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.
"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: https://aux.zicklin.baruch.cuny.edu/jrer/papers/pdf/forth/accepted/Bank%20Delays%20in%20the%20Resolution%20of%20Delinquent%20Mortgages.pdf
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.
EDITED TO ADD THESE EXCELLENT LINKS:
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!