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David's Macro Blog

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Tag: banking

Foreclosure Fraud By now you’ve probably heard of the massive fraud in foreclosures perpetrated by lenders in their haste to cut costs and process the high volume of forecloses quickly. Some of the biggest issues at the heart of the now nationwide foreclosure moratorium go to the heart of our legal system and the rule of law.

There are two depositions of paralegals at the David J. Stern law firm in Florida that you must read. These two employees describe the climate, culture, and operations of a “Foreclosure Mill“. This blatant disregard for the rule of law is so embedded in the culture there that our very freedoms and trust in the fairness of the egalitarian “American Way are at risk.

The biggest issues are that the Stern law firm (and probably most of the foreclosure industry) perpetrated fraud upon the courts by falsely signing affidavits and creating fictitious legal documents in order to capture fees for processing foreclosures quickly.

I know these are lengthy depositions, but it is well worth reading BOTH documents (embedded below) so that you understand the issues and realize the gravity of our situation should this systemic fraud continue.

My Thoughts on Foreclosure Fraud

Yes, home owners who haven’t paid their loan should lose their homes to foreclosure, but NOT through legal fraud imposed upon them by the banks and their servicers. Are we a 3rd-world nation where bribes and legal malfeasance direct action?

False affidavits are not unlike perjury in the courtroom because an affidavits is similar to a courtroom testimony. Many, many people should go to jail; let’s hope some of those at the top do; not just a few scapegoats.

Deposition of Tammie Lou Kapusta – Law Office of David J. Stern

Full Deposition of Tammie Lou Kapusta Law Office of David J Stern

Deposition of Cheryl Sammons – Law Office of David J. Stern

Full Deposition of the Soon to Be Infamous Cheryl Samons RE Deutsche Bank National Trust Company, As Truste…

More About the Foreclosure Mess and Fraud

Fraud Factories: Rep. Alan Grayson Explains the Foreclosure Fraud Crisis

The Daily Show With Jon Stewart Mon – Thurs 11p / 10c
A Nightmare on Wall Street
www.thedailyshow.com
Daily Show Full Episodes Political Humor Tea Party

Related Posts

Jon Stewart Explains the May 6th Flash Crash

Jon Stewart Interviews Jim Cramer on the Daily Show

Humor only works when there is truth embedded within it.  This works because while it is humorous, the truth is evident.

“You want the truth? You can’t handle the truth. Son, we live in a country with an investment gap. And that gap needs to be filled by men with money. Who’s gonna do it? You? You, Middle Class Consumer? Goldman Sachs has a greater responsibility than you can possibly fathom. You weep for Lehman and you curse derivatives. You have that luxury. You have the luxury of not knowing what we know: that Lehman’s death, while tragic, probably saved the financial system. And that Goldman’s existence, while grotesque and incomprehensible to you, saves pension funds. You don’t want the truth. Because deep down, in places you don’t talk about at parties, you want us to fill that investment gap. You need us to fill that gap.

We use words like credit default swaps, collateralized debt obligation, and securitization? We use these words as the backbone of a life spent investing in something. You use ’em as a punchline. We have neither the time nor the inclination to explain ourselves to a commoner who rises and sleeps under the blanket of the very credit we provide, and then questions the manner in which we provide it! We’d rather you just said thank you and paid your taxes on time. Otherwise, we suggest you get an account and start trading. Either way, we don’t give a damn what you think you’re entitled to!”

Source: StatsGuy – Baseline Scenario.

See the 13-page report below for my predictions for 2010 and more:

  • Stock Market
  • Real Estate Market: The next wave of ARM defaults? Is it time to buy yet?
  • Interest Rates: Stay low or heading higher?
  • Currency
  • Precious Metals
  • Commodities
  • Political: Will real reform be passed?
  • The Blame Game
  • Wild Cards
  • What’s the real problem and what are the potential solutions?
  • What would really shock me?

David’s 2010 Predictions

Related Post: 2009 Year in Review

Was the great real estate bubble of 2000 – 2007 preventable?

Who won and who lost?

Why weren’t the inevitable crash and current historic recession preventable or predictable by the best the brightest among us?

The following video from CNBC’s “House of Cards” (ht – Alan Sun) contains interviews with people in all parts of the real estate food chain: from borrowers to loan officers to lenders to wall street bankers to hedge fund operators to bond ratings analysts.

Wall Street will create what they can sell until there are no more buyers. This generates seemingly safe fee income which boosts quarterly profits and of course also produces undeserved multi-million dollar bonuses.

It is hard to believe now, but the banker’s financial models predicted 6% to 8% annual housing price increases forever into the future. How was this sustainable when household income wasn’t rising and probably wouldn’t rise much with global wage arbitrage? Many of the people on the front lines of this historic boom were young home buyers, recent MBA grads at Wall Street firms, etc. They had never known a down real estate market. It couldn’t even occur to them from experience that real estate goes anywhere but up in price.

The boom couldn’t start without Wall Street securitizing loans and selling them off to investors (many of them overseas). What type of WS culture creates an environment where there is strong incentive to sell what the market will buy and book a trading profit or fee income? No one had any incentive to stop the lucrative money train.
– Home buyers bought more house than they could afford.
– Loan officers originated more loans and earned significant income for basically just helping borrowers fill out a form (loan app).
– Wall Street bankers generated massive bonuses for themselves and quarterly profits for their firms.
– Rating agencies earned more fees rating mortgage backed securities (MBS) as AAA.

Isn’t it startling that nowhere was a fundamental issue like a borrower’s ability to service a loan and pay on time for 30 years ever discussed or considered?
The economic boom was NOT about fundamental value creation but solely a product of easy credit. Housing prices historically rise about 1% a year in line with increases in household income. They will revert to the mean over time. Essentially, there is no new economy or new economics. When we hear that in the MSM (mainstream media), look for the unsustainable bubble and prepare for it to end.

Why couldn’t Alan Greenspan, our economic “maestro”, our foremost authority on finance, interest rates and a stable economy, have warned us about the unsustainable boom and subsequent global economic collapse? He didn’t see the bubble. To make matters worse, he says:
“there is no doubt that somewhere in the future, we’ll have this conversation again. It will not be for quite a period of time, but it will occur because the flaws in human nature are such that we cannot change that, it does not work.”

Will you remember that all booms go bust?

Will you remember that what cannot go on forever must end?

Will you remember what your parents taught you? Just because everyone is doing it, doesn’t mean you have to do it too.

If history is any guide, almost all of us will forget what we learned by the time the next boom starts. Scary thought, isn’t it?