Skip to main content

This is a complete record of evidence, to date, to support the allegation that the housing boom was a fraudulent plan that begin in 1996.  A choreographed disaster.

Some of you know that I have been researching and writing about this for over 2 years.  A bit of what I have reported is just surfacing in the news, even though I constantly contacted them and provided information.  Others have picked up a lot of the foreclosure information, which is helping.  But the A-Z story needs to be told.  I have the details.

This is offered to help homeowners fight to keep their homes and the news media to grow some and get the whole story out in the open.

Below are some suggested SOLUTIONS TO FORECLOSURE/INVESTOR problems.

Some simple analogies towards the end.

Once deregulation of financial markets was in place, it was All Systems Go:

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.  We exposed it in 2008:  How Homes Were Stolen While Wall Street Partied Ha

The quants became registered inventors of the systems designed to whiz montages from here to there and into bundles to be rated and sole to investors.  US Patents exist leaving a trail of potential witnesses and collaborators.

Step 2. The rating agencies had to be co-opted to provide proper ratings to satisfy investors.

Step 3.  The FBI White Collar Crime division was defunded.  

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. Bernanke knew about appraisal fraud in 2005!

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.  FBI was gutted evidence.

Step 4. MARI, a division of ChoicePoint, the organization that has a computer record of all the details of our lives.

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.  EVIDENCE that the State of Florida new home buyers were at huge risk of fraud.

This also comes up in a search for Seventh Annual Report on Mortgage Fraud.  This is an indepth Florida report, written in 2005 by the Florida Department of Law Enforcement that references MARI research from 2001-2004.  

Scathing report/example of the full awareness of the State of Florida.  And buyers were left unprotected.
http://www.heraldtribune.com/...

2007 FDIC Report, Uses Mari research
http://www.fdic.gov/...

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 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 8,300 appraisers nationally signed a Letter of Alarm about the lenders demanding inflated appraisals.  Yet, no one is talking about this.

THOUSANDS OF HOME OWNERS WERE UPSIDE DOWN THE MINUTE THEY SIGNED THEIR MORTGAGE, and investors were defrauded.

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.

Here are a couple of examples:

Margaret W:

Finally, she discovered that her house had been

sold for $180,000 in August 2002,

and then resold to United Homes three weeks later for $230,000.

Three months later, after a quick renovation, she purchased it for $399,000.

An appraisal commissioned at the time found this value fair, but a second appraisal commissioned later by Ms. Wragg's lawyers found that the value at the time was only $250,000.

Ms. Barkley, a civil servant, was badly hoodwinked:
Barkley, for example, claims the United Homes salesman didn't tell her until the day of the closing, even though she repeatedly asked him, the actual price of her new home.

The price turned out to be $359,000 for a home United had purchased for $153,000 - less than three months earlier.

Click For all the charts, maps, tables, analysis, and proof of RAMPANT APPRAISAL FRAUD

Step 6.  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!  $400 BILLION.

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 is in charge, which is why there is no chance of a workout, and these go into foreclosure.

Credit Default Swaps or CDS (AIG)
There is nothing wrong (highly debatable these days, mine) 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 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.

Step 7.  Youtube of President Bush's "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.

The video only shows segments of the speech.  HERE IS THE TRANSCRIPT FOR THE ENTIRE SPEECH.

Some highlights from the speech that explain why minorities were targeted:

Less than 50 percent of African Americans are part of the homeownership in America. And less than 50 percent of the Hispanics who live here in this country own their home. And that has got to change for the good of the country. It just does.

That's why I've challenged the industry leaders all across the country to get after it for this goal, to stay focused, to make sure that we achieve a more secure America, by achieving the goal of 5.5 million new minority home owners. I call it America's home ownership challenge.

..... Fannie May and Freddie Mac, as well as the federal home loan banks, will increase their commitment to minority markets by more than $440 billion. (Applause.)  

....they will purchase more loans made by banks to African Americans, Hispanics and other minorities

Fannie Mae will establish 100 partnerships with faith-based organizations that will provide home buyer education and help increase homeownership for their congregations.  I love the partnership

The Neighborhood Reinvestment Corporation will dramatically expand financial and home buyer education efforts to 380,000 minority families.

First, the single greatest barrier to first time homeownership is a high downpayment. It is really hard for many, many, low income families to make the high downpayment. And so that's why I propose and urge Congress to fully fund the American Dream Downpayment Fund.   This will use money, taxpayers' money to help a qualified, low income buyer make a downpayment.

..will help 40,000 families every year realize the dream of owning a home

And so what I've done is propose what we call a Single Family Affordable Housing Tax Credit, to encourage the development of affordable housing in neighborhoods where housing is scarce. (Applause.) Over five years, the initiative amounts to $2.4 billion in tax credits.

And so, therefore, education is a critical component of increasing ownership throughout America. Financial education, housing counseling, how to help people understand that there are unscrupulous lenders. And so one of the things we're going to do is we're going to promote education, the education of owning a home, the education of buying a home throughout our society.

And we want to fully implement the Section 8 housing program, homeownership program. The program will provide vouchers that first-time home buyers can use to help pay their mortgage or apply to their downpayment...   Many of the partners today, many of the people here today, many of the business leaders here today are creating a market for the mortgages where Section 8 vouchers are a source of the payment. And that's good -- see, it's an underpinning of capital. It helps move capital to where we want capital to go.

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 (for all but the brokers and lenders) were widely distributed.

Step 9.  An interactive map.Rules for foreclosure, written by MERS in 1999!

Step 10.  Companies launch huge layoffs and refuse to hire, while giving higher bonuses and higher dividends to investors.  The DOW surges.

And the longer the economy stays down, the more homes will be stolen from good, hard-working, honest Americans.

GET ANGRY, and help people fight to keep their homes.

Vote straight Democrat and see if that helps improve the plight of the people against the Corporatists.

____________________________

SUGGESTED SOLUTIONS:  For Home Buyers/Owners and Investors

STOP THE MUSICAL HOME GAME NOW!!!

I have a solution.  

It will keep people in homes.  Hell, there are homes empty or about to be empties and people/families/babies and children/grandmas and grandpas who need a home.

Will make investors whole

And will make those who bent the law and fudged the numbers pay the difference to the investors  

PROPOSED SOLUTION TO THE MESS:

First the Investors:  Investors stand to lose a lot.  Pension Funds and foreign sovereign funds as well as many, many others.

I believe a polygram test will prove that absolutely everyone involved in rating, buying and selling the MBS and CDS knew in 2005, the height of the frenzy, that something wasn't quite right.

That said, contracts were made.  However, because the foundation product for the investment was worth much less than everyone said they believed they were worth, the investors have losses.

There is no way the banks have enough to make up for the contractual losses.  We are certainly not going to bail them out again, not after how poorly they have treated the majority of citizens in the US for the past 2-3 years.  They can go hang.

And, in a laissez-faire model, it's really not anyone's problem other than the investment fund Trustees and the institutions/people that sold them the MBS, CDOs.

Who bails us out if we are snookered?  Um, no one.

So, there is no way, in the short run, to resolve the losses.

However, the two most commodities in the deal still exist:  The House and the Home Owner/Buyer

The market still exists.  No one took the houses off the board and the people are still needing homes.

So.............to minimize the losses to the investors and to minimize the failure of the TBTFs, it's time for a do over.

New contracts need to be written BETWEEN the investors' Trustees and those who sold MBS and CDOs if, and only if, the investor hasn't been made whole via Credit Default Swaps for a property/properties.  I believe the NY FED under Geithner gave the money to AIG to take care of the investors so we could avoid World War III.

There is also a possiblity that the bank/lender could have been made whole, as well, via a PMI policy.

And, if the BANK/Mortgage had PMI insurance, and the bank was made whole via PMI for a home/homes, than those homes have no outstanding debt owed.  Period.

To avoid moral hazard, as most of the homes have been or will be foreclosed EVEN IF investors and banks/lenders were made whole, and to save entire neighborhoods from  blight and violent crime/crack houses, there is absolutely every reason to reunite the homeowner/buyer with their home and play LET'S MAKE A DEAL.

NO ONE HAS TO ADMIT TO APPRAISAL FRAUD or fraudulent behavior.  We will let the FBI work that all out if they ever get enough funding.

Most of the foreclosed homes end up auctioned off for peanuts to wealthy flippers, the very people most guilty of inflating home valuations to begin with.  This just doens't make sense.

The market today, if we don't stop and correct this mess will just get more and more corrupt, as proven by the most recent MARI Report:

Stats on numbers of fraud cases reported per year:

APPRAISAL Yearly fraud numbers

This table is from an April, 2010 Mortgage Asset Research Institute's TWELFTH PERIODIC MORTGAGE  FRAUD CASE REPORT (MFCR) submitted to the MORTGAGE BANKERS ASSOCIATION.

And this, according to an FBI Report:

Mortgage fraud is a relatively low-risk, high-yield criminal activity that tempts many. However, according a May 2006 Financial Crimes Enforcement Network (FinCEN) report,

finance-related occupations, including accountants, mortgage brokers, and lenders, were the most common suspect occupations associated with reported mortgage fraud2. Perpetrators in these occupations are familiar with the mortgage loan process and therefore know how to exploit vulnerabilities in the system.

What is a reasonable price for the homeowners to pay to be able to either stay in or return to their home?  

Does it really take a Rocket Scientist (I revere them) to understand that there absolutely HAS TO BE a relationship between the cost of housing and household wage?

Are we to believe that entire industries hadn't caught on to this basic of rules for financing?  No.   Which if all would be honest, all would admit that we got to play pretend monopoly with real homes and real people, and their childrens' lives.  Shame.

Those who are the haves, who want to bring up moral hazard for helping desperate people get on with their lives, simply shut up.  Where was your moral hazard squawking when the billions were flowing like a chocolate fountain at a mid-sized wedding?

Both homeowners and investors need a reasonable solution that isn't fraught with risk.

Here's an expert opinion on how to value homes:

America (and other countries) that suffered from exploding house-price bubbles, had no excuse, the tools were there, just they chose not to use them.

The reason was mainly because there was no agreement on what is the correct or fundamental value of a house; even though some people were warning about potential problems with housing in USA and also in UK in 2003, there was no consensus. Alan Greenspan spoke of a “bit of froth” in 2005, but he had no courage in his convictions, and even as late as early 2008, just before the slump really started in UK, Gordon Brown was saying that housing in UK was “affordable”, and so there was no risk of catching the American disease.

Even now, after a cataclysmic wake-up call, there is no consensus about what is the “right” price for housing.

What is the right price?

At it’s simplest level (it gets more complicated), the “right”  price for housing is that which allows the population to spend a fixed proportion of their income on “shelter”, that proportion is broadly well-known, it works out somewhere between 20% and 30% (and I’m not going to argue-the-toss about exactly where it is, although there is a broad consensus in that the calculation of the weighting of “shelter” in the CPI analysis provides good base-line).

Homeowners deserve their homes at true value (costing no more than 30% of their income total for mortgage, taxes, and insurance) and those who issued the MBS and CDOs owe the investors the rest.

And here is where we can get creative.  

Today, many are un, under or low wage employed because, as Evidence #10 above clearly lays out, cash rich companies/banks  are refusing to hire or loan money to small businesses and, instead, are using their trillions to buy more stock, pay higher bonuses, and reward shareholders with higher dividends.  On top of the past decade of shipping manufacturing jobs, and the tax revenues as well, America is at a cross roads, perhaps a solid stand still.

The corporations and the TBTFs will do just fine.  They can move to tax-free Dubai.  Hope that works out well for them.

But we have to glue this mess together again, NOW, stop the bleeding and heartache.  

And there are millions of families that have been displaced, tens of millions of children.  This will destroy our country's social fabric if it is resolved instantly.  And it can be.  Unless we are just heartless enough to watch the house burn rather than help tens of millions of people whose only sin was being laid off and/or lied to, or both.

Which is why I believe we need a new mortgage model.  For lack of a better name, I will call it a Sliding Scale Mortgage.  Whatever wages are made in a home, no more than 20% will be used to pay off the mortgage.  

There will be no transfer of funds for the homes other than payments from the homeowners to the investors/lenders IF they can prove a stake in the house.  Money already paid the builder, developer, and the real estate professionals at least once for the homes which stand ready to occupy.  

It can be called The Cost of Housing Payment.  Buyers could pay off faster if they wanted to with no penalities, because we are not going to use this life sustaining commodity, a roof over the heads of a family, for speculation again.  Overtime, this can make the investor whole again and, in the interim provide a stream of returns.

20% of income is all people can afford because of all the ways and means money is taken from them at every turn in this country.  Health care insurance/costs being one of the worst financial assaults on the American family.

For instance, people in flood zones surely can't afford Flood Insurance anymore.  My quote jumped from $350/year to $2,100/year this year.  Thank FEMA.  Guess I just rot if a rain cloud hangs around for too long.  Who, at FEMA, thinks middle class families can pay $2,100/yr on top of a mortgage, taxes, and insurance.  Flood insurance is now comparable real estate taxes.    It's ridiculous.  Why pretend there is a national flood insurance program, when no one can afford it.  Just another example of how every penny we make is being squeezed from us.

Also, there is a need for some clawback in lieu of prosecutions.  

Have you ever wondered where all that money collected by the FBI, Justice, the IRS goes?  I believe the American people deserve a transparent, easy to navigate open window to this process for resolving The Housing Disaster.

Have you ever read the Federal Budget?  I have.  Good Grief, it's a poorly written fairy tale, quite frankly.  Besides which, I want to see, on a weekly basis, where every penny is going.  It's our money!!!

The clawback money could be bundled and put into a Housing Restoration Fund, divided by states, and monitored by volunteer citizens groups within each county.  I think we have learned we can't trust money making people to always do the right thing when it comes to housing.  A portion could also be distributed to a Disaster Fund to help in future disasters.

We can let Justice, the IRS (maybe deduct the clawed back monies from income in a kind gesture), and the FBI work that out.  

The citizenry deserves to see that crime does not pay, and certainly children need to see that there are consequences for bending the rules and fudging the numbers.  

Of course, some did much worse and may have to pay a higher price than clawback.

I would rather see the guilty white collar criminal be sentenced to working for minimum wage AND HAVING TO LIVE AT THAT RATE of income (taken from his hoard of cash and paid to him every two weeks like the majority of Americans), with the wage he earns paid directly to fund programs for the needy:   needy children, the elderly, infirm, etc., quite frankly, than jail.

 Enough with prison industries profiting privately run, corporate prisons whose stocks are traded on Wall Street!  HAVE WE COMPLETELY LOST OUR MORAL COMPASS IN THIS COUNTRY?

Perhaps we could boost our compassion commodity, which is sorely undervalued at this time.

These suggestions would STOP THE FORECLOSURE INSANITY and

keep people in their homes and/or

fill the empty homes,

punish those who cheated the investors, and the payments made by homeowners

would fulfill the investors' contracts over time which, I suppose, could be leveraged when necessary by the very banks that sold the MBS/CDS.

We have to put aside the moral hazard issues.  No one was ringing that alarm while millions became millionaires playing with people's homes.

And, no way in hell should the enriched by The Housing Disaster be allowed to buy foreclosed properties at auction, to start the whole corrupt process all over again with the very same players who bent the rules and fudged the numbers.

We have the homes that need to be filled.

We have people in need of homes.

Fill the damn homes.

STOP THE MUSIC.  Stay in the home you landed on.  Agree to pay 20% of your income for the home.

______________

SOME OF MY ANALOGIES AND A RANT
_
_____________

An Analogy of the Housing Debacle

Please feel free to improve on it, OR just skip this part and go to the meat below:

Pretend if you will, that I have an antique car I want to sell in excess of its real market value.  I am willing to finance the sale to the buyer, because I know I am going to sell his debt to someone else.  I plan on accepting an offer from a naive buyer only.

What can I do:

Contact and make sure all the appraisers in my area use my inflated value in case the buyer calls around..

Convince someone to buy the loan from me.

Done.  Check.

Naive buyer shows up, loves the car, and the fact that I will only charge him interest for the first year on the variable interest loan I offer him.  He signs and drives off.

I call the "secondary 1" loan buyer, who looks forward to jacking the interest price up to 8% next year, and get all my money back PLUS a $1,000 loan origination fee.

I'm happy.

Then "secondary 1" loan buyer decides to do the same and sells the loan to "secondary 2" loan buyer and collects $1,000 loan origination fee.

"Secondary 2" sells to "Secondary 3", to "Secondary 4", "5", "6", and so on as this happens a few times thereafter.  Sometimes even a couple of times a week.  Why?  PONZI !

The fees are added to the total debt.

In the end, the loan is placed in a bundle with a bunch of other loans purchased by a TBTF bank, rated as AAA, and sold to investors.

Not being stupid, the TBTF banks also purchase Credit Default Swaps from RottenEGG, and a PMI policy for extra cushioning just in case the complete stranger they are now financing disappears.

RottenEGG has the protection of the NY FED, Geithner.

All this happened without paperwork ever being updated at the Department of Motor Vehicles Registry, as there is an electronic/internet process in place called MARS (Mortgage Acquisition Repossession Scheme)

The original title on the car still has the original owner's (the seller/lender) name on it with the purchaser's name.

Out of no where the car buyer gets notice that his car is about to be repossessed by a Bank/Loan Servicer, let's call them Spank of America.

At the same time the buyer hears on TV that the Federal Government has a program call RUSE for people who were sold cars whose value was misrepresented, to help any car owner whose car may be repossessed.  So the car buyer calls and is told to Stop Making Payments, until things are sorted out and a new agreement can be reached.

A couple of months later MARS comes to repossess the car and a court/hearing date is set.

The buyer calls his lawyer who orders an Audit for the Record of Title from the Registry of Motor Vehicles.  No where in the records is the Spank of America or MARS listed as having any standing to repossess the car.

They perform a Car Ownership Audit and find that nothing in the records at the Registry seems to have transpired since the day the buyer signed the Promissory Note with the original car owner for an overstated value.

Now, in the meantime, the original owner has died even though he is shown as the holder of a note on the car.

WHAT'S THE SOLUTION?

Did the buyer's obligation end upon the death (think no longer in business) of the seller/lender who sold his loan without the buyers permission?

In this mess, how is the buyer guilty of anything.  He made all his payments on time before calling RUSE, who told him to hold off on the payments.

Isn't the true recourse for those at the top of the Hot Potato Loan scheme ladder to get reimbursed from whoever sold them the loan/investment, and so on down the ladder, until the first secondary lender gets to the car's original owner's estate for reimbursement?

And, btw, who will stand up and verify receiving the car buyers payments the buyer made for three years?  Where did that money go?

THIS is the housing mess.

THIS IS WHY THE RHETORIC THAT "BUYERS ARE DEADBEATS" MUST STOP.

And also, THE REASON WHY WE MUST KEEP LOOKING AT THE WHOLE TRANSACTION, which evidence indicates was mostly fraudulent, especially beginning in 2005, while also staying on top of the foreclosure crimes.

Sometimes I think, because houses are big and the amount of money is huge, and the players are all so rich and powerful, that it tamps down our innate abilities to understand what has happened.

I have come to the collusion where I feel comfortable with the allegation that the Housing Boom/Bust was planned and choreographed.  The economy was in a major decline after the DotCoN bubble and only got worse after 911.

I think this plan was in the works as soon as the Gramm-Leach-Bliley Bill  passed that deregulated the banks.  I don't find any innocent in this crime other than the unsuspecting home buyers, not including the flippers/crooks.

Both Democrats and Republicans in power for the past listened to the economic advise of the disciples of Milt Friedman.  

My opinion of laissez-faire economics?  Laissez-faire = Oligarchy Rule

Here's an analogy to demonstrate laissez-faire economics:

A bee hive:  A worker complains one day, so the Queen Bee says "If you work hard and smart enough, someday you can be a Queen Bee, too.  Until then, you get to serve me.  Unless I really, really favor you or you are descended from a bee I really, really favor"  Well any thinking bee knows that you can't become a Queen Bee.  So all the bees become sycophants, turning on each other, all vying for the Queen's favor.
Laissez-faire is a heartless, cruel, and destined to become oligarchy system.

Another laissez-faire example:

What could be more laissez-faire than the three paragraph Bailout Paulson presentedf for handing the banks $700 billion dollars.

It was a glaring example of his and the Bush Administrations' lack of concern for homeowners and investors.

Oh, excuse me, that was pure, unadulterated socialism.

AMERICA IS A CRIME SCENE

And if we don't stop this foreclosure insanity, I fear all hell is going to break loose, literally.

And everyone is guilty.

Where does Paulson live now?  Dubai?

Another definition of laissez-faire could be, and you've heard this before, privatize the profits, subsidize the losses with the taxpayers money.  And how cynical is it to use the tax earnings of the millions who are being tossed to the curb in bogus foreclosure proceedings?

They just took care of the banksters.

The Housing Boom/Bust of 2000-Present was simply a rewrite of the Savings & Loan Crash.  And no one in Congress protected the American citizens or the investors, many of whom are foreign Sovereign Wealth Funds (think Saudi Arabia, for one)

Except, today 800,000 families a month are at risk of losing their homes while millions already have.  That is an unnecessary and harsh reality.
______________

MUST READS TO KEEP UP WITH THE MORTGAGE FRAUD IN YOUR AREA:

Justice Department - Mortgage Fraud
http://searchjustice.usdoj.gov/...

Justice Department - Foreclosure Fraud
http://www.ojp.usdoj.gov/...

FBI Mortgage Fraud/Schemes - Beware of Reverse Mortgages, btw
http://www.fbi.gov/...

http://4closurefraud.org  

http://www.msfraud.org/

And a fascinating history of the MERS system that made the housing crisis possible:

http://webcache.googleusercontent.com/...

Even President Obama's property was RoboSigned!

http://4closurefraud.org/...

AND maybe that will be a good thing.

Originally posted to War on Error on Fri Feb 11, 2011 at 07:57 AM PST.

EMAIL TO A FRIEND X
Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags

?

More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

    •  Be back later to finish reading (6+ / 0-)

      2000 futures and commodities modernization Act, Created the the financial instrument known as the Credit Default Swap

      FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

      by Roger Fox on Fri Feb 11, 2011 at 08:28:09 AM PST

      [ Parent ]

    •  You should add that getting away from the 80% (5+ / 0-)

      mortgage with 20% equity, or 90% with PMI (payment Mortgage Insurance) was a fundamental cause of the financial crisis.  In my mind, this was by far the greatest regulatory failing - letting houses to be financed with far too much leverage.

      The 80% mortgage + 20% mortgage world was a much better housing and mortgage world for homeowners and the financial system and was the rule prior to the 1990s.

      1. Having 20% equity was verification the homeowner had the financial means to get the 20% equity, so he is more likely to be able to make the payments than the person who can only pay for closing costs.  There is also a demonstration a a better ability to handle their own finances.
      1. Lower monthly payment compared to 100% Mortgage, in addition to having a 25% higher principle to make payments on, the interest rate is higher on a 100% mortgage.  So the monthly payment is about 30% higher with the 100% mortgage - so the homeowner has greater difficulty making the payment, esp if there is a temporary financial setback.
      1. More stable housing markets with 80% mortgage limits. When a person gets a 100% mortgage, the equity in the house after the 6% broker fee is a negative 6%.  Have that followed by a 10% decline in house prices and the homeowner is 16% "underwater."  As many states permit the homeowner who can make the payments to simply walk away from the property, this creates an unstable housing market.  With the 80% mortgage, to get to 16% underwater the house price needs to decline by 30% - a far less likely situation than a 10% decline.
      1. Lower housing prices.  Higher leverage on houses permitted the price of houses to form a dangerous bubble in valuations.
      1. Securitizing mortgages is far more difficult and risky without the 80% mortgage limit, as there is little or no equity cushion from the homeowner to backup the mortgage.  So the mortgage securities have far greater housing market risk, greater risk of a decline in consumer credit quality.

      The most important way to protect the environment is not to have more than one child.

      by nextstep on Fri Feb 11, 2011 at 09:39:28 AM PST

      [ Parent ]

      •  I get so sick of hearing about all the people (4+ / 0-)
        Recommended by:
        ybruti, War on Error, vahana, Taras Bulba

        "who got loans they couldn't afford".

        No one gets a loan without someone offering to make that loan.  The idea that people were just marching into loan offices, lying about their credit and income and demanding loans is just ridiculous.

        They got loans from people who knew damned well that they had no hope of ever paying them back.  

        •  I just sat with a 30 year real estate veteran and (0+ / 0-)

          this is what she said happened:  the broker asked the mortgagee if they wants a quick doc loan(no verification of income or assets) or if they wanted to go through the whole process.  What do you think people said?  They wanted the bigger more expensive house so they said they wanted the quick route.  It was collusion on both sides.

          THE GREATNESS OF A NATION AND ITS MORAL PROGRESS CAN BE JUDGED BY THE WAY ITS ANIMALS ARE TREATED. -Gandhi

          by lakehillsliberal on Fri Feb 11, 2011 at 09:58:53 AM PST

          [ Parent ]

          •  Sorry, that is so much bullshit. (2+ / 0-)
            Recommended by:
            millwood, gulfgal98

            It's difficult to be happy knowing so many suffer. We must unite.

            by War on Error on Fri Feb 11, 2011 at 10:04:19 AM PST

            [ Parent ]

            •  Sorry you are wrong.....just because it is (1+ / 0-)
              Recommended by:
              War on Error

              an inconvenient truth does not make it any less true.  People heard what they wanted to hear.  Were there brokers that committed outright fraud(changing the terms_sure) but at the end of the day, people knew what they could afford and what they couldn't.  I know some very intelligent people that took high risk adjustable rate mortgages because they believed what they wanted to believe, that housing never goes down, that they would never lose their job and that they could always refinance even when told that was historically inaccurate.  Am I saying that the financial community did not commit fraud, no I am not, but some borrowers committed fraud as well.  They are not all innocents.

              THE GREATNESS OF A NATION AND ITS MORAL PROGRESS CAN BE JUDGED BY THE WAY ITS ANIMALS ARE TREATED. -Gandhi

              by lakehillsliberal on Fri Feb 11, 2011 at 10:39:20 AM PST

              [ Parent ]

              •  No, not all innocent, but not criminals either (1+ / 0-)
                Recommended by:
                millwood

                Of course, neither of us can generalize; however, based on the outcomes, who are the victims?

                It's difficult to be happy knowing so many suffer. We must unite.

                by War on Error on Fri Feb 11, 2011 at 10:57:58 AM PST

                [ Parent ]

                •  Not saying they are criminals and the buyers (0+ / 0-)

                  have clearly paid a high price for their error in judgment(bankruptcy,loss of their home, stability) which the brokers and banks have not paid.  I am not saying it is equal at all, the system used to work because the lenders held people's feet to the fire about the condition of their credit, their stake in the property and the stability of their income.  It seemed punitive but it turns out that it acted in their best interests of both the buyer and the lender and the system worked.  

                  THE GREATNESS OF A NATION AND ITS MORAL PROGRESS CAN BE JUDGED BY THE WAY ITS ANIMALS ARE TREATED. -Gandhi

                  by lakehillsliberal on Fri Feb 11, 2011 at 02:44:15 PM PST

                  [ Parent ]

              •  Please provide citations (3+ / 0-)
                Recommended by:
                importer, millwood, War on Error

                to verify your allegations.  Everyone in the housing business stood to make money by selling as many homes and approving as many mortgages as possible.  They all knew that those mortgages would be bundled up and packaged with other mortgages to be sold as a commodity.  The load originators and original banks did not hold thos mortgages.

                The real estate, mortgage and banking industry are the professionals here.  They are not bound to sell a home and mortgage to an unqualified buyer.  It was incumbent upon them (and their professional ethics) to ensure that the applicant was qualified.  

                I have been searching for a citation that I once read but have been unable to locate at this moment.  In that citation, according to the FBI, the vast majority of mortgage fraud was by the mortgage brokers and lenders, not the applicants.

                I am more likely to believe an official report than anecdotal conversation with a realtor.  Remember, the realtor also stood to make money from a sale.

                The United States is not just losing its capacity to do great things. It's losing its soul.--Bob Herbert

                by gulfgal98 on Fri Feb 11, 2011 at 11:06:10 AM PST

                [ Parent ]

              •  In Florida (1+ / 0-)
                Recommended by:
                War on Error

                A lot of this was caused by speculation in the vacation/second home markets.

                The value of some of the real estate was so high, that the only way to make money was to flip it.  Rental income could not begin to cover the cost of the mortgages.  The last fool was the one who got stuck when the market collapsed.  In that case, everyone was to blame, but ultimately, it was up to the realtors, mortgage originators, and banks to determine if the applicant is qualified and if the value of the real estate was fair.

                The United States is not just losing its capacity to do great things. It's losing its soul.--Bob Herbert

                by gulfgal98 on Fri Feb 11, 2011 at 11:28:23 AM PST

                [ Parent ]

              •  it's not that simple, and (2+ / 0-)
                Recommended by:
                millwood, War on Error

                many of us have some blood on our hands, but no one makes a decision autonomously, not truly, though we try. There would not be so much advertising and hype for building permits and flipping if people could not be influenced against their better instincts. Some of us are lucky to not be influenced by those things.

                The whole "buyer beware" mantra of surviving capitalism is not a real survival credo for a sustainable economy, as history bears out.

                •  And it's going to get worse. (3+ / 0-)
                  Recommended by:
                  importer, millwood, vahana

                  The regulation gloves are off.

                  I just cancelled comcast.  The few programs I liked were brought to us by SCAM ADVERTISEMENTS.

                  A smalll thing, buy my protest.

                  No, people can't always know what is in their best interest.  Especially we older folks.  We have had 50 years of being able to trust that we had some modicum of protection on products we condered buying.

                  Now, not so much, and it looks like anyone can run an ad for a scam and get away with it because it's

                  "Up to the consumer to know what is good and what is not".

                  With a new Republican Congress falling all over itself to hand corporations whatever they want, it was only a matter of time before some politician turned up in the pages of the Wall Street Journal, breathlessly describing the “dazzling” and “path-breaking” nature of the free market, and vowing to get rid of regulations that have placed “unreasonable” burdens on businesses.

                  We just didn't think it would be Barack Obama.

                  But the man who couldn't give an executive order to halt dismissals of gay and lesbian members of the military has apparently issued an order to review regulations that stifle job creation, or place unreasonable restrictions on business, or -- and these are his own words -- are “just plain dumb

                  http://www.huffingtonpost.com/...

                  It's difficult to be happy knowing so many suffer. We must unite.

                  by War on Error on Fri Feb 11, 2011 at 12:26:25 PM PST

                  [ Parent ]

              •  I'm Not Sure Where You Live (0+ / 0-)

                But for those caught in the initial wave of defaults that started in 2007 and 2008 - the working class and minority -- NOBODY was looking at housing in these terms.  They were doing only what the market told them to do:  buy a house, then use that house's equity to improve their overall standard of living and secure the future for their family.

                You should have sat in some of the seminars in which folks were told that only ignorant people tied up all their cash assets in their mortgage payment and that truly wealthy people paid the minimum each month they could.  I sat in a couple of these.  I got tossed out on my ear from one when I used the words "Ponzi scheme" just to try and protect my neighbors including the one who invited me.

                And that was just the tip of the iceberg of the lies and the fraud.  I've been litigating housing fraud cases for 12 years now.  And you simply do not know what you are talking about.  The amount of outright criminal behavior (complete with document forgery, manufactured appraisals and deliberate failure of lenders to underwrite even when red flags involving certain brokers were acknowledged in their own files) was legion.

                Now you can call the homeowners who got caught up in that names, like ignorant or greedy - two of the favorites around here. I call them struggling. I call them Americans - sold the same American dream as everyone else, on false pretenses.  Even when educated, they were not educated about secured transactions like mortgages.  Hell, most lawyers don't even understand them, since it's not something that most are required to know.  It was the professionals -- the brokers at the top of the list, the appraisers and yes, ultimately the lenders who violated a duty that has existed under federal law since the New Deal to ensure that loans are not made that do not meet prudent underwriting criteria - who are to blame.  As are the second-level professionals that really were driving the entire thing:  those that converted mortgages into investment vehicles after the fact and leveraged them by orders of magnitude (the last figure I heard was 600-1:  there is $600 in mortgage-backed investment paper out there for every dollar of actual secured mortgage) for no reason other than to Get Paid.

                If you don't stand for something, you will go for anything. Visit Maat's Feather

                by shanikka on Sat Feb 12, 2011 at 08:18:21 AM PST

                [ Parent ]

        •  AND they could have paid IF (2+ / 0-)
          Recommended by:
          importer, millwood

          not for the ARMS.

          It's difficult to be happy knowing so many suffer. We must unite.

          by War on Error on Fri Feb 11, 2011 at 10:03:38 AM PST

          [ Parent ]

          •  ARMs were no so bad (1+ / 0-)
            Recommended by:
            War on Error

            the really bad ones were the Option ARMs, which permitted people to have payments that did not even cover interest - so principle would rise.  These mortgages had truly exceptional default rates.

            The most important way to protect the environment is not to have more than one child.

            by nextstep on Fri Feb 11, 2011 at 10:42:51 AM PST

            [ Parent ]

            •  They served their purpose (3+ / 0-)
              Recommended by:
              ybruti, millwood, Taras Bulba

              To create bad paper to sell to investors.

              My sadness:  It just did not have to play out like this.

              Had reasonable homes been built, affordable housing, this could have been a win, win for all.  Less commission for the players at the time, but a win, win.

              None could have transpired, without the collusion of all.

              Now we have rotting McMansions dotting the land.  Why not break them up into multi units?

              Where are the solutions?  I don't see any accepthe Hud $1 Home deal, which one has to wonder about:

              HUD's Dollar Homes initiative helps local governments to foster housing opportunities for low to moderate income families and address specific community needs by offering them the opportunity to purchase qualified HUD-owned homes for $1 each.

              It's difficult to be happy knowing so many suffer. We must unite.

              by War on Error on Fri Feb 11, 2011 at 11:01:56 AM PST

              [ Parent ]

          •  ARMs (1+ / 0-)
            Recommended by:
            War on Error

            Have existed for decades, long before the housing crisis.  So did sub prime lending (i.e. lending for those with less than stellar credit.)  Neither was the problem or the cause of our crisis today, despite all propaganda about "folks buying homes they could not afford" and "Freddie Mac/FNMA is the devil" to the contrary fed to us by both sides of the political aisle (a lot of Kossacks have even drunk the poisonous Koolaid on these issues.)

            It was predatory lending (which  made it far easier to feed the securities markets new paper while providing no meaningful benefit to homeowners because of their terms), the elimination of basic underwriting standards (even in subprime, which used to mean only that you paid a point or 2 more in annual interest rate, not that you were trapped into loans for minimum periods which adjusted every 6 months and had spreads ranging up to 10% above the average interest rate for a fixed loan) and exotic mortgage products (Option ARMs were the worst, but any negative amortization vehicle for a mortgage is exotic and other forms exist as well) that accelerated our housing downfall.  

            If you don't stand for something, you will go for anything. Visit Maat's Feather

            by shanikka on Sat Feb 12, 2011 at 08:09:49 AM PST

            [ Parent ]

            •  And the refusal of the banks to refinance (0+ / 0-)

              when the contracts shifted to the higher payments.

              People were told "no problem, just refinance"

              When that day came, the banks closed the doors to refinancing at reasonable rates.  If that door had stayed open, millions would still be in their homes, perhaps with the exception of the other fatal blow:  massive layoffs.

              Nothing will convince me that homes were simply used to fuel Wall Street, and then were stolen to refuel Wall Street, and it continues to this day.

              Listen for the ads on TV of how easy it is now to get rich by simply buying foreclosed homes for pennies on the dollar.  Who, in government State or Fed, is responsible for making sure these aren't, in essence, predatory ads?

              It's difficult to be happy knowing so many suffer. We must unite.

              by War on Error on Sat Feb 12, 2011 at 08:18:51 AM PST

              [ Parent ]

              •  The individual property vultures (0+ / 0-)

                should be careful not to buy too many homes.

                Keeping the homes rented is going to be a major challenge.

                It is easier to keep three homes rented than ten homes rented.

                The cash flow on three homes and a 10% vacancy rate may be positive.

                The negative cash flow on ten homes and a 40% vacancy rate will probably bankrupt most vultures.

        •  The hope of paying back was (4+ / 0-)
          Recommended by:
          importer, millwood, War on Error, vahana

          that the house price would go up.

          People did not buy houses they bought a "call option" on a house.  If the house price went up, the homeowner would sell and keep the gains, or re-finance to take cash out of the house.  If the house price fell, they would walk away from the house and mortgage - when they purchased with little or no down payment.

          The most important way to protect the environment is not to have more than one child.

          by nextstep on Fri Feb 11, 2011 at 10:19:57 AM PST

          [ Parent ]

          •  The intoxication was wide spread (2+ / 0-)
            Recommended by:
            importer, millwood

            and encouraged.

            Bush after 911

            Go out and spend.

            And spend they did.  My dog, Bruzer, had 4 credit cards and 3 mortgages.

            Kidding, but I think he could have, if I didn't have principles!

            It's difficult to be happy knowing so many suffer. We must unite.

            by War on Error on Fri Feb 11, 2011 at 10:31:34 AM PST

            [ Parent ]

      •  Part of the deregulation (2+ / 0-)
        Recommended by:
        importer, millwood

        Appraisal Fraud w/lax qualification process set up good people to lose all they had saved.

        Shame on anyone who blames those who were sucked into this Great Crime.

        The only innocents were the people who faithfully bought the homes Pres Bush told them to buy.  The Ownership bull shit set up to the Great Crime.

        It's difficult to be happy knowing so many suffer. We must unite.

        by War on Error on Fri Feb 11, 2011 at 10:03:03 AM PST

        [ Parent ]

      •  LOL Most Americans now live hand to mouth (2+ / 0-)
        Recommended by:
        importer, millwood

        thanks to the cheap CEOs in charge of wages.

        It's difficult to be happy knowing so many suffer. We must unite.

        by War on Error on Fri Feb 11, 2011 at 10:15:03 AM PST

        [ Parent ]

    •  As usual, great diary (2+ / 0-)
      Recommended by:
      War on Error, vahana

      For some of us in the middle of this crapfest, it's all we can think about. I mean, how can you wake up or go to bed each and every day worrying about the thing you and your family go to bed and wake up in?

      And watching the system you played by and need support from, being kicked around, like a can down the road, by all those in power.

      Obama had bipartisan support for cramdown, talked congress out of it so he could kick the can down the road, still kicking and kicking with Summers and Timeh.

      "Building houses for each other does not create a vibrant economy, rather people build houses because the economy is vibrant."

  •  Bankruptcy laws were overhauled with full (6+ / 0-)

    knowledge that millions were going to default on homes and credit card debt.

    The new laws make it far more difficult for someone to discharge their debts.

    That had to happen so they could hook people into these insane credit card deals and stick people with the "balance" on homes that they might try to walk away from.

    I have had a running battle with a collection agency who claim I owed an amount.  They couldn't produce evidence that it was mine and finally admitted the amount was from the early 90's.  When I suggested that it was well past the statute of limitations even if it was mine, I was assured that I still owed it!  I just received a 1099-A indicating that they had "forgiven" my so-called debt, but that they were reporting the amount as "income" to me for their forgiveness!!!!!!!

    I wonder how many home owners are going to receive similar 1099's indicating they have been "forgiven" fraudulent amounts on home forclosures?

    •  Oh my! (6+ / 0-)

      my neighbor applied for modification, and B o A took their home, mortgaged at $325.

      It was short sold for $200,000.

      My neighbor could have handled the mortgage of $200,000.

      It will be auctioned at the end of the month.

      CRIMINALs are still cashing in on the housing fraud cash cow.

      It makes me sick, literally.

      It's difficult to be happy knowing so many suffer. We must unite.

      by War on Error on Fri Feb 11, 2011 at 10:06:53 AM PST

      [ Parent ]

      •  ! that is the issue that most (2+ / 0-)
        Recommended by:
        importer, War on Error

        gets my goat! This is truly insane and helps no one, not investors or banks, or communities and their businesses, just the mortgage servicers and the vultures that prey on the carcass.

        Actually, that was in bad taste, sorry vultures. I should know better because vultures provide a useful service to the ecosystem.

      •  In Florida (0+ / 0-)

        sometimes a friend or relative buys the house after the foreclosure and rents it back to the former mortgagors.

      •  The banks can't take (0+ / 0-)

        the full loss for every mortgagor because they simply don't have enough net worth.

        The banks have to play tough and hope inflation and economic recovery save them from their stupidity and former belief the real estate values don't collaspe in a modern economy.

        The FDIC isn't going to want to eat all the possible underwater amounts.

        Dinging customers an average of say $200 per account per year isn't going to cover say $125,000 per mortgage losses.

    •  I Would Speak to a Lawyer (1+ / 0-)
      Recommended by:
      War on Error

      If the debt is as old as you report, it was unsecured (it makes a big difference if it was secured, like a mortgage) and you had neither made any payment nor promise to pay since the 1990's, the idea that the debt write-off is being reported as current income to you effectively screws you when, in fact, the debt is simply gone.  Period.  Not reportable to any source - it's against the law.

      If you don't stand for something, you will go for anything. Visit Maat's Feather

      by shanikka on Sat Feb 12, 2011 at 08:05:29 AM PST

      [ Parent ]

    •  I sort of remember (0+ / 0-)

      something about Congress shouldn't pass an ex post facto law.

      I sort of feel that the bankruptcy law at the time the mortgage was taken out or last modified by the mortgagor should apply.

      Of course I don't sit on the Supreme Court.

  •  Strong Allegations... (0+ / 0-)

    ...with links. I'll bookmark and read later.

    One thing I've noticed here at dkos is the number of diaries that are full of interesting details that get buried in the short-attention-span graveyard. As story complexity increases, the use of fiction involving representational characters starts to become the efficient way to tell some truth.

    best,

    john

    I support socialized water

    by jabney on Fri Feb 11, 2011 at 09:20:28 AM PST

    •  Allegations? Or facts. (2+ / 0-)
      Recommended by:
      importer, jabney

      My allegation is that the facts indicate collusion, of course to be denied by all.

      It's difficult to be happy knowing so many suffer. We must unite.

      by War on Error on Fri Feb 11, 2011 at 10:08:04 AM PST

      [ Parent ]

      •  Please Don't Consider My Post an Attack At All (1+ / 0-)
        Recommended by:
        War on Error

        Rather, consider it a request.

        Showing that collusion may have taken place is not enough to make many (most?) readers care. A sympathetic every-person character that reacts to and is affected by the results of collusion tells a much stronger story to a potentially much wider audience.

        best,

        john

        I support socialized water

        by jabney on Fri Feb 11, 2011 at 10:19:24 AM PST

        [ Parent ]

        •  Yes, I think (1+ / 0-)
          Recommended by:
          jabney

          I have a few stories in some of my other housing crisis diaries.

          I hope the 10 Step will help people (a) be aware and (b) use the information to do some forensic investigation into their home purchase, especially those from 2004-now. There may be recourse for them.

          I will do some digging to find the examples of real people getting really badly shafted and bring them here for you.

          Thanks for your suggestions.

          It's difficult to be happy knowing so many suffer. We must unite.

          by War on Error on Fri Feb 11, 2011 at 10:35:57 AM PST

          [ Parent ]

        •  Here you go. (2+ / 0-)
          Recommended by:
          jabney, vahana

          I added these to the diary above.

          Let's look at a real case scenario from 2002 as reported in a 2004 New York Times report

          Finally, she discovered that her house had been

          sold for $180,000 in August 2002,

          and then resold to United Homes three weeks later for $230,000.

          Three months later, after a quick renovation, she purchased it for $399,000.

          An appraisal commissioned at the time found this value fair, but a second appraisal commissioned later by Ms. Wragg's lawyers found that the value at the time was only $250,000.

          Here's another United Homes deal.  A civil servant was hoodwinked:

          Barkley, for example, claims the United Homes salesman didn't tell her until the day of the closing, even though she repeatedly asked him, the actual price of her new home.

          The price turned out to be $359,000 for a home United had purchased for $153,000 - less than three months earlier.

          For fun, google the story for  Mr. Fayez-Olabi

          There are literally millions of stories. And the crime just keeps going on, and on, and on.

          Click below for charts, maps, tables, and proof of rampant appraisal fraud, which continues to this day:
          http://www.dailykos.com/...

          It's difficult to be happy knowing so many suffer. We must unite.

          by War on Error on Fri Feb 11, 2011 at 10:55:53 AM PST

          [ Parent ]

          •  Now Add Some Emotion (1+ / 0-)
            Recommended by:
            War on Error

            You're recounting a saga, so go to the master of wrapping truth in the form of fiction: Charles Dickens. See how he tells the story of Jarndyce and Jarndyce in, "Bleak House."

            Since it's unlikely that you'd be able to directly interview all the Ms. Wraggs that got a raw deal, it's legitimate to conflate them into a single fictional character. Then put yourself into the character's shoes: longing for a home of her own (maybe inspired by a childhood growing up next door to cooking cabbage); or needing to move and not finding an apartment that will let her bring her cat; or showing her pride and enthusiasm as she fixes-up her new home.

            As long as your characters remain plausible and truthful at the core, it's a legitimate technique to exaggerate the quirks thus making them stand out more for the reader. I've only suggested fictionalizing a complex political story to one other writer here. A good story is a good story.

            best,

            john

            I support socialized water

            by jabney on Fri Feb 11, 2011 at 11:45:37 AM PST

            [ Parent ]

            •  Oh, sorry for being so daft. (1+ / 0-)
              Recommended by:
              jabney

              Interesting you mention Dickens.  Just finished rereading Tale of Two Cities.

              I will share, in humility, that I only have one semester of college.

              I don't know if I know how to write a novel; although Dickens writes in a language very familiar to me (probably everyone, explaining his timeless audience)

              I will also share that I have probably had more homes than most Americans, kind of a choppy life, that had a happy home ending, thanks to some miraculous circumstances.

              Thank you for your faith.  I will churn the idea.  There must be others far more talented.

              Even my poetry is didactic, esoteric, and dry.

              It's difficult to be happy knowing so many suffer. We must unite.

              by War on Error on Fri Feb 11, 2011 at 12:44:36 PM PST

              [ Parent ]

              •  Please Visit the WriteOn Diaries on Thursdays (1+ / 0-)
                Recommended by:
                War on Error

                SensibleShoes makes sure there's an interesting short exercise each week. The comments tend to be useful in the sense that if you knock one out of the park you'll be told so, while if you strike out, you'll still usually get a tip or two as a sign of encouragement.

                Cheaper than college tuition and less pretentious than the writing that comes out of some prestige programs.

                I like Dickens, even though it is evident that he got paid by the word. He wrote for the popular press and he never seemed to hold his audience in contempt.

                best,

                john

                I support socialized water

                by jabney on Fri Feb 11, 2011 at 12:58:04 PM PST

                [ Parent ]

          •  The fact that (0+ / 0-)

            one person pays $399,000 for a $250,000 house is merely evidence of personal stupidity.

            Three people paying too much shows three cases of stupidity.

          •  In the 19th century (0+ / 0-)

            I think it was P.T. Barnum who said there was "a sucker born every minute."

  •  War on Error, (4+ / 0-)
    Recommended by:
    ybruti, War on Error, vahana, Taras Bulba

    This is an encyclopedia of information regarding the single greatest crime committed against the American people.  I am afraid that I might not get this read completely and digested before it disappears into the great migration to DK4, but hopefully the bookmark I make by hot listing this will remain at our new home.

    I appreciate the extensive research you have done and have tipped, hot listed, and recommended this important diary.

    The United States is not just losing its capacity to do great things. It's losing its soul.--Bob Herbert

    by gulfgal98 on Fri Feb 11, 2011 at 11:10:29 AM PST

  •  What is the right price? (2+ / 0-)
    Recommended by:
    ybruti, War on Error

    The 20% of take-home is hypothetical, - what the market and economy can bear, ie the most you should get without busting the economy, ie the most you can get, ie an auction-bubble economy.

    take the property, add the structure. Rarely is this more than what homes sell for and often far less, which shows the level of fraud in appraisals.  Where it is equal, then property and location is playing to temporal demand with auction pricing and bubble appraisal.  One of the reasons some cities implement rent control and prop 13 was passed in CA.

    There are great places to live, good weather, economy, water and other resources. But as with Disneyland/Orange Co. If you only have wealthy homes in your community, their is no place for lower wage earners and young people. An auction-bubble economy prevents the stratification of housing to match the demographics.

    Then there are places like Riverside, CA, crapsuck land, hot and smoggy communities with the worst groundwater in the nation, but homes going for 400-800k. The most underwater place in the country. It was once justifiable to some as a bedroom community to good jobs in the LA Basin, but then it was a real estate economy and about building homes for each other.

    Control and sustainably appraise property values in terms of real resource assets and the price of homes becomes mostly the cost of a structure (as in the old days). You can hire a contractor to build a McMansion for 150-200k, price the material yourself and it is 100-130k, and one can build a 2500 ft square home for under a 100k.

    So the question is then, what is the property really worth in a non-auction-bubble economy?

  •  The question: (2+ / 0-)
    Recommended by:
    gulfgal98, Taras Bulba

    So the question is then, what is the property really worth in a non-auction-bubble economy

    ?

    I like this professional's analysis:

    America (and other countries) that suffered from exploding house-price bubbles, had no excuse, the tools were there, just they chose not to use them.

    The reason was mainly because there was no agreement on what is the correct or fundamental value of a house; even though some people were warning about potential problems with housing in USA and also in UK in 2003, there was no consensus. Alan Greenspan spoke of a “bit of froth” in 2005, but he had no courage in his convictions, and even as late as early 2008, just before the slump really started in UK, Gordon Brown was saying that housing in UK was “affordable”, and so there was no risk of catching the American disease.

    Even now, after a cataclysmic wake-up call, there is no consensus about what is the “right” price for housing.

    What is the right price?

    At it’s simplest level (it gets more complicated), the “right”  price for housing is that which allows the population to spend a fixed proportion of their income on “shelter”, that proportion is broadly well-known, it works out somewhere between 20% and 30% (and I’m not going to argue-the-toss about exactly where it is, although there is a broad consensus in that the calculation of the weighting of “shelter” in the CPI analysis provides good base-line).

    At it's peak, the median home valuation was 44% inflated above the fundamental valuation.

    It's difficult to be happy knowing so many suffer. We must unite.

    by War on Error on Fri Feb 11, 2011 at 12:17:04 PM PST

    •  I agree that those are numbers I hear (1+ / 0-)
      Recommended by:
      War on Error

      for a market economy with monthly payment cycles. I have had brokers tell me that their loan comfort zone does not go above 35%.

      It would be even better if a home was an asset to be acquired and owned, rather than a 30-year(or more w refis or 2nds) "rent" every month for someone's effective lifetime.

      In the modern job economy, who has a consistent job and income for 30 years? If you do not put away savings while you are working, you are forced to sell or they foreclose at the first bump in the road one hits.

  •  There are probably (0+ / 0-)

    many real estate agents familiar with bidding wars between people with degrees from top-50 colleges and jobs with top-level employers.

  •  I read the other day (0+ / 0-)

    that about 30% of mortgages were underwater.

  •  Some real life stories from Florida (0+ / 0-)

    about financial problems.

    http://www.mortgagefit.com/...

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site