Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Silver Notches Best Month Since 1979 - 12th Aug 20
Silver Shorts Get Squeezed Hard… What’s Next? - 12th Aug 20
A Tale of Two Precious Metal Bulls - 12th Aug 20
Stock Market Melt-Up Continues While Precious Metals Warn of Risks - 12th Aug 20
How Does the Gold Fit the Corona World? - 12th Aug 20
3 (free) ways to ride next big wave in EURUSD, USDJPY, gold, silver and more - 12th Aug 20
A Simple Way to Preserve Your Wealth Amid Uncertainty - 11th Aug 20
Precious Metals Complex Impulse Move : Where Is next Resistance? - 11th Aug 20
Gold Miners Junior Stcks Buying Spree - 11th Aug 20
Has the Fed Let the Inflation Genie Out of the Bottle? - 10th Aug 20
The Strange Food Trend That’s Making Investors Rich - 10th Aug 20
Supply & Demand For Money – The End of Inflation? - 10th Aug 20
Revisiting Our Silver and Gold Predictions – Get Ready For Higher Prices - 10th Aug 20
Storm Clouds Are Gathering for a Major Stock and Commodity Markets Downturn - 10th Aug 20
A 90-Year-Old Stock Market Investment Insight That's Relevant in 2020 - 10th Aug 20
Debt and Dollar Collapse Leading to Potential Stock Market Melt-Up, - 10th Aug 20
Coronavirus: UK Parents Demand ALL Schools OPEN September, 7 Million Children Abandoned by Teachers - 9th Aug 20
Computer GPU Fans Not Spinning Quick FIX - Sticky Fans Solution - 9th Aug 20
Find the Best Speech Converter for You - 9th Aug 20
Silver Bull Market Update - 7th Aug 20
This Inflation-Adjusted Silver Chart Tells An Interesting Story - 7th Aug 20
The Great American Housing Boom Has Begun - 7th Aug 20
NATURAL GAS BEGINS UPSIDE BREAKOUT MOVE - 7th Aug 20
Know About Lotteries With The Best Odds Of Winning - 7th Aug 20
Could Gold Price Reach $7,000 by 2030? - 6th Aug 20
Bananas for All! Keep Dancing… FOMC - 6th Aug 20
How to Do Bets During This Time - 6th Aug 20
How to develop your stock trading strategy - 6th Aug 20
Stock Investors What to do if Trump Bans TikTok - 5th Aug 20
Gold Trifecta of Key Signals for Gold Mining Stocks - 5th Aug 20
ARE YOU LOVING YOUR SERVITUDE? - 5th Aug 20
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

The Mortgage Securitization Scam

Housing-Market / US Housing Oct 23, 2010 - 06:59 AM GMT

By: Bob_Chapman

Housing-Market

Best Financial Markets Analysis ArticleThe foreclosure crisis has set its sights on MERS, the Mortgage Electronic Registration Systems, which files almost all of the foreclosure actions in behalf of lenders. The problem never anticipated by lenders is that the company has no legal standing to do such things. In addition they broke the law by not requiring a notarized document of transfer of title signed by the seller and buyer. That is because they did not own the loans.


Only the owner of the loan can file. Thus, many of the titles are now subject to fraudulent conveyance. This means that foreclosure proceedings could be subject to legal challenge. Another question is could the foreclosures done since 2007 be nullified? How could a settlement be arrived at in a few months when there are millions of homeowners involved. The banks, which obviously deliberately broke the laws, will be responsible for fines and settlement with injured parties could cost them more than $10 billion. While this scenario moves forward the banks still are acting like goons and violating laws, to get people out of homes.

The question is who has the loan paper and that is the note-holder. He or they are the only ones with legal standing to request a court to foreclose and evict. That all changed with the coming of MBS, mortgage backed securities. Loans were bundled into tranches or REMIC’s, a vehicle designed to hold the loans for tax purposes. These mortgages were cut into bits and pieces to satisfy the different tastes and needs of investors. During this process the note was not signed over to the bondholders, because the mortgage may have been split into pieces and no one could know which part would default first. Therefore the MBS held the note.

The MERS system was a bridge and repository for these mortgages, a shadow holder owned by lenders and Fanny Mae and Freddie Mac. The system located mortgages and was involved in the altering of mortgages. The upshot was a broken chain of title. When that happens the mortgage note is no longer valid. The borrower does not know who to pay and so pays no one. Then come the foreclosure mills and that led to falsification of documents to assist the lender, which is fraud. These actions expedited foreclosures and evictions and that was all the lenders were interested in.

There is no question a massive fraud took place. It was identified by the title insurance companies who the lenders are trying to blame this criminality on. The result was the banks went around the title insurance companies and used foreclosure mills, when the title companies wouldn’t play ball.

The banks terrified that they had gotten caught tried to ram through Congress the Interstate Recognition of Notarizations Act to protect themselves and their criminal acts. The scum in the Senate and House used voice votes to pass the bill and because of the massive complaints the President pocket vetoed the measure. He also knew the bill would have been identified as unconstitutional.

The bottom line is the banks had no legal right to foreclose and evict. That means the evicted can get their homes back. The new buyers are screwed because they have no legal standing because the banks sold them a house they did not own. The fraud committed by the foreclosure mills, at the behest of the banks, puts all foreclosures into question and even the status of those homeowners who are currently paying mortgages. That means if homeowners all stop paying their mortgages, they could end up owning their homes.

This is a mega crisis far bigger than Bear Stearns and Lehman, but not as big as what we will see in the future when the CFTC, LBMA, Comex, GLD and SLV are taken down in their gold and silver scam.

The heart of these criminal acts is anchored in securitization and the scam that it was. We have been demanding criminal action for three years and no one will listen. It was only recently that civil suits have been entered into. We don’t get it. Do we still have a legal system?

This problem can only worsen the problems in the housing sector. About half of homebuyers really qualify to own homes. False appraisals on about 50% of homes littered the landscape just two years ago. Half of the first-time homebuyers didn’t even buy homes, which cost the taxpayers about $15 billion. Inventory over hang is now in the realm of years not months, as homebuilders continue to increase new homes at the rate of 600,000 a year. What can they be thinking of with a further 20% correction ahead? Foreclosures are now 1 in 12 of all mortgages. Four years ago it was 1 in 100. For sure home prices have not bottomed.

It could be the mortgage market is dead and all the bondholders are sunk. If that is the case the financial structure is close to collapse.

We were in the brokerage industry for years and we never saw such criminality. The banks that pulled this off are virtually unregulated.

Some writers believe there will be hundreds of billions in losses and they are correct, unless the government and the Fed bail them out.

Then there are the subprime and ALT-A loans issued over the past two years that are beginning to be reset. Half will go under and Fannie and Freddie guaranteed those loans. This will put further downward pressure on housing prices.

All in all it looks terrible and we see no easy way out. Is it any wonder investors are buying gold and silver bullion, coins and shares.

You cannot tell the players without a program. That fits perfectly in all endeavors, particularly journalism. Last week in the FT Martin Wolf wrote apiece titled “why America is going to win the global currency battle.” What he forgot to tell you is that he is a member of the Bilderberg Group, whose mission is a One-World bank and government.

The plan according to Fed Chairman Ben Bernanke is for the Fed to continue purchases of Treasury debt and to allow further monetization, which means higher inflation. He tells us inflation officially is too low and unemployment is too high. He doesn’t see either changing much. We believe both are headed higher.

The global currency battle has been going on for years – it’s just it was almost never discussed. The US was happy to tolerate deliberately misaligned, depreciated currencies because it kept US inflation down and foreigners continued to buy US debt, no questions asked. Obviously things have changed.

The monetization is supposed to promote stability, job growth and to conquer deflation. Mr. Wolf says, “To put it crudely, the US wants to inflate the rest of the world, while the latter is trying to deflate the US.” Mr. Wolf believes the US must win, since it has infinite ammunition in a machine that can create money and credit endlessly. Just a minute, if the IF does that, it most certainly will lead to hyperinflation, where no one would want the US dollar. Europe and China want deflation. The problem is if that happens the entire system will collapse. They obviously want to get the problem over with and have a depression. The US obviously is not ready for that, because it would dethrone the dollar as the world reserve currency, a condition that would cost America its imperial status. We find it of interest as well that the US is encouraging further debt among US and foreign consumers to offset trade imbalances, when they know the results in Japan over the last 18 years following such a policy was unsuccessful if not disastrous. Presently, they are again trying to push that upon Japan and China as well - the same old unsuccessful Keynesianism.

China already has its own credit bubble, distortions, imbalances and inflation having mimicked the US model. In spite of higher interest rates, speculation and inflation are at high levels.

In the US QE1 did not work and create recovery on a permanent basis and it impaired the economy. All the money and credit created by the Fed ended up in the financial world with little ending up in the real economy. That is why unemployment has again risen to 22-3/4%. Again, policies since August 15, 1971 have created continual inflation and distorted patterns throughout society. It was good while it lasted, but the game is in the process of coming to a close. Other nations realize the US is trying to export inflation and are in the process of erecting barriers to keep large amounts of dollars out of their economies. This in part has put downward pressure on the dollar recently and it will continue to do so. The US has become like a pressure cooker spewing dollars all over the world with inflation in its wake. As a result over the last year foreign central banks, with large dollar balances, accumulated larger balances trying to keep the value of the dollar steady, as others were sellers. They must feel like the Dutch Boy with his finger in the dyke. That, of course, is not the answer.

You cannot indefinitely aid and abet a flawed policy, even though that policy allowed you to live far beyond your means. These inflationary pressures emanating from the US cannot be managed and other nations have realized this and that is why this weekend the G-20 is meeting in S. Korea to try to bring an end to currency warfare. We believe the meeting will be another non-event.

Not only are these US policies creating inflation worldwide, but also they are in part responsible for the increases in gold, silver and commodity prices. A battle has been in progress for the past 18 months - the dollar verses gold. In spite of a dollar rally gold has won hands down and the world doesn’t realize it yet and probably won’t for some time to come. There is much less confidence in the US dollar and as long as we have quantitative easing and inflationary expansion, the confidence will deteriorate. The dollar is no longer king. Gold has assumed its position. That is why currency without gold backing is doomed to failure. It is not only privately owned central banks, but government owned ones as well. The temptation to create money and credit is too great. That is why gold backing has always been necessary. If we didn’t have fiat currencies we wouldn’t have an over-liquefied, speculative financial world. Nor would we have booms and busts to enrich the rich on Wall Street. The ability to recycle our excesses through global currency markets and back into our markets is coming to an end. Foreigners want an edge. They are deliberately reducing the value of their currencies, which is an exercise in futility at this point in the cycle. All that will do is add to the dollar inflation already having descended on these economies. All they are doing is trying to successfully function within a dying system.

The US economy cannot live without stimulus. The inflation created by this policy is not going to be allowed to be dumped into other countries, and as a result will manifest itself in the American economy. The risk of holding dollars increases with each passing day. Dollar weakness will cause foreigners to dump dollars back into the US economy, keep its own currency low and push these nations to accumulate gold as they are currently in the process of doing. The day of reckoning for the dollar is in process and it is going to be very unpleasant for dollar holders.

As that transpires labor supply rose 137,000 and jobs only rose by 64,000. The workweek was unchanged at 34.1 hours, as were wages, as inflation continued to rise. Job openings were up but hiring was down. Full-time jobs fell 106,000 and were off 4 months in a row. Part-time workers rose 353,000, the largest increase in 8 months. Discouraged workers leaving the economy rose 9% to a record high of 1.2 million. All of this culminated in a U6 figure of 17.1% unemployment. If the birth/death ratio is removed real unemployment is 22-3/4%. All in all there is no good news on the employment front. It is difficult to improve conditions when businesses are trying to make 25% of their jobs part-time of contract labor, to escape paying benefits.

Late comment on Foreclosuregate is that, the longer this lasts, the worst it will be for the banks, title insurers and mortgage insurers. The 30% of sales activity in foreclosures over the past three months will end and real estate prices will continue to fall. As an addendum we find 32% of the household sector have a sub-620 FICO score, which to an extent limits the number of buyers.

The purchase index was not encouraging being off 50% annualized with purchases off 37%. Of total loans 82.4% came from refis – close to two-year highs.

Since August 19th, the Fed has purchased $40 billion in government bonds, as foreigners bought $117 billion.

Theinternationalforcaster.com

Global Research Articles by Bob Chapman

© Copyright Bob Chapman , Global Research, 2010

Disclaimer: The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of the Centre for Research on Globalization. The contents of this article are of sole responsibility of the author(s). The Centre for Research on Globalization will not be responsible or liable for any inaccurate or incorrect statements contained in this article.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules