Foreclosure-Gate!


There is Only One Way Out of the Foreclosure Crisis

by George Washington on 10/08/2010

(George means to federalize the banks, and it seems likely to happen.)

… We’re the fish. The giant “too big to fail” banks are the bird. They’ve got their talons in the American consumer and the economy. The only way out for us – the fish – is if someone “shoots” the bird …

And now there’s the foreclosure crisis. … Janet Tavakoli says: …

This is the biggest fraud in the history of the capital markets. …

As Congressman Grayson wrote to Geithner, Bernanke, the SEC, FDIC, and the rest of the financial overseers:

The liability here for the major banks is potentially enormous, and can lead to a systemic risk. Fortunately, the Dodd-Frank financial reform legislation includes a resolution process for these banks.

The Dodd-Frank legislation is the recently-passed “financial reform legislation” that lets regulators force insolvent banks – no matter how big – into bankruptcy. …

Banking analyst Chris Whalen wrote on Thursday:

The issue is recognizing existing losses ?? not if a loss occurred. Impending operational collapse of some of the largest U.S. banks will serve as the catalyst for re?creation of RFC?type liquidation vehicle(s) to handle the operational task of finally deflating the subprime bubble. …

And Ellen Brown points out:

Karl Denninger … writes:

Those who bought MBS from institutions that improperly securitized this paper can and should sue the securitizers … We now have “resolution authority,” let’s see it used.

The resolution authority Denninger is referring to is in the new Banking Reform Bill, which gives federal regulators the power and responsibility to break up big banks when they pose a “grave risk” to the financial system – which is what we have here.

***

Financial analyst Marshall Auerback … writes:

Most major banks are insolvent and cannot (and should not) be saved. The best approach is something like a banking holiday for the largest 19 banks …

The giant banks can be broken up and replaced with a network of publicly-owned banks …

For details on the foreclosure crisis, see this, this, this and this.

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Grayson’s Letter On Foreclosures – And A Way Forward

Posted 2010-10-08 10:26
by Karl Denninger
in Foreclosuregate

The immediate action that must be taken is to force all payments into court escrow – that is, a court-held suspense account – until it is sorted out who actually owns what. …

The proper remedy under the law for institutions that tendered assets into a trust that they knew or had reason to know did not meet the qualifications for that trust is for the transaction to be unwound – for the bank to be forced to refund the full face value of the mortgage and repurchase it. For those assets that were never conveyed the solution is likewise for the bank that was supposed to convey it to repurchase the asset…

With more than $1 trillion in outstanding non-agency REMICs of this sort, and another $5 trillion or so at Fannie and Freddie, if half – a reasonable estimate of those that might be compromised – are forcibly unwound and the bad loans are recognized at their recovery or renegotiated value then we’re going to need that Dodd-Frank resolution authority- for all the major banks. …

We have to force these resolutions folks.  These REMICs must go through all their paper and prove up its provenance in each and every case.  If they are either holding empty boxes or bad notes that did not meet the claimed credit quality they must be forced back onto the issuers, because it is both manifestly unjust to allow the major financial institutions to get away with screwing your pension funds, insurance companies (e.g. annuities, etc) and similar, and we must resolve the title issues that are now being exposed as massive and pervasive across the country. …

Private property rights have as their highest expression the ownership of real estate.  …  What the banks have done – intentionally – is severely damage that sacred trust.

(Intentionally destroying private property rights? Jeez, you’d think they were communists or something!)

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About icliks

Biding my time in central ms ... yours too, if ur reading this.
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