Petition against Banks...

Discussion in 'Politics' started by atlclgurl, Sep 22, 2011.

  1. atlclgurl

    atlclgurl Member

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    ... getting a "Pass" for their criminal conduct.

    As some of you know, the Banks have been "negotiating" with the 50 state Attorney General "Task force" in regards to giving them immunity for their criminal conduct in this foreclosure mess.

    Progressive Change is trying to do something about this along with a handful of AG's. If you're concerned about this at all, please consider clicking on the link below and adding your name.

    Thanks!

    Progressive Change Campaign Committee (PCCC) | Stand With Conway Against Wall Street Immunity
     
  2. D_Amadeus_Mofart

    D_Amadeus_Mofart Account Disabled

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    Discussing criminal activity.. you should forget about banks and focus on oil companies.
     
  3. atlclgurl

    atlclgurl Member

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    Why? One doesn't preclude the other.
     
  4. dandelion

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    Besides, arent the bankers doing more harm?
     
  5. atlclgurl

    atlclgurl Member

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    They and their creation (MERS _ Mortgage Electronic Registrations Systems, Inc.) are responsible for destroying the housing market and hundreds of years of procedure in regards to a prospective buyer being able to rely on the land records of the county to determine if they are getting a clear title to their new home, so I think the answer to that questions would be "Yes!".

    Here's s HuffPost article about the petition:
    Kentucky Attorney General Backs New York's Schneiderman In National Foreclosure Settlement Talks
     
  6. dandelion

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    serious enough, but i think that's a drop in the ocean.
     
  7. D_Rosalind Mussell

    D_Rosalind Mussell New Member

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    I've worked for a couple of major lenders that I'll leave nameless, both during major refi booms. My most recent stint was 4 years ago, where reduced doc mortgages were given out like candy and fraud was a major issue. The Fannie and Freddie reduced doc guidelines left a lot of room for abuse by loan originators and borrowers alike, and that abuse played a huge part in what happened to the economy. When you put people in houses that they can't afford foreclosure is imminent.

    While I would love to blame the banks strictly, the fault falls on the Fannie, Freddie and the borrowers also. People will readily overstate their income to get the house they want and Fannie & Freddie handed that ability directly over to them. Unfortunately, the honest folks ended up taking this fall with them when it all unraveled. My family is among them and we're still sorting through it all.

    As far as these "robo signers" are concerned, I'm not surprised at all that they were hired. I've seen too many shitty practices behind that curtain to be shocked. I've had more than my fair share of confrontations regarding this type of shit and it soured me on the business. There were a lot of things I loved about working in the industry and there are some very honest companies out there, but they are unfortunately overshadowed by the fraud that was allowed to run rampant for too long.
     
  8. D_Rosalind Mussell

    D_Rosalind Mussell New Member

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    This is precisely why everyone should buy owners title insurance. Even though lenders require clear title prior to closing they still buy title insurance. CYA 101.
     
  9. dandelion

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    what are you saying actually happened? Were these duff mortgages issued because borrowers lied to banks or because banks failed to make reasonable checks about credit risks on people who asked for money? I find it hard to believe this mess happened because ordinary people suddenly started lying more than they had before - shouldnt that be assumed?

    Wouldnt it be better to fix the system so they dont have to buy insurance, rather than forcing people to make yet another payment to a financial institution? Talk about breaking something so you can then charge to fix it!
     
    #9 dandelion, Sep 22, 2011
    Last edited: Sep 22, 2011
  10. Redwyvre

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    Even before the the balloon burst I was horrified by the the idea of an "ARM" (adjustable rate mortgage). How could a person be in touch with reality and sign a ARM contract? Hundreds of thousands of people did. Greenspan has said he was unaware of the scope of the situation. Sometimes I don't know what to think. Seems like there are a lot of mindless people and a lot of heartless people.
     
  11. D_Rosalind Mussell

    D_Rosalind Mussell New Member

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    The reduced documentation loans allowed for less paperwork for certain borrowers, heavily relying on credit rating. Such programs included stated income/stated asset, no income/asset verification, stated meaning whatever words passed their lips, that's the income that was taken into consideration. No verification whatsoever. For example, we had a public school teacher state that she earned $6500 per month, which was a complete lie. Conveniently, this was precisely the amount of money she would have needed to make in order to meet debt ratio requirements to afford the house she was buying. Even though the underwriter had every reason to question the authenticity of this statement, we were not allowed to question the borrower on this. Stated was stated, end of story. As long as all of the other guidelines were met, a blind eye was turned. So yes, plenty of people abused that but it wasn't strictly borrowers that abused the system.

    Title insurance is a one time purchase. I bought title insurance for $79.00 when I closed on my house in 2001, which is offered through all attorney's offices at closing. My policy will be in effect as long as I own my property, it's a small price to pay to cover my investment. Title rundowns aren't as simple as plugging digits into a computer, it takes a bit of research. Human error can and will happen. Also, not all states treat their real estate transactions the same. Some record their deeds with the city, some with the county, some states are escrow, some are non-escrow, etc. It's nearly impossible to change the system with one broad stroke. There are lots of things that need to change about the mortgage industry, but title insurance isn't one of them.
     
  12. D_Rosalind Mussell

    D_Rosalind Mussell New Member

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    ARMs are good loans for people that don't plan on being in the property for a long time. For example, if they wanted to flip the house within 6 months it might be more financially sound for them to take out an ARM. They could make mortgage payments at a greatly reduced interest rate while they rehab the house, giving them more wiggle room with the budget. I wouldn't get an ARM myself, but I can see why it would be beneficial to some.
     
  13. atlclgurl

    atlclgurl Member

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    There were multiple frauds, some originated prior to the "borrower" even getting a "loan". The banks gamed the system by deliberately ignoring underwriting standards so they could build vast "pools" of "triple A" mortgage backed securities and then buy an insurance that they called Credit Default Swaps.

    Those CDSs paid out 30, 40 and sometimes 50 TIMES the so called "value" of the pool it was insuring.

    So, if you fabricated a pool of mortgages that was supposed to have contained 1B (just for round numbers), and the pool was declared "in default" (as it was designed to do), the bank (and Goldman) would collect up to 50 BILLION dollars because the entire pool was declared "in default" when as little as 7% of the loans were not being paid (which happened inevitably, what with the ARMS resetting).

    In other words, even though 93% of the pool was paying, on time, as agreed, the pool was still "in default" and the banks STILL collected their insurance.

    Phil Angelides, chair of the Financial Crisis Inquiry Commission, said this business model was “like selling a car with bad brakes and then taking out an insurance policy on the driver.”

    And then there was (and is) the robo-signing fraud. People with no knowledge of anything testifying, via affidavits, that they had ALL the numbers correct. Not to mention notaries attesting to documents having been "executed in FRONT of them" when they weren't even fucking notaries!

    Are the borrowers entirely innocent? Certainly not, but then they didn't have the ability to approve those "lair loans", the banks did, and they happily approved those loans knowing full well that they were creating the housing bubble and not giving a shit about how it would affect the worldwide economy as long as they could line their own pockets with proceeds from what Goldman's Fabrice Tourre (thier trader charged with fraud) so blithely labelled as "shitty" and as "crap pools", even when selling them to "widows and orphans."
     
  14. dandelion

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    If you mean a mortgage whose interest rate changes from time to time as the economy changes, whatever, then this is the normal practice in the UK. Certainly one reason the bank of England has zero interest rate, because a large proportion of mortgages are linked to this. Very nice for the holders during this crisis, because their interest rates all fell to and have remained at rock bottom. On the other hand, were the rate to rise there would have been a disaster. Some variable rates are not linked and merely defined by the lender, and generally these have not done so well, but rates are generally at or below what they were before the crisis began. This has counteracted the effect of the recession. Historically in the UK rates have floated with inflation into the teens when bank rates were raised, but in the last decade people have adjusted to an expectation of rates around 5-10%.

    Sounds a nice scam, but shouldnt this straightforwardly be reversible since it is just a transfer of money not a real loss?

    wouldnt that be a good thing because it wasnt real notaries behaving fraudulently?

    One might wonder why an underwriter would agree to such terms unless they were happy with them. The Uk property market has long assumed that it will be possible to sell a property 6 months after it was purchased at a profit, so whether the purchaser can pay is not necessarily important. Some banks were quite happy to make 'self assessment' mortgages, and to date this has not caused a problem. (but granted there is a huge overhang just waiting for a bit of a nudge...) By and large although people may have lied they have been able to pay what they said they could. Broadly, it has always been cheaper to pay interest on the purchase price of a house to live in than the rental cost of that property....so if you cant afford a loan you cant afford to live at all. The government is getting quite concerned that the public system which pays housing benefit (ie pays some of your rent for you) is becoming huge and reaching relatively wealthy people because rents are so high. But what it amounts to is many people had a trial run at the payments before taking the loan.


    Possibly premiums are rising? Maybe it is difficult to fix, but there is no way to claim a defraudable system is good.
     
  15. D_Rosalind Mussell

    D_Rosalind Mussell New Member

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    I completely agree with you. I am not saying banks are blameless. Rather, I say the contrary because they are responsible on every level for allowing these situations to pass. My experience on this is from an operational perspective, as I worked in an underwriting team while this was going on.

    Let me give you a peek into what I experienced:

    Real estate is a volatile business built on relationships and real estate agents hold most of the power. When a market is hot the sense of urgency increased 100 fold because they want to close as many deals as possible all the time. Pressure starts from the top, where numbers are everything. Quotas are set and that same pressure is applied downward, where unreasonable demands are made of lenders, title companies, appraisers, etc.

    Unfortunately, this pressure to meet their quotas caused some people to try to slide things under the radar. Appraisers not disclosing in reports that the market conditions were declining, even though all evidence in their reports pointed in that direction. To indicate so would make some deals fall through the cracks, therefore pissing off their bread and butter. Loan officers had to meet quotas or they were let go. So for some of them it was either unemployment or tweak someone's income ratio and keep working. It doesn't make any of it right at all, but these were the types of decisions many had to make.

    My colleagues and I were subject to a lot of pressure by the loan officers and we were constantly pushing back because we refused to let this stuff slide under the table. Our manager would go to bat for us with the sales managers and we'd get shut down because it was the numbers that mattered to them. Needless to say it made an unhappy place to work. Although we had a lot of great loan officers that never pulled any tricks, the ones that did created utter misery. It made me hate my job because I felt like shady practices were being encouraged through the attitude of upper management. When you have greedy people calling the shots, everyone loses.
     
  16. D_Rosalind Mussell

    D_Rosalind Mussell New Member

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    But this is where the problem lies. The underwriter knew it was wrong and talked to our manager about it. She refused to sign off on the loan and our manager made a few phone calls. It pissed a lot of people off because the "don't ask" rule ended up being violated and the woman took her business to another lender. While my department were happy to see the loan get withdrawn, all the sales manager saw was a loss of a unit. Pretty sad, if you ask me.

    The cost to rent here is higher than the cost of a monthly mortgage payment also. We have a lot of people here taking public assistance for housing as well and the list of people still waiting goes back years. It was one of the deciding factors in my home purchase. It was either pay $1200 for a 2 bedroom rental or $750 per month for a mortgage payment. It was a no brainer.

    Identity theft will never go away. The internet has taken it to new heights, but it's been around forever. I don't see title insurance ever going away, but you never know.
     
  17. dandelion

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    I have not heard any reports that mortgage lending in the Uk ever became as competitive as you describe. With steadily escalating house prices the industry had a nice automatic growth factor built in which pretty much was soaking up all the money they could throw at it. It seems the US had found a way to make money not from the loans but from trading them, so volume became all important. It is true that conditions on mortgages had become more and more relaxed in the UK, so you could get 105% mortgages but although they were going for bust, they hadnt quite arrived. The UK housing market is priced entirely on what buyers are capable of paying (not building cost), because there is a huge shortage.(at least except in fringe areas which generally means the north). Prices have fallen now but no one is quite certain what is happening. Quite a few recent purchasers must be sitting on losses.
     
    #17 dandelion, Sep 23, 2011
    Last edited: Sep 23, 2011
  18. Klingsor

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    Actually, the greedy people can end up doing quite obscenely well for themselves. It's everyone else who loses.
     
  19. atlclgurl

    atlclgurl Member

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    Well, one would think so, but the banks and Fannie and Freddie are fighting any "loss" tooth and nail.

    No, because it's Notaries who are NOW notaries, swearing that they had executed these "assignments" of interest in the property (ownership of the debt instrument) PRIOR to even becoming Notaries. In other words, they are CURRENT notaries, who are claiming to have officially witnessed something they couldn't possibly have been the official witness for, because they had not gain a Notary Commission prior to the date they were actually Notaries.

    It's akin to someone claiming to being a Police Officer, based solely upon their application to the Police Academy! Then, they arrest you, throw you in jail, and after you've lost everything due to the system grinding you up, THEN its discovered that they hadn't been a Police Officer, but they had become a Police Officer after you were falsely arrest!

    So, no, not a good thing at ALL.
     
  20. Redwyvre

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    Thanks BBW36 for explaining the double standard that emerged during the bubble. I had to jump through the hoops to get a home loan in '04 like submit paystubs, and IRS records, even had to pay off a credit card balance for like $700. Still seems very strange so many people didn't have to jump through any hoops to get a loan. Now the market is almost at a complete stand still. Hardly anybody is moving because almost everybody everywhere will lose money if you put your house up for sale.
     
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