YouTube Added: 09.11.2011
Mortgage crisis
Black Hole Fannie Mae Asks Taxpayers For Another $7.8 BILLION To Cover Its Losses In Third Quarter
Consider this:
– Fannie Mae Knew About Toxic Mortgages in 2003!
– 97 Percent Of All US Mortgages Are Backed By The Government
– Fannie Mae And Freddie Mac Worst Case Scenario Is $1 Trillion!
– Tickerguy On Dylan Ratigan Show – Massive Fraud At The Highest Levels!
– Report: Fannie Mae, Freddie Mac Bailouts Could Hit $363 Billion
– Bank of America: Thrilled to Pay $3 Billion Penalty – Freddie Mac Putbacks Resolved for 1¢ on $
– US Taxpayers on Hook for $5 Trillion of Fannie, Freddie Debt … No Matter What Barney Frank Says
– Fannie Mae loss widens, asks taxpayers for $7.8B (AP, Nov 8, 2011):
WASHINGTON (AP) — Mortgage giant Fannie Mae is asking the federal government for $7.8 billion in aid to cover its losses in the July-September quarter.
The government-controlled company said Tuesday that it lost $7.6 billion in the third quarter. Low mortgage rates reduced profits and declining home prices caused more defaults on loans it had guaranteed.
The government rescued Fannie Mae and sibling company Freddie Mac in September 2008 to cover their losses on soured mortgage loans. Since then, a federal regulator has controlled their financial decisions.
Taxpayers have spent about $169 billion to rescue Fannie and Freddie, the most expensive bailout of the 2008 financial crisis. The government estimates that figure could reach up $220 billion to support the companies through 2014 after subtracting dividend payments.
Fannie Mae Knew About Toxic Mortgages in 2003!
– Could they have stopped the credit crunch? Fannie Mae knew about dodgy mortgages in 2003, says report (Daily Mail, Oct. 4, 2011):
Mortgage giant Fannie Mae knew about allegations of improper foreclosure practices by law firms as early as 2003 but did not act to stop them, a government watchdog has said.
But it wasn’t until mid-2010 before the company’s overseer began to scrutinise the conduct of some of the law firms when news reports emerged of dubious practices, a report revealed today.
An unnamed shareholder warned Fannie Mae of alleged foreclosure abuses in 2003, the inspector general of the Federal Housing Finance Agency (FHFA) said in the report.
Fannie Mae responded by hiring a law firm to investigate the claims in 2005, which reported it had found foreclosure attorneys in Florida ‘routinely filing false pleadings and affidavits’ the following year.
Underwater Mortgages Could Sink America Without A Trace
Flashback:
– ‘Welcome to the Recovery’: Why Another 11 Million Mortgages Will Go Bad
– Welcome to the Recovery (New York Times, by Timothy Geithner, August 2, 2010)
– If it doesn’t do something about its underwater mortgages, America could sink without trace (Guardian, Oct. 2 2011):
Stimulating the economy is all very well in the short term. But the national legacy of unpayable property debt will weigh the US down for years
It’s now more than six years since Alan Greenspan, in the days when he was still known as the “maestro” of the world economy, conceded that there might be a little “froth”, perhaps even a few “local bubbles”, in the American housing market.
Read moreUnderwater Mortgages Could Sink America Without A Trace
Full-Blown Civil War Erupts On Wall Street: As Reality Finally Hits The Financial Elite, They Start Turning On Each Other
Recommended ‘extensive roundup’ here:
– Full-Blown Civil War Erupts On Wall Street: As Reality Finally Hits The Financial Elite, They Start Turning On Each Other (AmpedStatus, Sep 3, 2011):
Finally, after trillions in fraudulent activity, trillions in bailouts, trillions in printed money, billions in political bribing and billions in bonuses, the criminal cartel members on Wall Street are beginning to get what they deserve. As the Eurozone is coming apart at the seams and as the US economy grinds to a halt, the financial elite are starting to turn on each other. The lawsuits are piling up fast. Here’s an extensive roundup:
…
Former Assistant Secretary OF Housing Catherine Austin Fitts: ‘It’s Time to Bring Our Mortgages Home’
– It’s Time to Bring Our Mortgages Home – Your Municipality and Community Venture Fund is the Ideal Investor for Fannie, Freddie & FHA Defaulted Mortgages (Solari, August 29, 2011):
By Catherine Austin Fitts (in the first person) and Carolyn Betts
The Administration is now proposing the transfer of significant defaulted mortgages and foreclosed properties held by Fannie Mae, Freddie Mac and the Federal Housing Administration (“FHA”) to large national institutional investors.
A Huge Housing Bargain — but Not for You
The Street (18 Aug 11)White House Seeks Ideas to Shrink Foreclosure Glut
Catherine, News & Commentary (11 Aug 11)Enterprise/FHA REO Asset Disposition (PDF)
RFIFinal (10 Aug 11)Such a transfer is not economic — other than for the large investors and to serve a wider agenda of social control and engineering, including gentrification of numerous areas whose former residents were fraudulently induced and evicted with the use of these mortgages.
I served as FHA Commissioner (See: Austin Fitts Better be Good With Hammer and Nails) during the first Bush Administration and then, several years later, my company, Hamilton Securities Group, served as the lead financial advisor to FHA, providing portfolio strategy advice with respect to $400 billion of financial liabilities and assets, including over 50,000 of foreclosed properties held by the government as the result of mortgage insurance claims for defaulted FHA-insured mortgages.
Matt Taibbi: Obama Goes All Out For Dirty Banker Deal (Rolling Stone)
Obama bin Bush: Mission accomplished!
– Obama Goes All Out For Dirty Banker Deal (Matt Taibbi, Rolling Stone, August 24, 2011):
A power play is underway in the foreclosure arena, according to the New York Times.
On the one side is Eric Schneiderman, the New York Attorney General, who is conducting his own investigation into the era of securitizations – the practice of chopping up assets like mortgages and converting them into saleable securities – that led up to the financial crisis of 2007-2008.
On the other side is the Obama administration, the banks, and all the other state attorneys general.
This second camp has cooked up a deal that would allow the banks to walk away with just a seriously discounted fine from a generation of fraud that led to millions of people losing their homes.
The idea behind this federally-guided “settlement” is to concentrate and centralize all the legal exposure accrued by this generation of grotesque banker corruption in one place, put one single price tag on it that everyone can live with, and then stuff the details into a titanium canister before shooting it into deep space.
Read moreMatt Taibbi: Obama Goes All Out For Dirty Banker Deal (Rolling Stone)
‘Welcome to the Recovery’: Why Another 11 Million Mortgages Will Go Bad
– Welcome to the Recovery (New York Times, by Timothy Geithner, August 2, 2010)
– Laurie Goodman On Why Another 11 Million Mortgages Will Go Bad (Business Insider, July 26, 2011):
A major bear on the housing market, Amherst Securities’ Laurie Goodman has predicted since 2009 another housing crash as banks are forced to liquidate tons of bad loans.
Up to 11 million mortgages are likely to default, according to Goodman. This is a frightening figure, seeing as only several million have been liquidated since the crisis began. When it happens the market will be flooded with supply.
Goodman reached 11 million by projecting default rates for non-performing loans, re-performing loans, and underwater loans. Here’s a slide from a recent presentation (via The Atlantic):
66% Of Las Vegas Mortgages Are Underwater, 27.7% Of Total US Housing Debt Has Negative And Near-Negative Equity
– 66% Of Las Vegas Mortgages Are Underwater, 27.7% Of Total US Housing Debt Has Negative And Near-Negative Equity (ZeroHedge, June 7, 2011):
Following yesterday’s news out of Zillow of a 0.77% drop in April home values compared to March, today we get an update from CoreLogic which in turn looks at the latest trends on “underwater” (or negative equity) mortgages in the US. In summary: “10.9 million, or 22.7 percent, of all residential properties with a mortgage were in negative equity at the end of the first quarter of 2011, down slightly from 11.1 million, or 23.1 percent, in the fourth quarter. An additional 2.4 million borrowers had less than five percent equity, referred to as near-negative equity, in the first quarter. Together, negative equity and near-negative equity mortgages accounted for 27.7 percent of all residential properties with a mortgage nationwide. In the fourth quarter, these two categories stood at 27.9 percent.” The most impacted state is Nevada, which has 62.6% of all mortgages underwater (with another 4.8% in near-negative), followed by Arizona, Florida and Michigan. California is fifth with 30.9% of all homes underwater. We doubt these millions of “homeowners” are benefiting much from the wealth effect.
US Underwater Mortgages Rise As Home Prices Fall
See also:
– 97 Percent Of All US Mortgages Are Backed By The Government
The number of Americans who owe more on their mortgages than their homes are worth rose at the end of last year, preventing many people from selling their homes in an already weak housing market.)
WASHINGTON — The number of Americans who owe more on their mortgages than their homes are worth rose at the end of last year, preventing many people from selling their homes in an already weak housing market.
About 11.1 million households, or 23.1 percent of all mortgaged homes, were underwater in the October-December quarter, according to report released Tuesday by housing data firm CoreLogic. That’s up from 22.5 percent, or 10.8 million households, in the July-September quarter.
The number of underwater mortgages had fallen in the previous three quarters. But that was mostly because more homes had fallen into foreclosure.
Underwater mortgages typically rise when home prices fall. Home prices in December hit their lowest point since the housing bust in 11 of 20 major U.S. metro areas. In a healthy housing market, about 5 percent of homeowners are underwater.
Roughly two-thirds of homeowners in Nevada with a mortgage had negative home equity, the worst in the country. Arizona, Florida, Michigan and California were next, with up to 50 percent of homeowners with mortgages in those states underwater.
Oklahoma had the smallest percentage of underwater homeowners in the October-December quarter, at 5.8 percent. Only nine states recorded percentages less than 10 percent.
In addition to the more than 11 million households that are underwater, another 2.4 million homeowners are nearing that point.
When a mortgage is underwater, the homeowner often can’t qualify for mortgage refinancing and has little recourse but to continue making payments in hopes the property eventually regains its value.
The slide in home prices began stabilizing last year. But prices are expected to continue falling in many markets due to still-high levels of foreclosure and unemployment.
That means homes purchased at the height of the real estate boom are unlikely to recover lost value for years.
Underwater mortgages also dampen home sales. Homeowners who might otherwise sell their home refuse to take a loss or can’t get the bank to agree to a short sale — when a lender lets a borrower sell their property for less than the amount owed on the mortgage.
Home sales have been weaker in areas where there are a large number of homeowners with negative equity.
Many banks are also requiring homebuyers to put as much as 20 percent of a home’s value as down payment and the Obama administration is pushing for a 10 percent down payment requirement on all conventional loans guaranteed by the ailing mortgage giants Fannie Mae and Freddie Mac.
Few homeowners in states hit hard by foreclosures, including Colorado, Georgia and Nevada, have 20 percent or more equity in their homes. Higher down payments make it increasingly difficult for those people to sell their homes.
The total amount of negative equity increased to $751 billion nationwide, up from $744 billion in the previous quarter.
Published: Tuesday, March 08, 2011, 11:05 AM Updated: Tuesday, March 08, 2011, 1:46 PM
Source: AP
97 Percent Of All US Mortgages Are Backed By The Government
Washington’s Blog strives to provide real-time, well-researched and actionable information. George – the head writer at Washington’s Blog – is a busy professional and a former adjunct professor.
I heard a recent talk by Richard Wolff – Professor of Economics Emeritus at the University of Massachusetts in Amherst (PhD in Economics from Yale) – where Wolff said that 97% of all U.S. mortgages are either written or guaranteed by the government.
As Bloomberg explained last August:
Fannie Mae and Freddie Mac, the government-controlled companies that issued and guaranteed more than 71 percent of mortgage-backed bonds last year. Between those companies and Ginnie Mae, which guarantees loans insured by the Federal Housing Administration, the government backed nearly 97 percent of U.S. mortgages in 2009.
There are supposedly plans in Washington to wind down Fannie and Freddie. Critics say that would destroy the “recovery” in housing.
If continuing to throw money at Fannie and Freddie would stabilize the economy, I might be for it – even though it is not free market capitalism. I am not wed to either liberal or conservative ideologies, and am instead simply motivated to do whatever will work to stabilize the economy and help the most people.
But as I noted in January:
Most independent experts say that the government’s housing programs have been a failure. That’s too bad, given that the housing slump is now – according to Zillow’s – worse than during the Great Depression.
Indeed, PhD economists John Hussman and Dean Baker, fund manager and financial writer Barry Ritholtz and New York Times’ writer Gretchen Morgenson say that the only reason the government keeps giving billions to Fannie and Freddie is that it is really a huge, ongoing, back-door bailout of the big banks.
Many also accuse Obama’s foreclosure relief programs as being backdoor bailouts for the banks. (See this, this, this and this).
Read more97 Percent Of All US Mortgages Are Backed By The Government
Paul Craig Roberts: The Perfidy Of Government How We Lost Our Economy, The Constitution And Our Civil Liberties
Paul Craig Roberts was Assistant Secretary of the Treasury during President Reagan’s first term. He was Associate Editor of the Wall Street Journal. He has held numerous academic appointments, including the William E. Simon Chair, Center for Strategic and International Studies, Georgetown University, and Senior Research Fellow, Hoover Institution, Stanford University.
This essay is about three recent books that explain how we lost our economy, the Constitution and our civil liberties, and how peace lost out to war.
Matt Taibbi is the best–certainly the most entertaining–financial/political reporter in the country. There is no better book than Griftopia (2010) to which to turn to understand how stupidity, greed, and criminality, spread evenly among policymakers and Wall Street, created the financial crisis that has left Americans overburdened with both private and public debt. Taibbi walks the reader through the fraudulent financial instruments that littered the American, British, and European financial communities with toxic waste. He has figured it all out, and what in other hands might be an arcane account for MBAs is in Taibbi’s hands a highly readable and entertaining story.
Amazon.com: Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America
Amazon.de: Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America
For the first 65 pages Taibbi entertains the reader with the inability of the public and politicians to focus on any reality. The financial story begins on page 65 with Fed chairman Alan Greenspan undermining the Glass-Steagall Act leading to its repeal by three political stooges, Gramm-Leach-Bliley. This set the stage for the banksters to leverage debt upon debt until the house of cards collapsed. When Brooksley Born, head of the Commodity Futures Trading Commission, attempted to do her regulatory job and regulate derivatives, the Federal Reserve, Treasury, and Securities and Exchange Commission got her bounced out of office. To make certain that no other regulator could protect the financial system and its participants from what was coming, Congress deregulated the derivatives markets by passing the Commodity Futures Modernization Act.
Housing Armageddon: 12 Facts Which Show That We Are In The Midst Of The Worst Housing Collapse In US History
This is as I’ve said many, many times ‘The Greatest Depression’.
We are officially in the middle of the worst housing collapse in U.S. history – and unfortunately it is going to get even worse.
Already, U.S. housing prices have fallen further during this economic downturn (26 percent), then they did during the Great Depression (25.9 percent).
Approximately 11 percent of all homes in the United States are currently standing empty. In fact, there are many new housing developments across the U.S. that resemble little more than ghost towns because foreclosures have wiped them out.
Mortgage delinquencies and foreclosures reached new highs in 2010, and it is being projected that banks and financial institutions will repossess at least a million more U.S. homes during 2011.
Meanwhile, unemployment is absolutely rampant and wage levels are going down at a time when mortgage lending standards have been significantly tightened.
That means that there are very few qualified buyers running around out there and that is going to continue to be the case for quite some time to come.
When you add all of those factors up, it leads to one inescapable conclusion. The “housing Armageddon” that we have been experiencing since 2007 is going to get even worse in 2011.
Bank Bailouts Explained (Must-See!!!)
Added: 28. January 2011
14 Eye Opening Statistics Which Reveal Just How Dramatically The US Economy Has Collapsed Since 2007
There are always some that have a lot to celebrate:
And how about ‘main street’?
– US Census: Number of Poor People May Be Millions Higher
– US: Food Stamps Used by Record 43.2 Million in October, Up 15 Percent From A Year Ago
– US Consumer Bankruptcies Hit 5-year High in 2010
– Hiding The Greatest Depression: How The US Government Does It:
The real US unemployment rate is not 9.8% but between 25% and 30%. That is a depression level of job losses – so why doesn’t it look like a depression for many people? How can so large of a statistical discrepancy exist, and how is it that holiday shopping malls are so crowded in a depression?
This is the Greatest Depression.
The Great Depression
Most Americans have become so accustomed to the “new normal” of continual economic decline that they don’t even remember how good things were just a few short years ago. Back in 2007, unemployment was very low, good jobs were much easier to get, far fewer Americans were living in poverty or enrolled in welfare programs and government finances were in much better shape. Of course most of this prosperity was fueled by massive amounts of debt, but at least times were better. Unfortunately, things have really deteriorated over the last several years. Since 2007, unemployment has skyrocketed, foreclosures have set new all-time records, personal bankruptcies have soared and U.S. government debt has gotten completely and totally out of control. Poll after poll has shown that Americans are now far less optimistic about the future than they were in 2007. It is almost as if the past few years have literally sucked the hope out of millions upon millions of Americans.
Sadly, our economic situation is continually getting worse. Every month the United States loses more factories. Every month the United States loses more jobs. Every month the collective wealth of U.S. citizens continues to decline. Every month the federal government goes into even more debt. Every month state and local governments go into even more debt.
Unfortunately, things are going to get even worse in the years ahead. Right now we look back on 2005, 2006 and 2007 as “good times”, but in a few years we will look back on 2010 and 2011 as “good times”.
We are in the midst of a long-term economic decline, and the very bad economic choices that we have been making as a nation for decades are now starting to really catch up with us.
So as horrible as you may think that things are now, just keep in mind that things are going to continue to deteriorate in the years ahead.
But for the moment, let us remember how far we have fallen over the past few years. The following are 14 eye opening statistics which reveal just how dramatically the U.S. economy has collapsed since 2007….
#1 In November 2007, the official U.S. unemployment rate was just 4.7 percent. Today, the official U.S. unemployment rate is 9.4 percent.
#2 In November 2007, 18.8% of unemployed Americans had been out of work for 27 weeks or longer. Today that percentage is up to 41.9%.
#3 As 2007 began, there were just over 1 million Americans that had been unemployed for half a year or longer. Today, there are over 6 million Americans that have been unemployed for half a year or longer.
#4 Nearly 10 million Americans now receive unemployment insurance, which is almost four times as many as were receiving it back in 2007.
#5 More than half of the U.S. labor force (55 percent) has “suffered a spell of unemployment, a cut in pay, a reduction in hours or have become involuntary part-time workers” since the “recession” began in December 2007.
#6 According to one analysis, the United States has lost a total of approximately 10.5 million jobs since 2007.
#7 As 2007 began, only 26 million Americans were on food stamps. Today, an all-time record of 43.2 million Americans are enrolled in the food stamp program.
#8 In 2007, the U.S. government held a total of $725 billion in mortgage debt. As of the middle of 2010, the U.S. government held a total of $5.148 trillion in mortgage debt.
#9 In the year prior to the “official” beginning of the most recent recession in 2007, the IRS filed just 684,000 tax liens against U.S. taxpayers. During 2010, the IRS filed over a million tax liens against U.S. taxpayers.
#10 From the year 2000 through the year 2007, there were 27 bank failures in the United States. From 2008 through 2010, there were 314 bank failures in the United States.
#11 According to the U.S. Department of Housing and Urban Development, the number of U.S. families with children living in homeless shelters increased from 131,000 to 170,000 between 2007 and 2009.
#12 In 2007, one poll found that 43 percent of Americans were living “paycheck to paycheck”. Sadly, according to a survey released very close to the end of 2010, approximately 55 percent of all Americans are now living paycheck to paycheck.
#13 In 2007, the “official” federal budget deficit was just 161 billion dollars. In 2010, the “official” federal budget deficit was approximately 1.3 trillion dollars.
#14 As 2007 began, the U.S. national debt was just under 8.7 trillion dollars. Today, the U.S. national debt has just surpassed 14 trillion dollars and it continues to soar into the stratosphere.
So is there any hope that we can turn all of this around?
Unfortunately, the massive amount of debt that we have piled up as a society over the last several decades has made that impossible.
If you add up all forms of debt (government debt, business debt, individual debt), it comes to approximately 360 percent of GDP. It is the biggest debt bubble in the history of the world.
If the federal government and our state governments stop borrowing and spending so much money, our economy would collapse. But if they keep borrowing and spending so much money they will continually make the eventual economic collapse even worse.
We are in the terminal stages of the most horrific debt spiral the world has ever seen, and when the debt spiral gets stopped the house of cards is going to finally come down for good.
So enjoy these times while you still have them. Yes, today is not nearly as prosperous as 2007 was, but today is most definitely a whole lot better than 2015 or 2020 is going to be.
Sadly, we could have avoided this financial disaster completely if only we had listened more carefully to those that founded this nation. Once upon a time, Thomas Jefferson said the following….
I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article, taking from the federal government the power of borrowing.
January 10th, 2011
Source: Economic Collapse Blog
Hasta La Vista: Washington Mutual Lost 100,000 Mortgage Files
… and WTC 7 was brought down by a controlled demolition, says Max Keiser.
29. November 2010
US Courts Helping Banks Screw Over Homeowners
The foreclosure lawyers down in Jacksonville had warned me, but I was skeptical. They told me the state of Florida had created a special super-high-speed housing court with a specific mandate to rubber-stamp the legally dicey foreclosures by corporate mortgage pushers like Deutsche Bank and JP Morgan Chase. This “rocket docket,” as it is called in town, is presided over by retired judges who seem to have no clue about the insanely complex financial instruments they are ruling on — securitized mortgages and labyrinthine derivative deals of a type that didn’t even exist when most of them were active members of the bench. Their stated mission isn’t to decide right and wrong, but to clear cases and blast human beings out of their homes with ultimate velocity.
They certainly have no incentive to penetrate the profound criminal mysteries of the great American mortgage bubble of the 2000s, perhaps the most complex Ponzi scheme in human history — an epic mountain range of corporate fraud in which Wall Street megabanks conspired first to collect huge numbers of subprime mortgages, then to unload them on unsuspecting third parties like pensions, trade unions and insurance companies (and, ultimately, you and me, as taxpayers) in the guise of AAA-rated investments. Selling lead as gold, shit as Chanel No. 5, was the essence of the booming international fraud scheme that created most all of these now-failing home mortgages.
The rocket docket wasn’t created to investigate any of that. It exists to launder the crime and bury the evidence by speeding thousands of fraudulent and predatory loans to the ends of their life cycles, so that the houses attached to them can be sold again with clean paperwork. The judges, in fact, openly admit that their primary mission is not justice but speed. One Jacksonville judge, the Honorable A.C. Soud, even told a local newspaper that his goal is to resolve 25 cases per hour. Given the way the system is rigged, that means His Honor could well be throwing one ass on the street every 2.4 minutes.
Foreclosure lawyers told me one other thing about the rocket docket. The hearings, they said, aren’t exactly public. “The judges might give you a hard time about watching,” one lawyer warned. “They’re not exactly anxious for people to know about this stuff.” Inwardly, I laughed at this — it sounded like typical activist paranoia. The notion that a judge would try to prevent any citizen, much less a member of the media, from watching an open civil hearing sounded ridiculous. Fucked-up as everyone knows the state of Florida is, it couldn’t be that bad. It isn’t Indonesia. Right?
Well, not quite. When I went to sit in on Judge Soud’s courtroom in downtown Jacksonville, I was treated to an intimate, and at times breathtaking, education in the horror of the foreclosure crisis, which is rapidly emerging as the even scarier sequel to the financial meltdown of 2008: Invasion of the Home Snatchers II. In Las Vegas, one in 25 homes is now in foreclosure. In Fort Myers, Florida, one in 35. In September, lenders nationwide took over a record 102,134 properties; that same month, more than a third of all home sales were distressed properties. All told, some 820,000 Americans have already lost their homes this year, and another 1 million currently face foreclosure.
The Dylan Ratigan Show with Prof. William Black: ‘Fire Holder, Fire Geithner, Fire Bernanke’
Complete administrations should have been fired a long time ago:
– Elite Puppet President Obama Exposed
Even firing complete administrations would not solve the problem, because they are all only puppets of the elitists that OWN governments (all big parties), the Federal Reserve, other central banks, the big corporations and the mass media worldwide.
Added: 25. October 2010
The fraudulent CEOs looted with impunity, were left in power, and were granted their fondest wish when Congress, at the behest of the Chamber of Commerce, Chairman Bernanke, and the bankers’ trade associations, successfully extorted the professional Financial Accounting Standards Board (FASB) to turn the accounting rules into a farce.
The FASB’s new rules allowed the banks (and the Fed, which has taken over a trillion dollars in toxic mortgages as wholly inadequate collateral) to refuse to recognize hundreds of billions of dollars of losses. This accounting scam produces enormous fictional “income” and “capital” at the banks.
The fictional income produces real bonuses to the CEOs that make them even wealthier. The fictional bank capital allows the regulators to evade their statutory duties under the Prompt Corrective Action (PCA) law to close the insolvent and failing banks.
See also:
– Prof. William Black: Timothy Geithner ‘Burned Billions,’ Shafted Taxpayers on CIT Loan
Nearly 50 Percent leave Obama Mortgage-Relief Program
WASHINGTON — Nearly half of the homeowners who enrolled in the Obama administration’s flagship mortgage-relief program have fallen out.
A new report issued Friday by the Treasury Department said that approximately 630,000 people who had tried to get their monthly mortgage payments lowered through the effort have been cut loose through July. That’s about 48 percent of the 1.3 million homeowners who had enrolled since March 2009. That is up from more than 40 percent through June.
The report suggests foreclosures could rise in the second half of the year and weaken the ailing housing market, analysts say.
Another 421,804, or 32.3 percent of those who started the program, have received permanent loan modifications and are making their payments on time.
Many borrowers have complained that program is a bureaucratic nightmare. They say banks often lose their documents and then claim borrowers did not send back the necessary paperwork.
The banking industry said borrowers weren’t sending back their paperwork. They also have accused the Obama administration of initially pressuring them to sign up borrowers without insisting first on proof of their income. When banks later moved to collect the information, many troubled homeowners were disqualified or dropped out.
Read moreNearly 50 Percent leave Obama Mortgage-Relief Program
US Probes Morgan Stanley
And nothing will happen, unless the elite wants it to happen.
Prosecutors Look at Mortgage Securities; Firm Says It Hasn’t Been Contacted
U.S. prosecutors are investigating whether Morgan Stanley misled investors about mortgage-derivatives deals it helped design and sometimes bet against, people familiar with the matter said, in a step that intensifies Washington’s scrutiny of Wall Street in the wake of the financial crisis.
Morgan Stanley arranged and marketed to investors pools of bond-related investments called collateralized-debt obligations, or CDOs, and its trading desk at times placed bets that their value would fall, traders said. Investigators are examining, among other things, whether Morgan Stanley made proper representations about its roles.
Among the deals that have been scrutinized are two named after U.S. Presidents James Buchanan and Andrew Jackson, a person familiar with the matter said. Morgan Stanley helped design the deals and bet against them but didn’t market them to clients. Traders called them the “Dead Presidents” deals.
SEC Accuses Goldman Sachs of Civil Fraud
FILE – In this June 20, 2007 file photo, Treasury Secretary Henry Paulson testifies on Capitol Hill in Washington, before a House Financial Services Committee hearing on the state of the international financial system. The government has accused Goldman Sachs & Co. of defrauding investors by failing to disclose conflicts of interest in mortgage investments it sold as the housing market was faltering Friday, April 16, 2010. (AP Photo/Manuel Balce Ceneta, file)
WASHINGTON (AP) — The government has accused Goldman Sachs & Co. of defrauding investors by failing to disclose conflicts of interest in mortgage investments it sold as the housing market was faltering.
The Securities and Exchange Commission said in a civil complaint Friday that Goldman failed to disclose that one of its clients helped create — and then bet against — subprime mortgage securities that Goldman sold to investors.
Investors in the mortgage securities lost more than $1 billion, the SEC said. The agency is seeking to recoup profits reaped on the deal.
Flashback: The Wile E Coyote Government
Why does the American government consistently fail to foresee the future results of its own actions?
Because it is incompetent.
—
My take on that is, that it is impossible to be that much incompetent! This is an ‘intentionally incompetent’ elite puppet government that is looting the taxpayer until there is nothing left.
The government is ‘channeling’ taxpayer money through their friends on Wall Street into the hands of the elite behind the scenes (that control the US government, the Federal Reserve, Wall Street and the media), thereby bankrupting America and destroying the US dollar.
This is a controlled demolition.
—
It is managing the financial crisis Wile E Coyote style.
Added: 25. September 2008