GMAC/Ally crisis

[loosecannon]

"Trying to speed up the process puts the taxpayers like me on the hook for trillions not counting punitive damages."

"The FBI taskforce on Real Estate Fraud was effectively muzzled in early 2004. I know of many cases where state and local law enforcement have uncovered fraud rings run by mortgage originators and in the cases I am aware of no forensic accounting was involved."

I know a local woman who merely worked at a local bank and she openly admitted to committing mortgage fraud, or conspiracy to commit fraud, and her explanation was that everybody was doing it.

But if we dredge up the whole industry and mine it for fraud it is gonna take an industry larger than the mortgage industry to process the paperwork.

And what if anything is gained?

 

[KissMy]

"Trying to speed up the process puts the taxpayers like me on the hook for trillions not counting punitive damages."

"The FBI taskforce on Real Estate Fraud was effectively muzzled in early 2004. I know of many cases where state and local law enforcement have uncovered fraud rings run by mortgage originators and in the cases I am aware of no forensic accounting was involved."

I know a local woman who merely worked at a local bank and she openly admitted to committing mortgage fraud, or conspiracy to commit fraud, and her explanation was that everybody was doing it.

But if we dredge up the whole industry and mine it for fraud it is gonna take an industry larger than the mortgage industry to process the paperwork.

And what if anything is gained?

I say lets do it. Lets put people to work investigating these mortgages & take back every fraudulent penny. I have thought from the beginning there needs to be claw-backs. The democrats ran on this. Now that they are in & on the take it is bailouts as far as the eye can see. If you file fraudulent taxes the government will come down on you like a hammer even if you are broke.

These assholes pulled off massive fraud & paid off some officials to look the other way & now are sitting on piles of money while tax money had to fill the accounts that the money was stolen from. This is ethically, morally & legally wrong on so many levels. A society can not endure with this kind of cancer rotting it to the core.

 

[iamwhatiseem]

as to GMAC Ally


well this is the tip of the iceberg, I assure you.


and I found this particularly interesting for those that weren't aware;

GMAC was created in 1919 to provide financing for buyers of General Motors Co.’s vehicles. GMAC converted into a bank holding company in 2008 as it received more than $17 billion of government funds during the financial crisis. It rebranded itself Ally Financial last year, and continues to offer auto loans and mortgages.

Ally's GMAC Mortgage Halts Home Evictions in 23 States - Bloomberg

now look, GMAC was into mortgages before they and GM went belly up, and we got involved. One might ask why is an Auto manufacturer involved in a co. that finances homes? I mean they could into even make their core business profitable...right?

It was part and parcel of the host of issues with GM mgt. etc...that our gov. continued to buy off on their financing of mortgages etc. growing their portfolio in any way shape or form on our dime is criminal.

Mark my words- in 5 years ALLY or whatever POS entity they morph into next will be fire-saled with us suckers holding the bag for at least 17 Billion.

Do you know how many GM "businesses" there are?
How many people here know that know less than 8 GM "businesses" are, and have been in bankruptcy for about 3 years now.
That's right - 3 years.
My company is one of the creditors, although we cut them off before they went belly up (whew)

 

[william the wie]

If this level of corruption is tolerated then recovery will simply take that much longer.

 

[loosecannon]

"Trying to speed up the process puts the taxpayers like me on the hook for trillions not counting punitive damages."

"The FBI taskforce on Real Estate Fraud was effectively muzzled in early 2004. I know of many cases where state and local law enforcement have uncovered fraud rings run by mortgage originators and in the cases I am aware of no forensic accounting was involved."

I know a local woman who merely worked at a local bank and she openly admitted to committing mortgage fraud, or conspiracy to commit fraud, and her explanation was that everybody was doing it.

But if we dredge up the whole industry and mine it for fraud it is gonna take an industry larger than the mortgage industry to process the paperwork.

And what if anything is gained?

I say lets do it. Lets put people to work investigating these mortgages & take back every fraudulent penny. I have thought from the beginning there needs to be claw-backs. The democrats ran on this. Now that they are in & on the take it is bailouts as far as the eye can see. If you file fraudulent taxes the government will come down on you like a hammer even if you are broke.

These assholes pulled off massive fraud & paid off some officials to look the other way & now are sitting on piles of money while tax money had to fill the accounts that the money was stolen from. This is ethically, morally & legally wrong on so many levels. A society can not endure with this kind of cancer rotting it to the core.

It may feel good to do it, but it would create a legal quagmire large enough to employ everybody in NYC. And it would take decades to resolve.

Couldn't you settle for a focused investigation of the biggest fish while offering immunity to anybody who rolls up?

 

[loosecannon]

If this level of corruption is tolerated then recovery will simply take that much longer.

You know what a shitstorm this could become, possibly trashing the entire world's financial architecture.

Yet you still cheer it on.

why? Esp since this particular scandal is not gonna capture most of the most egregious perps. Just a lotta Lieutenants and foot soldiers in the mortgage industry.

The biggest fish have already been designated too big to fail, or been handed even more authority, or have managed to keep winning elections anyway. Or simply retired and turned over some new leaves (Gspan).

The bottom line is that "Too big to fail" is a 100% classist metaphor. We have a class of people who are too big to let fail, too big to jail, too big to hold accountable.

Those people will not be exposed by dredging up every document the mortgage industry generated in the last decade and performing a forensic investigation on every one of them.

The little people will be swept up while the big people are immune from prosecution.

And at the end of the day everybody who stopped paying their mortgage payment still deserves to be foreclosed upon. And the law requires banks to do it.

What possible net gain do you foresee in this?

 

[william the wie]

Definitely a possible solution LC but the goal is not vengeance (except for idiots) or even justice. Until and unless the banking system is seen as being purged of corruption the economy will not recover because the level of trust is too low.

 

[loosecannon]

You could purge all of the corruption from the financial sector now and it would all return in a few short years if you don't regulate the industry with an iron fist.

Listening to the fiery rhetoric about the mortgage mess emanating from politicians this week, you'd think that big bad banks were trying to foreclose on hundreds of thousands of homeowners who were current on their payments but had become victims of sloppy business practices. If that were the case, declaring a national moratorium on foreclosures would be the just and reasonable thing to do.

But if, as appears to be the case, the overwhelming majority of homeowners facing foreclosure have fallen far behind on their payments, then it is a good deal harder to summon up the same moral outrage over reports that the banks and loan service companies cut corners, failed to keep the right documents and engaged in shoddy and even fraudulent practices. Just because the banks and servicers have screwed up doesn't mean they and their investors are no longer entitled to get their money back.

Certainly banks and servicers should, at their own expense, be sent back to do things right. Those who engaged in fraud should be punished. And if there are legitimate questions about who owns a loan, those will need to be resolved before the proceeds of any foreclosure are distributed.

But none of that changes the basic reality that there are millions of Americans who took out mortgages they could not support on houses they could not afford. It may be necessary to postpone their day of reckoning for a few months to get the paperwork in order and ensure that all the proper procedures are followed, but the reckoning is inevitable.

There may be some good that comes out of this mess.

Stretching out the foreclosure process would reduce the number of houses dumped on the market over the next six months, which could help firm up housing prices in the short term and put some extra support under a sagging economy. But everyone should understand that the longer the foreclosure process goes on, the longer it will take for the excess supply of houses to be absorbed, for prices to stabilize and for the real estate market to return to something closer to a normal equilibrium.

A moratorium should also put pressure on banks and loan servicers to finally bite the bullet, as many of us suggested they do two years ago, and move more aggressively to restructure problem loans by writing off more of the principal and refinancing what remains at lower interest rates over longer terms.

The breakdown in the foreclosure system has also exposed serious weaknesses in the way mortgages are written, packaged and serviced that should force the industry to adopt instruments and structures that are simpler and easier to change when things go wrong. Based on the recent revelations, the consumer protection agency should require that mortgage servicers meet minimal standards of customer service and offer clear procedures for loan modification and third-party adjudication before the foreclosure process can be initiated. If this adds to the price of a loan, so be it.

That said, those who are cheerleading for a moratorium should realize they can only push things so far. It would not help the recovery of the economy, or the real estate market, if the foreclosure process became so hopelessly tangled that banks and investors effectively lose the ability to recoup the remaining value of their collateral. That would provide some immediate financial relief to households facing foreclosure, but it would encourage many more homeowners to begin shirking their mortgage payments in the belief that they would also be able to avoid the consequences. The long term consequences of that would be that mortgage rates would be higher and mortgage loans would be smaller and harder to get.

washingtonpost.com

 

[william the wie]

The big questions are:

Were the mortgages taken out lawfully?

Are all of the actual plaintiffs being named in court?

 

[KissMy]

"Trying to speed up the process puts the taxpayers like me on the hook for trillions not counting punitive damages."

"The FBI taskforce on Real Estate Fraud was effectively muzzled in early 2004. I know of many cases where state and local law enforcement have uncovered fraud rings run by mortgage originators and in the cases I am aware of no forensic accounting was involved."

I know a local woman who merely worked at a local bank and she openly admitted to committing mortgage fraud, or conspiracy to commit fraud, and her explanation was that everybody was doing it.

But if we dredge up the whole industry and mine it for fraud it is gonna take an industry larger than the mortgage industry to process the paperwork.

And what if anything is gained?

I say lets do it. Lets put people to work investigating these mortgages & take back every fraudulent penny. I have thought from the beginning there needs to be claw-backs. The democrats ran on this. Now that they are in & on the take it is bailouts as far as the eye can see. If you file fraudulent taxes the government will come down on you like a hammer even if you are broke.

These assholes pulled off massive fraud & paid off some officials to look the other way & now are sitting on piles of money while tax money had to fill the accounts that the money was stolen from. This is ethically, morally & legally wrong on so many levels. A society can not endure with this kind of cancer rotting it to the core.

It may feel good to do it, but it would create a legal quagmire large enough to employ everybody in NYC. And it would take decades to resolve.

Couldn't you settle for a focused investigation of the biggest fish while offering immunity to anybody who rolls up?

Why are all the big fish criminals doing even better than before? Even raising taxes on these big fish will not matter because they have already made & hidden the money. We need to investigate where the big money went & get it back. None of these clowns went to jail. They just offered up one obvious fraud clown Madoff to appease the masses. Madeoff sounds like a stage name. They are telling us Ha Ha, we made off with the cash & you can't touch us because we have all the power & we rule over you peasants.

This economy will not recover because people can't trust the system. More rot at the top corruption needs to be rooted out. I am not satisfied as with the majority that any of this is corrected. These assholes acted with zero fiduciary & their only goal was to screw the public regardless of the cost to society. The rest of us could never get away with that. They had no rules & we are ruled over like slaves. If you put a dollar in their bank they just use it to drive up the prices of the items you wanted to spend it on devaluing your dollar while they are making money off your dollar & never sharing with you the spoils that your dollar just made them. The Fed hands them money at zero interest & we can't get a loan at 6%. If you have a dollar to invest you cant earn any interest.

If I take a dollar out of their bank & stick it in my mattress it takes $30+ dollars away from these assholes. I am seriously thinking of taking a $100,000 & stashing it in a few safes. That will take $3 million away from these assholes. I say Fuck the ruling class!!! Never put a dime into their banks ever again.

 

[loosecannon]

I say lets do it. Lets put people to work investigating these mortgages & take back every fraudulent penny. I have thought from the beginning there needs to be claw-backs. The democrats ran on this. Now that they are in & on the take it is bailouts as far as the eye can see. If you file fraudulent taxes the government will come down on you like a hammer even if you are broke.

These assholes pulled off massive fraud & paid off some officials to look the other way & now are sitting on piles of money while tax money had to fill the accounts that the money was stolen from. This is ethically, morally & legally wrong on so many levels. A society can not endure with this kind of cancer rotting it to the core.

It may feel good to do it, but it would create a legal quagmire large enough to employ everybody in NYC. And it would take decades to resolve.

Couldn't you settle for a focused investigation of the biggest fish while offering immunity to anybody who rolls up?

Why are all the big fish criminals doing even better than before? Even raising taxes on these big fish will not matter because they have already made & hidden the money. We need to investigate where the big money went & get it back. None of these clowns went to jail. They just offered up one obvious fraud clown Madoff to appease the masses. Madeoff sounds like a stage name. They are telling us Ha Ha, we made off with the cash & you can't touch us because we have all the power & we rule over you peasants.

This economy will not recover because people can't trust the system. More rot at the top corruption needs to be rooted out. I am not satisfied as with the majority that any of this is corrected. These assholes acted with zero fiduciary & their only goal was to screw the public regardless of the cost to society. The rest of us could never get away with that. They had no rules & we are ruled over like slaves. If you put a dollar in their bank they just use it to drive up the prices of the items you wanted to spend it on devaluing your dollar while they are making money off your dollar & never sharing with you the spoils that your dollar just made them. The Fed hands them money at zero interest & we can't get a loan at 6%. If you have a dollar to invest you cant earn any interest.

If I take a dollar out of their bank & stick it in my mattress it takes $30+ dollars away from these assholes. I am seriously thinking of taking a $100,000 & stashing it in a few safes. That will take $3 million away from these assholes. I say Fuck the ruling class!!! Never put a dime into their banks ever again.

all the more reason to reward folks for rolling up and offering immunity is a start. But you would have to offer a better incentive because you really need a wide net if you want to uncover all fraud. You need a fully expedited investigation because the trail is getting cold and documents and e-mail shredded.

But my own instincts tell me that those near the top were pretty well legally protected, which is why the SEC would rather cut them deals and small fines than imprison anybody.

Have you seen an attorney to find out how your 3 properties will fare in the great mortgage unraveling?

BTW they let Madoff stay in his penthouse during trial, even after they caught him trying to hide assets. He's the Martha Stewart of this crisis.

 

[william the wie]

I agree with expediting and rolling up but if Holder doesn't get all over this and soon it will spin out of control.

 

[loosecannon]

You wanna go after the big mortgage lenders?

Try this:

Class Action Lawsuit Against Countrywide: California in [Market-Ticker]

I am no real estate attorney but this sure smells like a smoking gun.

 

[B. Kidd]

I looked into this Willie and as best as I can tell nobody knows how meaningful this will be.

But a worse case scenario is that foreclosures will be delayed by months as paperwork processing and legal filings get log jammed. But all of the same foreclosures will still proceed after considerably more expense is incurred in preparing them.

Somebody still has a deed, and a right to foreclose. They just have to prove it.

If anything this only proves the completely irrational character of the mortgage securitization industry. As in, should it even exist?

Why shouldn't banks be required to retain accounts that they originate?

You ask an essential question as to whether or not mortgage securitization's should exist. If one believes that mortgages' should be bought/sold/traded like common stock, then they'd be for securitizations.
Economic 'in-securitization' was the result of mortgage securitizations, so I believe they should not exist.

Good thread.

 

[william the wie]

You wanna go after the big mortgage lenders?

Try this:

Class Action Lawsuit Against Countrywide: California in [Market-Ticker]

I am no real estate attorney but this sure smells like a smoking gun.

WaMu is purportedly worse. But it gets better WaMu, Wachovia, Countrywide and other less famous crooks were taken over at the behest and financing of the New York Fed and the fraudulent foreclosures were disposed of by HUD (See Kissmy's post.) This is a huge can of worms.

 

[saveliberty]

I looked into this Willie and as best as I can tell nobody knows how meaningful this will be.

But a worse case scenario is that foreclosures will be delayed by months as paperwork processing and legal filings get log jammed. But all of the same foreclosures will still proceed after considerably more expense is incurred in preparing them.

Somebody still has a deed, and a right to foreclose. They just have to prove it.

If anything this only proves the completely irrational character of the mortgage securitization industry. As in, should it even exist?

Why shouldn't banks be required to retain accounts that they originate?

It would slow the pace of mortgages. Not a bad thing given what has transpired. I think requiring them to keep a 50% stake might be a better place to start.

 

[loosecannon]

You wanna go after the big mortgage lenders?

Try this:

Class Action Lawsuit Against Countrywide: California in [Market-Ticker]

I am no real estate attorney but this sure smells like a smoking gun.

WaMu is purportedly worse. But it gets better WaMu, Wachovia, Countrywide and other less famous crooks were taken over at the behest and financing of the New York Fed and the fraudulent foreclosures were disposed of by HUD (See Kissmy's post.) This is a huge can of worms.

Then KissMy might be in big trouble if he invests much into those properties, because this class action suit sounds like it has teeth and Moonbeam Brown is about to be our governor.

There is no place more distressed by foreclosures and bullshit mortgages than CA. People want blood.

Who ended up buying Countrywide, WaMu and Wachovia in the FDIC reorganization? WaMu is an actual commercial bank with depositors so I know they were salvaged. Wasn't Countrywide a mortgage spin off from BOA? If all they did was mortgage they may have been killed. I don't know Wachovia.

 

[loosecannon]

JPM bought WaMu, and it looks like Countrywide is still around as CountryWide reo. Whatever that means.

 

[loosecannon]

I looked into this Willie and as best as I can tell nobody knows how meaningful this will be.

But a worse case scenario is that foreclosures will be delayed by months as paperwork processing and legal filings get log jammed. But all of the same foreclosures will still proceed after considerably more expense is incurred in preparing them.

Somebody still has a deed, and a right to foreclose. They just have to prove it.

If anything this only proves the completely irrational character of the mortgage securitization industry. As in, should it even exist?

Why shouldn't banks be required to retain accounts that they originate?

It would slow the pace of mortgages. Not a bad thing given what has transpired. I think requiring them to keep a 50% stake might be a better place to start.

a lotta evil was and still can be hidden inside mortgage backed derivatives and securities. This was a terrible idea from the very start imo.

The originating banks need to be tied to the product to ensure due diligence and to insure that they apply safe lending standards. But maybe, just maybe some proportional securitization scheme might be acceptable.

I can't believe I said that, please shoot me.

 

[loosecannon]

I looked into this Willie and as best as I can tell nobody knows how meaningful this will be.

But a worse case scenario is that foreclosures will be delayed by months as paperwork processing and legal filings get log jammed. But all of the same foreclosures will still proceed after considerably more expense is incurred in preparing them.

Somebody still has a deed, and a right to foreclose. They just have to prove it.

If anything this only proves the completely irrational character of the mortgage securitization industry. As in, should it even exist?

Why shouldn't banks be required to retain accounts that they originate?

You ask an essential question as to whether or not mortgage securitization's should exist. If one believes that mortgages' should be bought/sold/traded like common stock, then they'd be for securitizations.
Economic 'in-securitization' was the result of mortgage securitizations, so I believe they should not exist.

Good thread.

thanks. Mortgage securities are treated like high grade bonds, or virtual currency. Even today the Federal Reserve allows member banks to use them as actual banking reserves!

They ARE NOT securities no matter the insurance that they may be attached to. Esp since I don't see a Fannie or Freddie stepping up to insure them in the future. They are just like stocks and subject to the same instabilities.

The CDOs are asset backed which is clearly something. But if you wanna use mortgages as an asset you absolutely MUST guard their integrity.