Great Leap Forward

A Modest Proposal to Stop Foreclosures

Sheila Bair, former head of the FDIC is just about the only one in Washington who gets the irony of the continuing foreclosure crisis. A couple of weeks ago she published a tongue-in-cheek call for the Fed to provide a $10 million interest-free loan to every American household:

Every underwater household could pay off the crappy and fraudulent mortgages that the bankster thieves are using as a pretext for illegally foreclosing on homes. They’d still have plenty of money left over to buy US Treasuries to generate some interest income. And they could pay off credit card debt and the ballooning student loan debt while they’re at it.

Why, households could put their finances into better shape than the banksters have managed to do with the $29 TRILLION that the Fed provided to them! And while the help the Fed provided to the banksters has done absolutely no good whatsoever, loans to households would put the US on the path to recovery.

Ok, Ok, Bair’s proposal is a bit over the top. And much of the analysis in her article is out-of-paradigm thinking (someone needs to sit down with her to explain Modern Money Theory!).

But it beats the heck out of anything that comes out of the current Obama administration, which just creates task force after task force to do nothing—see my post last week as well as an excellent piece in the New York Daily News:

Obama continues to fiddle while another 12 million families will have their homes taken away from them by banksters. The foreclosure “factories” are still working overtime, as John Schoen reports over at Economy Watch:

The biggest bankster foreclosing on homes is Wells Fargo. As Schoen reports, they’re still robosigning with Burger King kids who are deputized as Bank Vice Presidents to evade the law which requires that top bank officials attest to personal knowledge of the verity of the documents used to take homes away from the rightful owners. (You can be pretty sure that no real Vice President wants to sign off on the frauds!)

And Wells Fargo still has $1.8 trillion in mortgages yet to foreclose—to do its part in moving all property to the rightful ownership class at the top 1% of the income distribution. So this is going to continue for a long time. Forget the stories about US housing “recovering”.

Employees at Wells Fargo are trying to blow the whistle—reporting that their workload remains far too high to actually meet the requirements of foreclosure law. They cannot check the validity of documents, which are typically handled by third party vendors (I’ve been told privately that these tasks are usually outsourced to cheap labor in foreign countries—often to workers with little English language ability). As a result these “Vice Presidents” are forced to perjure themselves—signing affidavits that carry the same legal weight as sworn testimony in a courtroom. They claim that the Bank’s records on amount owed as well as the chain of property title are both in order.

In reality, both claims are false. If the property documents exist (and it is likely that they were purposely destroyed in accord with MERS’s business model), they are held in storage warehouses and it would be far too expensive and time consuming to locate them.

Further, Wells Fargo routinely loses mortgage payments or credits them to the wrong accounts. It tacks on erroneous fees, and then illegally credits mortgage payments to the fees rather than to the loan.

An audit by the San Francisco assessor’s office found irregularities in 99% of 382 foreclosure cases; in 84% of them there were clear violations of the law.

And here’s the worst part. As NY State Supreme Court Judge Schack noted, the homeowner must challenge the banksters in court to uncover the mistakes. He called it an “adversary system…so if someone doesn’t challenge it, it’s going to go through”. The banksters know most homeowners do not have the means to challenge the theft of homes, so they proceed without worrying about the consequences.

And no top manager of any big bank has yet to face charges. The Obama administration is not interested.

Too bad Sheila Bair left.

Here’s the modest proposal.

1.Offer zero interest loans to all households with credit card debt, student loan debt, and mortgage debt–of sufficient size to retire all the debt outstanding on May 1.

2.Fire Eric Holder. Appoint an Attorney General willing to go after the banksters.

3. And fund a team of white collar criminologists of sufficient size and experience to go after every damned bankster.

10 Responses to “A Modest Proposal to Stop Foreclosures”

OrigblessAugust 27th, 2012 at 4:48 pm

$1,000,000 to every household, including renters and folks living in tents in downtown
American cities – would do fine.

We have lost just about everything which has stabilized our consumer economy for 65 years. The last great consumption stabilizer – 'entitlements' – are now under the gun. Ninety five percent of 'entitlement' monies are returned to local economies (shopkeepers, landlords, vendors, gas stations, groceries, medical providers, etc.)within 30 days. Nickled and dimed will become pennied and pinched under Romney/Ryan. Businessmen are experts at finding money in other people's pockets.

nikkiMay 8th, 2013 at 8:44 am

Can I simply say what a relief to find a person that actually understands what they are discussing on the internet. You actually realize how to bring a problem to light and make it important.