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Happy Hour Roundup

* Obama brings down the hammer: He will not sign a bill passed by Congress that could make foreclosures easlier.

* Obama targets Chamber: At a political rally today, he attacked the U.S. Chamber of Commerce over allegations that its fundraising from foreign corporations could be helping fund attack ads:

Just this week, we learned that one of the largest groups paying for these ads regularly takes in money from foreign corporations. So groups that receive foreign money are spending huge sums to influence American elections, and they won't tell you where the money for their ads come from. So this isn't just a threat to Democrats. All Republicans should be concerned. Independents should be concerned. This is a threat to our democracy.

* House Dems are also cranking up the rhetoric against the chamber. John Boccieri of Ohio, a target of the ads, had this to say today:

"After flying missions overseas, I never thought I'd see the day when our own country's U.S. Chamber would so blatantly sell out our people."

* And: Dem Rep. Mary Jo Kilroy, another Chamber target, is calling on her GOP opponent to condemn the ads, claiming they're foreign funded.

* The whole point of this attack on the Chamber's foreign money is that it resonates with another Dem attack line on GOPers across the country: They support policies that outsource jobs.

* Joan McCarter and John Aravosis get the significance of my reporting on the Chamber yesterday exactly right. The Chamber is sidestepping a core charge against it, as I wrote yesterday:

When I asked Ms. Freeman whether the dues from AmChams go into the same general fund that bankrolls the Chamber's ads, she declined to answer. "We don't feel obligated to answer that question because we follow all applicable law, and no foreign money funds our voter education activities," Freeman told me.

* The ever-expanding House playing field: By Aaron Blake's estimate, it's now up to 71 contested seats and counting, and Republicans currently control only five of them.

* More bolting from Pelosi: Ryan Grim reports that Blue Dog Dem Bobby Bright has become the first Dem to confirm that he'll oppose Nancy Pelosi for Speaker.

* David Plouffe, in a moment of rather ambitious expectations setting, says if the GOP doesn't take back Congress it will be a "colossal failure."

* Also: Plouffe makes a point that can't be stated enough: The current impact of the Tea Party on the GOP is "the absolute tip of the iceberg."

* Christine O'Donnell, on whether global warming is manmade:

"I don't have an opinion on that."

* O'Donnell, in the above link, on whether to teach creationism in schools:

"It doesn't have anything to do with what I will do in Congress....My opinion on that is irrelevant."

* O'Donnell, on whether Sarah Palin is qualified to be president:

"Is she running for president? Again, hypothetical."

She won't say whether Palin is qualified for the presidency? Now that's big news!

* And Sharron Angle's latest ad repeats the already-debunked falsehoods that Harry Reid gave special tax breaks and Social Security benefits to illegals, and adds a new one: He voted to use tax dollars for Viagra for sex offenders:

Steve Benen has the dispiriting background on the Viagra charge.

What else is up?

By Greg Sargent  | October 7, 2010; 6:05 PM ET
Categories:  2010 elections, Happy Hour Roundup, House Dems, Senate Republicans, Tea Party  
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Next: The Morning Plum

Comments

Sounds like the democrats have nothing.

.

Posted by: SaveTheRainforest | October 7, 2010 6:13 PM | Report abuse

I could write better stuff for the democrats.


They have no one who can frame an issue? All these trial balloons have been disasters.


I seem to remember some conference of business leaders at the White House - and Obama purposely did NOT invite the Chamber of Commerce. So instead of bringing them in, and listening to their concerns like on health care - and COMPROMISING, Obama himself CREATED this situation.


"Chamber of Commerce" sounds like your local Main Street merchant - it sounds like Obama is at war with Main St.


In a sense, Obama did raise health care costs for Main St. businesses - but it doesn't have to be on the front page as an all-out battle.


Obama is making a serious mistake by fighting the "Chamber of Commerce" - it sounds like Obama is attacking Main Street America - and it just doesn't work.

.

Posted by: SaveTheRainforest | October 7, 2010 6:17 PM | Report abuse

Good for Obama on the veto.

Now, the question is: where did that bill come from??

Good reporting on the Chamber stuff, Greg.

Posted by: BGinCHI | October 7, 2010 6:21 PM | Report abuse

"Obama targets Chamber"

THAT's what I'm talking about.

Without these corporate-funded special interest groups the GOP would be DEAD IN THE WATER.

The Republican Party and all its Tea Party people owe their political lives to massive -- in many cases multinational and foreign -- corporations whose only interest is profiteering off the hard-working American people. You know, us "hickey" type people.

Posted by: Ethan2010 | October 7, 2010 6:21 PM | Report abuse

BG, it was passed on a voice vote at the end of the Senate session. Sad.

Posted by: suekzoo1 | October 7, 2010 6:22 PM | Report abuse

@Greg: Considering the fact that there is no proof at all that any of the Chamber's advertisements are funded by foreign money, you must agree that the following two statements are absolutely disgusting:

"I never thought I'd see the day when our own country's U.S. Chamber would so blatantly sell out our people."

"Dem Rep. Mary Jo Kilroy... is calling on her GOP opponent to condemn the ads on the grounds that they're funded by foreign money."

This is just ridiculous. Guilty unless proven innocent based on accusations without proof. This is the real threat to our democracy. Hurling accusations without any proof at all. And who's leading the charge? Our President. A new low.

Posted by: sbj3 | October 7, 2010 6:24 PM | Report abuse

Hickey Ad = COLOSSAL SCREW-UP

* West Virginia Gov. Manchin's "Blood Boiling" Over "Hickey" Casting Call *

“I wouldn’t have been upset if they said we want coal miners and truckers,” he told me. “Those are 2 of the most honorable professions we have- hard-working people. But to cast that in such a disparaging light is just awful. And that does get your blood boiling in West Virginia whether you’re a democrat, republican, or an independent. It should get them fired up.”

[...]

...Raese campaign says it never wanted this ad to air in the first place:

“The ad is ridiculous and I am happy to say that no one with the Raese campaign had anything to do with it. As a matter of fact, we asked that it be taken down long before it went public,” Raese Press Secretary, Kevin McLaughlin said in a statement.

But this ad was done as an independent expenditure by the NRSC, which means it could be a violation of FEC rules if the Raese campaign saw the ad before it went public. Independent expenditure ads by party committees are not allowed to be coordinated with the campaigns of individual candidates.

http://blogs.abcnews.com/thenote/2010/10/west-virginia-gov-manchins-blood-boiling-over-hickey-casting-call.html

Posted by: Ethan2010 | October 7, 2010 6:25 PM | Report abuse

lots of sloppy spelling in this blog post

Posted by: adammc123 | October 7, 2010 6:25 PM | Report abuse

Suekzoo1

So Harry Reid and the Congressional democrats VOTED TO MAKE FORECLOSURES EASIER FOR BANKS ???


Is that basically what happened???


See what I mean when I say "the democrats sold you out"

.

Posted by: SaveTheRainforest | October 7, 2010 6:26 PM | Report abuse

"David Plouffe, in a moment of rather ambitious expectations setting, says if the GOP doesn't take back Congress it will be a 'colossal failure.'"

I think this goes beyond simple expectations setting. Plouffe is not inclined to cavalierly throw around this type of rhetoric; he usually has some information to back it up. Remember: this is the guy that was seeing the Obama win in their ground game/internals well before others were.

So, maybe he's not sharing what he knows? Maybe he's now seeing enough grassroots activity and/or internal polling to suggest that a Republican takeover has become less likely?

Posted by: associate20 | October 7, 2010 6:27 PM | Report abuse

sue, it went through the House? Is there a record of the vote in the Senate?

Sorry, I'm not lazy, just in a hurry as I write this....

Posted by: BGinCHI | October 7, 2010 6:28 PM | Report abuse

Campaign Finance

The ONE part of the campaign finance reform which was working was the Presidential limitations -


OBAMA TRASHED THAT PART OF CAMPAIGN FINANCE REFORM.

So, for Obama to go out there with a campaign finance issue - and try to have any credibility on the topic, is a complete joke.


It has become unbelievable - Obama has ZERO credibility after raising $700 MILLION in 2008 - and with the questions surrounding the sources of that money.


Sorry - but someone in his office should stop Obama - this is really really embarassing.


.

Posted by: SaveTheRainforest | October 7, 2010 6:30 PM | Report abuse

BG, yes it went through the house. No record of Senate vote, it was a voice vote, not a roll call.

Posted by: suekzoo1 | October 7, 2010 6:32 PM | Report abuse

Ethan, that ABC thing is wrong. I reported it out today. What happened is that the spox was referring to the Politico story becoming public, not the ad itself.

Posted by: Greg Sargent | October 7, 2010 6:35 PM | Report abuse

Good for Obama on the veto


Fine - but what about ALL the democratic members of Congress who voted FOR the measure???

You would think that Obama would TELL them he would veto it - so that they didn't have to go on record as voting TO MAKE IT EASIER FOR BANKS TO FORECLOSE.

The "democrats sold you out"

yea, but isn't Obama incompetent for allowing those votes to go through BOTH Houses of Congress.


The democrats should be losing complete confidence in Obama to do ANYTHING PROPERLY.


.

Posted by: SaveTheRainforest | October 7, 2010 6:36 PM | Report abuse

BG, it passed the house on a voice vote, also, got out of Leahy's committe in the Senate and passed on unanimous consent.

http://thomas.loc.gov/cgi-bin/bdquery/D?d111:1:./temp/~bdoBN3:@@@L&summ2=m&|/home/LegislativeData.php|

Posted by: suekzoo1 | October 7, 2010 6:36 PM | Report abuse

sue, thanks.

That's so depressing.

sigh

Posted by: BGinCHI | October 7, 2010 6:37 PM | Report abuse

"The current impact of the Tea Party on the GOP is "the absolute tip of the iceberg.""

As it was 15-20 years ago when the fundies gained control of the Texas GOP and kicked out the friends of George H. W. Bush and the other country club cattle & oil barons.

Unfortunately for the Teabaggers, their collective temper tantrum (& that's all it is) will never gain them anything but a rump conservative party that can't govern the country as a whole. As they gain control of the GOP it will shrink until it's only themselves and the rest of the country avoids them like the political plague that they are.

Posted by: akaoddjob | October 7, 2010 6:42 PM | Report abuse

Interstate Recognition of Notarizations


Can Congress even make the rules for STATE courts?

Where is the limit of Congressional Powers? They can't tell a State Court what to do.


.

Posted by: SaveTheRainforest | October 7, 2010 6:43 PM | Report abuse

Greg,

How can that be so re: ABC story?

Here is the quotation:

"The ad is ridiculous and I am happy to say that no one with the Raese campaign had anything to do with it. As a matter of fact, we asked that it be taken down long before it went public," Raese Press Secretary, Kevin McLaughlin said in a statement.

He explicitly refers to the ad.

Posted by: Ethan2010 | October 7, 2010 6:44 PM | Report abuse

BGinChi

What is depressing?

Posted by: SaveTheRainforest | October 7, 2010 6:47 PM | Report abuse

GOP Insiders Blame Steele, Majority Says DNC Outperforming RNC

Based on the results of the latest National Journal Political Insiders Poll, if the Republicans fail to score major gains in the Senate and House on Nov. 2 they already have their scapegoat -- Republican National Committee chairman Michael Steele. This week, the Political Insiders were asked to judge which of their respective national party committees "is doing a better job in the run-up to the mid-term elections." When comparing the RNC to the Democratic National Committee, the 93 GOP Insiders who responded to the poll this week were withering in their assessment and 73% said that the DNC was out-performing the RNC. Only 15% said that the RNC was besting the DNC and 12% said neither committee had stood out.

In their comments, the GOP Insiders blamed the RNC's woes on chairman Steele who has wandered off message with verbal miscues and alienated GOP major donors. "Steele has been a huge disappointment, especially on the fundraising front," said one GOP Insider. Others used words like "embarrassment," "horrible" and "idiot" to describe Steele. "[DNC chairman] Tim Kaine is always on message, Michael Steele rotates which foot is in mouth," said another GOP Insider.

http://hotlineoncall.nationaljournal.com/archives/2010/10/gop_insiders_bl.php

Posted by: Ethan2010 | October 7, 2010 6:48 PM | Report abuse

Someone please explain what the difference is supposed to be between Ethan and STRF.

Posted by: quarterback1 | October 7, 2010 4:35 PM
----

STRF is infinitely more intelligent. He must be more handsome, too, because Liam's always talking about getting in his pants.

Posted by: Brigade | October 7, 2010 6:54 PM | Report abuse

This is just ridiculous. Guilty unless proven innocent based on accusations without proof. This is the real threat to our democracy. Hurling accusations without any proof at all. And who's leading the charge? Our President. A new low.

Posted by: sbj3 | October 7, 2010 6:24 PM
----

They're getting the excuses ready, so when the voters show them the door, they can blame it all on foreign money and shadowy conspiracies instead of their own utter incompetence. The echo chamber at work.

Posted by: Brigade | October 7, 2010 6:58 PM | Report abuse

Favorite line from the Christine "Call me Alan Greenspan" O'Donnell interview:

"First of all, any time taxes have decreased, revenue has increased."

So we can wipe out our deficit and have more tax revenue to spend by continually cutting tax rates! But why didn't that work in the Bush years?

Posted by: bearclaw1 | October 7, 2010 6:59 PM | Report abuse

Without these corporate-funded special interest groups the GOP would be DEAD IN THE WATER.

Posted by: Ethan2010 | October 7, 2010 6:21 PM

----

Without all those voters you mean. Haven't you OD'd yet?

Posted by: Brigade | October 7, 2010 7:00 PM | Report abuse

I'll tell you guys quickly what happened - mortgages were traditionally held by local banks - state-by-state - so all the paperwork was done locally.

When Wall Street began to sell mortgage securities, the whole process changed.

The mortgages were sold into baskets of mortgages - and then Wall Street divided the RIGHTS to portions of the payments to different securities. For instance, some securities were for interest-only, and some were for principle-only. The tranches were divided up among which portions of the overall portfolio defaulted and in what order.

In order to do that, an agency had to be designated to collect all the mortgage payments and assign the portions of each payment to whoever bought which of the differenct securities.

In the rush to set all this up, the mortgages were often traded a few times before it ended up in a mortgage portfolio- among several banks.

In some states, each transfer required the transfer of that mortgage to be recorded at the local courthouse. Apparently in the rush, this wasn't always done at all - a computer just assigned who the new owner of the mortgage was - and it really wasn't transfered properly with all the stamps and signatures.

So, in many cases, the mortgage is really STILL in the name of the original bank - not in the name of the mortgage portfolio which bought the mortgage last in the process.

In addition, the agencies which manage this mess - there are questions whether those agencies have legal STANDING to actually FILE the foreclosures - because they don't actually OWN the mortgages - the portfolios OWN the mortgages.

An agency is simply a management company - does it have STANDING to file a foreclosure - well maybe UNDER the contract which created the mortgage portfolios - but MAYBE NOT under the State laws in which the mortgages are affected.

The issues are so much more complicated than robo-signers. There are 50 sets of state laws - and the agencies which manage these portfolio payments have NEVER been set up to comply with 50 sets of laws - they were just set up to collect money and divide it up according to complex mortgage security divisions and tranches.

Most importantly - the mortgages might actually be in the name of the first bank - not the portfolio - to foreclose, ALL that paperwork which wasn't done orginally really should get done - and it is not

ADD to that that some of the banks may not exist anymore - there have been so many FDIC take-overs.

.

Posted by: SaveTheRainforest | October 7, 2010 7:00 PM | Report abuse

(omitted the spam)

Posted by: Ethan2010 | October 7, 2010 6:25 PM
-----

Can't you find some new material?

Posted by: Brigade | October 7, 2010 7:03 PM | Report abuse

Unfortunately for the Teabaggers, their collective temper tantrum (& that's all it is) will never gain them anything but a rump conservative party that can't govern the country as a whole.

Posted by: akaoddjob | October 7, 2010 6:42 PM
----

Then they'll be just like the current Democratic majority, which resulted from 2008 temper tantrums. They couldn't possibly be any worse.

Posted by: Brigade | October 7, 2010 7:06 PM | Report abuse

Federal judge in Michigan refused to issue an injunction against implementation of the Affordable Care Act. http://tpmdc.talkingpointsmemo.com/2010/10/federal-judge-rejects-challenge-to-key-elements-of-health-care-law.php?ref=fpblg

Caveat: the judge was a Clinton appointee.

Explanation for caveat: the Reagan appointees were busy snorting coke and banging strippers.

Posted by: bearclaw1 | October 7, 2010 7:09 PM | Report abuse

So we can wipe out our deficit and have more tax revenue to spend by continually cutting tax rates! But why didn't that work in the Bush years?

Posted by: bearclaw1 | October 7, 2010 6:59 PM
-----

It only works if you don't spend three times your increased revenues.

Posted by: Brigade | October 7, 2010 7:10 PM | Report abuse

Round 1--Mandate to buy insurance constitutional says federal judge

A federal judge in Detroit, in a broad ruling upholding Congress’s power to require all Americans to buy health insurance or pay a penalty, decided Thursday that the mandate is necessary to prevent the “extinction” of the nation’s entire health care insurance market. U.S. District Judge George Caram Steeh said the requirement was well within Congress’s power to regulate commerce among the states. The decision is the first by a federal court to rule directly on the constitutionality of the buy-or-be-penalized provision of the sweeping new health care reform law.

http://www.scotusblog.com/2010/10/health-insurance-mandate-upheld/

Posted by: 12BarBlues | October 7, 2010 7:16 PM | Report abuse

"This is a threat to our democracy."

If Barack Obama has reasonable grounds to claim that money from foreign companies is being used to pay for election ads, his DOJ should be investigating and prosecuting. If he doesn't, he needs to shut his face. Once again, he is acting as a partisan bully while pretending to act as POTUS.

Posted by: quarterback1 | October 7, 2010 7:16 PM | Report abuse

"Round 1--Mandate to buy insurance constitutional says federal judge"

His opinion is as relevant to the final outcome as yours or mine.

Posted by: quarterback1 | October 7, 2010 7:18 PM | Report abuse

His opinion is as relevant to the final outcome as yours or mine.
-------------------------------
Really? Why is that?

Posted by: 12BarBlues | October 7, 2010 7:21 PM | Report abuse

Here's a pretty good overall assessment of the foreclosure snafu and the possible repercussions in layman's terms for all us armchair economists.

What's interesting about Obama's veto is it really shows the cheekiness of Congress Critters from both sides calling for moratoriums while at the same time attempting to set up a way out for the banks.

Was it Durbin who said "frankly the banks own the place"?

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

"Janet Tavakoli, founder and president of Tavakoli Structured Finance, a Chicago-based consulting firm, said that for much of the past decade, when banks were creating mortgage-backed securities as fast as possible, there was little time to check all the documents and make sure the paperwork was in order.

But now, when judges, lawyers and elected officials are demanding proper paperwork before foreclosures can proceed, the banks' paperwork problems have been laid bare, she said.

The result: "Banks are vulnerable to lawsuits from investors in the [securitization] trusts," Tavakoli said.

Referring to the federal government's $700 billion Troubled Assets Relief Program for banks, she added, "This problem could cost the banks significantly more money, which could mean TARP II."

http://www.washingtonpost.com/wp-dyn/content/article/2010/10/06/AR2010100607227.html?sid=ST2010100607251

Posted by: lmsinca | October 7, 2010 7:23 PM | Report abuse

There are other complications in the mortgage situation -

The court actions are going to highlight a real nightmare for the Wall Street banks - they were trading the securities BEFORE they went into the portfolios.

So - in essence, they were SKIMMING THE PROFITS off the mortgages BEFORE THEY WENT INTO THE PORTFOLIOS.


Some of the mortgage portfolios NEVER had a chance to make a profit - because so much money was SKIMMED off the top.


In addition, the QUALITY of the mortgages were suddenly changed in the process of trading - a homeowner who had worse credit was often CHARGED a higher interest rate for a mortgage -

Like Enron, those higher interest rates were PRICE OVER THE LIFE OF THE MORTGAGE - and traded with present-values assigned.

But the QUALITY DIFFERENCES often got lost in the trading and selling into the mortgage portfolios - investors were told that the portfolios were "mortgage-backed" or that Fannie Mae or Freddie Mac had guaranteed the mortgages.

Often - the HIGHER INTEREST rates which homeowners got - those tranlated into HIGHER present values - which the Wall Street firms SKIMMED.


There are serious questions of "fiduary responsiblity" - if one floor of a Wall Street firm is buying a mortgage at one price - and then another floor of the same firm is buying that same mortgage at a significantly DIFFERENT price and then stuffing it into a mortgage portfolio -

It starts to look like a skimming operation - to give the investors in the portfolios securites that are priced in a way that the PROMISED returns have NO CHANCE OF HAPPENING.


This has to do with the Notarization law - because at each stage of the trading (skimming) the mortgages SHOULD have been recorded properly at the local courthouses.


Wouldn't it be interesting if the same Wall Street firm was buying and selling the same mortgage to ITSELF - before those mortgages were stuffed into a portfolio AT INFLATED PRICES ???


I don't know if you can follow all that-
.

Posted by: SaveTheRainforest | October 7, 2010 7:24 PM | Report abuse

It only works if you don't spend three times your increased revenues.

Posted by: Brigade
++++++++++++++++++++++

Actually, the bulk of the Bush deficits resulted from the tax cuts, with spending on the Bush/Cheney GWOT as contributor #2.

http://www.cbpp.org/cms/?fa=view&id=909

Posted by: bearclaw1 | October 7, 2010 7:25 PM | Report abuse

"Really? Why is that?"

Because it will go to the Supreme Court, which will conduct de novo review, meaning they'll decide for themselves. They might comment on the district judge's or court of appeals' opinions, but they decide questions of law like whether the Commerce Clause grants Congress this power without any deference to lower courts. This is all just preliminary right now. Nothing matters except the final SCOTUS vote.

Posted by: quarterback1 | October 7, 2010 7:29 PM | Report abuse

And if that wasn't enough here's Felix Salmon over at Reuters. What a mess.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~

"The big-picture consequences here are by their nature unpredictable, as no one has a clue how this might all play out. But I can think of a few themes:

1. Bond investors, who have seen the value of their mortgage-backed debt rise impressively over the past 18 months, could find themselves unable to find any kind of bid at all. The paper will still be cashflowing, but those cashflows will be surrounded by enormous uncertainty, and no one’s going to want to buy them except at extremely deep discounts until the mess is cleared up.
2. Mortgage servicers will go from being assets to being liabilities, and banks which own mortgage servicers could find themselves on the hook for substantial losses.
3. The time from default to foreclosure will become indefinite, and as a result there will be a significant uptick in strategic defaults, especially in states with judicial foreclosures.
4. The “shadow inventory” of houses which aren’t on the market but will eventually be sold once the bank gets around to foreclosing will grow substantially from its already-enormous level.

All of this is going to be very costly and very unpleasant for all concerned; the only winners I see here are the lawyers. Add in possible securities-fraud charges against investment banks which underwrote a lot of these bonds, and the end result is a level of legal chaos I can barely imagine, in both the civil and criminal courts. And I see no easy way out at all."

Posted by: lmsinca | October 7, 2010 7:29 PM | Report abuse

Brigade,

GOP = Big Money, Corporate Special Interest PR campaigns

American Crossroads/GPS
Americans for Prosperity
60-Plus
U.S. Chamber of Commerce
Koch Industries "Hot Air Tour"

You've gotta be a FOOL not to see what's right in front of your eyes.

Corporations have BOUGHT the Republican Party into the position they are in now and they will only continue to destroy the American electoral system as they pour in hundreds of millions of dollars into what used to be a system for providing representative democracy.

Posted by: Ethan2010 | October 7, 2010 7:32 PM | Report abuse

@Ims,

"the only winners I see here are the lawyers."

Yippee!!! There IS a silver lining!!!

Posted by: bearclaw1 | October 7, 2010 7:34 PM | Report abuse

To finish up - for those who care about Obama's veto of the Mortgage Foreclosure law

There have been reports of really sloppy (to be kind) bookkeeping of the mortgage security portfolios.


Specially, I have read reports that the SAME mortgage has been spotted in several different mortgage portfolios - meaning that the SAME mortgage was sold over and over and over again.

These are all questions going directly to the question: who owns which mortgages?

To rely on the mortgage agencies - who didn't follow the proper procedures in the first place - to sort things out - and to have COURTS just take the word of computer print-outs - instead of legal filing at Courthouses. That is where this is now.


Conversely - if the SAME mortgages are in several portfolios - that probably means there are mortgages out there that NEVER got properly assigned to their correct portfolios - meaning they are "hanging" out there somewhere, legally.

It appears that there are many, many "hanging" out there - not just between the original banks and the portfolios - but between the various portfolios.

Meaning - that investors in mortgage portfolios MAY have been sold "generic portfolios" - without ACTUAL MORTGAGES actually being assigned to each portfolio.


Quite a situation - especially in a situation in which so many mortgages have gone bad - and those SECURITIES WHICH ARE REALLY RIGHTS TO PORTIONS OF BASKETS OF MORTGAGES - have to be VALUED.

Someone could come in and say - well my porfolio REALLY didn't have ALL those defaults - because THOSE mortgages WERE NEVER actually IN my portfolio.


The Wall Street banks could be in for a pack of trouble.


.

Posted by: SaveTheRainforest | October 7, 2010 7:34 PM | Report abuse

So much for the Forrest Gump theory of the mortgage meltdown that banks simply took advantage of loopholes (that just happened to occur without their help) in the laws.

Wall Street developed these products to have a high interest rate product to sell, in a low interest rate environment. Large investors LOVED the product (AAA investment rated and high interest to boot) and bought MORE and MORE and MORE of the securities. The banks, mortgage brokers, appraisers, and the whole unholy gravy train rushed to fill that demand because they are all making money hand over fist.

And here come the real dopes, the real Forrest Gumps, the homeowner who is refinancing his house so many times it looks like a slot machine, buying consumer goods, cars, etc. And the speculators buying houses to flip, and the marginal credit homeowners. And all to feed the insatiable appetite for mortgage backed securities.

Posted by: 12BarBlues | October 7, 2010 7:35 PM | Report abuse

Sloppy paperwork in the secondary mortgage and servicing bus goes back more than a decade. The slop just got bigger.

It is unfortunate in that it really has nothing to do with the ultimate responsibility of the mortgagors or the realities of defaults.

Posted by: quarterback1 | October 7, 2010 7:36 PM | Report abuse

bearclaw1:

Cutting taxes DID increase revenue under Bush -- of course, there was a short downtick to account for the first year tax cut but then revenue increased (and tax receipts specifically stayed constant) -- federal revenue really started going DOWN when the Dems took over ...

http://www.heritage.org/budgetchartbook/income-tax-receipts

Posted by: JakeD2 | October 7, 2010 7:42 PM | Report abuse

Sharia soup, anyone? Mmm good!

Evidently this is not new, but I just read about it--Campbell's is marketing a line of Halal-approved soups. Anti-Muslim groups are all atwitter and tweeting about it; some calling for a boycott. I say good for Campbell's. I also loved the name of one of the blogs--"Creeping Sharia." :)

http://tpmmuckraker.talkingpointsmemo.com/2010/10/right_wing_sounds_the_sharia_alarm_over_campbells.php?ref=fpb

Posted by: carolanne528 | October 7, 2010 7:42 PM | Report abuse

Greg:

Does the Washington Post Company earn any of its income from overseas sources? If so, does it separate that income out from its domestic earnings? If not, is the Washington Post also a threat to democracy for using foreign funds to advocate on behalf of certain politicians and policies?

Just wondering.

Posted by: ScottC3 | October 7, 2010 7:47 PM | Report abuse

Speaking of the Supreme Court, where's leichtman1, our resident criminal defense attorney?
I've read with some interest the case involving former inmate John Thompson, who spent years in prison and was nearly executed for a crime he evidently didn't commit because prosecutors withheld evidence that would have exonerated him.

I understand why prosecutors can't be vulnerable to lawsuits every time they lose a case, but c'mon, this appears to have been serious malfeasance. Evidently there is such precedent that Thompson had no hope of prevailing against the actual culprit who did him wrong, so he's suing the office which employed the prosecutor on grounds he should have received better training---maybe on how not to withold important evidence.

However, from the justices' line of questioning, it appears that they are open to the idea that even had such training taken place, the particular prosecutor could have deliberately withheld the evidence even though he had been trained to do otherwise and, since he can't be held accountable, well ... you get the idea. Kind of scary.

Posted by: Brigade | October 7, 2010 7:47 PM | Report abuse

quarterback1:

When do you think that the DOJ will be investigating and prosecuting foreigners who contributed to Obama's campaign?

BTW: if Obama ever tells Biden that he wants to nominate Hillary for VP in 2012, how likely do you think it is that Biden and half of the Cabinet sign a declaration under Amend. XXV, Sec. 4?

Posted by: JakeD2 | October 7, 2010 7:49 PM | Report abuse

lmsinca at 7:29 PM

ALL those items you wrote about the over-all effects are correct.

The housing market overall - is still inflated - and this is going to make that situation worse.

Why should someone buy a house when there is a flood of houses ready to come on the market - which will surely DEPRESS prices?

The banks are PUSHING their losses ONTO new home-buyers.

It is a game that will not last long. People will realize what is going on - which will crash prices further - and hurt the banks even worse.

PLUS Obama and the democrats have Fannie Mae and Freddie Mac out there - essentially GUARANTEEING THE HOUSING PRICES - so the decline in the housing market which WILL happen - that will HIT TAXPAYERS LIKE A NEW VERSION OF AIG.


Obama is "all in" on this - and the democrats should have done something about Fannie Mae and Freddie Mac last year - instead of having everyone wait until this year, thinking something was going to get done with the financial reg bill - but NEVER DID.


AGAIN Obama and the democrats have the Federal Government "ALL IN" ON THE MORTGAGE GUARANTEES OVER THE PAST TWO YEARS AT FANNIE MAE AND FREDDIE MAC.

.

Posted by: SaveTheRainforest | October 7, 2010 7:50 PM | Report abuse

sue, thanks.

That's so depressing.

sigh

Posted by: BGinCHI | October 7, 2010 8:02 PM | Report abuse

http://www.youtube.com/watch?v=9uvp0Jljh6U

The David Vitter version of the illegal aliens ad. Even more racist than Angle's.

Posted by: DDAWD | October 7, 2010 8:02 PM | Report abuse

qb

"It is unfortunate in that it really has nothing to do with the ultimate responsibility of the mortgagors or the realities of defaults."

Are you talking about the homeowners here?

Posted by: lmsinca | October 7, 2010 8:03 PM | Report abuse

Sorry for the double post. I blame the internets.

Posted by: BGinCHI | October 7, 2010 8:04 PM | Report abuse

Christine O'Donnell has another ad out -- she's definitely not saying that she's like the Dem -- she "didn't go to Yale" and didn't "inherit millions like my opponent." LOL!!!

Posted by: JakeD2 | October 7, 2010 8:06 PM | Report abuse

The David Vitter version of the illegal aliens ad. Even more racist than Angle's.

Posted by: DDAWD | October 7, 2010 8:02 PM
----

I don't think it's illegal aliens in general whom they dislike. They just hate brown people. :)

Posted by: Brigade | October 7, 2010 8:07 PM | Report abuse

lms, big thanks for the posts on the bank foreclosure bill and the issues surrounding it.

Wow. Lots to sort through and come to terms with.

I hate to have to use this word, but if we don't get a bipartisan solution to this we're going to get into real trouble. Neither party has clean hands here and many people in this country are hugely at risk. Wall Street and the financials have to stay on the hook here but the solution can't be to send the system into even worse turmoil.

Given our current crop of pols in the House and Senate I don't feel too confident. And if we get a bunch of Teabaggers after Nov we're done like dinner.

Posted by: BGinCHI | October 7, 2010 8:10 PM | Report abuse

lmsinca:

Mortgagors = The borrower in a mortgage agreement, e.g. homeowner : )

Posted by: JakeD2 | October 7, 2010 8:13 PM | Report abuse

lms,

"Are you talking about the homeowners here?"

Yes. Clumsy way of saying, a lot of defaulting homeowners might be able to profit from the paper mess, although it has nothing to do with their default or obligations. Some might think that's good, and the banks are getting their just desserts. I tend not to look at it that way, especially since I dealt with a real dedbeat, crook of a homeowner for a large back and saw first hand the abuse he was able to get away with.

Btw, since you probably didn't go back to the morning thread, I'll repeat my response to your response (that you didn't respond to everything because you were working at the same time):

How dare you set an example of responsibility on this blog.

Posted by: quarterback1 | October 7, 2010 8:13 PM | Report abuse

"Corporations have BOUGHT the Republican Party into the position they are in now and they will only continue to destroy the American electoral system as they pour in hundreds of millions of dollars into what used to be a system for providing representative democracy."

Really Ethan? So let me ask you, do you think the Democratic party isn't beholden to special interests?
- How many teachers support the use of their dues to support democratic campaigns? Do you think if they cut out the donations, that an extra few bucks would be helpful? I'm sure the Dems would still support the goals of the union. After all they support teachers, and not just because they get alot of money from them.

- Do you think George Soros is a good thing for american politics? He brought us Move On, paid for America Coming Together, and who knows how much else. Oh, isn't he originally a foreigner. The horror!

- Why is it you say that they are buying the elections, or that this country "used" to be a representative democracy. Last I voted, corporations didn't try to tell me how to vote. And I have a powerful tool to block out ads on TV - the off button. You really have a low opinion of your fellow americans if you think it is that easy to impact elections.

Posted by: Bailers | October 7, 2010 8:16 PM | Report abuse

Hi BG

Yeah there's plenty of blame to go around. I've been following this pretty closely since the deficit commission has been pretty mum lately re SS.

If I were a banker and owned one or part of one of these loans, I'd try to get all the stakeholders together, straighten out the paperwork and re-negotiate the mortgage at today's prices. But that's just me. Why let the lawyers have all the fun!!!!!!!!

Posted by: lmsinca | October 7, 2010 8:16 PM | Report abuse

This is the point I was making last night. Congress does NOT come up with these laws out of the clear blue sky. It's glaringly obvious that the lobbyests for the bankers came up with the "Interstate Recognition of Notarizations Act" which solved all their little problems in foreclosures. And Congress either understands and nods, or probably more accurately does not understand the full import of some details about notaries, and just nods their heads and say "right on".

I've been saying for some time, that the bankers and Wall Street get what they want out of Congress in order to feed their need for profits. In this case, they just needed a "little adjustment" to help them on their way. This applies to Democrats and Republicans alike.

Good for the President for stopping this thing, to give Congress a chance to really focus on the thing. Maybe it's right to pass this law, but if it's so right, it will survive the test of a little time and analysis.

Posted by: 12BarBlues | October 7, 2010 8:19 PM | Report abuse

Nevada State Senate Republican Leader Endorses Harry Reid, Trashes Angle

http://tpmdc.talkingpointsmemo.com/2010/10/nevada-state-senate-republican-leader-endorses-harry-reid-trashes-angle.php
~

Posted by: ifthethunderdontgetya | October 7, 2010 8:21 PM | Report abuse

12bar

Let me just settle something that you got particularly nasty on


The oil spill estimates - look it up on Google news


You can apologize at any time.....

.

Posted by: SaveTheRainforest | October 7, 2010 8:25 PM | Report abuse

Actually the subprime debacle is a bit complicated. Fannie Mae started the American Dream Commitment in 2000 with the express purpose of increasing lending to underserved markets (think CRA). Franklin Raines (ex Clinton budget director) was CEO at the time.

Here is a FNM press release from 2003 as they reached the halfway point of their $2 trillion commitment to underserved households. This was social engineering in action.

Before anyone complains about the source, this is an official FNM press release, not Faux news or Breitbart or anyone like that. It is Fannie in their own words discussing what they were doing.

Also not the co-signatories to this press release: Bank of America; Bank One Corporation; Charter One Bank; Countrywide Financial Corporation; Doral Financial Corporation; First Horizon Home Loan Corporation; Fleet Boston Bank; Huntington Mortgage Company; Irwin Mortgage; J.P. Morgan Chase & Co.; and Standard Mortgage Corporation.

The who's who of the subprime lending crisis.

The punch line of this release is that Fannie Mae couldn't originate subprime loans due to their charter, but the were allowed to purchase subprime loans if someone else originated them. Which is what they did. So while Countrywide was the official originator of the loan, it was meant for Fannie Mae to buy it for their own balance sheet. It was an end around their charter. Note that when the $2 trillion commitment was completed in the mid '00s the whole bubble came crashing down.

Here is a good interview with an ex-Fannie Mae executive which discusses how HUD prodded them to make more and more dodgy loans.

http://online.wsj.com/video/opinion-journal-i-was-a-fannie-mae-executive/DA0FB70F-B034-467C-8F99-2583455711C1.html

I find it completely irritating that the blame for the financial crisis has become a partisan issue. Franklin Raines (ex Clinton budget director) was the CEO of Fannie Mae during an accounting scandal of Enron-esque proportions. Does anyone care? Nope. Not until the Republicans take the House and he has to deal with Issa. We are never going to find the right way to prevent another crisis like this if the examination of the entrails is a partisan issue.

Look, I am not blaming the real estate bubble (and therefore the whole financial crisis) on Fannie Mae and social engineering, but the did have a big impact (almost as big as the Fed). The government had their fingerprints all over the real estate bubble, and it is yet another example of how social engineering creates unintended consequences which smack us all upside the head.

Since everyone wants to blame Wall Street (and they aren't blameless) let's at least think about Washington's involvement and try not to repeat the same mistakes.

Posted by: sold2u | October 7, 2010 8:26 PM | Report abuse

Jake,

"When do you think that the DOJ will be investigating and prosecuting foreigners who contributed to Obama's campaign?"

Oh, probably the second Tuesday of the seventh week of February 2018. Around about then. Besides, what are you, some kind of racist?

I think Biden would probably not mind switching jobs with Hillary. VP is kind of a pointless job other than flacking for Obama. Biden is all about taking himself seriously and trying to convince us to, and Sec State is a job he has wanted for a long time, imo.

Posted by: quarterback1 | October 7, 2010 8:26 PM | Report abuse

qb

I'm all about personal responsibility, believe it or not :)

I don't necessarily think the banks should be on the hook for all of this, we can't just give the homes away afterall. But by the same token a lot of these people just got caught in the crossfire.

It's not as if they decided to band together years ago to take down the banks or Wall Street. They didn't trick the appraisers or lenders into dismissing underwriting process or forge documents. And then talk them into securitizing the whole mess and concocting credit default swaps or go out on a limb with 30X leverage rates.

I still like my suggestion above, re-negotiate the loan for those who can qualify and stabilize what's left of the market. In the meantime though I'm pretty sure Congress will screw it up.

Posted by: lmsinca | October 7, 2010 8:29 PM | Report abuse

Look, I am not blaming the real estate bubble (and therefore the whole financial crisis) on Fannie Mae and social engineering,
...

Posted by: sold2u | October 7, 2010 8:26 PM
========================

As soon as you drag the CRA into it, your argument starts losing credibility.

Furthermore, it was neither Fannie Mae nor Freddie Mac that drove underwriting standards through the floor. That was done by Wall Street CMBS issuers and the banks that fed them paper.
~

Posted by: ifthethunderdontgetya | October 7, 2010 8:31 PM | Report abuse

Since everyone wants to blame Wall Street (and they aren't blameless) let's at least think about Washington's involvement and try not to repeat the same mistakes.

Posted by: sold2u | October 7, 2010 8:26 PM
---------------------------------
I agree with this. This is a complicated problem with roots headed off toward government, toward Wall Street and toward the plethora of third party beneficiaries, all of whom cooperated in wringing trillions of dollars out of this "opportunity". Even, some homeowners benefited, but to a much smaller degree. Follow the money as someone famous said.

Posted by: 12BarBlues | October 7, 2010 8:31 PM | Report abuse

"Angle: Muslim law taking hold in parts of U.S.
Tells Tea Party crowd the country needs to address a "militant terrorist situation"; compares 9/11 to Holocaust "

http://www.salon.com/news/politics/2010_elections/index.html?story=/news/feature/2010/10/07/us_nevada_senate_angle

"U.S. Senate candidate Sharron Angle told a crowd of supporters that the country needs to address a "militant terrorist situation" that has allowed Islamic religious law to take hold in some American cities.

Her comments came at a rally of tea party supporters in the Nevada resort town of Mesquite last week after the candidate was asked about Muslims angling to take over the country, and marked the latest of several controversial remarks by the Nevada Republican.

In a recording of the rally provided to The Associated Press by the Mesquite Local News, a man is heard asking Angle : "I keep hearing about Muslims wanting to take over the United States ... on a TV program just last night, I saw that they are taking over a city in Michigan and the residents of the city, they want them out. They want them out. So, I want to hear your thoughts about that."

Angle responds that "we're talking about a militant terrorist situation, which I believe it isn't a widespread thing, but it is enough that we need to address, and we have been addressing it."

"My thoughts are these, first of all, Dearborn, Michigan, and Frankford, Texas are on American soil, and under constitutional law. Not Sharia law. And I don't know how that happened in the United States," she said. "It seems to me there is something fundamentally wrong with allowing a foreign system of law to even take hold in any municipality or government situation in our United States." "

Posted by: Liam-still | October 7, 2010 8:31 PM | Report abuse

sold2u:

"Since everyone wants to blame Wall Street (and they aren't blameless) let's at least think about Washington's involvement and try not to repeat the same mistakes."

Hear, hear.

Posted by: ScottC3 | October 7, 2010 8:36 PM | Report abuse

sold2u,

Well done. I don't find much there to disagree with.

Posted by: quarterback1 | October 7, 2010 8:40 PM | Report abuse

Washington did pass a provision in the Commodity Futures Modernization Act (thanks, Senator Phil Gramm, for sneaking that in there) that led to the credit default debacle.

In other words, Washington let Wall Street blow up the economy. Magic of the markets, you see!
~

Posted by: ifthethunderdontgetya | October 7, 2010 8:40 PM | Report abuse

I'm fine with people walking away from their mortgages. Banks aren't looking out for them, Congress isn't looking out for them. This isn't whimsical. This is about survival.

If the press showed half as much outrage over the Republicans blocking a stimulus bill as they did about people leaving upside-downs, I might be more inclined to feel sorry for the poor banks.

Posted by: DDAWD | October 7, 2010 8:45 PM | Report abuse

Wall St., through it's army of paid lobbyists, funneled enough donations to politicians to get them to do what they wanted to have done.

Now that the Gang Of Five Right Activists Justices have declared that big money is the only voice that should be heard, Congress has become a mere rubber stamp for Wall St, and The Chamber Of Commerce.

The Gang Of Five has pulled off a coup, and established The American Oligarchic Dynasty.

That is why the bill that President Obama now has pocket vetoed, was rubber stamped in both the House and Senate. They are no longer in charge of anything. The Oligarchy has purchased their franchise, and just kept them on as figure heads.

Posted by: Liam-still | October 7, 2010 8:53 PM | Report abuse

lms,

"I still like my suggestion above, re-negotiate the loan for those who can qualify and stabilize what's left of the market. In the meantime though I'm pretty sure Congress will screw it up."

I am reminded for some reason of a passage in Proverbs that says "Of making of books, there is no end . . . ." Of screwing up by Congress, there is no end.

I'm not sure the idea of wholesale renogiation is necessary or is even feasible (they would still have to straighten out the paper), but that's beyond my expertise.

Posted by: quarterback1 | October 7, 2010 8:54 PM | Report abuse

Washington did pass a provision in the Commodity Futures Modernization Act (thanks, Senator Phil Gramm, for sneaking that in there) that led to the credit default debacle.

In other words, Washington let Wall Street blow up the economy. Magic of the markets, you see!

Posted by: ifthethunderdontgetya | October 7, 2010 8:40 PM
----

Yes, all those greedy Republicans. Now go back and read sold2u's post, pretend you understand, and go back to the pipe.

Posted by: Brigade | October 7, 2010 8:55 PM | Report abuse

My point is that government does not come up with this enabling legislation all on its own, at least not these days. Wall Street, who is way smarter than any bunch of lawyer legislators, devises products that they can sell the hell out of. Then, they determine the obstacles to selling them. Then, ring-ring to the lobbyests--"get this passed, get that passed, get state laws adjusted, etc."

Bingo--obstacles eliminated. Wall Street, with all its clients hanging onto its fur, takes off with this new business opportunity in its teeth, and if they run off the end of a cliff like a buffalo stampede, oh well. They'll think of something else. A little paperwork screw up?--no problem, let's call it the Interstate Notary Act and clear that little problem up. It all sounds so innocuous doesn't it?

Posted by: 12BarBlues | October 7, 2010 8:59 PM | Report abuse

Holy smokes! Looks like there may actually be some real agreement on this blog re the problems with mortgage paperwork and the need to come up with a reasonable solution. Certainly a homeowner that has defaulted on their loan should not be allowed to avoid liability or get the house for nothing but the banks must also be held accountable in some way.

As usual, lms proposes a sensible possible solution.

Posted by: pragmaticstill | October 7, 2010 9:02 PM | Report abuse

If this bankruptcy business gets worse, no bank will lend, or even renegotiate any loan.

I mentioned a couple of weeks ago, after tao9 had brought it up, that Congress would act on this before Thanksgiving and I was right. This does not bode well for recovery. If lenders (regardless of one's personal feelings about them) have even the slightest doubt about defaults and getting their money/property back, they just wont lend.

I heard Gibbsy say the Barry was going to do a pocket veto, but I thought that was only valid if Congress was not in session. Isn't the Senate in some sort of session to prevent recess appointments?

I still say this... uncertainty get's cleared up by Thanksgiving.

Posted by: TrollMcWingnut | October 7, 2010 9:19 PM | Report abuse

12bb,

I think you just went of the rails again. You have a simple theory that you think explains everything. It doesn't. It really didn't happen that way, much as you seem to need it to have been that way. But I'm done with it for now.

Posted by: quarterback1 | October 7, 2010 9:19 PM | Report abuse

But I'm done with it for now.
------------------------
You can look at your way--I'll look at it mine. That's what makes a market, and a horse race.

Posted by: 12BarBlues | October 7, 2010 9:24 PM | Report abuse

Troll, why do you think a bank would refuse to make good loans with proper paper work NOW in retaliation for making bad loans with faulty paper work BEFORE?

Posted by: pragmaticstill | October 7, 2010 9:28 PM | Report abuse

Axelrod: I did not endorse "ground zero mosque", and nobody will prove he's a crook...

...speaking of a plum line, the collectivist activist, ACORN, inc. gang has had it's 1.5 Trillion pound gorilla on the scale for the last 24 months. Why does anyone expect anything but mayhem in the economy? No Jobs, No re-elections. Simple. Done deal.

The Axlerod is losing it's momentum before it's through the traps. The battering Rahm is leaving for greenie pastures. The Tela-Tubby Prompter is looking for a way out and may no longer be available for 'no comments', just the faxed over questions please.

Candidates all over the country are joining a Thurd Party of 'Dem? not me that must be some other guy' and hanging out at the 'Not here, he's somewhere else' Bar and Coffee House. This can't be anythong but sweet music to sore eyes, and abused ears of the vast not so silent minority of people who truly belong here, love it, and will stay to see the infernal machine being designed and built from the sweat and tears of generations of poets and patriots, unplugged for good and shoved, along with any who wish to go with it, over the brink dug right before OUR eyes by those WE elected to look after US.

Down with Rubber-Stamp Administrations and Unfettered Lawers. It's OUR Country and WE need Reform NOW!

Posted by: RichNomore | October 7, 2010 9:29 PM | Report abuse

pragmaticstill,

I'm assuming there's some snark in there.

There were/are however, plenty of good faith loans made out there and if a lender is concerned that even good faith behavior is not going to protect their investment, they'll stop lending.

Posted by: TrollMcWingnut | October 7, 2010 9:33 PM | Report abuse

Another way of saying what Troll is saying is that if an originator (BofA, etc) cannot SELL the loan to investors (mainly because investors are paralyzed with fear), then the originators will seize up and STOP making loans.

Just like they did back in '08, when this whole house of cards started to fall.

Posted by: 12BarBlues | October 7, 2010 9:40 PM | Report abuse

Jake,

"When do you think that the DOJ will be investigating and prosecuting foreigners who contributed to Obama's campaign?"


_____________________________--

The same day they figure out how to blame Bush for it.


.

Posted by: SaveTheRainforest | October 7, 2010 9:40 PM | Report abuse

Actually Troll I didn't mean to sound snarky and I agree in general that behavior undertaken in good faith should not be punished. On the other hand, however, it appears that there are problems with the documentation with old loans, this creates legal issues which must be resolved. However, presumably the banks will now take the steps necessary to eliminate these issues for future loans and therefore, they should have no legal issues in those new loans. But you think they will still refuse to make new loans?

Posted by: pragmaticstill | October 7, 2010 9:43 PM | Report abuse

[@ October 7, 2010 9:19 PM | quarterback1 smarter than anybody else in his brain, saw 12bb's post, and came up with an analysis of same, but forgot to spell check his piece of work and Posted...:
12bb,
I think you just went of the...But I'm done...now.]

Here's how simple it is two-bitback1:

Abbrogation or Responsibility

Collectivism has obscene consequences and is fair to no one but those who administer it. Freedom and Protection from collectivism has it's own level playing field. Supreme Justice-Unconstrained Representation-Limited Administration cures all problems. What if? Eh?

Men of the People, not of certain People.

Example: Representative says, "certain people need help getting loans to live in a Condo. Administration says "not so fast, there may be consequences to the availability of credit without oversight and qualification". Collectivist Lawyers say "give the loans or we will shut down the banking industry", Administration folds like a house of cards. Voila! Sub-Prime Morgue for 50% of Capital driven Business activities, a new hope and change remake of Robin Hood Politics, and USA is nearly on the ropes without one more plane through a building. Reps of certain people, WIN. Administration of Certain Business people, WASH. Collectivist Lawyers/Progressive Congress-persons, Left of Sanity Academics, Al Qaeda, WIN WIN WIN! Cost-Benefit: $10,000,000,000,000/$0.00.

Not exactly what US of America had in mind when WE voted for hope and change.

Don't go away mad, just more learned.

Posted by: RichNomore | October 7, 2010 9:44 PM | Report abuse

sold2u at 8:26 PM

You are correct - I keep on saying that Fannie Mae and Freddie Mac were packed with long-term Clinton appointees -

AND note the date of the program you are talking about: the year 2000 when Clinton was still in office

They set aside a 2 TRILLION dollar program to be put in place over the NEXT administration -

The CLINTON PEOPLE were doing this all during the Bush years - until Nancy Pelosi took over control of the House -


AND just at that time, the whole thing came crashing down - and LOOK the democrats REFUSE to do ANYTHING ABOUT IT even to this day.


.

Posted by: SaveTheRainforest | October 7, 2010 9:46 PM | Report abuse

You all keep on forgetting some IMPORTANT ASPECTS here


First - they pumped $2 Trillion into the housing market that SHOULD NOT have been there - which OVER-INFLATED PRICES.


Everyone who bought a house in that time, OVERPAID -

Meaning some people who bought overpriced houses would have NEVER defaulted if they were able to buy an UN-INFLATED HOUSE.


The crisis multiplied itself - they pushed people into foreclosure who should have NEVER been in that position.


ANOTHER democratic program just HURTING THE LITTLE GUY.

The people the democrats intended to help - they are out of their houses ANYWAY -


So innocent people got HURT, and no one got helped in the long run.


DEMOCRATS - please learn LESSON, apply to health care, and move on.

.

Posted by: SaveTheRainforest | October 7, 2010 9:53 PM | Report abuse

from news.yahoo.com
By STEPHEN OHLEMACHER, Associated Press
10/07/2010

WASHINGTON – More than 89,000 stimulus payments of $250 each went to people who were either dead or in prison, a government investigator says in a new report.

The payments, which were part of last year's massive economic recovery package, were meant to increase consumer spending to help stimulate the economy.

But about $18 million went to nearly 72,000 people who were dead, according to the report by the Social Security Administration's inspector general.
-----

LOL. No wonder the stimulus was such a bust. Why no Plum Line story about this? I'm wondering how many of these 72,000 dead people will be voting Democratic in the upcoming election.

Posted by: Brigade | October 7, 2010 9:57 PM | Report abuse

quarterback


I have to caution you to avoid a fight with 12Bar

You are correct, she over-simplifies things - and then she insists that people on the blog agree with how smart she is - and how wonderful her understanding of the issues are.


If one starts to discuss the issue, she tends to argue endlessly that she is correct on every aspect of her analysis - and that you are somehow wrong.

After about an hour, she will suddenly shift the issue, or twist it around to some other point - separate from what the other person was saying.

At that point, she will insist that she was right all along - and the issue all along was the shifted position she has taken.

As revenge, she will be nasty to you for at least a week - if she is really mad about something, she will follow you around the blogs and harass you every time she sees that you make a comment - about anything.


Just a caution.

.

Posted by: SaveTheRainforest | October 7, 2010 9:58 PM | Report abuse

pragmaticstill,

Fair question. I wonder if the foreclosure laws can be changed quickly enough or universally enough to make a difference.

Posted by: TrollMcWingnut | October 7, 2010 10:02 PM | Report abuse

Oooooooooooooh, save STRF from that nasty 12bar.

Bwhahahaha!!!!!!!!!!!

Posted by: 12BarBlues | October 7, 2010 10:04 PM | Report abuse

[@ October 7, 2010 9:43 PM pragmaticstill Posted...:

Actually Troll I didn't mean...]

Why quibble about banking regs., etc...

Yes, actually prag, for the simple reasons outlined in the previous Posted by: RichNomore | October 7, 2010 9:44 PM

No simple way to describe it, to quote a famous line from "JFK" the Movie by Oliver Stoned 'n Hurlin' Again, "...f***(sic) man! It's a mystery! It's a mystery wrapped in a riddle inside an enigma! The f***in'(sic)..." (Joe Pesci as David Ferrie), the bribers don't even know who the bribee's are!

This Nation's Economic Engine has been PURPOSELY (it cannot be total stupidity that brought US to the 'Brink'). There must be a brain operating somewhere in there, OUR job is to unplug the brain, thereby disabling the defective chip still operating on the mother-board.

Let's go easy on the mooch and her chelle. Why not say those two can stay, but the rest of the collectivist activist, ACORN, inc. gang, OUT and don't come back. WE want the pleasure of seeing the 'first evers' up there waving from the plane for the last time in 2013, after No-Bama learns what bills to sign and what bills not to sign. Post Mayhem could be a sweet deal with him as a figure-head instead of a stupid-head. Sounds and looks like Gibbs is already seeing the 'leaves in the tea', so with the Tela-Tubby Prompter gone, all that "the president thinks" BS, will stop".

Down with Rubber-Stamp Administrations and Unfettered Lawers. It's OUR Country and WE need Relief not Reform NOW!

Posted by: RichNomore | October 7, 2010 10:04 PM | Report abuse

Gallup is reporting that the unemployment rate is now 10.1% according to the latest September data. Anyone who votes Democratic in the upcoming election probably deserves to be on foodstamps. Your children may have holes in their shoes, but you can always console them by saying at least you didn't vote for those crazy people.

Posted by: Brigade | October 7, 2010 10:06 PM | Report abuse

sold2u at 8:26

I find it completely irritating that the blame for the financial crisis has become a partisan issue. Franklin Raines (ex Clinton budget director) was the CEO of Fannie Mae during an accounting scandal of Enron-esque proportions. Does anyone care? Nope.

____________________________

I respect your opinion.


And I understand and agree to the extent that partisan infighting over this issue has prevented the country from getting to the bottom of these issue - finding the proper solutions - AND THROWING THE WALL STREET EXECUTIVES IN JAIL.


_________________________

However, when the democrats blame the "last eight years" on the Republicans - and try to blame the Republicans for the bad economy - and when just this week Obama was trying to pin the economic situation on the Republicans,


it MAKES SENSE to point out that the $2 Trillion program for housing started in 2000 under Bill Clinton - Clinton put a bunch of long-term appointees in at Fannie Mae and Freddie Mac to run the program


This is at the center of the complaints about Barney Franks - and his policies on housing - and how that led to the housing disaster.


It is FAIR to say that Obama and the democrats are trying to PIN THE MORTGAGE BUBBLE ON the Republicans.


Or pin it on Bush, and then pin Bush's policies on the Republicans.


The problem is that the TRUTH does not SUPPORT any of that - it is just another Obama lie.

Another Obama deception - when Obama KNOWS PERFECTLY WELL WHAT THE TRUTH IS.

I agree that the partisan nature of this issue is preventing things that should happen - however look at what has been going on. Even this week with Obama attempting to deceive the country again.


.

Posted by: SaveTheRainforest | October 7, 2010 10:08 PM | Report abuse

Gallup Finds U.S. Unemployment at 10.1% in SeptemberUnderemployment, at 18.8%, is up from 18.6% at the end of August by Dennis Jacobe, Chief Economist
PRINCETON, NJ -- Unemployment, as measured by Gallup without seasonal adjustment, increased to 10.1% in September -- up sharply from 9.3% in August and 8.9% in July. Much of this increase came during the second half of the month -- the unemployment rate was 9.4% in mid-September -- and therefore is unlikely to be picked up in the government's unemployment report on Friday.
----

Probably George Bush's fault huh? What's it going to be, foodstamps or jobs?

Posted by: Brigade | October 7, 2010 10:15 PM | Report abuse

Here is a simple explanation of what is going wrong with the mortgage paperwork mess:

” For the benefit of newbies, what everyone calls a mortgage actually has two components: the note, which is the borrower IOU, and the mortgage (in some states, it’s called a deed of trust) which is the lien on the property. In 45 states, the mortgage is a mere accessory to the note; you must be the real party of interest in the note in order to foreclose.

The pooling and servicing agreement, which governs who does what when in a mortgage securitization, requires the note to be endorsed (just like a check, signed by one party over to the next), showing the full chain of title, and the minimum conveyance chain is A (originator) => B (sponsor) => C (depositor) => D (trust). The endorsements also have to be wet ink; no electronic signatures permitted.

-----------------------
Long story short: all the endorsements are not there. In some cases, the notes were imaged and then destroyed, even though "in most (if not all) jurisdictions, original notes with proper wet ink endorsements are required."
-----------------------------

"This creates a lot of problems. If the originator is bankrupt (New Century, IndyMac), the bankruptcy trustee is supposed to approve any assets leaving the BK’d estate. I’m told bankruptcy judges who have been asked were not happy to hear this sort of thing might be taking place, which strongly suggests this activity is going on without the requisite approvals. And who from the BK’d entity can endorse it over? It doesn’t have any more officers or employees. Similarly, a lot of the intermediary entities (the B and C in the A-B-C-D chain earlier) are long dead. How do you obtain their endorsements?"

Now you understand why everyone is resorting to fabricated documents and bogus affidavits.

http://www.nakedcapitalism.com/2010/09/more-evidence-of-bank-fubar-mortgage-behavior-florida-banks-destroyed-notes-others-never-transferred-them.html

Posted by: 12BarBlues | October 7, 2010 10:17 PM | Report abuse

TrollMcWingnut at 9:19 PM


You are correct - however with the housing market that isn't what is going on


The RISK for the new mortgages - where is that?


OBAMA and the democrats have the RISK with Fannie Mae and Freddie Mac - they have become the NEW AIG.


The situation is serious - because of the economic crisis, they didn't want to see the mortgage market


So they have the GUARANTEES coming from Fannie Mae and Freddie Mac now -


THE TAXPAYERS ARE ON THE HOOK - OBAMA HAS THE COUNTRY IN FOR A FEW MORE TRILLION DOLLARS OF LIABILITIES.

Watch - the situation is extremely serious.


And what they are doing is CONTINUING to keep the housing market INFLATED - which is prolonging the situation - and is SHIFTING the RISK from the banks to the FEDERAL GOVERNMENT.


Watch - as they sell EACH HOUSE - STILL AT INFLATED PRICES - they transferring the RISKS from the banks to the FEDERAL GOVERNMENT.

Obama is ALLOWING THIS TO HAPPEN


They are inflating another pile of debt - and this time Obama has the Federal Government holding the RISKS


.

Posted by: SaveTheRainforest | October 7, 2010 10:29 PM | Report abuse

So how big a deal are these document problems:

"From the very beginning, the servicers have taken the position that the document problems are mere “technicalities”. While that’s a stretch even with the affidavits (false affidativs are a fraud on the court), the problem of widespread failures to convey notes to the securitization trust isn’t a “technicality”; it means what were sold as MBS are potentially just unsecured consumer paper. And it goes further than that: if no notes were conveyed at closing, the trust under New York law (and all these trusts elected NY law for the trust operation) was “unfunded” meaning it does not exist (multiple top experts on NY trust law concur on this issue). I sincerely doubt anyone will try that line of argument in court but it gives you an idea of how fundamental these problems are."

This is why we're hearing about investors in MBS suing for fraud.

http://www.nakedcapitalism.com/2010/10/congressmen-attack-lps-servicer-misconduct-pr-counteroffensive-starting.html

Posted by: 12BarBlues | October 7, 2010 10:29 PM | Report abuse

What's the next line of attack:

"Now that judges in some states are starting to take these dubious, potentially fraudulent measures seriously, the next line of attack is to get the more bought and paid for Federal government to intercede on behalf of the banks."

Hence, the Interstate Notary Act.

Posted by: 12BarBlues | October 7, 2010 10:35 PM | Report abuse

@Brigade: "Probably George Bush's fault huh? What's it going to be, foodstamps or jobs?"

George Bush? Are you kidding? Let's talk Ronald Reagan. This is the result of 30 years of supply side economics and tax cuts for rich fat cats and . . . Plus, Obama has had a very obstructionist minority in congress to deal with. Compared to, you know, those cooperative Democrat minorities of Reagan/Bush/Bush. ;)

Posted by: Kevin_Willis | October 7, 2010 10:37 PM | Report abuse

ALL,

Obama is allowing the banks to keep the housing market INFLATED - that means the houses are still over-priced - by holding the foreclosures off the market.


WHY - first they are trying to unwind their mortgages at HIGH PRICES - which limits their losses - and puts the potential for those losses on the NEW BUYERS


ALSO - the GUARANTEES with EACH old mortgage that gets paid off - and EACH NEW MORTGAGE THAT GETS WRITTEN - GETS TRANSFERRED TO FANNIE MAE AND FREDDIE MAC.


Fannie Mae and Freddie Mac are PILING up new guarantees for the new mortgages - ALL at inflated prices.

SO the banks - are holding UP the housing markets - WHILE they transfer the DOWNSIDE RISKS TO FANNIE MAE AND FREDDIE MAC.

Obama and the democrats are ALLOWING THIS TO HAPPEN - and the taxpayers are taking on TRILLIONS OF POTENTIAL LIABILITIES.

Then, at some point, all the houses HELD BACK have to come onto the market -


AND WAM - WHO GETS HIT - THE TAXPAYER.

Thank you Obama - for slamming us AGAIN.


.

Posted by: SaveTheRainforest | October 7, 2010 10:39 PM | Report abuse

@12Bar: re: STRF: "and then she insists that people on the blog agree with how smart she is - and how wonderful her understanding of the issues are."

Yes, 12Bar, stop insisting we agree with how smart you are and how wonderful your understanding of the issues is. You're doing it all the time, as well as breaking out the brass knuckles for STRF, and it's just disruptive and distracting and . . .

Oh, wait, you don't do that. It's someone else whose a constant pain-in-the-butt with the posting and accusing people of doing stuff they've never done. Sorry, I got confused there for a minute. :)

Posted by: Kevin_Willis | October 7, 2010 10:43 PM | Report abuse

12Bar

We have been through all this already - please read the prior posts


Also, please don't try to start a fight over anything -

You have copied and pasted something - we now understand you are prepared to fight to the death to prove how right you are, and how smart you are.


Thank you.

.

Posted by: SaveTheRainforest | October 7, 2010 10:44 PM | Report abuse

[@ 9:58 PM October 7, 2010 SaveTheRainforest, smarter than anybody else in his brain, except quarterback1 Posted...:
"I have to caution you...12Bar...You are correct...she...is...wonderful...]

This may clear up the confusion and confusing attempts at analysis of the current political landscape.

US of A want to know:

Is she qualified?
Is she a *itch or not?
Is he Right or Wright Wing?
Is he *ocialist, *acist, or *azi
Are they Dino, Rino, or Republican
Are they of, by and for US of America
Why is the Elephant Red and Blue over White

Nothing more, nothing less. The rest of those who can be stirred up to vote will do what they do.

It is you people who over-think and under-feel, who mistake a lot of sense and words for common sense that have created a sort of relativity in this matter.

Let's just get on with it.

Posted by: RichNomore | October 7, 2010 10:44 PM | Report abuse

Brigade

Foodstamps and margaritas, we're all going to need them. Volker for President, Kaufman for VP, Warren at Treasury. I love outsiders.

Posted by: lmsinca | October 7, 2010 10:47 PM | Report abuse

Kevin_Willis at 10:43 PM

I've never ask you to agree with you - or tried to fight with you.


I just wanted to caution - our experiences with 12Bar have been extensive - and the way she picks fights, and then argues for hours -

ONLY to twist the whole thing around at the end-

Anyway - How are you involved with this?


.

Posted by: SaveTheRainforest | October 7, 2010 10:48 PM | Report abuse

At the risk of sounding too smart, here's the next dot to connect.

What is happening right now (per Wall Street Journal)?

"The biggest issue that is now developing, as we noted last week, is the fact that title insurers (firms such as Fidelity National, First American, Stewart Info and Old Republic) are refusing to insure mortgages in foreclosure or otherwise, uncertain as to who actually owns the title."

snip

Another important topic discussed is the fact that due to decades of faulty securitizations, suddenly no bank knows who owns what.

Courtesy of several trillion in now title-undefined mortgages, which in turn form the basis for thousands of CDOs, which in turn are split up into millions of tranches, and includes the complicity of Fannie, Freddie and private label, it is the banks and their clients that have shot themselves in the foot: as other have noted, very soon, the entire MBS process can and very may grind to a halt (if that happens, goodbye Pimco).

http://wallstcheatsheet.com/breaking-news/is-a-mortgage-meltdown-foreclosure-moratorium-imminent-as-the-robosigning-scandal-goes-mainstream/?p=19106/

Posted by: 12BarBlues | October 7, 2010 10:54 PM | Report abuse

[@ 9:58 PM October 7, 2010 SaveTheRainforest, smarter than anybody else in his brain, except quarterback1 Posted...:
"I have to caution you...12Bar...You are correct...she...is...wonderful...]

12BarBlues,

It appears that a common virus has infected the forum here such as it is. Some on the WWW. virtual comment sites believe that possesion is nine-tenths of the law and the longer they post, the bigger their head becomes and the smaller their brain is, relatively speaking (see my last post...

...stay grounded and don't let the booble-troll-hogs get you down, anyone with your creative talent doesn't require an apology from that which is indefensible. It would be shallow at best...

...WE have seen this behavior before, but it was way long ago @ the sand-box : )

Posted by: RichNomore | October 7, 2010 10:54 PM | Report abuse

Thanks for that shoutout, RichNoMore. I'm not too sure I really understand everything you are trying to convey, but I'll take your advice to heart.

Posted by: 12BarBlues | October 7, 2010 10:58 PM | Report abuse

12BarBlue


It is way more complex than that - it is NOT just the endorsements - because everyone now imagines that a few stamps and signatures can solve the problem.


The problem is the assignment of EACH mortgage to EACH portfolio was not done properly.


So - the people and insitutions who bought the mortgage-backed securities certainly may have a claim - to say that THEIR portfolio NEVER got the mortgages they were supposed to.

And now - the banks are supposedly taking BAD mortgages WITH LOSSES - and are assigning them TO PORTOFOLIOS.


Those people have a right to claim foul.


Literally, there have been allegations of "generic portfolios" being sold - meaning the same mortgages were assigned to MULTIPLE portfolios - and the other mortgages out there were NEVER assigned TO ANY PORTFOLIO.


NOW who gets the good mortgages and who gets the bad mortgages ???


It is basically FRAUD of the highest order - WITHOUT A SOLUTION that a Judge looking at one mortgage or ONE PORTFOLIO can solve - because it is system-wide.

Anyway - the WALL STREET EXECUTIVES - they should have been in jail two years ago - and there is little reason to keep them out now.


............ except for campaign contributions to the democrats, that might keep them out.

.
.

Posted by: SaveTheRainforest | October 7, 2010 10:59 PM | Report abuse

[@ 10:37 PM October 7, 2010 Kevin_Willis letting his CPU do the thinking exceeded his cache limit and Posted...:(
"Yes, 12Bar...I got confused...there...a minute.]

Talk about high maintenance...

...when will the shallowness end?

Posted by: RichNomore | October 7, 2010 11:13 PM | Report abuse

Keep it up, or down, and y'all will never think your way out of that paper bag...

Posted by: RichNomore | October 7, 2010 11:17 PM | Report abuse

It's called the Brady notice prosecutors required to disclose exculpatory evidence to the Defense. Not heard of civil damages against prosecutors usually county governments are sued and end up paying large out of court settlements and occasionally but rarely prosecutors are turned into the State Disiplinary CommitteeIts sad and why my wife argues against the death penalty ; I don't just want DAs prosecuted and sent to prison themselves if they egregiously tamper with evidence in death penalty cases which is rare.Not much time to post here right now I just think when the TeaParty goes after Hatch, Snowe and Corker next the GOP will think twice about them taking over their party. Except for Corker 's attacks on rescuing the auto accident there have been many times I have agreed with him on CNBC. I guess that makes Corker a dangerous lefty. Might Snowe actually consider changing and become a D in 2012 or run as an Indy and lose?

Posted by: leichtman1 | October 7, 2010 11:27 PM | Report abuse

There are multiple problems in the mortgage situation.


Obama failing to do anything last spring about Fannie Mae and Freddie Mac will turn out to be extremely important - because the opportunity to solve that part of the mess was missed.


Now the Federal government will be even more on the hook.


The Wall Street Execs should have been put in jail a long, long time ago.


The truth is the democrats and Obama let them OFF - and now we find out that this crisis is even worse than we think.

Mind you - these are the TOXIC ASSETS - which the TARP money was supposed to buy up.


But suddenly - after Congress gave the money to buy those assets - the banks said they didn't want to sell those assets - and the whole program turned into a bail-out -


INSTEAD of a situation in which the US government could use its credit to save the value of the toxic assets - and the American people would get the benefits of its credit SAVING those assets.

Instead the banks said, give the bail-out money to us - and we will benefit from saving those assets.


THROW THEM ALL IN JAIL AND BE DONE WITH IT.

.

Posted by: SaveTheRainforest | October 7, 2010 11:33 PM | Report abuse

“Waivers Address Talk of Dropping Coverage”
http://www.nytimes.com/2010/10/07/business/07insure.html?_r=2&partner=rss&emc=rss

Uh, can my company please have a waiver?

We're pretty small and, um, it will have to be retroactive.

No? Really? Darn, I guess Christine, that nice new girl in distribution'll have to go...we were just starting to get back up to speed too.

BTW: Did I mention I don't think you're a socialist but you are without question a friggin' economic Shemp. And, oh yeah, Kathleen “The Secretary shall determine...” Sebelius is a lying, arbitrary, weak yet disturbingly insolent, autocratic, slithery, unctuous, double-dealing, distaff Duce.

Thanx & All the best, you a$$clowns!

tao

nb/ps.: The above is happening right freakin' now, compliments 2 merde for brains. And Krugman can eat his aforementioned cortex.

Posted by: tao9 | October 7, 2010 11:37 PM | Report abuse

I've been looking for this for the past hour, something I read earlier this week. A whistle blower's testimony regarding the underwriting standards of some of these loans.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

....."former president and chief operating officer of Wall Street's foremost mortgage-loan due diligence firm testified under oath before a federal panel that his firm found that its clients' standards were a joke -- that as many as 2.5 million potentially toxic mortgages got a rubber stamp.

"During the boom years, Clayton controlled as much as 70 percent of the market for so-called third-party due diligence, Johnson testified, which involves analyzing mortgages given to borrowers with poor credit for Wall Street firms, which then packaged and sold those mortgages in the form of bonds and other securities to investors.

During the Sept. 23 hearing in Sacramento, Calif., first reported by The Huffington Post, Johnson and a current Clayton executive, Vicki Beal, described Clayton data showing that not only did more than a quarter of loans sampled fail to meet underwriting standards, but also that Wall Street banks ignored Clayton's recommendations nearly half the time and likely purchased those loans anyway, selling them to unwitting investors who were never told that the biggest home loan due diligence firm in the country had found potential defects in these mortgages."

http://www.huffingtonpost.com/2010/10/05/clayton-holdings-financial-crisis-inquiry-commission_n_750039.html

Posted by: lmsinca | October 7, 2010 11:39 PM | Report abuse

...save rain,
Whose gonna save you when you run out of fruitless thought, energy?

Posted by: RichNomore | October 7, 2010 11:55 PM | Report abuse

"Thanx & All the best, you a$$clowns!"

Don't forget Granny McRictus Botox. "We had to pass the bill to find out what's in the bill."

Those are some powerful, powerful words.

Sorry dude. Sucks. At least though, were in the best of hands.

Posted by: TrollMcWingnut | October 8, 2010 12:00 AM | Report abuse

How about this quote Rich


Now admittedly there is a wee problem in that foreclosures hit mortgages securitizations from the bottom up (bottom tranches take first losses), while the losses on mods are allotted across all tranches (ie, even the AAA tranche will take a hit).


___________________________


Wow - apparently the incentives in the system are to foreclose, not modify the mortgages.

Rich - do you have any solutions or are you just going to snipe?

.

Posted by: SaveTheRainforest | October 8, 2010 12:14 AM | Report abuse

This quote is good too


But cleaning up the mortgage mess would fix the economy. The uncertainty over when the housing market will clear and how much of bank earnings and reported equity are a function of extend and pretend is impairing credit market activity. Why do you think new mortgage lending is now a subsidiary of the US government? This unhealthy state of affairs is a direct result to the failure to clean out the rot in the mortgage market.

So we have a simple choice, having the rule of law in this country or capitulating to the banks’ false claims that exposing their malfeasance will cause widespread economic harm. In reality, the biggest potential casualty is the financiers’ unwarranted privileged status. That is why they are so quick to resort to fearmongering, to obscure what is really at stake.

____________________________

In other words, when Wall Street says "the economy is about to collapse" they really mean "the wall street banks are about to collapse"


The key is that the unresolved crisis is HURTING the economy - and preventing a recovery.


The housing market has to find a floor - if it is held back, the floor will come somehow, someway - and often the consequences will be worse.


Meanwhile - just as in the 2006-2008 period, the Wall Street banks are given time to transfer THEIR LOSSES TO SOMEONE ELSE - THEIR CUSTOMERS OR TO THE US GOVERNMENT, THE TAXPAYERS.

Obama is letting this continue.

.

Posted by: SaveTheRainforest | October 8, 2010 12:25 AM | Report abuse

Banks in 1997 created the Mortgage Electronic Registration System, which computerized, centralized and privatized deed records on some 60 million mortgages


________________________

Is that even legal? Deeds and liens are supposed to be recorded at the County courthouse - not at some private electronic firm.


NOW when they want to foreclose, they don't have recorded liens - like has always been done.


State laws - the banks appear to have been operating OUTSIDE of state laws - and now the liens may be no good unless the proper paperwork is done.


HOWEVER - the banks represented to the Mortgage CDO holders that everything was in order -


Seems to me that the banks are liable


NO one in this country is in the mood to let the banks get away with ANYTHING this time.


THROW THEM ALL IN JAIL - AND GIVE THEM A SENTENCE FOR EVERY IMPROPER SECURITY SOLD.


We can keep track of the sentences in a private electronic firm - and if the paperwork with their release dates gets lost - well those kinds of things happen, right?


.

Posted by: SaveTheRainforest | October 8, 2010 12:39 AM | Report abuse

Some lawyer may have to come on and give us some information here -

If the banks haven't been filing liens since 1997 - then what happens?

How good are those liens?


On one level, the lawyers are saying that the paperwork situation is aimed at simply forcing the banks to work on modifications - and be more flexible because the way the system is now there is little incentives for modifications - and foreclosures seem to be what the mortgage servers are going for.


HOWEVER - these court cases open up a whole set of claims - which threaten the banks - open up claims from the holders of CDOs.

To be honest, how did the big banks get away with what they have already.


It is time to start putting ALL these guys in jail - charge them with one year for each offense - and give them terms in jail for hundreds of years each.


AND we can have the Mortgage Electronic Registration System keep track of their prison terms.

.

AND if any bank in the chain of custody of a mortgage has gone bankrupt - the whole mortgage may NEVER have been transferred to a portfolio.

The bankruptcy judges in those situation may want to hold onto those mortgages - and treat them as assets which may be claimed by the bankrupt-bank's creditors.


Just that part of it may open up the big banks to claims that could cause them to collapse.

Posted by: SaveTheRainforest | October 8, 2010 1:53 AM | Report abuse

The Post now has an article on this topic

listen to this:

"It wasn't like Congress or state legislators did anything," said Christopher L. Peterson, a law professor at the University of Utah who has consulted in cases against MERS. "The mortgage industry just changed how the land title system worked without getting anyone's okay."

MERS has consistently claimed authority to act as a representative, or "nominee," on behalf of banks and lenders.


______________________________


Well - is that legal? In terms of a lender choosing to NOT file a lien?


If a lien has not been filed correctly with the County - what is its status?

Do some states REQUIRE that a lien be filed before a foreclosure can take place?


Obviously, there is a set of issues involved here far more basic than the fundamental questions - however there has to be fundamental issues - over 50 States there has to be States' law which really will not support this.

The big banks just can't create a central corporation - and say that company has the right to foreclose on anyone - whether the paperwork is there or not.


In each case, the State law has to be followed.


One really has to wonder if the banks can survive the claims that are going to come out of this mess - they are responsible for all the FRAUD if any is found -

And probably to compensate those CDO holders if losses come as a result of not having the correct paperwork.


IN ADDITION, if the mortgages were not properly assigned, the CDO holders prior to 2008 can claim that they NEVER recieved the rights to the underlying mortgages - AND THEREFORE THE LOSSES AREN'T THEIRS EITHER.


There are massive losses here - and the questions about "Whose Losses ARE they really"


For instance, a mortgage creates a loss - a foreclosure - the bank has already slammed the CDO holders with that loss - they can come back and say - NO, you never delivered that mortgage to us.


(besides you represented you were giving us good mortgages, and these mortgages are clearly bad mortgages - so we will NOT accept the bad mortgage you were SUPPOSED to give us - we want the good mortgage you were SUPPOSED to give us)

Posted by: SaveTheRainforest | October 8, 2010 2:09 AM | Report abuse

Any one of these issues could be enough to collapse the big banks.

The CDO holders have claims - it is clear.


If a foreclosure loss is out there - and that mortgage NEVER got properly assigned to a mortgage portfolio - WHO is really responsible for the loss ???


The whole nightmare works both ways - if the Court is saying that the liens weren't transferred properly - that the mortgage owner is in doubt - THEN not JUST the homeowner can say that the mortgage is not owned by who they say it is.


THE CDO securities holders can say - "WE DON'T LEGALLY OWN THAT MORTGAGE (WHICH IS A DOG)"


The CDO holders can say - "We NEVER got what we were supposed to get" - and that opens up the WHOLE QUESTION of FRAUD - whether the QUALITY OF WHAT WAS DELIVERED WAS WHAT WAS PROMISED.


So the banks say - "we sold you a bunch of dog mortgages in your portfolios"

The CDO holders say "you didn't deliver anything to us" Besides, you were supposed to give us mortgages which were good, not dogs.


That makes it so much harder for the banks to say "No, these dog mortgages are yours"


It is a total nightmare - and one has to wonder if the banks can survive a real FRAUD examination of what was actually delivered.

Especially when legally, NOTHING was actually delivered - which is WORSE because the CDO holders can claim that they deserve their ORIGINAL INVESTMENT BACK - and not just the value of what the mortgages are valued at now.


The question is not just "who owns the mortgages" - it is now "WHO OWNS THE LOSSES"


There is no reason to let the big Wall Street banks off the hook this time.


THROW THEM ALL IN JAIL

LET THEM ALL GO BANKRUPT

CLAW-BANK ALL THEIR SALARIES WHEN THE FRAUD TOOK PLACE.

LET AND "ELECTRONIC SYSTEM" KEEP TRACK OF THEIR RELEASE DATES - WITHOUT THE PROPER PAPERWORK BEING DONE.


.

Posted by: SaveTheRainforest | October 8, 2010 2:24 AM | Report abuse

The Post article again:


One lawsuit says:

in one filing that banks and lenders used MERS to facilitate "illegal mortgage registration, transfer and wrongful foreclosures" and that MERS "was created for the unlawful purpose of hiding and insulating the brokers and originators of predatory toxic loans from accountability and liability."


_______________________________

That might be going too far however the point is well taken - if the standards for the mortgages were so bad - and the normal procedures of government have been circumvented -


Up to now, many Courts were not listening to these lines of reasoning - now ALL courts in the country can not help but sort through EXACTLY the legal standing of MERS et al under EACH State's laws.


THAT is why it seems so disasterous - imagine if just a few States say the banks are so far out of compliance - then those few may be enough to cause the banks to collapse.

There are 50 States - what are the chances that this new system is going to measure up in ALL the Courts systems? The banks have to run the tables with all the state laws - and all the states' Court systems willing to let them go on ALL the issues, including fraud.

Posted by: SaveTheRainforest | October 8, 2010 2:35 AM | Report abuse

Mortgage rates are historically low you can easily refinance these days your mortgage to 3%. It is the best way to save money. Search online for "123 Mortgage Refinance" they can do 3% refinance and free analysis of your current mortgage

Posted by: taylordirk | October 8, 2010 5:16 AM | Report abuse

12bb said:

"You can look at your way--I'll look at it mine. That's what makes a market, and a horse race."

Actually, no, this isn't just a matter of characterization. You made a specific factual claim about the mortgage/credit mess: "Wall Street, who is way smarter than any bunch of lawyer legislators, devises products that they can sell the hell out of. Then, they determine the obstacles to selling them. Then, ring-ring to the lobbyests--"get this passed, get that passed, get state laws adjusted, etc.""

Historically speaking, that just isn't an accurate description of what happened. At best it is a spin on the facts that is oversimplified and reinterpreted to the point of being factually wrong. The entire market for secondary sale, securitization, etc., of mortgage loans was a deliberate creation of the government. That was and remains the very purpose of the GSEs. They originated these practices and instruments. They go back decades, indeed, one could argue with some validity to the beginning of Fannie Mae. The purpose of the whole enterprise was, from the start, to create a liquid market for lenders to sell loans. That was FDR 70 years ago, not Wall Street a few years ago.

Without passing judgment on it, that is the history. You can have your own spin, but you can't have your own facts. ; )

Posted by: quarterback1 | October 8, 2010 7:52 AM | Report abuse

That may all be true but the system seemed to work for most of those 70 years until there were changes in the rules through the repeal of Glass-Steagall and the explosion of MBS and lending standards were relaxed to the point that there were no standards as referenced by the post of lms, above.

Without placing any political blame but from a business perspective, isn't it the banks that really screwed the pooch?

Posted by: pragmaticstill | October 8, 2010 8:02 AM | Report abuse

The system undoubtedly evolved and became more complex, etc., over 70 years, with the GSEs originating be basic instruments for packaging and selling loans over a long period of time. I don't know what it means to say it "worked" (until 2008, I presume you mean). But there certainly was a sort of perfect storm that broke in 2008, fed by many factors including monetary policy.

I'm not aware of GS repeal's having anything to do with it. That claim is made all the time, and we've discussed it many times, but it is never backed up. I don't discount the laxity of lending standards, but again, that is a broad concept that can refer to a number of points along the road, and the government's fingerprints are on it, too. My only point was, the simple account given by 12bb, wherein the whole mess was created because some banks invented all these instruments, rang up their lobbyists and bribed some people to pass a mythical loophole to make them legal, is entirely fictional.

One can reasonably cast a wide net of blame -- which has to include reckelss borrowes as well -- but the facts themselves more nearly are the opposite of what 12bb claimed.

Posted by: quarterback1 | October 8, 2010 8:15 AM | Report abuse

The Newark Star Ledger's Editorial Board savages Christie's political decision to kill the long-planned and desperately-needed Hudson River tunnel just to boost his standing with the national Conservanuts:

"The governor’s decision to kill the Hudson River tunnel project will go down as a blunder of historic proportions. It will stunt the state’s job market, depress home values, and leave us with nightmarish traffic jams and dirtier air. He is leaving $3 billion in federal money on the table. And he’s putting at risk another $3 billion in Port Authority money that had been set aside for this project. Those are collosal sums.

So why did he do it? Why would he kill a project that even he concedes is critical to the state’s future? He wants you to believe he had little choice because the costs were skyrocketing. Don’t buy it. The evidence makes it clear that he wanted to kill this tunnel project so he could grab the money New Jersey had set aside for it. That is the only way he can avoid raising the gas tax to finance transit projects within the state’s borders.
If he wanted to build this tunnel, why did he refuse to even ask the Port Authority for more help? And yesterday, when federal Transportation Secretary Ray LaHood called and asked to discuss new ways to keep the project alive, why did the governor turn him down?

The governor quit on this project before he had to. He seized on inflated cost-estimates from mid-level bureaucrats who were asked to examine worst-case scenarios under a tight deadline, and he ran with it. Instead of finding a way to make this project work, he killed it so he could grab the money.

The kindest explanation is that he is a true anti-tax ideologue who can’t bring himself to make drivers pay a few more pennies for a gallon of gas, even in a state where the gas tax is among the nation’s lowest. Maybe. The darker possibility is that his motive was purely political. He knows that raising the gas tax would spoil the political image he has built for himself, all the way to Iowa. He’s a rock star on the national conservative circuit now, and that’s hard to give up.

For New Jersey, this is a serious blow. Roughly 250,000 people commute to jobs in Manhattan that pay 60 percent higher salaries than the average. Rail ridership has quadrupled in the last two decades. But the tunnel is now at capacity. The governor, in effect, is slamming this door shut. The boom in commuter job growth is now doomed to end. And that will reduce home values and worsen the state’s budget shortfalls.
One final insult: Sen. Frank Lautenberg said yesterday that New Jersey will have to pay $300 million to reimburse Washington for the work that’s already been done. That’s quite a price for a tunnel to nowhere."

Christie applies the GOP-Conservative creed: Do whatever benefits yourself: It's all about me. Let my community, my state, my nation, the world be d*mned. Greed and gluttony. Selfish pigs. Oink Oink, Gov. Christie.

Posted by: wbgonne | October 8, 2010 8:22 AM | Report abuse

And here is Gov. Oink Oink undermining the people's will on medical marijuana.

http://www.nj.com/news/index.ssf/2010/10/gov_christie_defends_proposed.html

No doubt the law enforcement-industrial complex is pleased. There's plenty of money to be made keeping American citizens in cages.

Posted by: wbgonne | October 8, 2010 8:26 AM | Report abuse

Certainly all he11 seems to have broken loose in 2008 but the problems leading to 2008 clearly pre-date the collapse. It is also apparent that the causes of the collapse are complicated and no one act or actor is solely to blame. Having said all of that, it is the banks that approved the loans, the banks that prepared and archived the documentation and the banks that created and sold the exotic financial products that ultimately collapsed.

From what I have seen, the banks that made loans that they held on their own balance sheets and serviced with their own employees have weathered the storm. This is because their top concern was making good loans rather than making huge short term profits.

I suppose it is somewhat naive but if banks were required (as Glass-Steagall prescribed) to limit their activities to those of a traditional banking business model - accepting deposits and making loans - the collapse would not have happened.

Posted by: pragmaticstill | October 8, 2010 8:31 AM | Report abuse

All, Morning Roundup posted:

http://voices.washingtonpost.com/plum-line/2010/10/the_morning_plum_107.html

Posted by: Greg Sargent | October 8, 2010 8:34 AM | Report abuse

"I suppose it is somewhat naive but if banks were required (as Glass-Steagall prescribed) to limit their activities to those of a traditional banking business model - accepting deposits and making loans - the collapse would not have happened."

It's not somewhat but completely naive. That simply isn't what happened. Indeed, the GS commercial/investment wall had nothing to do with lenders' selling their loans. Again, remember, that was going on forever. It was the purpose of Fannie Mae since the Depression to facilitate the sale and trading of mortgage loans in a liquid market, so that lenders would make more loans.

That system was created by the government at roughly the same time as GS. GS in no way prevented it. To the contrary, it was created, fostered, and encouraged by the government.

"Having said all of that, it is the banks that approved the loans, the banks that prepared and archived the documentation and the banks that created and sold the exotic financial products that ultimately collapsed."

Someone with more expertise should perhaps speak directly to this, but I wouldn't accept this as factually accurate without a lot of clarification and specific factual support. For one, the government had to take over and to bail out Fannie and Freddie to the tune of billions. How does that fit your explanation? Again, I am not the world's greatest expert, but I think you just lack some basic understanding of how this system worked and how the GSEs were in the middle of it.

Posted by: quarterback1 | October 8, 2010 9:21 AM | Report abuse

For one, the government had to take over and to bail out Fannie and Freddie to the tune of billions. How does that fit your explanation?

It fits my explanation by adding another negligent player to the mix but it does not change my explanation since Fannie and Freddie did not originate the faulty loans, they only purchased them without adequately reviewing them. In other words, it seems Fannie and Freddie unjustifiably relied on the banks to properly assess the suitability of the borrower and the propriety of the documentation. This would seem not to reduce the primary responsibility of the banks but, rather, to just shift the burden of the ultimate failure. In other words, the loans would have gone bad no matter who owned them at the time of default.

Posted by: pragmaticstill | October 8, 2010 9:35 AM | Report abuse

This is another misconception. When Fannie bought loans it was principally responsible for the gaps in documentation. In fact it was deliberate because Fannie dis not want to be record owner and definitely didn't want to foreclose.

Of course that is really a different set of issues. It is true that ownership of loans is irrelevant to borrower default. But the gse's did not passively rely on anyone. They were the 800 pond gorilla.

Posted by: quarterback1 | October 8, 2010 9:53 AM | Report abuse

Not sure I understand your point here. Are you saying Fannie prepared the documentation or that it became responsible for the gaps and inadequacy of the documentation upon purchase? Certainly any purchaser ultimately becomes responsible if the enforceability of the loan becomes questionable. This is not unique to a GSE and seems to account for the problems now perceived to exist.

As far as passive reliance, are you saying that it was Fannie's obligation to review each individual loan for suitability/collectability? Should Fannie have pored over every document to determine it comlied with state law? What about every other purchaser? Certainly Fannie was not the ultimate purchaser of every loan that is now in default.

Posted by: pragmaticstill | October 8, 2010 10:11 AM | Report abuse

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