David's Macro Blog

“Taking the law into their own hands” is a phrase used to describe aggressive actions by people who feel slighted in such a way that waiting for traditional law enforcement isn’t acceptable.

Due to the massive foreclosure fraud (called “Foreclosure Gate”) perpetrated by the big banks, some Americans are fighting back.

Jim and Danielle Earl in Simi Valley, CA broke into their former home that was sold at trustee sale auction to a professional flipping company. The Earl family, with their attorney, Michael Pines, seized the home after the investment company fixed it up and were about to sell it to new owners. The police were there but did nothing to stop the theft of the home by the Earls.

How is this not breaking and entering?

The logical consequence of the banks’ blatantly breaking the law (see Systemic Foreclosure Fraud by Lenders) is that average citizens will fight back and take the law into their own hands.

Do we really want civil unrest? Can the government do anything to fix this quickly? Do two wrongs make a right…or just more wrongs? Share your opinion on this situation in the comments below.

Conejo Capital Partners, the company that bought the home at trustee auction tell their story here: 5893 Mustang

So, does anyone still believe that cheap credit and easy money from the Federal Reserve after the Dot Com Crash was a good thing?

More About Families Stealing Back Foreclosed Homes

• Bubble Info – Bando Follow Up
• Karl Denninger’s Commentary on the House Stealing

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

• Yves Smith Explains the Foreclosure Mess in 10 Minutes (Watch this video!)
• Barry Ritholtz – Foreclosure Linkfest

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

By now we’ve all heard or read stories about disillusioned home owners (home debtors really) who haven’t made their loan payments in quite a while but feel that everything will work itself out. They may be working on a loan mod, short sale, principal reduction, or just the “free rent” program.

What tragic commentary on the situation we’ve created! The credit bubble bursting made 25% of home loans under water and foreclosure a likely outcome. There will be a whole generation of home owners and their children scarred by this experience just like the Great Depression.

Hat tip – Jim Klinge

Favorite Quotes

Realtor – “My name is Randy and I am a local Realtor…”

Homeowner – “Oh yes, I am quite aware that many of you low-life blood sucking vultures…”

…”but we are in the middle of a loan modification so we are just FINE!”

“I don’t mind at all you blood sucking vampire…we are behind 17 payments just like the rest of our social climbing friends.”

Realtor – “It appears I am too late, and you will keep your head buried in the sand because you actually believe you are going to get your loan modification…”

Last week I interviewed John Ray, the largest buyer of foreclosed homes at the Maricopa County (Phoenix area) trustee sale auction.  Through his company, Bid AZ Foreclosures, he currently buys around 100 homes a month on behalf of his clients.

Listen as he shares his knowledge and experience on topics such as: getting a good deal on a foreclosure, the amount of research it takes to compete, the old boys’ network (main players) at the auction, and much more.

Note: there are 4 parts/videos of this interview, about 36 min. total.

Original post for your reference: Interview with John Ray: How to Get a Good Deal on a Foreclosed Property at the Trustee Sale Auction and Avoid Common Mistakes

Here’s a video of live bidding at the Phoenix auction:

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