The Robo-Signing Mess Is Just the Tip of the Iceberg, Mortgage Putbacks Will Be the Harbinger of the Collapse of Big Banks that Will Dwarf 2008!

http://www.zerohedge.com/article/robo-signing-mess-just-tip-iceberg-mortgage-putbacks-will-be-harbinger-collapse-big-banks-wi

Outstanding read

Now that the Robo-Signing scandals have achieved full notoriety through the media, it is time to address the real issues facing investors in bank stocks. I also believe that the media is staring at the wrong target. Each major media outlet is copying what is popular or what the next outlet broke as a story versus where the true economic risks actually lie – which is essentially the real story and where the meat actually is. Here's what's truly at stake – the United States is now at risk of losing its hegemony as the financial capital of the world! Why? Because when we had the chance to put the injured banks to sleep and redirect resources to into new productivity, we instead allowed politics to shovel 100's of billions in tax payer capital into zombie institutions as they turned around and paid much of it right back out as bonuses. As a result, significant capital has been destroyed, the original problem has metastized, and the banks are still in zombie status, but with share prices that are multiples of the actual values of the entities that they allegedly represent – a perfect storm for a market crash that will make 2008 look like a bull rally! For those who feel I am being sensationalist, I refer you to my track record in making such claims.

The Japanese tried to hide massive NPAs in its banking system after a credit fueled bubble burst by sweeping them under a rug for political reasons. Here’s a newsflash – it didn’t work, it hasn’t worked for 20 years, and despite that Japan is embarking on QE v3.3 because it simply doesn’t believe that it is not working. Here are the steps the US is consciously taking it its bid to enter a 20 year deflationary spiral like Japan, and may I add that these steps were clearly delineated on BoomBustBlog ONE YEAR ago (Bad CRE, Rotten Home Loans, and the End of US Banking Prominence? Thursday, November 12th, 2009), so no one can say this is a surprise.

Step one: Hide the Truth!

Judges try to get a grip on foreclosure chaos

http://www.bradenton.com/2010/10/04/2624103/judges-try-to-get-grip-on-foreclosure.html

Looks like the Florida judges have had it with the mockery being made of the judicial system.
You know a lawyer knows better than to treat the court system as though it's revlevance means nothing and to treat it as if it's his personal playground.


The fifth time was the final straw for Manatee County Circuit Court Judge Janette Dunnigan.

Four times in a 2007 foreclosure case, a Fort Lauderdale law firm representing a bank scheduled a hearing and either did not appear or canceled it at the last minute without telling others. So when it happened again April 13, Dunnigan called Smith, Hiatt and Diaz P.A. and issued a warning: Stop it or I’ll hold you in contempt of court.

The threat didn’t work: The firm subsequently set two more hearings and didn’t show for either one. So Dunnigan found the firm in “deliberate, willful and flagrant” contempt after an Aug. 30 hearing and issued a $49,000 fine, which the firm is contesting.

Legal observers said they believe Dunnigan’s act is the first time a Florida judge has sanctioned a so-called ‘foreclosure mill’ for its practices. But they said it also illustrates a growing effort by judges to regain control of the foreclosure process after years of chaos.

“The system’s overloaded and they’ve got to do something about it,” said Dawn Bates-Buchanan, managing attorney for Gulfcoast Legal Services’ Bradenton office. “The judges all are saying, ‘No more. We’ve had enough.’ ”

That frustration stems from a foreclosure crisis of historic proportions.

Calif. lawmakers want foreclosure investigation

http://finance.yahoo.com/news/Calif-lawmakers-want-apf-156017385.html?x=0&sec=topStories&pos=main&asset=&ccode=

Nancy Pelosi,
Didn't she just have congress vote on passing off an electronic signature as legal for a Notarized document?
I can just imagine the fraud that could be produced out of that one can't you?
I could sell your car for you and you would even know I did it until it turned up missing.
This investigation is no job for the "collusionists" from congress.
This is a crime and should be treated as such.
I wonder if this is Nancy's way of covering her democratic ass if Obama signs it?
God Damn, they think we're stupid.

More than 30 House members from California are calling on federal regulators to investigate whether mortgage companies broke the law by using paperwork that may have contained errors.

The Democratic lawmakers, led by Rep. Zoe Lofgren and House Speaker Nancy Pelosi, urged bank regulators and the Justice Department to probe whether mortgage companies violated any laws in handling foreclosures and borrowers' requests for loan assistance.

"It appears that we aren't dealing with isolated incidents and that a pattern of misconduct and obstruction is present," Lofgren said Tuesday.

Editorial:On the Foreclosure Front

http://www.nytimes.com/2010/10/03/opinion/03sun1.html?scp=1&sq=&st=nyt

The spin to soften the crime is in the house kids.
Note how it's the "foreclosure front" rather than "Mortgage-gate". A name it's self that brings up the reminder a crime or rather many Federal crimes have been committed by the Mortgage Industry for the sake of speculation greed.
It always goes back to Wall Street and the buying and selling of financial instruments.
Note to the fix the author thinks should be imposed.
To once again lie the fix upon Barney Franks door.
Because Barney is buddies with those who committed the crimes.
He worked hard to ensure that Fannie and Freddie would comply with their needs.
His suggests of sway are all geared toward the coverup of the crime.
What worries me is he is also ascociated with the letter Senator Al Franken sent to Obama, Holder and the others he sent it to.
If mortgage companies work fast now and get sign a quick fix, you will have left a carbon print allowing them to get off the hook.
They need a miracle and are banking on you needing one to.
But your miracle has actually already happened, make sure you don't give it back.
I heard from over at Karl Denninger's place that Wells Fargo is threatening to sue people if they don't sign for their fix.
Don't sign no matter what they threaten, they don't have a leg to stand on.

To the extent the suspensions ensure a process that is legal and fair, they are to the good. But delays feed uncertainty, and that could be bad for the economy. Will they result in fewer foreclosures, helping to prop up prices? Or will they create a backlog of foreclosed homes that will push prices down when they come to market?

The best outcome would be for lenders to work harder to avoid foreclosures altogether. Congress and the administration need to give borrowers more tools to fight for modifications of their mortgages that will allow more Americans to stay in their homes.

The Obama antiforeclosure effort, for instance, requires lenders to do an analysis to see whether it is more prudent to foreclose on a troubled loan or to modify it. Lawyers for borrowers say that it is often unclear why a modification is denied. Congress should pass a law giving homeowners the right to challenge any foreclosure if the lender cannot show it has done a proper analysis.

The Dodd-Frank financial reform law could also help. One provision authorizes — but does not require — more government spending to provide legal services for struggling homeowners. That should be a priority.

What sort of loan modifications are available matters a lot. Reductions in principal are generally regarded as the best way to both deliver relief to homeowners and avoid redefault. The administration has altered its programs somewhat to emphasize principal reductions. It must press lenders to follow through.

The central weakness in the administration’s antiforeclosure