan to buy assets from cash-strapped structured investment vehicles.

The ``SuperSiv'' fund brokered by Treasury Secretary Henry Paulson, slated to be about $80 billion when it was announced in October, ``is not needed at this time,'' the banks said in a statement today.

The need for a bailout has diminished as HSBC Holdings Plc, bond insurer MBIA Inc. and other companies that manage SIVs arranged their own rescues. The steps lessened the threat that SIVs will dump their holdings and further roil credit markets contaminated by losses in securities tied to subprime mortgages. New York-based Citigroup said last week it would guarantee $58 billion in debt from SIVs it manages in order to avoid a forced sale of the assets.

``The market is in surgery and they can't even get the Band- Aids to work,'' said Thomas Flaherty, who manages $25 billion in corporate debt at Aberdeen Asset Management in Philadelphia.

OK, what now?? Could it be absolution?

Fair Warning: There is some political stuff in this article which I have avoided posting, but if you go to the site to read the article you will see it.

Similarly, the "money" power of the Federal Reserve – our own monetary Frankenstein monster which reflects us yet inevitably, viciously turns on us – is both profound and seemingly limitless, but yet somehow still mundane and weak. It is the heart of a wretched and lawless system that nevertheless has a few fundamental rules.

Such as this one: the banks are all insolvent, but the insolvency has to be manageable. The subprime problem illustrates the same thing that Fed Chairman Ben Bernanke would telegraph if he ever sent those oft remarked money laden helicopters aloft to drop their load: the situation has become utterly unmanageable.

And indeed we see, the major players are beginning to carp at each other (most recent target Goldman Sachs for their cynical short plays), and are running to Abu Dhabi and Beijing to "shore up capital structure" (Citigroup and Morgan Stanley).

Of course, it is not enough. Somebody is going to be left holding the bag, they all know it, and they’re all scrambling around, pointing fingers, trying to make sure it isn’t them. And it’s too late. And it’s coming soon. They know that, too.

So I've revised my thinking somewhat. I now think there is a real and substantial possibility that a major worldwide economic event will occur in a matter of months, maybe even weeks. And I think the event, should it occur, will center on exactly what it should be centered on: the monetary-financial-banking system.

Thus it's not too soon to start thinking about how calamity and suffering can be avoided, and as it happens I think it is quite simple, and very much like the ancient Solon's solution: the "debts" to the banks must be absolved and the dollar must be redefined in gold terms based upon what is currently on hand at the Treasury and the Federal Reserve, so as to cover deposits in the banking system and avoid a collapse of activity in the "real economy". The gold would be eventually distributed to the banks physically, and the Federal Reserve would be closed. Forever.
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4 justice now
Hello AG,

Yes, I suggest we start a list of all those things that we can clearly do without:

The Federal Reserve

Internal Revenue Service

Absolutely All Lobbyist

95% of all Politician's (Beginning with our pres and his vice criminal).

Attorneys for the most part

Rich, Greedy Bastards which, is most likely a very redundant group based on crap listed so far.

My Opinion.

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4 justice now:

Frankly, I find your post to be offensive and far from constructive.  In response to the Fed's Regulation Z amendment public comment, I SUGGESTED that we identify what we LIKED and DISLIKED about the proposal and HOW it could be IMPROVED.  To date, no one has bothered.

While I AGREE that our Federal Reserve Board was asleep at the wheel for far too long, the Fed DOES now seem to be keenly aware of the problems and is both taking regulatory action AND intervening to inject liquidity into distressed markets in the most market friendly way possible.

The Fed DOES NOT regulate mortgage bankers EXCEPT through TIL and Regulation Z.  It does NOT have the statutory authority to do so!

Whether you LIKE HIM or DISLIKE HIM, the President has essentially no role in the regulation of mortgage bankers either!  President Bush and Vice President Cheney did NOT create this problem!

The IRS did NOT create this problem either.

This having been said, there IS plenty of culpability to go around.  The Comptroller of the currency and the FDIC should have been far more proactive in their regulatory oversight of commercial banks.  The credit rating agencies bear enormous culpability for giving investment grade ratings to junk paper backed by fraudulently obtained mortgages.  The Wall Street investment banks also bear culpability.  Mortgage servicers engaged in wholesale fraud bear culpability.

State attorney generals and local DAs also should have been far more attentive to indications of pervasive fraud.  But generally rising prices tends to lift all boats and submerge even eggregious lending frauds.  While the subprime fraud is only several years in the making, it is the culmination of more than two decades of lending fraud which has ben steadily but imperceptibly RISING during a period of generally rising home prices.

The subprime debacle fueled a home price explosion -- an unsustainable price bubble.  The tide has gone out!  And no all of the submerged fraud is readily exposed.  

While I share your distate for lobbiest and find myself mortified by the quality, competence and integrity of many lawyers -- and especially lawyers working for lender foreclosure mills -- I find venting and hostility directed at most of the entities named to be misplaced.

As far the 95% of the politicians you DISLIKE, I would ask WHAT HAVE YOU DONE to assure the election of people you LIKE, RESPECT and TRUST?  I make political contributions, help with election campaigns and spend ALL DAY working a polling place, both primary and general. 

That is NOT to say that I am uniformly Happy with my elected officials!  I am VERY DISTRESSED at the recent Democratic take-over of control of the U.S. Senate and U.S. House!  And I am mortified as to the possibility that one of the Democratic candidates for President might actually be elected!

In conclusion, contrary to BATTERING the Fed, I would express some tentative mild admiration!  It appears to me that the subprime debacle has WIPED OUT THE CAPITAL of the nations very largest investment banking concerns.  It was this same sort of problem that was a major contributor to the Great Depression.  The Fed has an ENORMOUS problem on its hands of epic proportions. 

To date, the remediation strategies seem both rationale and measured.  As quarterly losses are announced, investment banks make hurried arrangements for private placement of equity for additional capital infusions.  The Fed is obviously closely monitoring liquidity.  So is the European Central Bank!  If these had been doing a POOR JOB of liquidity management, the stock market would have completely tanked and commercial banks would already be FAILING.

While I would AGREE that the subprime debacle is about GREED, it is NOT an indictment of capitalism and free markets.  It is an indictment of very poor regulation (mostly at the state level) and failures in prosecuting violations of existing state laws relating to FRAUD.  
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