Amazing how the letter went out moments after Barack vetoed Harry’s “get out of jail free act” bill that willmake banker scum do their jobs…now he gets to pretend he is strong and standing up for us….what a lying scumbag.

This is a win win issue for Dems and I believe they shoud milk it for all they can get. It would be wonderful if the President would recall congress to pass a tempory halt of all forclosures until the fraud situation is resolved. If the Rethuglicans could do it for Terry Shaivo the Dems should do it for the Middle class.

Why not empower an agency of the federal government to seize all homes in foreclosure? They could then be awarded to private citizens as land grants. This would be especially useful for dealing with foreclosures sans title or deed.

There are many ways to approach the problem, now that the government realizes there might actually be one.

I attempted to edit the post to add this (but after 2 refreshes, perhaps it was too late to post the edit):

The land grant approach would be particularly useful where title or deed are missing from a property in foreclosure. In that case, make the grant to the people living in the home. They could attach a note, “Congratulations on your new home, citizen! Signed: Your government! See! We really do give a damn!”

so why would a pol “in the fight of his life” have anything to do with expediting a voice vote on a specious bill that would only speed up and increase foreclosures ??

Oh, I think the government has known all along there’s a problem, it’s just that with the election drawing close and the Dems position iffy, they know they need to pull something out of their hat to appear to help the little guy to try to sway his vote.

David Dayan is Da Man staying on top of this crucial and timely issue. FDL and all of us are very fortunate to have him.

OT, only because it’s the second best news of the day, and we need good news.

Lieberman’s approval rating stands at only 31%, with 57% disapproval — even lower than the 36%-54% for Sen. Chris Dodd, who is retiring. Broken down by party, Lieberman’s rating is 20%-69% among Democrats, 46%-41% among Republicans, and 31%-56% among independents.

The October surprise.

Does that mean that Reid Jr. is also calling for a foreclosure moratorium from a position that affects the governor’s race?

Guess that shows that Lieberman is in the wrong caucus.

as land grants

Choked on the coffee when I read that.

Wrong. It shows that O is really postpartisan. /s

It’s too bad Reid calling for a moratorium and an actual moratorium are two different things.

Nice eye candy for the election I guess.

Guess they decided their trash-the-hippies campaign wasn’t working and had to start throwing some bones the voters’ way instead. Feeding time at the zoo.

Also, a moratorium that isn’t accompanied by a well-funded federal effort to prosecute banks and others for engaging in fraud is nothing but an election ploys.

Oh darn, and that trash-the-hippies thing was working so well, too…

Exactly.

Real consequences are only for little people.

People late on their mortgages?? Real consequence is foreclosure, out of the house, homeless. OK.

Banksters perpetrate fraud in courtrooms all over the country? Real consequence is…. sternly worded letters, maybe a fine or two, but certainly no individual real consequences

When, oh when, are we going to treat business criminals EXACTLY like street criminals??? Until we do, we’re likely to see millions of them.

Yes, and these are real crimes being committed here. One frightening aspect is the behavior of judges. In Florida’s famous “fast track” scheme you see judges playing fast and loose, and coming down on the side of banks. In a case I’m personally involved with here in California, a large bank claimed to have a legitimate claim on a property, but when the property owner challenged this in court — demanding to see proper documentation — the judge backed a request by the bank’s lawyer to not release the documents to the defense. Constitution? What constitution?

You see, this is what gets me pissed at these cowards in Washington. Reid and Pelosi, by their calls for action, clearly realized this needed to be done 2 years ago, but in typical cowardly Democratic form, they wait until their ass in trouble with the voters to call for action on something that hardly began last week. They, by calling for these actions, admit they were aware of these issues long ago, but because of the coziness with the banks and drive for campaign donations kept their mouths shut and their power dry. Now that the bastards have turned their back on them and are feeding the wing nuts on the right, and they fear they may lose their seats of power, they call for action that should’ve been mandated by Congress two years ago. I am a Progressive Democrat, and this kind of cowardly action is getting quite old with our leadership.

LOL! It’s bad for your nerves, I hear. Coffee, that is. Not land grants. Unless it’s your land, of course…

Don’t worry. The Ds will snatch the football away on November 3.

… but then, if it were your land, you’d be able to produce the title, right?

For all of those properties where the foreclosing entity can’t produce title, and therefore certainly aren’t owned by the entity in any legal sense, a land grant system of some sort or another makes sense. They need to be back in circulation in the economy, and I can’t think of a better idea for what to do with the inventory.

Were I a banker, I’d be very conflicted right now.

Reid leads by more than a dozen points among registered voters but loses by 2 points among likely voters, and our media says it could be

1. Tea Party enthusiasm is making GOP turnout more likely while Dem Turnout is average, or

2. GOP enthusiasm is average but Dem enthusiasm is down – – -

with media fellow suggested it is obviously the first choice.

Like it could not be Tea party up, in combination with Dem sending a message as in Scott Brown.

Indeed the media is working quite hard to pretend that the left does not have the power to send a message again – and indeed that there can be no again because the Mass Senate candidate was a bad candidate. I guess 800,000 staying home in Mass – one third of the Dem vote – just doesn’t register as a message from the left if you are focused on keeping business folks in the room.

ah jeez, just now saw a self identified Tea Bagger make total sense on the mortgage mess – wth ??

Someone, somewhere, with the money and know how, should be salivating over that 800,000 number right now.

Folks wonder if a third party could ever stand a chance. Right there’s your door, wide open, waiting for someone to walk through.

Something about a blind dog or a thousand monkeys and typewriters comes to mind here…

actually – he wasn’t just lucky

he talked about Fed sittin on the toxic sh* . didn’t use any of their usual dogwhistles about all ‘those folks’ who knowingly took out loans they couldnt pay for

really, it was mind blowing

Good old Harry — a day late and a dollar short. Go, Harry Reid, champion of the people!

It would make more sense if Rory Reid was calling for a moratorium unless Harry Reid is calling for a national moratorium.

If a state attorney general can create a moratorium, why can’t Eric Holder?

I agree that someone who couldn’t get through the Senate as much as Harry Reid couldn’t get through the Senate has the appearance of a Hail Mary pass.

Why not empower an agency of the federal government to seize all homes in foreclosure? They could then be awarded to private citizens as land grants. This would be especially useful for dealing with foreclosures sans title or deed.

As I see it, that would be an action of eminent domain, and the price for the house would have to be a fair market value. The remaining lien on the house would have to be abrogated, in what looks like a “taking” to me. You could sell the house back to the owners for the same value, but someone would have to underwrite the mortgage – the feds?? An what do you do for others who are underwater but not in default? And what about the folks who were more prudent? And has anyone read the 4th amendment?

I think this is a completely political trial balloon.

This is going to starkly put on display the self serving hypocrisy of our Political Class. I think this may wind up with RICO, where the defendants are Heads of our Financial Services sector and a bunch of Pols. from both parties.

This will dovetail with the coming onslaught of austerity measures Fed. and State, and the raid on SS, that the scales will finely have to drop from the public’s eyes, or not.

Not every state has as many progressive Dems as Massachusetts (or a city machine in a major city that sat on its hands).

I’m not sure that Nevada is anything like Massachusetts politically.

Because that would crash the Ponzi?

Already is a RICO case in Kentucky that names MERS, CitiBank, and Ally.

In case you missed it, the Ponzi crashed in October 2008. The bettors are still trying to stick innocent bystanders with the bill instead of admitting they fell for a fraud.

The Ponzi includes the Fed/Gov. collusion. The 2008 event was a mere pre-shock.

Holder will resist and will be thrown under the bus to be replaced by another Neoliberal sycophant.

Question I would like answered because I read an article in the Sun-Sentinel down in Florida today. The article states and makes a case that forestalling foreclosures does nothing but supress the housing market and will do nothing but delay the inevitable. I understand that people should never be thrown out of their homes because of a fradulant foreclosure. The fact is though, more then likely, 99% of these foreclosures are legitimate. Until these houses are sold, whether it be to investors or others, it will do nothing but slow down the housing recovery. Somebody explain to me why halting foreclosures is such a great idea in the long term, because it certainly does not look good after reading today’s article.

The fact is though, more then likely, 99% of these foreclosures are legitimate

Presumably you’re making a WAG at that figure. Check out the articles on this here that describe all the ways the fraud has been going on and you might change your mind on the 99% figure.

If the banks do not actually know who really owns the mortgage, if the banks have not actually complied with the laws of their states in properly updating records, if the banks are fraudulently backdating and swearing to the validity of the information provided, then it is fraud.

The banks have to follow the laws as well as the homeowners have to do so.

The banks created the problem by trying to use short cuts rather than follow the proper procedure. They should not be rewarded for this.

my first post, I think you are referring to Karl Denninger of Market Ticker forum. I just watched Karl on Dylan Ratigan’s program. I have followed Karl’s forum for the past three years.

He hates banksters and fraud, additionally he voted for Obama and he sponsored a petition to impeach Bush.

Fraud is not a left/right issue, we need a new party since the current ones are opposite sides of the same corporate coin.

Now back to lurking

“The fact is though, more then likely, 99% of these foreclosures are legitimate.”

or that they are fraudulent. Considering the adulation of unaccountability by both the Gov. and the Financial sector, I would be shorting ‘legitimacy’.

bing!

To the extent that there is fraud, the lenders need to be held accountable. I am not sure that losing track of who owns the note is really malacious fraud, and the actual owners will likely be turned up and the foreclosures will proceed.

No matter what problems have occured in the record-keeping, the value of homes in our neighborhood – greater DC – have fallen by about 1/3 since the summer of 2005. That is the heart of the problem.

Very few mortgages were issued with a significant amount down, so almost any home sold in the 2-6 year ago time frame will be underwater. That has nothing to do with fraud. It is also true that many new homeowners were suckered into loan terms that they could not ultimately afford, but, on the other hand, a huge percentage of those buyers were playing the lottery and expecting that they wuold sell the house at a higher amount later, or refinance at more favorable terms because their equity would have grown.

It is also true that many homes were sold with different terms. 10% or less down was not uncommon, but more frequently it was an FHA with a down payment under 5%, or a conventional loan with as second that allowed them to avoid PMI or even stated income loans. That provided homes to many that would not otherwise have had them, but it also made real estate investments available to charlatans.

The market will regain stability when there is an efficient and liquid market, where buyers and sellers are both willing to transact.

O/T

American jailed for not reciting the pledge. Ain’t America grand!!!!

You can go to jail for not reciting the pledge, but fraud in courtrooms……?

Harry Reid: I take care of my own interests first. If you happen to benefit from that, well that’s not because I didn’t try really hard to prevent the “small people” from even having a crumb or a bone. Oh well. Vote for me because I might suck less than whackaloon Sharran Angle.

There have been way too many cases already where two different banks have tried to foreclose on the same property or banks have tried to foreclose on property that was purchased with cash. Or banks have sent people to break into occupied homes to change the locks.

Another part of the problem is with the auto pen notary signing that they’ve reviewed documents for 10k mortgages a month. A notary is a sworn statement under penalty of law.

The problem is systemic.

All of that is true.

Before this tsunami started, the REO departments and law firms that handled foreclosures were appropriately small. When the volume grew to untenable numbers, the experienced and trained staff were stretched beyond their ability to respond. I am not surprised that they have problems.

They need to man up and face their problems, but as I said, the underlying problems stem from the collapse of home prices.

Thank you for noticing, but it’s not entirely without merit. The fair market value of many of the foreclosed properties is far below what was “paid” for them, but without title the current holders are no different than squatters, except they have a storefront and lots of lawyers (who can’t argue much if they can’t produce title for the property).

And speaking of those properties without title, on what basis does anyone “own” the property? I’d submit there isn’t anyone the feds would necessarily need to pay for a great number of properties. The others could be purchased at fair market value (and if an outright grant frightens some, a below-value monthly payment for a short term might recoup the cost of administrating the program).

I know. Land grants. It sounds like that evil boogie-man, socialism. Just like the American-style socialism our forefathers got when this sorry-ass, pathetic excuse for a government cared for its people, rather than its owners.

That one time. You remember? No? Really? It’s been THAT long?

but as I said, the underlying problems stem from the collapse of home prices.

Actually, just as much of an underlying problem is people losing jobs making them unable to keep up with payments and the refusals of the banks to negotiate in good faith with people underwater on their mortgages.

Foreclosure itself doesn’t help those home price either.

Gee, a Senator acting for the American people.

Must be up for election…

Foreclosure helps in one way. The amount paid for the home determines whether the homeowner can resell at a later date. By foreclosing the “basis” for the new homeowner is lower, and provides them a more flexible set of options when they do sell. To the extent that the lender requires the homeowner to keep the same princiapl balance (even if the interest rate is lower) the owner may have a more dificult time selling later on. Lower “basis’ will make the overall market more active, and help keep prices more stable.

As most people are now aware, many of these loans were fraudulent from the gitgo. The reason to not properly transfer the paperwork, or lose it is to obscure the trail of evidence as to who is culpable in making the fraudulant loan.

Denninger is dead on about this. These loans were repackaged, rated AAA and sold to pensions, mutual funds, etc as super safe investments, and then the same banks that sold then bet against them. These loans, if improperly transferred are legally still owned by originating banks and those funds that bought them should get their money back because THEY NEVER LEGALLY OWNED THEM.

Yet by foreclosing and refusing to work with the current homeowners to make things work, the banks, by foreclosing, are actually costing themselves more money as the foreclosure sale rarely if ever brings remotely close to the amount owed.

And then the foreclosure vultures swoop in and buy the property for a song.

Which is another problem

Bingo. Cramdowns would have been a much better way to go.

this posting is probably done for – however:

It is true that foreclosure is expensive for the lender – generally much more than a short sale where there are no lawyers, no court appearances, no eviction and the like.

It is also true that “vultures” do pick up houses at a discounted price, although I don’t know if “song” is correct. It is also true that a lot of first time home owners can now afford a house today where they could not 2-4 years ago.

There are always two sides to a transaction.

ohhhhh, sorry I missed you and Welcome to DeLurkville !

Denninger is a fabulous example of something Jane Hamsher has been talking about for some time now – loosely, there was real and viable populist outrage throughout the political spectrum about the Banksters and Wall St – and the DNC Masters of the Electoral Universe, foolishly allowed it to languish only to have Kochs et al come along and rope it off – rendering it invisible

anyhoo, left a link of Denninger’s Ratigan appearance in David Dayen’s Grayson/Systemic Risk thread

and please comment again, I’m sure anyone who’s been reading Ticker Guy may have a few things to add :D

Agreed. Harry Reid should have been calling for a moratorium on foreclosures two years ago! He waits less than a month before an election to do this? Senator Reid must be kidding!