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Posts Tagged ‘foreclosure crisis’

A ‘Sensible’ Outline for Housing Solution

Posted by Larry Doyle on February 24th, 2012 6:54 AM |

All reports to the contrary, unless and until our housing market stabilizes you can rest assured our economy is NOT going to rebound in a meaningful fashion anytime soon.

A wide array of government sponsored mortgage programs to date have yielded very limited support. Uncle Sam has written checks and violated many a moral hazard via these programs, but has very little to show for it in return.

As we enter into 2012, the markets for purchasing versus rental in many geographic regions of our nation are dramatically different. Might a program which promotes converting current foreclosures to rental properties be viable?  (more…)

Aiding and Abetting Mortgage Fraud

Posted by Larry Doyle on October 19th, 2010 4:54 AM |

While selected Wall Street banks and their cronies in Washington may want to downplay the depth and impact of the mortgage fraud embedded in our national foreclosure crisis, anyone with a modicum of ‘sense on cents’ knows that this fiasco has many players with their hands in the till. Our friends at The Center for Public Integrity recently highlighted the manner in which those in the legal profession have aided and abbeted this enormous fraud. Let’s navigate.

The role of lawyers in the foreclosure process has garnered less attention, but they play a big role, especially in those states that require banks to go to court to get a foreclosure order. (The same states where the lenders have suspended foreclosures). In these states, banks are required to produce a notarized affidavit of a loan officer and submit the mortgage documents. Those documents, though, are difficult to produce, thanks to the securitization craze.

As CNBC notes in this helpful primer to the foreclosure crisis, every time a mortgage changes hands, the new owners are supposed to receive an “assignment” of the mortgage notes from the buyers. For securitized loans, the mortgages are assigned to a specially created investment vehicle.

During the housing bubble, however, the notes and other critical documents were often either not properly transferred or simply not created. Other records vanished along with failed brokers and lenders. This means that lawyers charged with putting together the paper trail often have a tough job. Over the past few years, some have used shortcuts. (more…)

Wall Street’s Chickens Are Coming Home to Roost

Posted by Larry Doyle on October 15th, 2010 4:09 AM |

Fraud is fraud.

No matter how you disguise it — or dare I say, securitize it — fraud smells. That stench associated with improperly, and often fraudulently, originated mortgages is growing rapidly and is poised to back up into the Wall Street plumbing. The losses connected with the inevitable outcome of Wall Street banks having to repurchase fraudulently originated mortgages are enormous, although hard to quantify.

I highlighted this reality two days ago in writing, The Real Issues Behind the Foreclosure Crisis:

The imposition of principal forgiveness may actually be less expensive for banks and servicers than addressing the real root problem behind many mortgages. What is that problem? The fact that a lot of mortgages in our nation today were fraudulently underwritten from point of origination and were then fraudulently conveyed via mortgage securitizations.

I actually initially addressed this reality in November 2008 in writing, The Wall Street Model is Broken…and Won’t Soon Be Fixed: (more…)

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