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Ever since the financial crisis hit, conservatives -- at places like the American Enterprise Institute and the Heritage Foundation, joined by some prominent Tea Party groups -- have fought tooth-and-nail to deflect new regulation of Wall Street’s wheeler-dealers. (In my new book, The Fifteen Biggest Lies About the Economy, I note that the Right, following the advice of conservative message-maker Frank Luntz, derided new regulations that Wall Street was fighting hard to kill as a "second bailout" of the big banks. It was a lie so bold that one couldn’t help but be impressed with their chutzpah.)

So there’s a certain amount of irony in new revelations that the banks, in their quest for easy profits, appear to have undermined one of the Right’s most important principles: the sanctity of property ownership.

"If you own something," George W. Bush explained in a 2004 speech, "you have a vital stake in the future of our country. The more ownership there is in America, the more vitality there is in America, and the more people have a vital stake in the future of this country."

Yet today, thanks to the "innovative" financial instruments cooked up by the Wall Street Casino, doubt may be cast on the ownership of American homes across the country. Brady Dennis and Ariana Eunjung Cha, writing in the Washington Post, laid out the contors of the story last week:

Millions of U.S. mortgages have been shuttled around the global financial system -- sold and resold by firms -- without the documents that traditionally prove who legally owns the loans.

Now, as many of these loans have fallen into default and banks have sought to seize homes, judges around the country have increasingly ruled that lenders had no right to foreclose, because they lacked clear title.

These fundamental concerns over ownership extend beyond those that surfaced over the past two weeks amid reports of fraudulent loan documents and corporate "robo-signers."

The court decisions, should they continue to spread, could call into doubt the ownership of mortgages throughout the country, raising urgent challenges for both the real estate market and the wider financial system.

Having pushed for deregulation that broke down the wall between commercial lending and investment banking, Wall Streeters came up with a way to slice and dice risky mortgages into investment vehicles, which they peddled for fat fees. Essentially, they laundered the risk out of shaky mortgages, at least in theory, transforming some slices into AAA-rated securities (which allowed pension funds and other institutional players to invest in them). In doing so, they broke the relationship between lenders and homeowners, and shielded themselves from the fallout. (Again, only in theory -- when the house of cards eventually came down it brought about the most painful economic downturn since the Great Depression, and they came running to the taxpayers for a bailout.)

Read the rest here [I know how annoying that is and apologize in advance -- AlterNet is a non-profit that feeds me and pays my rent, and this allows me to participate in the community without feeling guilty].

Originally posted to Joshua Holland on Thu Oct 14, 2010 at 08:15 AM PDT.

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Comment Preferences

  •  err... Because Fox News didn't tell them to be? (10+ / 0-)

    Republicans are drones. They believe only what is programmed into them.

    •  best answer ever hun (0+ / 0-)

      its really shameful that faux news sets the memes not just amongst right wingers but those on the left too.  i will never forget the oil spill.  for weeks people polled said they thought the pres was handling the situation correctly, especially with all the other disasters going on and faux news kept pressing the obama should be doing this or doing that meme, within no time liberal news started running with the same meme then libs themselves ran with the "outrage" "why isn't he doing this or that" meme.  GaaaaaaaaaaaaaaH  

      "fear versus hope and the past versus the future"potus obama 9-8-10 Still fired up! Gives pacifiers to the cry babies.

      by NorthCacalakaGirlForBO on Thu Oct 14, 2010 at 08:56:31 AM PDT

      [ Parent ]

  •  Because until you've paid off the bank... (4+ / 0-)
    Recommended by:
    Gooserock, Deward Hastings, shrike, VClib's not your private property.

    It's theirs, with certain rights given to you in exchange for your continuing to make monthly payments to buy the house.

    What have you done for DC statehood today? Call your Rep and Senators and demand action.

    by mistersite on Thu Oct 14, 2010 at 08:22:18 AM PDT

    •  My Deed Says It's Mine (5+ / 0-)

      It's subject to lien or confiscation if I welch on the mortgage but I'm pretty sure it's legally mine.


      We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

      by Gooserock on Thu Oct 14, 2010 at 08:29:54 AM PDT

      [ Parent ]

      •  You are correct. (4+ / 0-)

        You own the home. It is collateral for the loan you took out to buy it, but it is indeed yours.

        "A lie is not the other side of a story; it's just a lie."

        by happy camper on Thu Oct 14, 2010 at 08:34:54 AM PDT

        [ Parent ]

        •  Skip paying the property taxes and you'll (1+ / 0-)
          Recommended by:

          find out who actually owns the house (hint:not you).
          The town/city will issue a tax lien certificate for the balance and charge you in the neighborhood of 16% interest.  The person who puts up the $$$ for the lien certificate (who could be anyone) would receive the interest if you pay the certificate in time or GET YOUR HOME IN LIEU OF PAYMENT!  You see, the city/town counts on that revenue to meet its financial obligations for the latest budget passed.  They need to pay bills, people etc., so they ask for someone to put up the cash to help keep the city/town viable.  For anyone looking for a decent (not excellent) investment, tax lien certificates are an option to explore.  However, do your due diligence on the property before jumping in (could be a dump, for example).  BTW, if the above example has a mortgage on the property, the bank will step in to cover the tax owed before the let it proceed to the tax lien stage.

          "Those who cast the votes decide nothing. Those who count the votes decide everything." - Joseph Stalin

          by Taxmancometh on Thu Oct 14, 2010 at 10:06:30 AM PDT

          [ Parent ]

      •  Until they foreclose. (0+ / 0-)

        Your "ownership" is encumbered by your offering the property as collateral.  It's "yours" only so long as you make your payments and pay the taxes.

        Fail either and it becomes "theirs" . . .

        Fake Left, Drive Right . . . not my idea of a Democrat . . .

        by Deward Hastings on Thu Oct 14, 2010 at 08:57:50 AM PDT

        [ Parent ]

    •  It may be "theirs" (the bank's) (0+ / 0-)

      ... in a certain practical sense, although not by strict legal definition as other comments have pointed out.

      The problem we now have is that the definition of "them"-- the entity that should receive the payments, and has a claim on the property if it has not received them-- turns out to be very uncertain.

      Which makes clear title difficult or impossible to establish. That means that people don't effectively "own" property that they bought fair and square and have made all the payments on. And that in turn amounts to a "taking" of private property, normally the RW's top-priority concern.

      Which is the point of this diary, I believe ;)

  •  A Simple Answer (2+ / 0-)
    Recommended by:
    phonegery, imamish

    Right-wing Dictionary:

    Socialism:  When poor people get assistance and money from the government.  See also "Evil."

    The Wonderful Free Market:  When big corporations and rich people manipulate the system and get money from the government.  See also "God Bless America."

  •  Because they are the fraudsters? (1+ / 0-)
    Recommended by:

    I have been saying for a couple of years that the fraud had to be a collusion between all those who touch a mortgage.  This case proves that point.

    Check this real estate fraud case in Anchorage Alaska:

    Lockard, a licensed real estate investor and the lead defendant pled to 64 counts and was sentenced to 70 months and ordered to pay 2.5 million in restitution.

    Lockard also admitted the forfeiture allegation in an additional count, forfeiting his interest in $116,000 held in an investment account under his name.

    Charles Carlson, a licensed real estate appraiser, was sentenced on July 11, 2009, to 24 months and to pay restitution of $2,360,185.

    Holli Stroud, a title company loan closer, was sentenced on June 25, 2009, to 18 months and to pay restitution of $403,733.60.

    Keith Facer, a licensed real estate agent, was sentenced on May 29, 2009, to 16 months and to pay restitution of $221,065.24.

    Don Murray, a licensed real estate agent, was sentenced on May 19, 2009, to 21 months and pay restitution of $493,868.77.

    Cerise Sanders, a loan originator, was sentenced on May 19, 2009, to 12 months and one day.

    Jonathan Ruf, was sentenced on May 28, 2009, to 12 months and one day and to pay restitution of $1,066.390.

    Gary Paterna. Mr. Lockard’s father-in-law, was sentenced on May 18, 2009, to three days in jail and pay restitution of $1,162,884.86.

    Alaska State Mortgage, a local mortgage company, was sentenced on May 13, 2009, to a fine of $91,478.53.

    The defendants pled to a total of 64 counts charging conspiracy, wire fraud, bank fraud, and false statements to a financial institution.

    The key for those who bought at the height of the housing boom and now are underwater could be here:

    inflated the appraisals and falsified loan closing paperwork.

    Those who bought these houses did so with inflated values.



    10.2.10 March On Washington ROCKED

    by War on Error on Thu Oct 14, 2010 at 10:19:43 AM PDT

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