Central Planner Exits Stage Left

And cash from clunkers begins...

Ok, so I'm having me one of those blond days today

Does the cash for clunkers, stand for the excess crap the banks can't off load
or is the clunker part pertaining to the fraudulent MBS that never got registered?
There had to have been a crap load of those. Karl said that the banks only had 30 days after they were bought. I know there was a heck of alot of lawsuits citing fraud.
Doesn't the FED buying 40 billion a month of MBS kind of get the Investment banks out of a pretty tight spot?
Isn't the American taxpayer really picking up tab for the Mortgage Investment Banks gambling debts again?
It seems to me they are.....

MERS CEO R.K. Arnold Leaving Company

http://www.zerohedge.com/article/mers-ceo-rk-arnold-leaving-company

Are the banks using Arnold for the fall guy?
The banks themselves are responsible for the inception of MERS, not Arnold.
They were trying to cut a fat rat and did so it seems for close to a decade, until their house of cards fell down.
Now it seems there are 65 million homes that don't have titles that can be traced.
The mortgage investment banks single handedly fried a 400 year old system that worked without a fault for it's intended purpose, by using a system that they created, that only worked in theory to hide what they were doing.
Stealing America blind.
I see the mafia got picked on and I ask myself why. The investment banks have done way more damage to this country than the mafia ever has, and rather than arrest them our governmennt protects and rewards them.
I can't wait to hear what Karl has to say about this.



Is the biggest fraud in the history of the US housing market about to come unglued? If so, take our prediction of a $100 billion total in future BofA rep and warranty reserves and triple it.

From the WSJ:

The chief executive of the privately-held Mortgage Electronic Registration Systems, or MERS, is planning to leave the company and an announcement could come within days, according to people familiar with the matter.

The company has been under fire by Congress and state officials for its role in the mortgage-document crisis. The firm's board of directors has met in recent days to address the fate of the company and its chief executive, R.K. Arnold, the people said.

Arnold and other MERS executives didn't respond to requests for comment. A MERS spokeswoman Friday declined comment. Arnold, a former U.S. Army Ranger, has served as the CEO and president of Merscorp Inc., the parent company of MERS, since 1998 and has been with the company since its inception 15 years ago, according to a corporate biography.

MERS was built by Fannie Mae (FNMA), Freddie Mac (FMCC), and several large U.S. banks in 1996 as an electronic registry of land records. That created a parallel database to facilitate the packaging of loans into securities that could be sold and re-sold without being recorded in local county courthouses, reducing costs for banks. The company's name is listed as the agent for mortgage lenders on more than 65 million home loans.

But the company's practices have begun to receive heavy scrutiny from state prosecutors and federal regulators, particularly in light of foreclosure-document problems that surfaced last fall. State and federal lawmakers have begun to consider bills that would make it harder for banks to use or foreclose on properties through MERS.

New York Fed Faces `Inherent Conflict' in Mortgage Buybacks

http://www.bloomberg.com/news/2010-10-21/new-york-fed-faces-inherent-conflict-in-seeking-to-recover-mortgage-loss.html

Oh what's a little conflict of interest when Timmy is so busy saving the world?
He did a great job over seeing the AIG bailout in making sure Goldman Sachs and friends got 100 cents on the dollar for their insurance contracts with AIG.
And him and Ben have a great plan (even if you have to pay for it again) of buying up all that crap that those pesky MBS investors are bitchin about.
Heck their even going to keep it off the balance sheet, so it won't be added in.
That certainly will make the bottom line look a whole lot better, and it is the standard investment banking practice and if they all do it , it must be legal right?
Don't you fret for minute.
Timmy and Ben have got it covered.


The Federal Reserve Bank of New York’s effort to recover taxpayer money used in bailouts during the crisis may be at odds with its mission to ensure the stability of the financial system.

The New York Fed, which acquired mortgage debt in the 2008 rescues of Bear Stearns Cos. and American International Group Inc., joined a bondholder group including Pacific Investment Management Co. that aims to force Bank of America Corp. to buy back some bad home loans packaged into $47 billion of securities, people familiar with the matter said this week.

Fannie And Freddie HAVE NO NOTES EITHER?

http://market-ticker.org/akcs-www?post=169840

Oh the fine details are so pesky,and time consuming.
What's the problem?
It's all recorded on an excel spread sheet.
Isn't that good enough for you?
It saved our investor piles of money from not legally recording those details at the time.
To bad they're going to lose so much now legal fees and put backs, but you know it's all your fault not ours.
Your the one demanding to see those pesky little details, not us.
We can work without them, why can't you?

Which fraud are we referring to this time? Are we referring to tendering garbage loans in violation of representations and warranties (on purpose) or the larger issue - not tendering the notes at all, leaving MBS investors holding an empty box, a REMIC structure that cannot take in the paper later, and nobody with actual legal standing to foreclose?

The mortgage giants are sorting through their growing pile of delinquent loans to find sloppy or fraudulent loan underwriting that constitutes a violation of representations and warranties.

Oh, the former.

Still no comment on the latter issue, even though, once again, if you listen to the second link here at 8:25 in, you will hear two foreclosure defense lawyers tell you that they have never seen an actual properly-conveyed note.

Again - where is the damn paperwork that under State Law in about half the states, you must possess complete with all intervening endorsements, in order have an actual security interest in the property - that is, the right to foreclose?

Will Bankers go to jail for foreclosure-gate?

http://curiouscapitalist.blogs.time.com/2010/10/19/will-bankers-go-to-jail-for-foreclosure-gate/

There is no doubt that the perpetuation of fraud went all the way to the top seats of the banking industry.
They made MERS, they knew it didn't retain documentation for all of those loans. It was designed not to for easier fraud practice.
You can't resell a mortgage 4 or 5 times if there was easy investor access for a loan look up.


More and more, Foreclosure-gate is looking like the housing bust's Enron.

One of the amazing developments of the unraveling of the financial crisis has been the fact that there have been so few people we can actually point to and say without a doubt that guy or gal is a crook. Yes, Bernie Madoff and his fellow ponziers, but they were only flushed out by the financial crisis. They didn't really cause it. The Bear Stearns hedgies beat their case. The mastermind of AIG's demise Joe Cassano looks to have made a clean getaway. Lehman's Dick Fuld is still in the clear. Goldman and just last week Countrywide's executives had to pay out large fines. But none of them are headed to jail. John Paulson and other hedge funds that help construct CDO debt bombs and bet against them, haven't even been forced to give some of their winnings back. I can't think of anyone of any real consequence who is facing hard time.

Thanks to foreclosure-gate that may soon change.



Read more: http://curiouscapitalist.blogs.time.com/2010/10/19/will-bankers-go-to-jail-for-foreclosure-gate/#ixzz12uaSn9k6

Foreclosure expert confirms Mortagages sold numerous times

http://www.washingtonsblog.com/

Push button fraud, the standard practice.
If this was you or me the FBI would have nailed our ass long ago.
So why are these bankers still in operation?
After knowing all of this would you even seriously think of buying a house?
Oh Hell NO
So why are the "Talking Heads" still trying to sell the idea that a foreclosure moratorium would hurt housing even more?
This is how stupid the "talking heads" are, after reading all of this, do they actually think there is a real estate market left to hurt?
Lol apparently they do, it must be all those new housing starts.....NOT!

From Washington's blog
Today, foreclosure expert Neil Garfield (former investment banker, trial lawyer and board member of several financial institutions) confirms this, explains that the loans were not actually securitized, and the whole "sloppy paperwork" excuse is really an attempt to explain away a system of push-button fraud:

The game was to move money under a scheme of deceit and fraud. First sell the bonds and collect the money into a pool. Second take your fees, third take what’s left and get it committed into “loans” (which were in actuality securities) sold to homeowners under the same false pretenses as the bonds were sold to investors. By controlling the flow of funds and documentation, the middlemen were able to sell, pledge and otherwise trade off the flow of receivables several times over — a necessary complexity not only for the profit it generated, but to make it far more difficult for anyone to track the footprints in the sand.

If the loans had actually been securitized, the issue would not arise. They were not securitized. This was a mass illusion or hallucination induced by Wall Street spiking the punch bowl. The gap (second tier yield spread premium) created between the amount of money funded by investors and the amount of money actually deployed into “loans” was so large that it could not be justified as fees. It was profit on sale from the aggregator to the “trust” (special purpose vehicle). It was undisclosed, deceitful and fraudulent.

Thus the “credit enhancement” scenario with tranches, credit default swaps and insurance had to be

Sorry Folks, The Put-Back Apocalypse Ain't Gonna Happen

http://www.cnbc.com/id/39686897?__source=yahoo%7Cheadline%7Cquote%7Ctext%7C&par=yahoo

Your not allowed to change the rules at the end of the game.
And by all rights I do believe this is the end of the game for the bankers.
And this is a big sell to spin what the banks and politicians want to have happen.
But if this occurs, then it will undoutable prove that there is no longer enforcable judicial law to govern the country by.
The mortgage meltdown was not a mistake
But a well thought out criminal action.
It's not something you can look the other way on.
Nor should the government be allowed to tell you, you should.
If you can't do the time, don't do the crime.


Because the politicians will not let the financial stability of the largest bank in the nation be threatened by contractual rights. Not when there’s an easy fix available that won’t cost taxpayers a dime.

Here’s what is going to happen: Congress will pass a law called something like “The Financial Modernization and Stability Act of 2010” that will retroactively grant mortgage pools the rights in the underlying mortgages that people are worried about. All the screwed up paperwork, lost notes, unassigned security interests will be forgiven by a legislative act.

There’s a big difference between the financial crisis of 2008 and the new crisis. In 2008, banks were destabilized by the growing realization that they were over-exposed to the real estate market. Huge portions of their balance sheets were committed to mortgage-linked investments that were no longer generating the expected revenues or producing losses. That was a problem of economics that could only be solved by recapitalizing banks or letting some of the biggest banks in the U.S. fail.

The put-back crisis is not driven by economics. It is driven by legal rights. And there’s simply zero probability that the politicians in Washington are going to let Bank of America or Citigroup or JP Morgan Chase fail because of a legal issue.

So here’s what I expect will happen. The lame duck session of Congress will pass a bill that essentially papers over the misdeeds of the banks that originated mortgage securities. Every member of Congress and every Senator who has been voted out of office will cast a vote for the bill. And the President will sign it.

UBS Declines Legal Action Over Subprime Losses

http://www.nytimes.com/2010/10/15/business/global/15ubs.html?ref=business

No legal action, in other words
Fuck You common stock holders
We don't even consider you anything to worry about, let alone worry for!
Legal action might just actually implicate us, so we're making no waves in hopes this situation will just go away!

The Swiss bank UBS said Thursday that it will not take legal action against former executives and board members for the huge losses suffered during the U.S. subprime crisis that forced a bailout of the company.

Kaspar Villiger, chairman of Switzerland’s largest bank, said in a statement that the company had learned lessons from the crisis and now was focusing on the future.

“What happened should not have been allowed to happen

“Despite warnings, the bank falsely believed that its financial products in relation to the U.S. real estate market were valuable and sufficiently hedged against losses,” the report said.

UBS, long the star of the Swiss banking industry, lost billions of dollars during the global economic crisis and the confidence of many investors during a lengthy tax dispute with the United States.

Regarding this dispute, the report acknowledged that the bank had not made a comprehensive assessment of the compliance risk of its U.S. cross-border wealth management business before the investigation by U.S. authorities

J.P. Morgan Widens Mortgage Review to 41 States

http://online.wsj.com/article/SB10001424052748703673604575550030620196818.html

Here's the laugh for the day.
JP Morgan Chase only has 115,000 files to review for mistaken documents.
MERS requires no county or loan number. 115,000 reviews lol...Only in their wildest dreams.
Blank means they don't hold the right to foreclose and neither does the MBS investor that they stuck it with.

America in the old days they called this ...Jubilee
Your debt mortgage debt has been forgiven courtesy of the banks own penance for greed.
Greed kills
And when you live by the sword, you die by the sword!


J.P. Morgan Chase & Co. widened its review of foreclosures to 41 states and 115,000 loan files, the latest U.S. bank to take a more comprehensive look at its documentation to ensure all information is accurate

Mortgage Investors Are Set for More Pain

http://online.wsj.com/article/SB10001424052748703843804575534303696918076.html

This is bleeding the banks all by itself.
They have to continue to service the bond payments with a massive loss of income to do it.
Just say NO to TARP II.

For mortgage investors, the recent suspension of foreclosures could potentially cause further losses in the already-battered $2.8 trillion market for residential mortgage-backed securities.

When houses that have been packaged into a mortgage bond are liquidated at a foreclosure sale—the very end of the foreclosure process—the holders of the junior, or riskiest debt, would be the first investors to take losses. But if a foreclosure is delayed, the servicer must typically keep advancing payments that will go to all bondholders, including the junior debt holders, even though the home loan itself is producing no revenue stream.

The latest events thus set up an odd circumstance where junior bondholders—typically at the bottom of the credit structure—could actually end up better off than they expected. Senior bondholders, typically at the top, could end up worse off.

Not surprisingly, senior debt holders want banks to foreclose faster to reduce expenses

Oh BILL! BILL GROSS! Calling You Out Dude

http://market-ticker.org/akcs-www?post=168176

A little classic Karl, doing what Karl does best
Interpreting the bullshit that others spew.


From Twitter:

Gross: In many cases the servicers also originated the mortgage loans: This may lead to potential conflicts in interpreting foreclosure law.

Interpreting?

Let's talk about that a bit, and rehash some of the things that I've been hollering about since 2007.

Let's specifically talk about REMICs and MBS.

Let's talk about whether the notes - wet-ink signatures - were properly conveyed from the originators (or more-properly, the warehouse funders who are in fact the servicers most of the time) to the MBS Trusts (the REMICs.)

Let's talk about the Pooling and Servicing agreements - public documents filed with the SEC - which all said that those notes were conveyed at the time of the funding and formation of the Trust. That would mean that if they weren't the investors who bought those MBS were bamboozled. In common parlance one might call that "Securities Fraud", since that would leave the buyer holding an empty box for which they paid good money, and at best they got an unsecured note (and at worst they got nothing!)

Let's talk about IRS code, and the requirement that those conveyances (and in states where required, recorded conveyances) happen, and the iron gate that bars the REMIC from taking in new assets once that time period has expired, lest its "pass-through" (that is, non-taxable) status be retroactively voided.

Let's also talk about the IRS code provisions that make it non-permissible for a REMIC/MBS Trust to take in a non-performing asset.

Between these two provisions a failure to convey, once beyond 90 days or so when the closing date of the MBS passes, becomes essentially impossible to cure. Therefore, trying to "fix it" once a loan defaults and is headed to foreclosure is quite-literally impossible (other than by counterfeiting documents to show assignments and transfers that never actually happened, that is.)

It is my belief that these "problems", rather than "shortcuts", are why we're seeing all these allegedly-fraudulent backdated assignments and other similar games when foreclosures happen.

Could you address these issues Bill, with particular attention paid to PIMCO's trading in these MBS and what you might know - or suspect - about this?

After all, you are the "Bond King", and I suspect that the rapt viewership of CNBS would love to hear your explanation for what are now cascading claims being filed in real courts with regard to these "minor technicalities."