Weitz Law Firm - 520 Kirkland Way, Ste 103 - Kirkland, WA - (425) 889-9300

Thursday, October 7, 2010

Bank fraud abundant in mortgage documents – How, Why and What’s next?

Two of the best media sources (Dylan Ratigan and Karl Denninger) for spreading the truth of our current situation get together on the Dylan Ratigan show to discuss the mortgage fraud situation.



Weitz - Here's the situation in simplified form:

1. Banks make loans; bundle them together (Mortgage Backed Security ‘MBS’)

2. Banks sell this ‘bundle of loans’ to Pension Funds or other investment vehicles who buy them because the companies that "grade" these securities’ (ie. Moodys and Standard & Poors) have graded them ‘AAA’ (A+ in school terms)...probably because they are compensated by the very party who is asking them to grade them.
(this is the equivalent of students deciding how much money their professors make- do you think the professor might give better grades?)

3. Banks then bet against the those Securities (because they knew they were given to unqualified borrowers (presumably)). (bet that borrow will not actually be able to pay for the loan)

4. Securities then ‘blow up’ (homeowners default)

5. Banks make money on the bets against those securities

6. Banks try to foreclose on the properties that made up those loans (on behalf of the new true owner – typically either a government entity or pension fund that lost money on it)

7. Banks don’t have the proper paperwork to legally foreclose on these properties

The problem – the banks did not adequately document the transfers of the title when they ‘securitized the loan’ (there is no legal ‘chain of title’ maintained); and the Bank presumably ‘illegally packed these because the banks ‘foreseeably’ saw a default in the making (probably the reason they bet against that very security)

8. Next - ??? – ask your local judge or politician- my guess is that we allow the foreclosures to continue, and cover up the ‘fraud’ or ‘malpractice’ (depending on your level of pessimism) because fixing the problem would cause most of the banks to go under. I would argue this should be done so America can operate with new banks that are healthy (rather than the zombie banks that currently run our country.

For more information on your rights in short sale or foreclosure, consider contacting a Seattle Foreclosure Attorney.

Our Firm:

Weitz Law Firm, PLLC
5400 Carillon Point
Kirkland, WA 98033

weitzlawfirm.com

1 comment:

  1. Even if most businesses strive in the current economic situation, real estate business remain stable though it's not perfect but people are expected to look for a place to stay (basic human need.)

    ReplyDelete