Heal the Money » News posts

Changing the Paradigm of Money

Suzanne O'Keeffe — Sun, 07 Nov 2010 05:20:21 +0000

As I type, the Fed has just concluded a major conference at Jekyll Island … yup, THAT Jekyll Island, the one where the secret meeting was held 100 years ago that resulted in the creation of the Fed. Isn’t that cute. See the webcast from the conference if you’re curious. In case you’re not familiar with the story, here’s what Forbes magazine founder Bertie Charles Forbes had to say six years after the original Jekyll Island confab:

Picture a party of the nation’s greatest bankers stealing out of New York on a private railroad car under cover of darkness, stealthily riding hundred of miles South, embarking on a mysterious launch, sneaking onto an island deserted by all but a few servants, living there a full week under such rigid secrecy that the names of not one of them was once mentioned, lest the servants learn the identity and disclose to the world this strangest, most secret expedition in the history of American finance. I am not romancing; I am giving to the world, for the first time, the real story of how the famous Aldrich currency report, the foundation of our new currency system, was written…

The utmost secrecy was enjoined upon all. The public must not glean a hint of what was to be done. Senator Aldrich notified each one to go quietly into a private car of which the railroad had received orders to draw up on an unfrequented platform. Off the party set. New York’s ubiquitous reporters had been foiled… Nelson (Aldrich) had confided to Henry, Frank, Paul and Piatt that he was to keep them locked up at Jekyll Island, out of the rest of the world, until they had evolved and compiled a scientific currency system for the United States, the real birth of the present Federal Reserve System, the plan done on Jekyll Island in the conference with Paul, Frank and Henry… Warburg is the link that binds the Aldrich system and the present system together. He more than any one man has made the system possible as a working reality.

While the Fed congratulates itself on what it’s pulled off over these 100 years, “Scandal is spreading across Wall St like a very bad case of poison ivy. A rash of fraudulent home foreclosures has exposed some of the nation’s biggest banks to an even worse condition … bankruptcy,” as Peter White at truthout points out. Robo-signers and other widespread shirking of real-estate laws have come into full light.

“Why don’t we have Mickey Mouse sign the thing, instead of having a human being sign it? I mean it becomes meaningless,” New York Supreme Court Judge Arthur Schack told PBS “Newshour.”

Bloomberg’s Jonathan Weil postulates BofA may be reaching a tipping point:

[BofA's] stock has fallen 41 percent since April 15. Mortgage-bond investors are demanding untold billions of dollars in refunds. The foreclosure fiasco is metastasizing. A member of the Troubled Asset Relief Program’s oversight panel, AFL-CIO attorney Damon Silvers, openly worried at a hearing last week about the risk that Bank of America might need another bailout.

A new book is also out by Michael W. Hudson – The Monster: How a Gang of Predatory Lenders and Wall Street Bankers Fleeced America–and Spawned a Global Crisis — giving us yet more insight into the corruption. There sure are some stellar characters running our banks:

“I became a thief. And unfortunately, I found I was a very good thief.”
“We are all here to make as much fucking money as possible. Bottom line. Nothing else matters.”
“Anything that benefited production — that benefited me and benefited my wallet — I’d do it.”
“It’s hard to have a guilty conscience if you don’t have a conscience.”

So since it’s been 100 years since the Fed devised our current scandal-ridden money system, it seems as good a time as any to reconsider the paradigm we are holding of money and debt.

Ellen Brown weighs in that it’s time for a new theory of money. She argues, the current scheme has many “systemic flaws”:

The banks suck up cheap money and return it as more expensive money, if they return it at all. The banks control the money spigots and can deny credit to small players, who wind up defaulting on their loans, allowing the big players with access to cheap credit to buy up the underlying assets very cheaply. …

The bankers have engaged in what amounts to a massive fraud, not necessarily because they started out with criminal intent (although that cannot be ruled out), but because they have been required to in order to come up with the commodities (in this case real estate) to back their loans. It is the way our system is set up: The banks are not really creating credit and advancing it to us, counting on our future productivity to pay it off, the way they once did under the deceptive but functional façade of fractional reserve lending. Instead, they are vacuuming up our money and lending it back to us at higher rates. In the shadow banking system, they are sucking up our real estate and lending it back to our pension funds and mutual funds at compound interest. The result is a mathematically impossible pyramid scheme, which is inherently prone to systemic failure.

The flaws in the current scheme are now being exposed in the major media, and it may well be coming down. The question then is what to replace it with. What is the next logical phase in our economic evolution?

One theory suggests dropping the concept of money as a “commodity” or “thing” and instead accepting that it really functions as a “relation,” a legal agreement, a credit/debit arrangement. “Virtually all money today originates as credit, or debt, which is simply a legal agreement to pay in the future.” The solution Ellen proposes: public credit.

Credit needs to come first. We as a community can create our own credit, without having to engage in the sort of impossible pyramid scheme in which we’re always borrowing from Peter to pay Paul at compound interest. We can avoid the pitfalls of privately-issued credit with a public credit system, a system banking on the future productivity of its members, guaranteed not by “things” shuffled around furtively in a shell game vulnerable to exposure, but by the community itself. …

By turning banking into a public utility operated for the benefit of the community, the virtues of the expandable credit system of the medieval bankers can be retained, while avoiding the parasitic exploitation to which private banking schemes are prone. Profits generated by the community can be returned to the community.

We have been at the mercy of a system of money that is not serving us. It is time to see that plainly and reevaluate how it is functioning. This time the discussions need to take place out in the plain light of day, not on some remote island participants were whisked to in the middle of the night.

BofA Halts Foreclosures in ALL States; Plus Doc Fabrication Price Sheet

Suzanne O'Keeffe — Sat, 09 Oct 2010 07:28:09 +0000

The snowball keeps rolling. On Friday (again waiting until the end of the week for the big news), Bank of America halted foreclosures across all 50 states — more lenders no doubt soon to follow their action. The New York Times reports:

The plan swept states with some of the highest foreclosure levels, including California, Nevada and Arizona, into a swelling crisis over lenders’ flawed paperwork that had been mostly confined to 23 other states that require judicial review of foreclosures.

As a result, Fannie Mae is halting sales to new owners of foreclosed homes it bought from BofA.

They’re scrambling.

Meanwhile, over at the White House, President Obama, via a “pocket veto,” blocked legislation that would have made it more difficult for homeowners to challenge foreclosure. Interesting development. The Senate passed the bill by unanimous consent.

The bill requires federal and state courts to recognize out-of-state notaries — notary fraud is at the heart of many of the foreclosure suits. Why would the Senate be quickly, quietly and unanimously passing legislation that would make it more difficult for homeowners to challenge the foreclosure fraud rapidly revealing itself? And why is Obama equally quietly declining to sign it? Very interesting indeed.

Ellen Brown, in her report today, reiterates the banks’ flaws are not simply poor paperwork:

Those errors go far deeper than mere sloppiness; they are concealing a massive fraud. They cannot be corrected with legitimate paperwork, and that was the reason the servicers had to hire “foreclosure mills” to fabricate the documents. These errors involve perjury and forgery – fabricating documents that never existed and swearing to the accuracy of facts not known.

You want to see for yourself? Yves Smith at Naked Capitalism posted this price sheet for “document recovery services” offered by Lender Processing Services’ DOCX service. “Document recovery services” is code for mortgage document fabrication. You can “create missing intervening assignment” for $35, “create note allonge” for $12.95, “create lost note affidavit” for $12.95, or hey, why not simply “recreate entire collateral file” — all the documents the trustee needs to have, including the original of the note (borrower IOU), copies of the mortgage, securitization agreement and title insurance — all recreated for you for $95.

Yves explains:

So wake up and smell the coffee. The story that banks have been trying to sell has been that document problems like improper affidavits are mere technicalities. We’ve said from the get go that they were the tip of the iceberg of widespread document forgeries and fraud. This price sheet provides concrete proof that the practices we pointed to not only existed, but are a routine way of doing business in servicer and trustee land. LPS is the major platform used by all the large servicers; it oversees the work of foreclosure mills in every state.

And this means document forgeries and fraud are not just a servicer problem or a borrower problem but a mortgage industry and ultimately a policy problem. These dishonest practices are so widespread that they raise serious questions about the residential mortgage backed securities market, the major trustees (such as JP Morgan, US Bank, Bank of New York), … and the inattention of the various government bodies (in particular Fannie and Freddie) that are major clients of LPS.

Serious issues indeed. Yves sums it up astutely:

In a mere decade, we managed to allow a “free markets” ideology on steroids to gut investor and borrower protection. The result is a train wreck in US residential mortgage securities, the biggest asset class in the world. The problems are too widespread for the authorities to pretend they don’t exist, and there is no obvious way to put this Humpty Dumpty back together.

No, Actually, It’s the Whole Financial Industry That’s Been Lying

Suzanne O'Keeffe — Sat, 09 Oct 2010 00:35:58 +0000

The tide is turning. The shakeup ongoing from recent court cases that have uncovered the extended fraud in the foreclosure industry has given long-battered homeowners newfound power and resolve. On Wednesday, the Home Defenders League launched in California to help homeowners keep their homes and to call on Gov. Schwarzenegger to halt foreclosures in California.

Today, fed up homeowners throughout the state of California are coming together to announce the formation of the Home Defenders League. Californians are defending our homes from the greed and fraud of Wall Street and the Big Banks. We will not give up our homes without a fight!

The court findings also turn upside down widespread assumptions about the financial industry itself and homeowners caught up in the foreclosure mess.

Courts and the general public have been operating under several major assumptions that peek through when I read court cases or have conversations with everyday people:

Homeowners in foreclosure have done something “wrong.” This judgment shows up in assumptions such as “they bought a house they couldn’t afford,” or they are “irresponsible with money” because they can’t keep up with the payments. There’s often a corresponding judgment that goes something like “they should have known better.”;
These powerful institutions know what they’re doing and are trained to follow the law, so the assumption is they do follow the law;
The homeowner protesting the foreclosure doesn’t know what he or she is doing, compared with experienced institutions;
The homeowner is bringing suit to get a free ride; and
The big doozy belief: No one should live in a house “for free,” — if they can’t pay, they should be evicted.

Did you notice how all those assumptions are against the homeowner?

The truth of the matter, as is becoming more and more clear, is almost exactly the opposite of those assumptions:

Homeowners in foreclosure often wind up there because they are contesting the mortgages themselves — an unethical industry defrauded many homeowners by misrepresenting the mortgages they were getting into, spurred on by financial incentives to sell sub-prime and other crazy loan schemes.
The industry has institutionalized fraud, using foreclosure mills and document mills to backdate and manufacture documents to their specs. They know what they’re doing alright and it clearly is to circumvent record-keeping laws and defraud homeowners of their homes, many of which were sold to them with misrepresented mortgages;
Homeowners and their attorneys have been raising the issue of the industry’s fraudulent documentation for years, and, what do you know, they’re right;
The goal of many homeowners is simply to arrive at an appropriate and fair mortgage;
The super-profitable, high-rolling casino gambling these financial institutions have been doing with mortgage-backed securities and the other fancy financial “instruments” may have stripped any traceable chain of title away from millions of properties. That means these institutions claiming to be the owner of the title — and collecting your mortgage money in the meantime — may NOT legally own these homes. If there is no note to be found, the home is owned, then, by no one but the homeowner. As Ellen Brown says, “hordes of victims of predatory lending could end up owning their homes free and clear while the financial industry could end up skewered on its own sword.”

Kudos to those homeowners who have persisted in standing up to this machine — the general public owes you an apology for its incorrect judgments as well as gratitude for pushing long enough to uncover the truth. The collective momentum has finally exposed, as Rep. Alan Grayson put it in his hard-hitting video last week. the “factory of fraud.”

Foreclosure Fraud Indicates Deep Faultline in Financial World

Suzanne O'Keeffe — Wed, 06 Oct 2010 02:25:13 +0000

I’m not the only one seeing that the major disturbances coming to light in the foreclosure world are not mere surface tremors, but indicate a deep faultline that, as it keeps opening, just may cause the entire industry to fall into the sea.

Wall Street wants us to move along, nothing to see here. Firms are dropping statements like this from JPMorgan spokesman Tom Kelly reported in the Washington Post:

“While we don’t expect our review to find that consumers were harmed, we will take appropriate action if we find any impact.”

(Oh, the hubris.) Ellen Brown fires back:

“No harm perhaps except the illegal taking of thousands of homes without due process . . . .”

It seems Fed Chairman Ben Bernanke also wants us to move along, minimizing the issue to a “managerial challenge”:

Bernanke said that “it’s been a managerial challenge to the banks to deal with these foreclosure modifications.” And, he added, “they haven’t always met that challenge.”

You’d think the Chairman of the Federal Reserve might be a little more concerned than that about organized, long-term, industry-wide, real-estate fraud by the biggest banks in the nation. I’m guessing the real “managerial challenge” was to keep what was going on hidden / accepted for long enough to get all the bonuses handed out to the appropriate people.

I don’t know about you, but if I’d been bilked of my house by a fraud-pushing organization brazenly scooping up properties all over the country by scamming the system — if evidence I’d presented about this fraud had been routinely dismissed by the courts, as has happened — I’d damn well want my house back, or a hellofa big settlement for all the trauma. I can hear attorneys’ phones ringing now. Greg Clark, a Florida real estate lawyer, told the New York Times:

“You know those billboards that lawyers put up seeking divorcing or bankrupt clients? It’s only a matter of time until they start putting up signs that say, ‘You might be entitled to cash payment for wrongful foreclosure.’ ”

And they may be entitled to mighty big cash payments, I’m thinking.

Ellen Brown once again provides her vastly helpful perspective, calling the mess a box even Houdini couldn’t escape:

All of this is a major headache for the banks, but according to the New York Times, “The companies say they are reviewing their procedures to take care of any violations.” They seem to think they can correct the problem by redoing some paperwork. But if the holdings in recent court decisions are upheld, it will not be just a question of hiring extra staff to clean up some files. For all those mortgages filed in the name of MERS, say these courts, the chain of title has been irretrievably broken. Humpty Dumpty has had a great fall and cannot be put back together again. …

Increasingly, judges are holding that if MERS owns nothing, it cannot foreclose, and it cannot convey title by assignment so that the trustee for the investors can foreclose. MERS breaks the chain of title so that no one has standing to foreclose. The homes are effectively owned free and clear.

That does not mean the homeowners don’t owe money to someone. They do. … The investors are entitled to recover in equity only so much as they are actually out of pocket, not the full amount of the original promissory notes, since they were not parties to those notes and there is no way to re-establish the chain of title.

She also explains that the so-called non-judicial foreclosure states — the 27 states, including here in California, where they allow foreclosures without going to court – also have a real problem on their hands. If the lender signing the original documents is not the party foreclosing on the property, it becomes a judicial issue — a question of fact for the courts: Does the foreclosing party have the authority to proceed? If MERS has broken the chain of title, then the answer would be no.

Ellen quotes foreclosure expert Neil Garfield:

“There will be a head-slapping moment when title carriers, attorneys, judges and administrative agencies and clerks suddenly realize that the monster created on Wall Street has its equivalent in the public records of counties across the nation. I doubt if more than 6-7% of all the foreclosures in the past 10 years have resulted in clear title delivered to anyone. And the only corrective instrument can come from the original owner. That homeowner is sitting in the catbird seat and doesn’t know it. Millions of people who THINK they have lost their homes still own them and if anyone wants a signature from those people to clear title, they are going to be required to pay dearly, which is at it should be. Eventually the purse gets returned to the victim from whom it was snatched.”

Linda M. Tirelli, a lawyer in a Bronx foreclosure case against JP Morgan Chase, explained to the New York Times why the documentation problems are such an issue:

“The servicers have it in their control to get the right documents and do this properly, but it is so much cheaper to run it through a foreclosure mill. This is not about getting a free house for my client. It’s about a level playing field. If I submitted false documents like this to the court, I’d have my license handed to me.”

And so the financial industry may face the equivalent of having their licenses handed to them, as they return the purses to whomever they’ve snatched them from.

More Big Banks Trapped by Fast Expanding Foreclosure Fraud Discoveries

Suzanne O'Keeffe — Tue, 05 Oct 2010 04:42:33 +0000

Over the weekend, the AP reported that a Wells Fargo executive admitted back in May that he robo-signed up to 150 documents a day, yet that bank is still resisting halting foreclosures. A foreclosure case in Florida involving IndyMac/OneWest Bank was thrown out due to a robo-signer and lack of standing to foreclose. Saturday, Massachusetts Attorney General Martha Coakley took up the cause and announced her office would investigate “apparent failure of major creditors to follow state foreclosure law.”

As ProPublica reports:

The broadening scope of these problems shouldn’t be surprising. Officials at Fitch, a credit rating agency, recently noted that the processing “defects” are industrywide.

The breadth of these problems could initiate a Justice Department investigation or, for public companies like JPMorgan and Bank of America, a civil investigation by the Securities and Exchange Commission over the servicers’ disclosures to investors, according to Peter Henning, a securities law expert and blogger for The New York Times’ White Collar Watch.

So meanwhile, the mainstream news seems rather uninterested in this major news … no related stories on the online front pages today of the Los Angeles Times, CNN, New York Times, Yahoo! MSNBC or the Washington Post, although the NYTimes top most emailed article for a while today was the foreclosure crisis story that ran yesterday.

And interestingly, even in the foreclosure articles that are running in major outlets, I’ve noticed an odd fear is being raised again and again: that all this foreclosure trouble could cause problems for the housing market and economy to recover. This from the WSJ:

The most immediate effect of these legal battles and investigation is to prolong the foreclosure process, which could deepen the housing crisis entering its fourth year. “This growing mess in the foreclosure process just means that the day when the housing market recovers and economy returns to normal is farther away,” said Mark Zandi, chief economist at Moody’s Analytics. …

This seems like a veiled warning to me — in other words, don’t do this, don’t go there, if you want the economy to recover. Industry-wide fraud, then, is a nuisance? Thousands of people thrown out of their homes illegally by a financial steamroller machine … we should just shrug and move on? It’s more important to get the housing market and economy back to “normal?” The obvious point to me is that this “economy” we thought we had was entirely built on this kind of widespread rampant fraud. It’s not going “back to normal” folks.

In other news, banks are considering doling out their bonuses early … so they can take advantage of the tax-cuts for the super rich (average pay at Goldman Sachs is $500,000) — and I’m guessing get their cash before their firms feel the hit of the foreclosure mayhem likely heading their way.

Foreclosure Machine Seizes Up: JPMorgan and GMAC Halt Foreclosures

Suzanne O'Keeffe — Fri, 01 Oct 2010 19:32:41 +0000

Update: BofA waited until the end of the day today to announce it was also halting foreclosures in 23 states. From San Francisco Chronicle:

The move adds the nation’s largest bank to a growing list of mortgage companies whose employees signed documents in foreclosure cases without verifying the information in them.

Due to the fraud that has been coming to light in the foreclosure industry — see related posts here and here — JPMorgan and GMAC are the first to feel the pressure and halt their foreclosures. JPMorgan has suspended 56,000 foreclosures in 23 states; GMAC isn’t giving a number.

The New York Times reports:

Evictions are expected to slow sharply, housing analysts said, as state and national law enforcement officials shine a light on questionable foreclosure methods revealed by two of the country’s biggest home lenders in the last two weeks. …

Attorneys general in half a dozen states are demanding action or opening investigations. The Treasury Department said Thursday it was asking regulators to look into “these troubling developments.” …

Defense lawyers say the disclosures are symptomatic of the carelessness, if not outright fraud, that lenders have been exhibiting for years in their rush to file cases. Many necessary documents have disappeared, with defense lawyers saying the lenders often do not even have standing to foreclose.

Attorneys are scrambling to file motions to have the foreclosure actions dismissed. The New York Times quotes one of them:

“Judges used to look at us strangely when we tried to tell them all these major financial institutions are lying,” said Ms. Golant, a former associate general counsel for the lender Ocwen Financial.

Unfortunately, as you might expect, many homeowners faced with foreclosure don’t have the means to hire attorneys. Many have lost their homes already due to this fraud. I’m guessing the latest news is going to result in a whole lot of really pissed off people. As the Times puts it:

The issue has broad consequences for the millions of buyers of foreclosed homes, some of whom might not have clear title to their bargain property. And it may offer unforeseen opportunities for those who were evicted.

So struggling homeowners — who this industry has tried to run out of their homes as fast as possible while no one was looking — can stay in them. And because of the industry-wide fraud, the whole notion of who owns what is now deeply called into question. Very interesting times indeed.

JPMorgan Robo-Signers Unearthed in Florida Foreclosure Battle

Suzanne O'Keeffe — Fri, 01 Oct 2010 04:26:40 +0000

The foreclosure suit heard round the world … the court battle of one Florida homeowner’s foreclosure is calling into question the integrity of thousands of foreclosure notices issued by JPMorgan Chase. The latest: robo signers: document processors who sign off on 10,000 or more documents a month without actually reading them. The Huffington Post reports:

Lawyers for a Florida homeowner are using a May statement by JPMorgan executive Beth Ann Cottrell to claim that the homeowner’s foreclosure isn’t valid. In her statement, Cottrell said she was part of an eight-person team that approved about 18,000 documents a month without seriously reviewing them.

Ally Financial is putting the brakes on foreclosures in 23 states. More brakes to be applied in the days ahead, I would expect.

Rep Alan Grayson Gives Heavy Details on Foreclosure Factory of Fraud

Suzanne O'Keeffe — Fri, 01 Oct 2010 04:06:08 +0000

To follow up my post yesterday, Rep. Alan Grayson (D, FL) posted a video today echoing the major impact of recent MERS [Mortgage Electronic Registration System] court rulings and suits. He explains in detail and with examples the racket that is the foreclosure industry, calling it a “factory of fraud.” The implications of the discovery by the courts of all this rampant fraud are just starting to dawn on the industry and the public. I anticipate there’s much more to come.

Key points from the video:

97% of loans originated from 2005-2008 are in the MERS system.
On a widespread and pervasive basis, MERS did not take the steps necessary to own the note … which means that in 45 out of 50 states, MERS lacks the legal right to foreclose.
Because they don’t have real standing, they created a system where servicers hire foreclosure mills whose business is to forge documents.
Brazenly flaunting the law, Lenders Processing Services company has systematized the fraud: lawyers request from LPS the affidavits they need. LPS has document mills that can magically make an authorized president of whoever you need and send you back the backdated signed documents saying you have the right to foreclose.

www.youtube.com/watch?v=AqnHLDeedVg

Big News for Homeowners: Your Home — and 62-Million of Your Neighbors’ — Could Be Foreclosure-Proof

Suzanne O'Keeffe — Thu, 30 Sep 2010 00:50:04 +0000

photo by respres via Creative Commons license

A recent article from attorney and author Ellen Brown details a court ruling that I thought would be all over top-story news immediately. Curiously, that hasn’t happened. Considering how huge of an impact it could have, I think we all have a duty to get the word out.

Ellen writes that a recent California bankruptcy court recently held that banks do NOT own clear title to the properties held in the name of MERS. The “Mortgage Electronic Registration System” is an online computer software program for tracking mortgage ownership and rights devised in the ’90s as a convenient property shuffler to serve the needs of the mortgage-backed-securities speculators. Developed by financial titans like Bank of American, Countrywide, Fannie Mae and Freddie Mac, MERS allowed these institutions to securitize and shuffle their suspect mortgage deals behind a veil of anonymity.

The court held in the California case (In re Walker, Case no. 10-21656-E–11) that MERS could NOT foreclose and that Citibank could not collect on its claim. The reason is that while MERS is the mortgagee of record, legally, is merely a “nominee,” not the true owner of the property. Recent rulings have held that this is a fatal failure, and one that prevents the plaintiff’s legal ability to foreclose. In the latest California decision , the judge wrote:

Since no evidence of MERS’ ownership of the underlying note has been offered, and other courts have concluded that MERS does not own the underlying notes, this court is convinced that MERS had no interest it could transfer to Citibank. Since MERS did not own the underlying note, it could not transfer the beneficial interest of the Deed of Trust to another. Any attempt to transfer the beneficial interest of a trust deed without ownership of the underlying note is void under California law.

The court concluded:

Since the claimant, Citibank, has not established that it is the owner of the promissory note secured by the trust deed, Citibank is unable to assert a claim for payment in this case.

Essentially, MERS has not done proper legal paperwork to transfer title all the countless times the properties it’s holding were reshuffled.

Since MERS has been up and running, local governments been cheated out of their recording fees and the recording laws themselves — intended to guarantee purchasers clean title information — have been violated. Even worse, as Ellen points out, MERS fueled an “explosion in predatory lending in which lenders could not be held to account because they could not be identified, either by the preyed-upon borrowers or by the investors seduced into buying bundles of worthless mortgages.”

Other suits are taking up RICO and fraud charges against MERS. A class action suit was filed in Florida in July 2010 against MERS and an associated legal firm for racketeering and mail fraud. It alleges, “MERS was and is used in a way so that the average consumer, or even legal professional, can never determine who or what was or is ultimately receiving the benefits of any mortgage payments.”

What does all this mean, exactly? Well, MERS currently holds 62 million mortgages, including over half of all new US residential mortgage loans. As Ellen Brown writes:

The logical result could be 62 million homes that are foreclosure-proof. … The defaulting homeowners could wind up with free and clear title. … That means hordes of victims of predatory lending could end up owning their homes free and clear while the financial industry could end up skewered on its own sword.

You read that right — 62 million homes foreclosure-proof. 62 million homeowners with free and clear title. The chain of title has been broken and no one may have standing to sue. That seems like mighty big news to me. If I were one of those homeowners, I’d certainly want to know. Surely the obvious question arises: Why keep paying my mortgage to an entity that doesn’t really own the property, let alone an entity under suit for fraud and racketeering?

Ellen sums it up:

If courts overwhelmed with foreclosures decide to take up the cause, the result could be millions of struggling homeowners with the banks off their backs, and millions of homes no longer on the books of some too-big-to-fail banks. Without those assets, the banks could again be looking at bankruptcy.

Read Ellen Brown’s full article: Homeowners’ Rebellion: Recent Rulings Could Shield 62 Million Homes from Foreclosure

The Best Way to Rob a Bank Is to Own One: Bill Moyers Interviews William K. Black

Suzanne O'Keeffe — Wed, 15 Apr 2009 02:46:12 +0000

A must watch, in my opinion. As I’ve pointed out in several posts now, the financial crisis is a result of systemic fraud throughout the financial system. In this interview, Bill Moyers talks with William K. Black, author of “The Best Way to Rob a Bank Is to Own One,” and has him explain how the fraud began in the board rooms and CEO offices of the most elite institutions in the US and how our government is complicit in covering it up.

“WILLIAM K. BLACK: …we don’t want to change the bankers, because if we do, if we put honest people in, who didn’t cause the problem, their first job would be to find the scope of the problem. And that would destroy the cover up. [snip]

Geithner is charging, is covering up. Just like Paulson did before him. [snip]

BILL MOYERS: How is this happening? I mean why is it happening?

WILLIAM K. BLACK: Until you get the facts, it’s harder to blow all this up. And, of course, the entire strategy is to keep people from getting the facts. [snip]

I don’t know whether we’ve lost our capability of outrage. Or whether the cover up has been so successful that people just don’t have the facts to react to it. [snip]

If you leave the failed CEOs in place, it isn’t just that they’re terrible business people, though they are. It isn’t just that they lack integrity, though they do. Because they were engaged in these frauds. But they’re not going to disclose the truth about the assets.

BILL MOYERS: And we have to know that, in order to know what?

WILLIAM K. BLACK: To know everything. To know who committed the frauds. Whose bonuses we should recover. How much the assets are worth. How much they should be sold for. Is the bank insolvent, such that we should resolve it in this way? It’s the predicate, right? You need to know the facts to make intelligent decisions.

They’re deliberately leaving in place the people that caused the problem, because they don’t want the facts. And this is not new. The Reagan Administration’s central priority, at all times, during the Savings and Loan crisis, was covering up the losses.

BILL MOYERS: So, you’re saying that people in power, political power, and financial power, act in concert when their own behinds are in the ringer, right?

WILLIAM K. BLACK: That’s right. And it’s particularly a crisis that brings this out, because then the class of the banker says, “You’ve got to keep the information away from the public or everything will collapse. If they understand how bad it is, they’ll run for the exits.”

(Full transcript here.)