What Goes to the Banks Stays With the Banks

14 Feb

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Monday, February 13, 2012 10:20 AM
To: Charles Cox
Subject: What Goes to the Banks Stays With the Banks

Borrowers Don’t Count — But False Claims of Losses Count Multiple Times

by Neil Garfield

What Goes to the Banks Stays With the Banks

Even if the Payment was on the Debt owned by Another

There have been dozens of deals with law enforcement and regulatory agencies. There have been thousands of settlements with individual homeowners sealed under confidentiality. Why do they not work for everyone?

The answer is obvious — borrowers don’t count. And the reason they don’t count is the uninformed view that borrowers took the loans and should repay them — even if the loans are NOT in default, are paid off in full to creditors, and the claimants who keep getting money from all sides and from all directions without any demand for accounting.

It is the policy of this country that the full brunt of the cost of the mortgage crisis should be borne by borrowers. We are imposing an ideology over the facts, ignoring the absurdity of the consequences, and compounding both past evil and greasing the tracks for the banks to serve as the collection point for payments covering losses that never occurred (to the banks).

These payments include taxpayer direct bailouts (Bush’s TARP), indirect bailouts (Bush-Obama public-private Maiden Lane deals), direct private payments from servicers (while declaring non-payment from the borrower), direct private payments from insurers who were bailed out using taxpayer dollars, direct private payments from credit default swap counter parties who were funded by Taxpayer bailouts from the U.S. treasury and foreign treasuries, and indirect credits from other exotic credit enhancements.

THAT MAKES 6 distinct sources of payment received by the banks IN ADDITION TO THE DIRECT PAYMENTS FROM BORROWERS AND INDIRECT PAYMENTS FROM BORROWERS WHO GAVE UP TITLE AND POSSESSION TO HOMES ON WHICH THE CREDITOR WAS PAID IN FULL AND THERE WAS NO DEFAULT.

Even Borrowers can’t get their brains around the possibility that they accepted a loan that was paid off using their tax dollars and financial relationships enabled by the ignorance of both the creditor investor who actually loaned the money and the ignorance of the Buyer.

In all cases the investors are sitting with the alleged loss due to so-called defaulted mortgages. In no case have the banks loaned money in any securitized loan. In no case have the banks paid any money to buy the loans. In all cases the risk of loss was left with the creditor investor. In all cases, the Banks collected the payments, the bailouts, the insurance proceeds, the CDS proceeds etc. In no case have the banks even admitted the receipt of more than $17 trillion on defaults that at most were valued under $3 trillion. In no case have the banks been required to provide a full and fair accounting.

Instead, the banks and servicers have completely controlled the narrative portraying borrowers as deadbeats wanting to get out of a valid debt when what these brewers want is a modification based upon realistic numbers in a fair Market on a fair playing field — one which recognizes that the inflated appraisals of yesteryear were the responsibility of the banks that ordered those appraisals with express instructions as to what value must be attached to the property if the apprised ever wanted to work again as an appraiser.

What goes to the banks, stays with the banks.

There are rarely payments of more than a pittance paid to the creditors from their agent bankers.

The banks withhold money received because (a) they mean to keep it and (b) they mean to declare a non-existent default in order to create the appearance on an economic reality in which foreclosure is proper.

Add to that the "credit bid" the banks submit in lieu of cash payment at the bogus foreclosure sales, and you end up with the banks taking all of the money from investors and homeowners and all of the property from the homeowners whose debt has long since been paid.

This validation of economic crimes worthy of life sentences on Wall Street. Instead, we continue the attack on the middle class and poor thus defiling our own reputation and undermining the nation’s ability to recover from what could have been a temporary debasement of our currency and prospects.

It is axiomatically true that no nation has survived severe income inequality — because for wealth inequality to get that extreme the freedoms in the marketplace must be replaced by bullies. The nation of laws that keep a society intact is replaced by the law of men. Thus is born both the new Aristocracy and the new seeds of social revolution.

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