Revolving Door? Shocking, Just Shocking . . .

Thu, Jul 17, 2014 - 12:10am

Some wise folks have repeatedly told us that regulatory enforcement at the highest levels is compromised because of the constant flow of high-ranking government officials from positions of governmental power into the lofty, highly-paid perches of private employers who were once the subjects of regulation by those same folks.

Look at all the criminal actions brought by the SEC against all of the wrongdoers in the subprime mortgage fiasco? Right, not a single case. Or wait, there are all those bankers who fraudulently issued fake paper, assignments, robosigned documents, all of it, to allow big banks to foreclose upon homeowners who defaulted upon their NINJA, option-arm, no doc loans, who are serving time after being prosecuted by the Department of Justice, right? <sound of crickets . . .>

Well, there is MFing Global, and the Honorable Corzine, right, who stole a billion in customer accounts, and is rotting in jail? Err, wait . . .

Okay, I got it! Martha Stewart spent HARD TIME in prison for obstruction of justice for failing to correctly confess to insider trading some shares stock. There, see, law enforcement WORKS!!

But then there is this story, that just demonstrates the utter absurdity that there is any semblance of the rule of law left in this dying country known now as USSA, where crony-capitalism controls everything.

Take a look here:

"Then-Attorney General Mark Shurtleff interviewed for a job with a law firm that represents Bank of America just two months before he personally signed a settlement of a lawsuit against the financial giant over whether it was illegally foreclosing on homes in Utah.

He subsequently was hired for the post."

Look at WHO is being prosecuted!! Where is the prosecution of the BANK for corruptly securing the favorable treatment from the supposed "public servant," the attorney general of Utah!?

Is it NOT OBVIOUS what is going on here? The rule of law is DEAD.

It is, and has been for a long time now, a crony capitalism, fascist state. We are overpowered by corruption at the highest levels. This has all been made possible by fiat currency, as there is NO check on government power because the FED issues free money to the big banks, who dole it out to greedy politicians looking to get reelected. Worse still, are those in positions of enforcing laws, who seek the golden parachute from pittance wage government salaried positions, to lofty, multi-million dollar per year private salaried positions at influential hedge funds, big law firms, big corporations, etc. The enforcers are now bought and paid for shills, tools of the corrupt insiders.

For a detailed, but somewhat apologetic look at the sordid mess of securitization of home loans, look at this:

Here is a tantalizing bit:

"In 1995, a group of financial institutions (including Fannie Mae, Freddie Mac,
Bank of America and JP Morgan Chase) joined together to create the Mortgage Electronic Registration System, or MERS. The objective was to streamline the mortgage recording process by bypassing county offices that were slow to process legal documents regarding ownership of mortgages. Rather than record the mortgage with the county clerk, it was instead registered in the name of MERS, which became the owner of record. MERS could transfer the mortgage at
will as many times as desired to accommodate the speed of securitization that characterized the boom years. Transfers were to be recorded in the MERS database. Thus, MERS was a form of book entry for mortgages.

However, MERS relied on mortgage originators and securitization sponsors to record the mortgages as they were transferred through the system. Moreover, when
mortgage delinquencies mounted, MERS did not have the resources required to track ultimate ownership of the claims, thereby delaying possible renegotiation and/or mortgage resolution. Moreover, Hunt, Stanton and Wallace (2011) and Robinson (2011) show that the MERS structure violates legal requirements and may undermine the bankruptcy remoteness legal foundation crucial to the viability of mortgage securitization.

Moreover, the presence of MERS at the origination stage may have created moral hazard at each stage of securitization as underwriters, depositors and servicers substituted MERS’ purported book-entry system for their own back office record keeping. In our analysis, we find that the presence of MERS significantly contributes to the incidence of limbo loans and constitutes operational risk."

So, let me sum up one of their points: a scheme, created by TBTF banks and government-sponsored entities, a public-private crony capitalistic structure, resulted in institutionalized, systemic fraud that has now lead the country into at least seven years of economic malaise? This summation is FROM two academics and a BANKER no less!! [Linda Allen, Zicklin School of Business, Baruch College, CUNY; Stavros Peristiani, Federal Reserve Bank of New York; and
Yi Tang, Fordham University].

They conclude with this:

"In this paper, we document the extent of the limbo loans problem for Florida. We find the problem to be substantial in size, impacting around $25 billion, or almost 20% of subprime mortgages as of December 2010. Importantly, we find results consistent with the operational risk hypothesis. [E.g., FRAUD!!!!!] The limbo loan phenomenon does not appear to emanate from either bank capital constraints or bank capacity bottlenecks (although we do find some evidence of servicer bottlenecks). Instead, back office problems such as MERS participation and lost documentation [the fact is that documents proving the legitimacy of the loan and right to foreclose are NON-EXISTENT, but from this fact, these banksters draw the conclusion that the documents are "lost" rather than the equally likely, if not compelling conclusion that the ENTIRE SECURITIZATION SCHEME IS ONE BIG WALL-STREET FRAUD, MADE POSSIBLE BY FIAT PAPER!!], are shown to contribute both to the likelihood that a delinquent loan will remain in limbo, as well as to the length of time the loan remains in the limbo state."

So, what lessons can we glean from this bit of news and analysis?

Big banks corrupted the process, making debt slaves out of millions of Americans. After legions of homeowners defaulted, paper holders cannot, absent some risk of criminal exposure, or some financial exposure to at least a drawn-out civil litigation battle and attendant costs and fees, simply scoop up the homes and be gone like a thief in the night.

The result: "limbo-loans." As far as the eye can see, and for as long as banks get to keep these non performing loans on their books, in limbo.

What an utter farce.

Stack and prepare, or else.


and here:

As a closing comment, I do not know this attorney on the livinglies site. He seems to know his stuff, is an expert on this whole mess, and anyone affected with the housing meltdown can and should get answers to their own unique situation.

I am not licensed to practice law except in California, and as such, I have to politely decline the requests for specific legal advice. To do otherwise would place me in jeopardy of dispensing advice without a proper license. I do apologize in advance, but that is the way the system works.

If one looks around, one can find a qualified lawyer, just do the homework. I have given you all some leads, and good luck!

About the Author


sierra skier
Jul 17, 2014 - 12:16am


It has been awhile.

Jul 17, 2014 - 12:17am

could it be?

Long drive across the southwest. the drought seems to be easing in NM and TX. Raining hard right now. but people are talking about rain at all the stops we have made.

Now for the article

Jul 17, 2014 - 12:39am

Liars loan

Thank you Cal Lawyer for your great posts. I was wondering if you might know if this is correct? My girlfriend took out a mortgage from then Countrywide in 2007, who was then taken over by Bank of America in 2008. The mortgage was described by Honolulu attorney as a" Liar's loan" because Countrywide lied about my girlfriends finances and her ability to pay the monthly payment. In 2010 she hired that attorney, a Gary Dubin and provided a $16000 retainer. In November 2012 my girlfriend past away. I know her sisters who were the only heirs. I was recently informed that BoA is getting the home because the suit ended with my girlfriend's passing and the trust was not able to continue the fight. Does that sound right to you? The home is located in Hawaii. TIA

Jul 17, 2014 - 12:56am

Comment sought.

Thanks for your article, CA Lawyer. Could you comment on the recent decision involving MERS in federal court?

Thanks again for your contributions.

Spartacus Rex
Jul 17, 2014 - 1:14am

Chris Martenson: Boom & Bust

Chris Martenson on Boom and Bust - RT
Spartacus Rex
Jul 17, 2014 - 1:21am

@ Cal

It's actually Two Utah Atty Generals being indicted and BTW the provided link is not working.

Re: Martha, amazing how seemingly intelligent enough to become a very successful business mogul, yet not smart enough to have simply exercised her 5th Amendment guaranteed Right to simply STHU, or simply utter "I Can't Recall"

LYING to the Federales is F*n CRIME, even if one isn't under Oath/Penalty of Perjury

Why "Moonbeam" sat on his thumb while Atty Gen. and allowed MERS to rape every County of the Recording Fees, and the State of the Income Tax Revenue Stream from the Interest being paid/earned all those years. (and still the derelict DB wound up getting elected as gov again in Calif?)

Even the Calif Supreme Ct is filled w/ derelict DBs. Why does anyone expect accountability?

Sua sponte when they are ALL dependent upon counterfeited ponzi coupons? I think not.

Edit: Found the link I had saved

Two former Utah attorneys general charged with corruption

Cheers, S. Rex

Spartacus Rex
Jul 17, 2014 - 1:36am
Spartacus Rex
Jul 17, 2014 - 2:11am
Spartacus Rex
Jul 17, 2014 - 2:45am

Koos Jansen:

ICBC: A New Global Currency Setup Is Being Conceived

India Imported 713 MT Of Silver In April, 1921 MT YTD

Jul 17, 2014 - 3:05am

9 comments & no hat tip for CaliLaw

Tsk, tsk... :-) The aforementioned issue was one of the factors contributing to my (now somewhat rued) reluctance to buy a house in 2010. What is the current status and process for mortgage securitization (I can't imagine it having stopped)? How does one go about confirming the validity of the seller's claim to a title? What, if anything, is being or could be done to resolve the status of of those property titles in limbo?

Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

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Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

Key Economic Events Week of 10/7

10/8 8:30 ET Producer Price Index
10/9 10:00 ET Job Openings
10/9 10:00 ET Wholesale Inventories
10/9 2:00 ET September FOMC minutes
10/10 8:30 ET Consumer Price Index
10/11 10:00 ET Consumer Sentiment

Key Economic Events Week of 9/30

9/30 9:45 ET Chicago PMI
10/1 9:45 ET Markit Manu PMI
10/1 10:00 ET ISM Manu PMI
10/1 10:00 ET Construction Spending
10/2 China Golden Week Begins
10/2 8:15 ET ADP jobs report
10/3 9:45 ET Markit Service PMI
10/3 10:00 ET ISM Service PMI
10/3 10:00 ET Factory Orders
10/4 8:30 ET BLSBS
10/4 8:30 ET US Trade Deficit

Key Economic Events Week of 9/23

9/23 9:45 ET Markit flash PMIs
9/24 10:00 ET Consumer Confidence
9/26 8:30 ET Q2 GDP third guess
9/27 8:30 ET Durable Goods
9/27 8:30 ET Pers Inc and Cons Spend
9/27 8:30 ET Core Inflation

Key Economic Events Week of 9/16

9/17 9:15 ET Cap Ute & Ind Prod
9/18 8:30 ET Housing Starts & Bldg Perm.
9/18 2:00 ET Fedlines
9/18 2:30 ET CGP presser
9/19 8:30 ET Philly Fed
9/19 10:00 ET Existing Home Sales

Key Economic Events Week of 9/9

9/10 10:00 ET Job openings
9/11 8:30 ET PPI
9/11 10:00 ET Wholesale Inv.
9/12 8:30 ET CPI
9/13 8:30 ET Retail Sales
9/13 10:00 ET Consumer Sentiment
9/13 10:00 ET Business Inv.

Key Economic Events Week of 9/3

9/3 9:45 ET Markit Manu PMI
9/3 10:00 ET ISM Manu PMI
9/3 10:00 ET Construction Spending
9/4 8:30 ET Foreign Trade Deficit
9/5 9:45 ET Markit Svc PMI
9/5 10:00 ET ISM Svc PMI
9/5 10:00 ET Factory Orders
9/6 8:30 ET BLSBS

Key Economic Events Week of 8/26

8/26 8:30 ET Durable Goods
8/27 9:00 ET Case-Shiller Home Price Idx
8/27 10:00 ET Consumer Confidence
8/29 8:30 ET Q2 GDP 2nd guess
8/29 8:30 ET Advance Trade in Goods
8/30 8:30 ET Pers. Inc. and Cons. Spend.
8/30 8:30 ET Core Inflation
8/30 9:45 ET Chicago PMI

Key Economic Events Week of 8/19

8/21 10:00 ET Existing home sales
8/21 2:00 ET July FOMC minutes
8/22 9:45 ET Markit Manu and Svc PMIs
8/22 Jackson Holedown begins
8/23 10:00 ET Chief Goon Powell speaks

Key Economic Events Week of 8/12

8/13 8:30 ET Consumer Price Index
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Labor Costs
8/14 8:30 ET Philly Fed
8/14 9:15 ET Ind Prod and Cap Ute
8/14 10:00 ET Business Inventories
8/15 8:30 ET Housing Starts & Bldg Permits

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