Jury Anger Displayed - The Public is Awake

Thu, Jul 24, 2014 - 10:53am

As a follow-up to some earlier posts, this post brings into view the public perception component of the housing crisis, in real time, in a definitive, compelling manner.

Last week, in a quiet, bucolic part of this lovely state of California, the jury rendered a verdict in a predatory lending case.

Let's recall the basic story:

(1) Lenders recklessly created residential real estate loans, out of thin air, granting loans to anyone who could fog a mirror. Radical new loan products emerged, such as no income no job loans, option loans, pick a payment, etc. This loan generation process generated fees to the lender for the loan origination. Other fees were tacked on to the loan, and many industries benefited, such as appraisers, realtors, insurers, as well as companies who built houses, and provided goods to furnish all the new houses filled with brand new home owners. The govt was fully supportive of this massive effort, too. No-one had any incentive to stop this madness, as all incentives aligned to perpetuate this free money scheme in the short term; no-one considered, or appears to have ever cared, of any intermediate term or longer term ramifications of this short-sighted, immediate, feel good scheme to place unworthy borrowers into a lifetime debt trap. Bernanke never saw it coming, or so he says . . .

(2) Following creation of the loan, the lenders sold or transferred or assigned the rights to the loan to other companies, who (1) purportedly placed the loan into a trust, thus creating a mortage-backed residential loan security, which was then sold on Wall Street as an investment vehicle, and (2) variously performed the loan servicing [collecting the payments from the homeowner, applying the payments to the various tranches of the various assignees of the loans, and initially, engaging in efforts to restructure loans as they began to go sour].

(3) The housing bubble then burst, exploding the whole fog-the-mirror-and-get-a-giant-loan scam for what it was, a giant ponzi scheme operating on a greater-fool theory.

(4) As part of the aftermath to the housing bust, naturally, private industry looked for solutions, all of which involved either outright fraud [creating fake paper and simply refinancing the earlier bad loan to hide the problem, robosigning fake documents to process MILLIONS of foreclosed homes, etc.], or some form of kick the can until some magic solution showed up [endless loop home loan modification processes, designed to simply allow the servicer to generate fees, while simultaneously allowing the entity holding the "investment" to not realize any losses from a defaulted loan].

(5) As private solutions, namely fraud and more fraud begin to reach the public perception, naturally, politicians emerged with supposed "solutions." Obumbler stepped in as the mouthpiece for the banks, implementing various federal govt plans designed NOT to wipe clean the bad debt, but to instead enrich the banksters by perpetually enslaving the debtors in an endless stream of monthly debt service, thus both (1) avoiding any real solution to the problem, which was simply bad debt that needed to be cleared, and (2) avoiding insolvency of the financial giants based on the default of massive secured paper that would have destroyed the western fiat currency system thus leading to TARP, and endless FED bailouts and our now perpetual ZIRP policies and rendering the fiat system a zombie.

(6) As the endless loan mod programs emerged and became operational, naturally, the incentive structure was changed. Servicers did not want loan mods, as that cut their revenues. Investors did not want to realize losses, so loan mods were delayed perpetually in a never ending string of constant requests for information, delays, denials, and transfers and sales of the underlying paper.

(7) Eventually, devoted and diligent attorneys began getting cases to court, keeping them in court, despite the obstacles, namely, the judges' resistance to debtors' getting "free homes," as well as the absolutely limitless wellspring of money and resources poured into the foreclosure machine designed to steal homes from MILLIONS of homeowners based on fraud;

(8) Some cases survived long enough to get into appellate courts, which began to realize the scope of the problem, thus triggering serious attention from law enforcement, including state attorney generals [corrupted as they ALL are, they are still politicians, and need votes, so this provided some opportunity for them to appear to be part of the solution];

(9) Some federal and state govt action lead to some settlements with the fraud banks, all of which were pittance settlements and nothing more than attempts to secure litigation waivers against future court cases from individual debtors;

(10) Eventually, enough case law support emerged, and enough collective skill and knowledge of superb lawyers spread around the country, and discovery documents began to appear, along with deposition testimony of those corrupt banksters and fraudsters leaking out into the public, that eventually the truth began to appear.

(11) Some judges began to let these cases proceed beyond the pleading stage, on various legal theories, and eventually, even in this wretched socialist state of Kalifornia, juries have begun to get these cases.

One such case is here: https://www.sacbee.com/2014/07/18/6566661/yuba-jury-awards-16-million-in...

How's this for an opening paragraph:

"It started out as a simple loan modification for a troubled homeowner. It turned into a $16.2 million jury verdict against a nationwide loan-servicing company."

Nice, huh?

Read the short article, and understand that the collective wisdom of the folks, the jurors, has now awakened to the real story of the housing bubble and bust.

Understand that no economic "recovery" can EVER occur until all of this bad debt is expunged from the system. Until this massive debt is wiped clean, the debtors will either struggle along in debt service, which means NO consumption at the Walmart, thus depriving the economy of vital money velocity and all that it entails, or they will default thus requiring write-downs, and reduction of value of QUADRILLIONS of derivative financial products that are, essentially, worthless.

Who here thinks that any big write-downs will occur? If you do, please contact me for sale papers on the Brooklyn Bridge.

Thus, MOAR and MOAR fiat printing MUST occur, to keep papering over the fiat debt scheme, to allow for debt destruction via homeowner defaults, which are ongoing, and will be perpetual until 20 Million homedebtors' loans are cleared, along with all of the paper derivatives based on the defaulted paper.

Prepare accordingly.

About the Author


Jul 24, 2014 - 10:59am


Thanks, CaL!

Jul 24, 2014 - 11:10am

Perceptions Are A Changin'

Cal Thank You for such a nice piece of good news.

Might be a good time to review how we got to these warped perceptions in the first place. So we may avoid further deception in the future. ( Hopefully)

Psywar Full Documentary


Jul 24, 2014 - 11:15am

TF - Anything for You

Off to go grill some hapless corporate suit. I love when they get furrowed brows in response to simple questions, like "why?"

I'll check back in later.

Have fun everyone!

Jul 24, 2014 - 11:19am

"MOAR and MOAR fiat printing MUST occur ...

Which is why, fiat currency has a track record unmarred by success. The USDollar will NOT be the exception.

I don't usually collect fiat, and when I spend it, I prefer gold and silver. Keep stacking, my friends.

Might still be first (edit: Or not!). Couldn't stand waiting any longer.

wax off

Jul 24, 2014 - 11:32am
Urban Roman
Jul 24, 2014 - 12:56pm

Nice verdict

From the article:

Linza’s attorneys, Andre Chernay and Jon Oldenburg of the United Law Center in Roseville, said the award included $514,000 in compensatory damages and $15.7 million in punitive damages.


PHH said it plans to “seek further judicial review of the case and verdict,” which it said wasn’t supported by the facts. It called the jury’s award “grossly disproportionate to any alleged damages” and added, “We take our responsibilities to borrowers seriously and remain commited to meeting all of our obligations as a servicer.”

But what are the chances the plaintiff will actually collect any of that money from PHH?

Jul 24, 2014 - 2:35pm

Thank You CL

for a great read as I'm in that business, well kind off. Lol Real Estate. Lol and thanks Turd for the Gary C article keeps my mind from wandering. Keep Stacking

Jul 24, 2014 - 2:54pm

Cali, ya done good !

As you probably know, I think Shakespeare was a wimp when it came to his pacifists views on lawyers. I must admit, you seem like an exception to the run of the mill Caesarian S. O. B. lawyers that have infested our country, our congress and our courts.

Reading about a jury putting the pole to a gaggle of banksters was quite refreshing. Hopefully, this will become a mega trend and thousands of the unwashed, maternally incestuous, illegitimate rodents will see fit to launch themselves from the top of a skyscraper in an effort to learn for themselves once and for all if there is life after death.

sierra skier
Jul 24, 2014 - 5:18pm

It is about time the courts

It is about time the courts and public began to wake up too some of the shenanigans of the bankers and cronies. Perhaps we will begin to see much more of this in the near future.

Island Guy
Jul 24, 2014 - 5:35pm

Me Too!

I am in the midst of a very similar loan modification process. It has been going on for more than 2 and 1/2 years!

The originating bank keep giving me the run around, asking for more documents than the ones they originally requested, then asking for "updated" ones of what they already received. Documents would be lost and would have to be resent. Every few months the file would be transferred to a new clerk, with the result that the whole process had to be started over from scratch.

Eventually, the bank had to agree to a loan modification, since I wore them down by complying with everything they requested. But they still had another trick up their sleeve. They increased the amount of monthly insurance and tax escrow payments to double the actual expenses. This had the effect of increasing my overall monthly payment instead of making it more affordable. I called their hand, and accepted the loan modification, but insisted that the escrow payments reflect actual expenses.

Before the actual loan modification could take effect, the bank transferred the paper to another company. The new company refused to honor the loan modification with the original bank, saying that they had different rules for negotiating loan modifications. When I asked what these rules were, I was told they were "secret." And so the saga continues.

If enough jury verdicts come down in favor of the home owners, perhaps we may get some good faith negotiating by the banks.

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

Subscribe or login to read all comments.


Donate Shop

Get Your Subscriber Benefits

Private iTunes feed for all TF Metals Report podcasts, and access to Vault member forum discussions!

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

Recent Comments

Forum Discussion

by Green Lantern, Oct 16, 2019 - 9:53pm
by zman, Oct 16, 2019 - 8:51pm
by NW VIEW, Oct 16, 2019 - 7:31pm
by ancientmoney, Oct 16, 2019 - 5:23pm