Matt Taibbi’s on a book tour for his new book Griftopia (FDL Book Salon November 27), but he somehow managed to spend an hour at one of the “rocket docket” foreclosure hearings in Florida, ground zero for the foreclosure fraud crisis. And he used his typical colorful style to describe what happened there:
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.
The judge mentioned in this excerpt, Judge Soud, presided over the rocket docket in Jacksonville the day Taibbi sat in, and he claims to have never seen any evidence of fraud. In the first case of the day, the bank originally claimed to have held the mortgage note and to have destroyed it and to have lost it IN THE SAME COURT DOCUMENT. They returned to court having miraculously found the note, but the documents filed have the wrong dates on them. JPMorgan transfered the mortgage two months before they received it, according to the documents. Judge Soud, who remember has claimed never to seen a single case of fraud, grudgingly dismisses the case by the bank, but gives them 25 days to come up with new documents. For the third time on the same house.
The banks basically get multiple chances to foreclose on the property, like a CEO getting to re-do his tee shot again and again and again until he gets it right. The only way to reduce the caseload is to rule for the bank, and the entire purpose of the rocket docket is to reduce caseload. So this is a completely rigged system.
Now, where I will differ with Taibbi is that he’s looking at a very special case in Florida, where they’ve set up these special foreclosure courts through the legislature. And because the industry is so thick with fraud, even they aren’t succeeding in speeding through foreclosures with every judge. Skepticism has crept into the system, and lawyers like the one Taibbi profiles are getting very adept at sniffing out the fraud. This is not hopeless. And actually, people like Taibbi writing about it for a large audience can be part of the solution.
The rest of the article mines territory we’ve already covered, from the rampant fraud in the securitization process, to the faulty underwriting standards in the loan pools found by third-party due diligence companies like Clayton Holdings, to the improper conveyance of the mortgage notes, to the investor fraud and the rampant tax evasion associated with the mortgage pools, to the woman whose house was broken into by the bank, to the screwed-up incentives of the servicers, to the fiction that the borrowers are just deadbeats anyway, instead of victims. We’ve basically been doing on a rolling basis what Taibbi lays out in one glorious article, and I for one am glad he did it. Because this story needs to be told about 10 million more times so everybody gets the message. We have allowed banks to act like two-bit hustlers and get away with it at the expense of people who end up stripped of everything they have. Everyone should be made aware of the consequences of that. One by one and by the millions, everyone is. And Taibbi and everyone else working this beat are just spreading the word.
Be sure to read all the way to the end, when Judge Soud goes after Taibbi personally for daring to speak to a defendant after her case ends.




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Just as jobs have been outsourced, I have heard that a lot of these mortgages have been sold to China and India, that is why no one knows whose these properties really belong to. If that does not show people how we really need strict regulation in this country and government, then I guess they are getting what they deserve.
I found very interesting parallels in Taibbi’s article and your reporting on HAMP David. It seems HAMPS true purpose may have been just a convenient government assisted vehicle for banks to speed people along into forclosure so banks could seize the house, sell it, and then end their liability with the original investors, just like these forclosure court mills.
Taibbi (emphasis added):
David, you mentioned something you found over and over again was how the person trying to get a modification was given lower payments, but then when denied for some random beaurocratic reason, they where required to pay the difference back in a lump sum and their credit was destroyed from the bank reporting them as not paying their mortgage the whole time they were paying the reduced amount. Sounds very familier to this from Taibbi:
So it seems that happening to folks with HAMP wasnt a glitch with the program, it was a feature. It was one of the ways the banks accelerated, or pushed people off the cliff as Taibbi puts it, into forclosure so they could reposess the house and sell it.
What I am curious to know is if there are any statistics about if these HAMP homes that were forclosed on where bought up by Fanny and Freddy through the backdoor TARP. What a trick that would be. The banks use a goverment program to effectively speed up forclosure so they can cleanly pass the liability right back onto the taxpayer by funnelling it into the taxpayer owned open arms of Fanny and Freddy.
Foreclosure Gang Rape, Louisiana Style. . .(re: Wells Fargo)
http://www.lawgrace.org/2010/11/11/foreclosure-gang-rape-louisiana-style-absolutely-verifiable/
“Not in a sexual sense, but “rape” here synonymously describes the following things that were forced upon the victim: defilement, molestation, exploitation, humiliation, bigotry, betrayal, invasion, revilement, assault, depredation, torture, despoliation, stigmatization, maltreatment, denigration, ruin, pillage, plunder, ransack, spoliation, violation, impingement, racism.
“. . .so that the ravished victim might have an opportunity to begin a road to recovery, an opportunity to begin recompense, to cease from being wrongfully blamed (notwithstanding other things deserved), the victim has no other choice –and is running out of time! Moreover, it is imperative this story be told so that the guilty persons, who boastfully flaunt before the victim, will be brought to justice, as well as prevented from additional such acts.
“It was perhaps a year later that the homeowner learned that WF’s predatory modification was not only fraudulent, but also not lawfully enforceable. The salient reason why the loan modification that Wells Fargo constructed is not valid is because (to the homeowner’s oblivion) the modified loan on the home [unlawfully] binds the homeowner and a SHAM lender. . .”
I think a lot of people do get it. And they’ll get it even more as they watch all the people who should be doing time doing shots with their DC buddies to celebrate the “2010 Banksters Rule OK Act” that retroactively and henceforth legalizes everything they may or may not have done, be doing, will do, or are even just mulling over doing. To “preserve the integrity of the system”, you know.
Thanks for this David.
I’ve been following FDL’s coverage, but Matt Taibbi’s article puts it all in one place.
Tatere:
You’d be surprised how many usually liberal/progressive people either don’t or don’t want to “get it.”! I’ve forwarded the link to Matt’s article to a very good friend, who as recently as Tuesday evening, November 9, 2010, was STILL carping on how people should just have known better. STILL much more self-righteous against those who borrowed beyond their means and just should have been better informed.
I love this woman dearly, but every time she starts this song and dance, I just want to smack her. She has her primary residence and a rental property a few blocks away. She has refinanced each at least twice within the last 5 years. She’s very likely to lose her current job within the next year.
I love this woman dearly and hope against hope that she won’t have to learn the truth of what David D and everyone else has been reporting about Mortgage/Foreclosure Fraud directly (iow The Hard Way).
But I still just want to scream every time she gets on that high horse.
FunnyDiva
Mat needs to correct his math. I figure it’s about one ass a minute or 2.6 asses every 2.4 minutes, since household size is about 2.6 people. Sure makes me feel better.
Link to story in Jacksonville paper.
http://jacksonville.com/business/real-estate/2010-11-12/story/jacksonville-foreclosure-court-national-focus
The more pixels on this, the better.
But writing that only one person is affected per case, and basing the math on that, does seem to obscure the family tragedy behind every single one of these cases.
Sounds like this guy might be the next GOP president’s pick for SCOTUS associate justice.
The Judge, Soud, defers automatically to the largest institutional authority, as do all judges and all our political elites. It’s second nature. In these cases that is the banks but in general it is corporations who because of this culture have become de facto authorities in their own right.
The police are especially eager to defer to the authority of corporations, against citizens. The case where the woman waved her car title, with no lien, in front of the police after her car was repossessed, and ignored is typical.
The Robert’s court has made a fetish of deferring to the most powerful institution. Government over citizen, corporation over citizen, with the twist of corporation over government.
Taibbi’s got style. Gotta give him that.
Judge Soud, and many other of the recalled retired judges have probably been selected for their willingness to comply with the agenda of the ‘rocket docket’, gaveling cases through without scrutinizing the plaintiff’s standing to foreclose. These are not elected judges, and cannot be recalled or voted out of office by the victims.
It’s my theory that TARP and HAMP are primarily meant to run out the clock on the statute of limitations on many of the crimes committed by the banks. That’s in addition to enabling them to continue to gouge their customers in multiple ways while the banks have the leverage of threatening foreclosure while they tack on thousands of dollars in bogus fees.
——
I’m still hoping that someone will write the article that explains what is still a mystery to me. David keeps writing that the banks can’t afford to write down the values of the assets (crap mortgages) on their books, so this would deter them from foreclosing, or at least from auctioning off foreclosed houses, and taking a loss, which at this point would, if shown on their books, show them to be insolvent.
If that is so, then why the rush to foreclose now? What is the ultimate disposition of these hundreds of thousands of houses? Yves Smith writes that the market for these houses is not there. So how are the banks getting them off their books? Who is buying them? Who is paying the taxes on them?
Are the banks foreclosing now in order to hide the fraudulent origination of the mortgages? Or to hide the fact that the notes were never conveyed into the MBS trusts?
I posted this in an earlier thread but it’s a better fit here. If this is true they are going to make this all go away. Our fearless leaders in action.
—
A little off topic (sorry) but it does involve more WH/Congressional duplicity and I wanted to get it out there.
Via Atrios I find out from CNBC that it looks like our fearless leaders might be getting ready to hand out another get out of jail free card to the banksters.
This time by retroactively legalizing the fraud that is the MERS mortgage system.
http://www.cnbc.com/id/40150186
The important points here are:
1) Watch how bi-partisany Congress gets when it comes to their billionaire bankster buddies.
2) I think this vote (if it happens) will show us the 14 Democratic Senators that will be joining their Republican brothers and sisters to pass the catfood commission recommendations.
Your government has their priorities, and they aren’t the same as yours.
some people ONLY learn the hard way, if at all.
This sounds like the setting for a new reality show, and it could be called: Justice American Style.
I’m sure it would be a huge hit with the idiots inhabiting this country.
It’s like sexual assault in the sense that people fear losing their homes. They do not want to believe it could happen to them. They want to believe they have complete control over this. So they blame the victim. I know this too well. But the bottom line is that these folks broke the law. The greatest mistake of Obama was making it clear from the get go that he had no intention of enforcing the rule of law.
I have suspected that very thing for a long time.
Some people live alone and can’t make their payments. Some people have 6 or more kids..maybe it somehow averages out or something. Just a thought.
I am not sure what he means by this. Allowing banks to repeatedly file a claim on the same case is increasing up the case load, while dismissing the case “with prejudice” would clear it out for good.
McMia, I saw that too. We need to get on Pelosi about this. A bill can’t pass if it never get to the floor for a vote. It’ll happen next year if not this year but let Speaker Boner own it.
gnomedigest @ 2:
I’ve noted three foreclosure cases so far that were thrown out because banks tried to foreclose on borrowers whose mortgages were owned by Fannie. One is Pocopani, another is D’Amelio. I forget the third. And these are just the ones that were caught. I’ve suspected that, due to MERS’ lack of audit control, that the rush to foreclosure at this point is a matter of the first claim to get the property to the courthouse steps will get the cash. I think MERS was set up as a cloak to hide the notes until the endgame, and that the banks planned all along to just make up their phony assignments and steal as many houses as they wished when the whole scam blew up. Fannie & Freddie are letting the banks foreclose on loans that F&F bought from the banks.
McMia @ 13
Neil Garfield has posted that he believes this Bill of Attainder, to attempt to retroactively legalize the MERS fraud, will be hidden in a bill and must be found out by searching for terms that may be mentioned in the language of the bill. He posted a list of terms to search for in all proposed legislation today:
I took the liberty of copying and pasting the post here, because of the wording suggesting posting on the ‘major blogs’ and encouraging crowd sourcing.
I’d add these terms I got off of an official MERS power point:
eNote
Transferable Record
Authoritative Copy of Note
Controller
Controller’s Delegatee
Electronic Signature
I think you are correct, Surtt. DDay might want to revise that line. I think he introduced that confusion, not Taibbi.
Yes, and the family tragedy goes beyond those living in the house. There are the desperate months leading up to the loss in which family members pitch in trying to “save” the house. In my family this has added up to many thousands and severely strained the resources of others. Plus, all that money shoveled into saving a house is money not spent with local businesses, etc. Lots of collateral damage from these practices.
I’m reading Griftopia right now [thank you, Kindle app] and it’s wonderful.
Amazing to be able to “feel good” because of Matt’s searing prose, about a subject that’s fury-inducing.
Can’t wait for the book salon. I highly recommend getting your hands on this book, so we won’t have our usual “I have read your book yet, Mr/Ms Author, but . . .”
This is a point I hope Matt and other pick up on.
All that concern about “the economy,” but little interest in killing the vampire squid [and others] who are bleeding it dry, preventing folks from spending [on necessary goods, not flat-screen tvs] to get things rolling.
“This is not hopeless.”
You are, though.
http://www.cnbc.com/id/40150186
Enjoy.
I actually had more confidence in David Muir of ABC News.
It is up to the individual homeowner to look after their own property
interests in court. The White House and U. S. Congress have made it clear
they can’t do anything to prosecute a possible Foreclosuregate or Robosigner
scandal. The Rest Report enables homeowner protection against foreclosure
fraud. Click for Information on the Do it Yourself
Mortgage Modification
Matt has a way of humanizing and making accessible these otherwise esoteric and complex issues, so let’s hope he addresses that aspect. By keeping the squid alive and feeding it’s dragging everything down. All we hear from Team Bailout is how they prevented a depression, not so much how their leaving the monsters intact is turning into an endless deep recession.
There’s the hoarding instinct brought about by fear when people see this happening to friends and family but also the practical economic reality of taking billions out of the economy and shoveling toward crooked mortgage servicers in what is ultimately an exercise in futility. It builds no value in communities and only sows more fear and anger.
I’m taking a leap of thought here but it may have to do with the MBS’ and the various tranches within them. It may also have to do with taking the losses while there are government guarantees and funds flowing so they can then tout the accounting change BACK to mark to market. Strictly a swag.
“All of which is interesting, because in her file, it states that Wells Fargo sued Cooper for foreclosure on February 22nd, 2010. In other words, the bank foreclosed on Cooper three months before it obtained her mortgage from a nonexistent company.; JFC! Absolutely amazing.
ubetchaiam @ 30
I’m not sure I understand your hypothesis wrt the MBS tranches. No one who I’ve been reading, about foreclosure, writes about what’s happening to the thousands of houses in foreclosure, except as one-off anecdotes. There was a NYT magazine article about Cleveland last year that indicated there are thousands of vacant, stripped houses that the banks have abandoned, and a pattern of sending foreclosure notices, the people moving out, the house being stripped, and then the bank stops the foreclosure in order to avoid responsibility. But this may just be Cleveland and similar rust belt cities. I’m wondering about the pattern in newer, spiffier towns and neighborhoods, such as the Inland Empire in CA or Cape Coral, FL.
The suspicion that Fannie and Freddie are winding up with these houses is very strong, having just read Mortgage Lenders Meet Resistance in Courts (scroll down) with a graph captioned: “PILING UP: Fannie Mae and Freddie Mac are acquiring foreclosed homes faster than they are selling them, creating a backlog of foreclosed properties that must be sold.”
Getting back to the MBS tranches: If you mean that the foreclosures are to trigger CDSs, ok. But who’s paying off on the CDSs at this point? That news seems to be off the radar now. BAC is suing Old Republic, its mortgage insurer who has now stopped paying.
—–
@ 31
I actually learned nothing in the Taibbi article that I hadn’t already learned over the past two years of reading about foreclosure fraud (and personal experience). He did an excellent job, as usual, in telling the story of this outrageous fraud, except for one major, major narrative: the intentional servicer fraud, designed to force people into foreclosure, regardless of HAMP. If he wants to really explain why the ‘deadbeat borrower’ narrative is so very wrong he needs to write about the way people who could afford their mortgages are forced out by tacking on outrageous fees. One might even get the idea that the game is to see how quickly the servicers can force people into default, so that the bank can reclaim and re-mortgage the houses. In essence the banks are the house-flippers, taking huge fees, mortgage insurance, and bonuses at each flip.
The case of Ms. Cooper is the norm. The funny thing it points out is the lack of anyone at the foreclosure mills to keep time lines on the cases, in order to make sure the dates on the robo-signed documents conform to a plausible narrative for the foreclosure and how the bank came to have (fictitious) standing. This is more of an indictment of the courts, than just mere sloppiness or carelessness of the foreclosure mills: The fact that it wasn’t deemed worth the bother because the judges wouldn’t notice. Fact: none of the documents exist until foreclosure begins. The documents acquire dates when the robo-signers process and sign them. The depo of Tammie Lou Kapusta explains how it was recognized at one point that the notary stamps were dated differently from the signatures they purported to witness, and that thence forward they had to make the notary dates match the signature date not the date that the notary seal was applied. That’s how sloppy the paperwork was. And it’s those kinds of issues that the banks were trying to clean up in October, during their moratorium.
Taibbi’s colorful writing definently keeps the topic fresh despite the fact that a lot of us have been on top of this for quite some time.
I sure hope our Congress doesn’t do something suicidal like…. giving MERS a get out of jail free card.
Yup. And as parsnip@32 points out, the resulting vacant homes do much to damage communities.
Yup, until they bury the zombie banks… the economy won’t recover.
The present forclosure train could easily roll along for another 4+ years if we don’t take active measures to stop it.
Speaking of the devil:
http://emptywheel.firedoglake.com/2010/11/12/are-obama-and-congress-set-to-screw-homeowners-and-give-wall-street-mortgage-banksters-a-retroactive-immunity-bailout/
I agree with Taibbi about the giant Ponzi scheme, but there seems to be a bit of misunderstanding about what happened in derivatives markets. A derivative instrument is basically a contract with underlying assets and promises to perform if, say, the value or amount of the asset changes. Near the peak of the housing bubble, the nominal value of exchange-traded derivate contracts globally was about $524 trillion. In principle, there were parties at each end of these contracts and if each party performed the contracts would be settled. Gradually, they would fold down to a value of $0 outstanding if everybody performed. Not performing is considered so bad that a broker would face banishment and other sanctions. What happened was that parties that could not guarantee performance got into the game, bringing down the house with massive knock-on effects. Obviously, off-exchange credit default swaps based on mortgage-backed securities were one source of instability, but not the only one. Remember copper prices quintupling? $40,000 a ton nickel? Rice shortages? $140 oil? This had nothing to do with conditions in the real economy and everything to do with speculation. The name of the game was to get some unsuspecting sucker up on the other end of the contract. If you were a bank and you found yourself on the short end, you tried to fob it off on say depositors or unsophisticated investors, and failing that, the taxpayer.
And then they have the gall to talk about “limited government” and how their judges aren’t activists. It’s rather amazing.
You people can talk all you want. The truth is pre existing home sales are down 25% this past quarter in large part due to the slow down on foreclosures. There is no justice in letting the deadbeats stay in homes rent free. They owe money. They aren’t paying. They need to hit the road.
Oh, by the way. You’d better get ready for your homes to take another 20-30% haircut. Much of this is due to the foreclosure slowdown.
Oh, so we just let the deadbeats stay in the homes?
Hell yeah. Blame the victims. That’ll do it. Problem solved.
The mortgages were bundled into bondable packets of assets and “sold” (by transfer) to shell corporations. These shells are a legal and an honorable enough convenience.
Where the stink arises is that the primary mortgage brokers committed fraud at the point of sale.
– The original mortgages were done illegally. By the millions.
– Extra points were taken.
– Closing costs split up illegally and stolen.
– Title research was faked.
– Transfers of re-financed mortgages were faked.
– Refinancing, itself, was faked. Paperwork went through and nothing happened but payments getting hijacked.
Sure, the Wall Street thugs did their “George Anderson” imitations. They knew they could clam up and the lawyers would get them out of any crime.
These foreclosures are criminal conspiracy events — perfectly suited to RICO civil suits and Federal prosecution — because the banks, now, are conspiring with the original/primary mortgage brokers to cover up the felonies.
This is organized crime — no less than Phar-Mor, ENRON, or any other planned OC operation.
E.g.: Anatomy of a Scam, A Study of a Planned Bankruptcy by Organized Crime. DeFranco.
http://www.amazon.com/Anatomy-Scam-Planned-Bankruptcy-Organized/dp/0894992147
# Paperback
# Publisher: Books for Business (May 2003)
# Language: English
# ISBN-10: 0894992147
# ISBN-13: 978-0894992148
Depends……………..
To what extent are these houses Abandoned Property ?
Florida state law and SCOTUS precedent recognize that certain classes of abandoned items/assets can be claimed by simple discovery and possession, combined with such as paying taxes and making socially recognized improvements.
Many houses were abandoned during the Great Depression. These were converted by the thousands to Homesteads, auctioned off at typically $5 an acre plus paying taxes.
My family bought and improved several of them in the Bradenton area.
Why not do it again ?????