I believe the diary demonstrates how everyone, from Bush on down, choreographed the Housing Bubble. I have tried my best to make it easy to understand; however, the Plan is complex, even including the gutting of the FBI Criminal Division in 2001.
This is the crib version of two years of research and writing.
I promise you, if you read this you will see the light. No one has reported the whole story yet.
It's time everyone sees the big picture, before Congress and the higher courts continue to blame homeowners when, in fact, most homes were underwater the minute the mortgage or refinance papers were signed.
Why?
Read the 10 steps on how all allegedly colluded to steal your money and your homes below. I say 'allegedly' to cma.
THE MASTER MIND PLAN TO LAUNCH THE HOUSING BUBBLE:
Step 1. An electronic highway had to be created to enable huge quantities of mortgages to travel quickly enough to satisfy investors. This was designed so that it could feed into the computer models created by quants so bundles could be created for investor trades.
Step 2. The rating agencies had to be co-opted to provide proper ratings to satisfy investors.
Step 3. The FBI Criminal Investigators had to be removed.
Step 4. A Mortgage Fraud reporting system had to be put in place in order to cover the the missteps of the players with proof that the problem was caused by a "few rotten apples".
Step 5. Real estate appraisers had to be compromised with threats of getting no business and/or even blackballed.
Step 6. Credit Default Swaps had to be an option to hedge the losses most knew would result.
Step 7. President Bush had to announce the plan, and a few rules put in place to enable the Federal Government to back up some funding/risks, and to provide seed money to the developers/home builders.
Step 8. All had to turn their backs, as millions of unqualified buyers were allowed to buy homes, so they could also be blamed for the problems when the bubble of greed burst.
Step 9. The plans for mass foreclosures had to be in place.
Step 10. An economic disaster warning from Paulson, causing the economy to crash so millions would lose their jobs and then be ripe to lose their homes, so the same players could re-run the housing bubble.
Let me know if I missed a step or two.
HERE'S THE EMPIRICAL EVIDENCE:
Step 1. Mortgage Electronic Registration Systems. All the details are in the several diaries you will find, written by War on Error, when you click the link. The first was written in September, 2008.
Step 2. Links to articles about the Rating Agencies' debacle.
Step 3. The FBI White Collar Crime division was gutted from 2001-2007 and agents transferred to the War on Terror overseas, neglecting the economical terror being unleashed here IN the USA.
In this 2008 article by Digital Journal, the truth is that the Bush Administration and Congress wouldn't fund the FBI,whose resources were mostly shifted from white collar crime to the War on Terror:
From 2001 to 2007, the F.B.I. sought an increase of more than 1,100 agents for criminal investigations apart from national security.
Instead, it suffered a decrease of 132 agents, according to internal F.B.I. figures obtained by The New York Times.
During these years, the bureau asked for an increase of $800 million, but received only $50 million more.
In the 2007 budget cycle, the F.B.I. obtained money for a total of one new agent for criminal investigations.
It's so bad people (FBI) have been hiring private investigators to do the legwork. The NYT piece is full of grim facts, but this is the one that stands out as most indicative of real need:
In 2004, one senior F.B.I. official, Chris Swecker, warned publicly that a flood of fraudulent mortgage deals had the potential to become “an epidemic.”
Yet the next year, as public warnings about fraud (really, public warnings? Do you remember public warnings in 2004?) in the subprime lending markets began to approach their height, the F.B.I. had the equivalent of only 15 full-time agents devoted to mortgage fraud out of a total of some 13,000 agents in the bureau.
That number has grown to 177 agents, who have opened 1,522 cases.
This link is a treasure trove of proof positive that the FBI was aware of the problems. The references at the end of the report are stunning:
http://www2.fbi.gov/...
Step 4. MARI, a division of ChoicePoint, the organization that has a computer record of all the details of our lives was initiated by the Mortgage Bankers Association.
This information might be TMI for most, but the record is important to include:
google "Choice Point" MARI MBA
http://findarticles.com/...
You know about Choice Point, right?
Interesting fact: MARI/Choice Point produce The Gold Standard Fraud Report.
This year was the Twelfth Annual Mortgage Fraud Report AND covered 2009
Well, oddly, there are no First-Sixth MARI Fraud Reports that I could find. It seems like the The Mortgage Bankers Association (MBA) did a great job accumulating mortgage fraud data beginning with the launch of the housing bubble, unleashed by low interest rates and hired Choice Point (who has ALL of our personal information in their databases) to gather and process the data.
Then the FBI and others use the MBA/MARI report as gospel truth.
What do you make of all this? The MARI report does not include any fraud done by mortgage bankers.
Eleventh - 2008
TENTH - 2007
NINTH - 2006
EIGHTH - 2005
SEVENTH - 2004 :
FLORIDA HOMEOWNERS MUST READ AND PRINT THIS indepth Florida report, written in 2005 by the Florida Department of Law Enforcement that references MARI research from 2001-2004. The FDLE knew home buyers in Florida were at great risk. Are they still at risk today?
2007 FDIC Report, Uses Mari research
http://www.fdic.gov/...
Step 5. Lenders demand inflated housing valuations. Compromised Appraisers who were told by mortgage brokers/lenders either give us the appraisal we want or don't work. Complete with fraud maps, charts, and evidence.
For a particular home, with all the pieces in place, the fraud began when the house was appraised at inflated prices because the lenders demanded the appraisers do so.
In 2005, over 8,000 appraisers sent out a petition ringing the Appraisal Fraud by Lenders, Etc Alarm. The alarm that could of saved us from the brink of economic disaster. No one listened. Today there are more than 10,000 signatures.
In June, 2007 the American Society of Appraisers' sent another Alarm to BS Bernanke: Letter to Bernanke. Yet, no one is talking about this.
THOUSANDS OF HOME OWNERS WERE UPSIDE DOWN THE MINUTE THEY SIGNED THEIR MORTGAGE, and investors were defrauded, especially in 2005.
This IS the explanation for the huge increase is housing values, and also why the MBS/CDO securities were worth much less than the banks said they were.
A SIMPLE AUDIT OF A PROPERTY'S TRANSACTIONS beginning a year before the sale and through to the present can often surface a good case for appraisal fraud.
Step 6. The banks/funds selling Mortgage Backed Securities knew the housing values were inflated. How else can we explain the fact that they hedged the securities with AIG for the day when the meltdown would occur? Why else would they require homeowners to pay for PIP insurance? The banks/funds made doubly sure they would be bailed out on the day of reckoning by Paulson and Geithner, while homeowners lives/homes were decimated with no help from either Paulson, Geithner, or Congress. They were all in on it, or so it would seem
Articles about AIG bailout and about how Geithner, while at the NYFED, bailed out AIG and paid the Credit Default Swap holders, making them whole.
It's important to have a basic understanding of
Mortgage Backed Securities (MBS)(Fannie and Freddie issue),
This is in its simplest form a bond. The bond is backed by a pool of mortgages that are being paid by homeowners across the United States. Each month a homeowner makes a payment, that payment basically sent to the holder of this bond.
These securities are issued by Fannie Mae, Freddie Mac and Ginnie Mae - but can also be issued by other institutions.
Backed by our tax dollars, even the tax dollars of those whose homes are being taken, through funding for Fannie, Freddie, and Ginnie. THEY ARE ABOUT TO BE BAILED OUT AGAIN! $600 BILLION by Bernanke.
For all those at FM and FM who were charged with qualifying mortgages? Were they asleep?
They sold the FM/FM MBS TO INVESTORS. As the MARI reports shown above prove, there is absolutely no excuse for not knowing the stuff was riddled with fraud.
To quote MARI: "It is worth noting that value inflation is almost always a direct consequence of incorrect, fabricated or omitted comparables and other information."
In short, fudged appraisals. And 2009 was the worst year yet! See chart in MARI TWELFTH report above
But none did anything to stop this TRAIN WRECK
The investors, people like the Saudi Arabian Sovereign Wealth Fund, bought them because they were AAA rated and backed by the AMERICAN TAXPAYERS, you know, the ones being kicked out of the homes at the rate of 800,000 a month.
Collateralized Debt Obligations or CDO's (Sachs, BoA, etc),
Pretend that you have a mortgage (okay, most of us aren't pretending) and you make principal and interest payments each month - these payments are made to your loan servicer and then split up as follows:
Investor A - Gets all of the interest payments from years 1 - 4
Investor B - Gets all of the principal payments from years 1 - 4
Investor C - Gets all of the interest payments from year 5
Investor D - Gets all of the principal payments from year 5
Investor E - Gets the interest and principal payments from years 6 - 10
Investor F - Gets interest payments from years 11- 24
Investor G - Gets principal payments from years 11 - 24
Investor H - Gets the remainder of principal and interest payments, if made from years 25 - 30
A trustee for these investors is in charge. Who are the trustees?
Can you see why there is no chance of a workout, and these go into foreclosure.
Can you see why the lawyers for MERS and the Banks might have a problem proving a Standing to Foreclose? Who were the Investor A's?
Credit Default Swaps or CDS (AIG)
There is nothing wrong (highly debatable these days) with a Credit Default Swap - it is basically an insurance policy against the failure of a specific asset. The reason these have been in the news is because some companies - like AIG, Lehman and Fortis (and many others) found these insurance policies to be very lucrative business.
However, when the reality that the MBS and CDOs were for overvalued houses with predatory loans that wouldn't be paid, the insurers (AIG, PPI) just didn't have the money needed to cover everyones losses.
So Geithner bailed out AIG and made investors whole. Well, those that had CDS.
All quoted from this source, with author comments in italics included.
Step 7. Youtube of President Bush's May 17, 2002 "A Home of Your Own" speech wherein he declares "We are a Homeowner Society". Listen carefully to his words as he launches programs to give our tax dollars to developers and builders and ease the paperwork burden. Bush specifically targets low income, miniority buyers in this speech.
One has to wonder who was in the room for this speech. Anthony Mozilla? The CEOs of the TBTFs? The heads of Fannie and Freddie? Paulson? Bernancke? The President of MERS? The Mortgage Bankers Association? We need a list of attendees for this address!
In Bush's words, minorities were targeted, our tax dollars were used to pay incentives and tax breaks for developers and builders, and the promise to reduce mortgage payments for minorities who accumulated a good payment record:
These are George W Bush's words. Listen and hear them for yourselves.
Now that we are this end of the American Nightmare, you really HAVE to listen to what he said at the beginning of the Housing Bubble launch:
We must Increase home ownership
He addresses lower income families, minorities
We will Create American Dream Down Payment Fund using taxpayer money
Lack affordable housing units (where did that plan go?)
A tax credit to developers to build low income housing (did that happen?)
Simplify paperwork
Mel and Alfonso Jackson, will make closing easier
Federal government has to play an important role.
Need others. The real estate industry. The REI benefits.
Create a sustained commitment by the private sector. (Well he did that)
Expand capital to buyers, provide education. Not just a federal responsibility.
Challenged industry leaders to get after it, stay focused, to achieve the goal.
Achieve the goal of a more secure America.
Create 5.5 million new minority home owners. (some math: 5.5 million homes times avg home cost $200K only equals $1.1 billion in total mortgages, is this right? If so, why the $700 billion bank bailout? Could use some help understanding this)
America's home ownership challenge.
Fannie, Freddie - Increase their commitment to minority minorities $440,000,000,000 ($440 billion).
Thanks Leland and Franklin, conforms to their charters.
Freddie Mac Will purchase more loans made to minorities to
Freddie Mac will initiate 25 initiatives to eliminate home ownership barriers.
I understand that in this country there are too many people who say
"American dream?" What American dream?"
We need to make sure, for the security of this country, that the dream is alive.
Those with poor credit will get a mortgage with an interest rate that automatically goes down after a period of consistent payments.
Step 8. Proof that everyone had a clear picture of the disaster as it was unfolding. See evidence #4 above. The MARI reports regarding mortgage fraud were widely distributed.
Step 9. An interactive map.Rules for foreclosure, written by MERS in 1999! Be patient, after the map opens and you click on a particular state, it takes a bit for the Foreclosure Rules to pop up. When they do, NOTE THE DATE it was written: 1999.
Step 10. Companies launch huge layoffs and refuse to hire, while giving higher bonuses and higher dividends to investors. There are trillions of dollars in the coffers of big business and banks. The banks refuse to loan money. Both are using their gains to buy their own stocks and pay huge bonuses to themselves and increased dividends to their shareholders. The DOW surges. The American people suffer. Some system!
And the longer the economy stays down, part of the plan, the more homes will be stolen from good, hard-working, honest Americans.
GET ANGRY, and help people fight to keep their homes.
If you bought or refinanced in 2005 there is a good chance you were undewater the minute you signed a mortgage or a refinance.
________________________________________
The entire diary here:
Housing Fraud Opus: From A-Z, Collusion by All
http://www.dailykos.com/...
History, maps, and charts of the Appraisal Fraud that was necessary for the Housing Bubble to explode:
http://www.dailykos.com/...
Bernanke knew about the appraisal fraud.
In 2005, over 8,000 appraisers sent out a petition ringing the Appraisal Fraud by Lenders, Etc Alarm. The alarm that could of saved us from the brink of economic disaster. No one listened. Today there are more than 10,000 signatures.
http://www.dailykos.com/...