Foreclosures: Help is on the way via WH-- but for who?

[eilen]

"I must confess to being surprised at the report by Shahien Nasiripour of Huffington Post, namely that the Administration is pushing for an even more aggressive-looking mortgage modification program than has been rumored. The reason I’m surprised is that this effort, even though it appears misguided on several fronts and falls far short of what is needed, represents an upping of the demands being made against banks. That is contrary to both the Obama Administration’s past behavior of making great sounding promises and walk them so far back as to wind up in a different country, and of inconveniencing the banks terribly much. But Shahien is an able reporter, so I’m sure he has the facts right.

The scorecard thus far appeared to be that the state attorneys general were the only group moving forward against the foreclosure fraud, but the bold promises of criminal prosecutions were quickly recanted. Instead, a 27 page outline of their settlement demands was leaked. As we discussed, it was a disappointment. Virtually all of it merely insisted that banks obey existing law. It has only two new requirements. One was ending dual track (if a bank is entering into a modification discussion or program with a borrower, it cannot keep moving forward in parallel with a foreclosure). The other was “single point of contact,” meaning having one person at the bank serve as case manager and be the interface with the borrower. We deemed that to be operationally unworkable even if the banks had their records and systems working well. And if they got those in order, borrowers would not need a designated person to make sure a modification request was handled properly.

There was also a rumor, which was connected to the AG negotiations, that the banks would be asked to make mortgage modifications at their own expense, and the number $20 billion was bandied about. The AGs and the Federal regulators seemed to be collaborating closely, which we also objected to; the state and Federal issues are very different. The idea that the banks would be pressured to make mods has gotten a huge amount of pushback in the media and from Republican legislators; there appears to be a full bore PR salvo underway.

Now notice all these ideas are being evaluated in a vacuum. We don’t know what liability the banks would be released from (the legal term is what form of release they would receive). Nor do we or the regulators have an even remotely adequate understanding of all the bad stuff the banks did. The media and anti-foreclosure attorneys have reported on various abuses, most importantly, servicer driven foreclosures, in which the borrower has either made all his payments, or perhaps been late on one or two, and impermissible application of payment, fee pyramiding and junk fees quickly drive a minor arrearage that most borrowers could correct into a foreclosure."


Read the whole thing, it is very interesting in regards to the role the WH feels it has regarding the banks and use of the rule of law to keep them in line. It also outlines the utter incapability of actual effectiveness that such often proudly trumpeted programs have that are initiated by the policy-makers therein. It's a defining characteristic of too little too late. And, gee-- you mind not bringing up such unpleasantness? It's breaking my concentration on looking forward and winning the future and stuff.

Here's the link;

https://mail.google.com/mail/?hl=en&zx=bu2o4q0ujy7f&shva=1#inbox/12ec37cc90dfadc3

[northoftheborder]

1. This is the program I was very misinformed about and tried....

....to describe above in my post.......(did a terrible job trying to describe my understanding)

[eilen]

3. Wrong link-- I got it in my email and accidently left my email link which wont work for anyone

http://www.nakedcapitalism.com/2011/03/guest-post-curbing-the-credit-cycle.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

[BanzaiBonnie]

2. Sorry, I won't ever trust the banks again

I still have faint hope for President Obama.


But, we are fast becoming little more than slaves.

The question is, are we going to do something about it?

In my current reading repertoire, is a book written by cellular biologist Bruce Lipton and political and cultural commentator Steve Bhaerman. “Spontaneous Evolution” is broad in scope and depth.

What I want to share with you is a simple explanation of the death spiral of economic structure we are working under. Here are four paragraphs, per DU dictates. They are long paragraphs, but essential to illustrate exactly how banks are enslaving us.

So, let’s say you borrow $1,000, the privilege for which you must repay the bank $1,100. Where do you get the extra $100? Well, from selling your goods or services to other people. True --- but where do they get the money to pay you? Oh, yes ---- they borrow the money from the same bank, which, of course, charges them interest, too.


Let’s say a country has a population of one million people and each citizen borrows $1,000 from the bank to create an economy based on currency exchange. Collectively, the bank loans the country $1 billion in bank notes. In return, the country owes the bank $1 billion dollars for the loans principal, plus another $100 million for the interest. So where does the country get the extra $100 million in currency to pay the bank? It doesn’t. It can’t.

Now remember, only banks can create money. What’s happening today?

Inevitably, the compounding of the debt leads to a situation in which creditor insolvency motivates banks to foreclose on loans. The debtor’s property, used as collateral for the loan, is confiscated and distributed to the bank’s shareholders. Because the money loaned by the bank was never equal to the value of the collateral, the shareholders happily accept foreclosures.

So, how long has this been going on?

This persistent pattern in the money game can be traced back to ancient Babylon. Centuries before Jesus cast the moneychangers from the temple, the priests of Baal had their own money racket. Each spring, they would extend credit to farmers to plant their crops. At harvest time, the priests expected payment. However, because the priests also regulated the money supply, they made sure there was never enough money in circulation for all the farmers to repay their loans. This led to more credit being extended, which meant that, at the next harvest, the debt was even greater. Repeating the same game plan over a number of years inevitably led to the farmers becoming indentured servants to the priests, who produced nothing. The Babylonian civilization eventually collapsed when the productive elements of their society were reduced to little more than slaves.

This is where we’re at today. Many of the founders of our country were scholars who knew history. They understood this and warned of just this scenario.

It’s been about 80 years since the last intentional collapse of our economy, which was called the Great Depression. It’s been long enough that many who would recognize the repeating pattern were gone, or almost gone. So, we have the pattern repeated... voila, the Great Recession. Thank god it’s not a depression. Man, we’d really be hurting.

Make no mistake, the bankers learned this, promoted it and carried it out. It’s an incredible scheme. Better than Ponzi, because you can keep it going much longer AND with the blessings of the government and the governed.

I’m not willing to be a wage slave, but thanks for playing.