Congressman Grayson has written an extensive letter to the Financial Stability Oversight Council which includes among others Bernanke, Geithner, Bair, Gensler, Walsh, and DeMarco, in which he asks the FSOC to suspend all foreclosures in the United States, until this problem is understood and its ramifications dealt with.
What Congressman Grayson deeply understands (as does Elizabeth Warren) is that what is taking place in our nation with this illegal Foreclosure scam, is that it is simply one thing, and one thing only:
FRAUD TO COVER UP FRAUD.
I was thrilled to hear that President Obama chose to do the right thing and vetoed the dubious and highly suspect legislation: HR 3808. Thank you Mr. President !!!!
Now Congressman Grayson (who is uniquely qualified to understand exactly how Wall Street/the Banks, have been caught with their proverbial pants down around their ankles) is now, taking it to the next level, and fighting tooth and nail, to stop the madness and corruption that has put our entire national economy on the brink of systemic risk.
"So far, banks are claiming that the many forged documents uncovered by courts and attorneys represent a simple 'technical problem' with foreclosure processes. This is not true. What is happening is fraud to cover up fraud... The banks didn't keep good records, and there is good reason to believe in many if not virtually all cases during this period, failed to transfer the notes, which is the borrower IOUs in accordance with the requirements of their own pooling and servicing agreements. As a result, the notes may be put out of eligibility for the trust under New York law, which governs these securitizations. Potential cures for the note may, according to certain legal experts, be contrary to IRS rules governing REMICs. As a result, loan servicers and trusts simply lack standing to foreclose. The remedy has been foreclosure fraud, including the widespread fabrication of documents. There are now trillions of dollars of securitizations of these loans in the hands of investors. The trusts holding these loans are in a legal gray area, as the mortgage titles were never officially transferred to the trusts... The liability here for the major banks is potentially enormous, and can lead to a systemic risk."
http://www.zerohedge.com/...
Since the Banks/Lenders/Wall Street, could have cared less about the millions of 'liar loans' they were churning out as the insane greed and immoral madness overtook our national key markets during the endless Greenspan Housing Bubble (that crashed and burned), the last thing they want is for home owners who are rebelling is to actually 'show or prove' that many of these loans were in fact legal. That is exactly why HR 3808, was nothing more than a 'trap door' and safety feature to rubber stamp and continue the illegal foreclosures nationwide, would have been a disaster for our nation. Imagine a Federal Bill, that would take precedence over State Laws, that would in essence allow electronic Notary verification and imagine the consequences and corruption that would have been allowed to ensue (with no way to verify if the person that was electronically 'Notarizing' foreclosure documents was legally qualified, or even actually existed.)
HR 3808, was a last ditch effort by the Banks/the Lenders and Wall Street, to 'tie up any lose ends' to ensure that not only would they not be on the radar for having to prove who had written the loans, but indeed, if said loans were viable, legal, or trustworthy documents, to begin with.
Sanity has prevailed, because President Obama fully understood the implications of this 'ruse' that was nothing more than a way for those that destroyed out national economy from being held liable, and of course now, being sued, which is exactly what is starting to occur now. Homeowners are demanding, and rightfully so, that they be allowed access to the original agreements with the Banks/Lenders to prove to local Judges, that these Banks/Lenders were not only not honoring their original contracts in good faith with homeowners, but that these illegal Foreclosure Mills are providing false documents, to once again, make a quick buck, and ruin people's lives/credit history, rather than have to prove to the courts, that these Banks/Lenders operated in a legal matter, to begin with.
FRAUD TO COVER UP FRAUD.
Alan Grayson, Congressman from Ground Zero of the foreclosure mess, is calling on the Financial Stability Oversight Council to investigate the escalating foreclosure fraud crisis. Although the data points we have seen so far could be considered anecdotal, we have evidence that strongly suggests that major RMBS originators, the investment bank packagers, and the bank trustees failed to convey the notes (the borrower IOU, which is critical to having the legal standing to foreclose in 45 states) to the RMBS trusts starting in 2005, perhaps even earlier. And comments from industry insiders suggest this problem is pervasive. That puts a cloud over the entire US RMBS market, the biggest asset class in the world. This paper was sold as secured; the ability to offset the cost of borrower defaults by seizing and selling his house is critical to the value of the instruments. And if no assets were conveyed to a particular trust by closing, an even uglier possibility exists: under New York law, which was elected by RMBS as governing law for the trust, it would be considered to be "unfunded", which means it does not exist.
Felix Salmon is also on the case and makes some sound observations as to the larger implications: ....the mother of all legal messes has already emerged from the foreclosure crisis, and threatens not only a large chunk of the financial system but also venerable civic institutions, like the courts, which have thus far emerged from the crisis largely unscathed.... 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.
To understand how this all might play out and the likely scenarios see the excellent article below:
http://www.nakedcapitalism.com/...
I know of few public servants, who have consistently gone after Wall Street, the Banks and Lenders and the Federal Reserve who has been more effective, more tenacious, and who has shown more courage for digging out the devastating truth of what has happened to our national economy other than Congressman Alan Grayson. (I must include the great Elizabeth Warren, and William K. Black among many others also).
And Grayson's efforts are now finally coming to fruition. He has opened up the biggest Can of Worms, the Pandora's Box that the status quo has been relentlessly trying to hammer down since the great Heist of 2008 began. But he is 'not for sale' and he is not going to back down, because Congressman Grayson is the real deal.
Below is the letter that Congressman Grayson sent to Timothy Geithner and Ben Bernanke, et., al., of the FSOC. There is simply no reason what-so-ever for these key financial leaders NOT to call a national emergency to stop these illicit Foreclosure Mills, especially, because it was the Middle Class that was called upon, to bail out these same predators who have been able to get away with trillions of dollars, at our expense.
When is enough, enough? When will this corruption be stopped, and when will America find a national leader who has the 'guts' to stand up and demand that the truth of what has happened to our national economy was a direct result of a financial system that is not only broken, but has and continues to ruin the lives that has caused a national catastrophe and disaster, unlike any other experienced in our nation, under false pretenses and financial malfeasance.
October 7, 2010
The Honorable Timothy F. Geithner
The Honorable Sheila Bair
The Honorable Ben S. Bernanke
The Honorable Mary Schapiro
The Honorable John G. Walsh
The Honorable Gary Gensler
The Honorable Ed DeMarco
The Honorable Debbie Matz
Dear Secretary Geithner and members of the Financial Stability Oversight Council (FSOC),
The FSOC is tasked with ensuring the financial stability of the United States, which includes identifying and addressing possible systemic risks. There is a well-documented wave of foreclosure fraud sweeping the country that presents such a risk. Bank of America and JP Morgan Chase have both suspended foreclosures in 23 states where that fraud could be uncovered and stopped by the courts. Connecticut has suspended foreclosures.
I write to encourage the FSOC to appoint an emergency task force on foreclosure fraud as a potential systemic risk. I am also writing to ask the members of the FSOC to use their regulatory authority to impose a foreclosure moratorium on all mortgages originated and securitized between 2005-2008, until this task force is able to understand and mitigate the systemic risk posed by the foreclosure fraud crisis.
So far, banks are claiming that the many forged documents uncovered by courts and attorneys represent a simple 'technical problem' with foreclosure processes. This is not true. What is happening is fraud to cover up fraud.
The mortgage lending boom saw the proliferation of predatory lending and mortgage fraud, what the FBI called at the time 'an epidemic of mortgage fraud.' Much of this was lender-induced.
When lenders - many of whom are now out of business - originally lent money to borrowers, they often did so knowing that the terms of the loans could not possibly be honored. They sought fees, not repayment. These lenders put people in predatory loans, they induced massive amounts of fraud, and Wall Street banks misrepresented these loans to investors when they moved through the securitization chain. They were stealing money from investors, and from homeowners.
Obviously these originators and servicers didn't keep good records of who owed what to whom because the point was never about getting paid back, it was about moving as much loan volume as possible as quickly and as cheaply as possible. The banks didn't keep good records, and there is good reason to believe in many if not virtually all cases during this period, failed to transfer the notes, which is the borrower IOUs in accordance with the requirements of their own pooling and servicing agreements. As a result, the notes may be put out of eligibility for the trust under New York law, which governs these securitizations. Potential cures for the note may, according to certain legal experts, be contrary to IRS rules governing REMICs. As a result, loan servicers and trusts simply lack standing to foreclose. The remedy has been foreclosure fraud, including the widespread fabrication of documents.
There are now trillions of dollars of securitizations of these loans in the hands of investors. The trusts holding these loans are in a legal gray area, as the mortgage titles were never officially transferred to the trusts. The result of this is foreclosure fraud on a massive scale, including foreclosures on people without mortgages or who are on time with their payments.
The liability here for the major banks is potentially enormous, and can lead to a systemic risk. Fortunately, the Dodd-Frank financial reform legislation includes a resolution process for these banks. More importantly, these foreclosures are devastating neighborhoods, families, and cities all over the country. Each foreclosure costs tens of thousands of dollars to a municipality, lowers property values, and makes bank failures more likely.
I appreciate your willingness to assess possible systemic risks to the country, and would again encourage you to suspend foreclosures until this problem is understood and its ramifications dealt with.
Sincerely,
Alan Grayson
Member of Congress
The truth is, with these illegal Foreclosure Mills, the big freeze by 23 States, has already begun, because the leaders in those states, such as Janet Brunner of Ohio and others saw the handwriting on the wall, when their own citizens were being illegally foreclosed upon, and realized that the corruption and greed had reached a critical mass, and could no longer be ignored.
But that's the thing about corruption, greed, avarice, and immorality: they eventually like a snake, end up swallowing their own tail because the sleazy scum bags that run our key financial markets got way to greedy, and way to arrogant, and way to out of control. It was never enough for these people, and it never will be, until we stop them, dead in their tracks.
Our nation, will never be the same, until this corruption, and the misery and pain that it has cost all of us is directly addressed, and those that actually were foolish enough to believe, that they could continue raping and pillaging their own countrymen and women, and their families, are prosecuted and brought to account in a nation of laws, not men. We need a deep cleansing in our nation, and let's face it folks:
THE JIG IS UP, and party is fucking over.
Again, I stand up and salute my President, President Obama, for a great new beginning in our nation, by ensuring that HR 3808 was vetoed.
But I would like to thank Congressman Grayson, for having the courage to demand that the powers that be, those that failed to live up to their responsibilities during this 'Heist' began to turn the page, and immediately proceed to Nationally declare a moratorium on all future Foreclosures in our nation, until the Banks and Lenders, can provide the appropriate legal documents for homeowners.
Because of Congressman Grayson and others we now fully understand that Government by organized money is just as dangerous as Government by organized mob. Congressman Grayson is not for sale, and he reminds me more and more of FDR:
Roosevelt relished the opposition of vested interests. He fashioned his governing majority by deliberately attacking those who favored the status quo. His opponents hated him — and he profited from their hatred. "Never before in all our history have these forces been so united against one candidate as they stand today," he told a national radio audience on the eve of the 1936 election. "They are unanimous in their hatred for me — and I welcome their hatred."...
Just in case, you do not know, everyone from those idiots, Sarah Palin, Mike Huckabee and Newt Gingrich are all going after Congressman Grayson, and in fact, he is at the top of the list for the Republicans to beat this year, besides President Obama, and the rest of our party.
Why do you suppose that is? Because Congressman Grayson is a huge threat, to Wall Street, and the Republicans are raking in more money than you can even imagine to fight him, and get rid of him, toot sweet.
They know, who he is fighting for: The Middle Class. They know he is fearless, relentless and is a total Bronx Street Fighter that will not back down.
If you can, let's remember him as the election is right in front of us:
http://www.actblue.com/...
Don't forget, who is calling for a National Freeze on these illicit Foreclosure Mills, and ask yourself this:
It is the direct responsibility of Timothy Geithner, and Ben Bernanke (and the entire Financial Stability Oversight Council) to stop this madness and corruption NOW. 23 States have already taken this action. This is not one, single viable reason for the FSOC not to follow suit, unless, it is that they are continuing to do exactly what Congressman Grayson understands:
MORE FRAUD TO COVER UP THE FRAUD.
Game's up, and everyone knows it and it's way past time to turn the page on this disaster and restore the public trust in our nation, with our key financial markets.
They can do it now, or they can do it later, but regardless, it had to come to this, and for that, I am so thankful to Congressman Grayson, and to President Obama for standing up against RH 3808.
Thanks as always.
Ms. B.