While fighting against this $25 billion settlement agreement last fall I joined groups in meeting with Attorney General Gansler. He told us his hands were tied; there was the MERS decision; the fraud was too expansive; it would cost to much to investigate; the fraud too hard to prove we were told. I told Mr. Gansler that all 50 state attorneys general went to Greenspan and the Fed asking him to stop sub-prime mortgages after an investigation over a few years showed widespread fraud. It was known officially in 2003. So why, after 8 years of time to investigate and build cases had Maryland's Justice Department not served the citizens well enough to win a settlement equal to an interest payment on the amount of fraud committed? Gansler was astounded by that information....he didn't know 50 state attorneys general had acknowledged massive fraud in 2005. GIVE ME A BREAK!!!!!! I AM TIRED OF HAVING POLITICIANS WHO ARE WORKING AGAINST THE INTERESTS OF THE PUBLIC LOOK ME IN THE EYE AND TELL UNBELIEVABLE STORIES.....OK ......LIES.
I want to be sure that we don't let what is an attempt at revisionist history in the media be the only news out there. We must shout loudly and strongly to drown out the propaganda being given us. Below you will see who the victims of this sub-prime mortgage fraud really are. Whereas there were some who played the system and were caught, the overabundance of victims were hardworking lower-class families, retirees, and people with disabilities. Why did the banks and George W. Bush who promoted this policy from the Presidential pulpit choose these low-income and largely urban residents as victims? First, they were naive in that they did not know the process and trusted what they thought was an authority figure. Next, these people qualified for taxpayer/government funding to get these loans so there was less of a chance of being pursued legally afterwards as we are seeing is true now. Finally, those in urban areas lived in what was to become 'enterprise zones' and bankrupting these families made way for the development we are seeing today. Remember, the 1% had decided some decades ago that in order to pull off this massive movement of wealth to the top by means of fraud, they would need to reside in the confines of a city.....easier to secure than the suburbs.
So we see that this massive financial fraud was decades in the planning and involved social engineering on a grand scale. Simply to get enough legislators and lawyers on board to protect the fraud is a logistical wonder. That is in what they are proud..... in a 'MASTERS OF THE UNIVERSE' way. THE ONLY THING IS THAT NONE OF IT WAS LEGAL....THE ENTIRE PROCESS FROM BEGINNING TO END WAS CRIMINAL. THAT IS WHERE THE NEO-CONSERVATIVE/NEO-LIBERAL CONCEPT THAT STRENGTH DICTATES SUCCESS .......WINNING AT ALL COSTS TRUMPS MORALITY, ETHICS, AND RULE OF LAW.
VOTE YOUR INCUMBENT OUT OF OFFICE!!!!!
This is a good overview of the sub-prime history. Remember....you may not be as forgiving as I......that many involved debt consolidation. Wages were so low these two decades that in order to stay out of extreme poverty people would use credit.....entitlements and disability payments fell too and they were forced to use credit to make ends meet. People's personal debt was not always about personal consumption....it was often about survival.
Rise and Fall of Subprime Lenders Began on Wall St. by Jim Zarroli March 30, 2007 Subprime Rules? Disclosure Rules Fail Some in Subprime Market March 30, 2007
It all started last November, when a relatively small lender — called Own-It Mortgage Solutions — defaulted on its loans to JP Morgan Chase & Co. Since then, more than 24 subprime lenders have folded, victims of rising default rates — but also of rising suspicions that the entire subprime market is teetering. One of the nation's biggest subprime lenders, New Century Financial, is expected to file for bankruptcy any day now. Like a lot of lenders in the subprime market, New Century specialized in zero-down and no-interest loans, which cater to people with credit problems. For years, the company was able to prosper because of the financial support of much bigger Wall Street banks. But as the housing market has slowed, and regulations have tightened, that support has quickly dried up. Subprime lending has long been the forgotten, low-rent corner of the mortgage business, touched by a down-market taint. But the image is deceiving, industry analysts say: Subprime lending is based on the support of Wall Street's old-line banking establishment. "It encouraged it; it funded it," says Guy Cecala, publisher of the Inside Mortgage Finance newsletter. "Since the mid-90s, warehouse lending by Wall Street firms is what's kept companies like New Century in business." Cecala says that at one time, companies that were in the mortgage business lent out their own money. But in the mid-1990s, there was an explosion in mortgage-backed securities. Mortgages could now be repackaged as bond debt and sold to investors. Companies like Countrywide could now market and sell mortgages to their customers. And that, in turn, led to spreading risk. But it also opened the door to a lack of certainty over borrowers' ability to repay loans that had been pooled together and sold to investors like mutual funds. "These loans get sliced and diced, securitized and spread to the wind," former Federal Reserve Governor Edward Gramlich says, "and nobody has a clue who the ultimate — they know who the borrower is — but where the money comes from. It's all around the world." Investors loved the securities, seeing them as a way to invest in mortgages when the housing market was strong. They even loved the risky subprime mortgages that came from customers with weak credit. Big banks like Wells Fargo and Citicorp started their own subprime divisions. The big banks had another reason to like subprime lending. Keith Ernst of the Center for Responsible Lending says that many subprime companies are state-chartered, which means they aren't highly regulated. "I certainly think this helped the volume grow as quickly as it did," Ernst says. "And I also think it's part of the reason the quality is not what anyone wishes it would be." Ernst says that under federal law, banks have to meet certain safety and soundness regulations, so if they go out too far on a limb — by making too many questionable loans, for instance — the regulators will reel them in. Guy Cecala echoes that view. "What we're seeing now in the subprime market is, when the Wall Street firms get cool on the subprime market, they just cut the funding," Cecala said. "And the warehouse loans vanish overnight — and that's what puts a company like New Century out of business." Analysts say that the upshot of the troubles in the subprime loan industry is that there will be fewer companies offering loans to people with weak credit scores — which means home ownership will get a little more elusive for low-income people. But it should also wash a lot of risk out of the mortgage market, making it ultimately safer and more stable — at least until the next housing boom occurs. Lawmakers on Capitol Hill are demanding answers from regulators and lenders about subprime mortgages. Many worry that rising mortgage defaults and lender failures could hurt America's overall banking system. Already, the subprime crisis has been blamed for steep declines in the stock market. But just what is a subprime loan — and why should you care? Here, a primer: What's a subprime loan? Generally, subprime loans are mortgages given to borrowers with credit scores of 620 or below. Such low scores result from a history of paying debts late or not paying debts at all. Because subprime borrowers are seen as "higher risk," their loans carry interest rates that are at least 2 percentage points higher than those offered to borrowers with better credit. So, for example, while a credit-worthy borrower could get a mortgage at 5 percent interest, the same mortgage would cost a subprime customer 7 percent interest or more. About 20 percent of U.S. consumers have credit scores of 620 or below, on a 300-850 scale. But of that group, only 13 percent have mortgages, according to Experian, a credit reporting bureau. What kinds of loans do subprime borrowers get? The vast majority — about 80 percent — have adjustable-rate mortgages, or ARMs, says Susan Wachter, a professor at the University of Pennsylvania's Wharton School who specializes in real estate. (It's worth noting, however, that not all ARMs are subprime loans.) ARMs typically start out with an interest rate that's lower than the rate on a comparable fixed-rate mortgage. But after the introductory period — often two or three years for subprime borrowers — is over, the interest rate goes up, which can result in payments that increase by hundreds of dollars each month. Who are these borrowers? "A typical subprime borrower is not someone buying a house, but someone refinancing," says Mary Moore, a spokeswoman from the Center for Responsible Lending, a nonprofit that advocates curbs on predatory lending. "A typical subprime borrower is someone who has a lot of credit-card debt, and is refinancing to pay some of it off." Studies have found that subprime borrowers tend to live in low-income neighborhoods. They're less likely to have a college education and more likely to be a minority, especially black or Hispanic. According to Freddie Mac, about 10 percent of subprime borrowers could have qualified for a prime loan. Where do they live? "Historically, they have been in declining cities, the weak cities of the Rust Belt — Philadelphia, Baltimore, Detroit," Wachter says. She says those subprime borrowers were concentrated in distressed neighborhoods, where banks felt defaults were too high. That's why lenders chose to expand to places they thought would be better risks: rural areas and small cities in the West and Southwest, she says. But now, subprime borrowers in these areas are also finding themselves in trouble. Why do they go into default? Most subprime borrowers take out a loan to pay off creditors, but it may not be enough to solve their financial problems. Some loans were given to people who just couldn't afford the payments — even before their rates increased — but weren't savvy enough to turn them down. "Some of these loans require an accounting degree to understand," Wachter says. Others' financial situations may have changed since they took out the loan — they lost a job or got divorced, for example. Why did lenders make loans that borrowers couldn't repay? It can make sense for a bank to underwrite an ARM for a couple with modest incomes who are moving up the corporate ladder. The expectation is that, by the time the interest rate readjusts, the borrowers will have a higher income. However, some ARMs were sold to people on fixed incomes — retirees and those on disability. "It's legal. Right now, nothing prevents them from doing that," Moore said. "[Lenders] know that increase is coming, yet they're underwriting the loan at the start rate." She says lenders shouldn't approve borrowers unless they can afford their loans at the higher interest rate that's to come, not the low "teaser" rate. But oversight of such loans has been patchy — "if it exists at all," adds Wachter. Mortgage brokers are paid for writing loans, and aren't docked if those loans fail. Finance companies bundled subprime loans and sold some of them off to investors in other financial markets. But these firms miscalculated the likelihood of defaults in a housing downturn; they're now holding a bunch of bad loans that no one wants to buy. Why are foreclosures and defaults growing among subprime borrowers? "It's because the overall [real-estate] market has turned," Wachter says. When prices are flat, or down, borrowers can't refinance to lower their payments, because they don't have enough equity. They also can't sell to get out from under, because the house is worth less than they paid for it. The only option left is to bring in more income, or to miss payments. Nationwide, more than 13 percent of subprime borrowers were late on payments in the fourth quarter of 2006, according to the Mortgage Bankers Association. What does it all mean for the housing market? If all the subprime loans currently in default were to go all the way to foreclosure, that would still be a small part of the overall mortgage market. Even in states with the most foreclosures — Ohio, Michigan and Indiana — those foreclosures still represent just 0.5 percent of all mortgages. In regions with the most subprime lending that also have struggling local economies, foreclosures may rise to 1.5 percent or 2 percent of all mortgages, Wachter predicts. But with lending standards now tightened, fewer borrowers will qualify for loans. That's a double whammy for housing — more homes on the market and fewer buyers. For example, in markets where home prices might have fallen 3 percent because of the general housing downturn, the presence of a lot of subprime borrowers in trouble could magnify that to a 6 percent price drop, Wachter says. "Six percent of a $200,000 home may not sound like a whole lot," Wachter says, and it's not for a lot of people. But for those who bought recently, and who need to move quickly, they're going to be in trouble, she says.
Here is a fellow Baltimorean who posted a blog on FireDogLake, a progressive website. The language is much more explicit than mine......but he was right about the content. Where I speak to billions lost in actual fraud, he talks below about the DAMAGES to the state. All lawsuits have criminal penalty and civil penalty.....except this one.
A citizen (me) asks Maryland Attorney General Doug Gansler a simple question about the robosigning settlement & lameness By: jest Posted on FireDogLake Website
Tweet Recently, I found out that my AG, Doug Gansler (D-MD) was going to give one of a series of workshops regarding the details of the robo-signing settlement deal. Months before this, I had called Mr. Gansler’s office to express my, shall we say “discontent,” with the proposed deal while it was still in its infancy. So I took the time to go to the meeting to ask him about it. (Don’t you just love democracy?)
Also present at the meeting were a couple dozen homeowners, as well as a couple members of Maryland’s 2 larger Occupy groups: Occupy Baltimore & Occupy Frederick.
Gansler seemed pretty happy with himself.
Not to bore you with the details, but a broad overview is as follows:
- Maryland gets $1 billion of the $26 billion deal; it’s the 6th highest of any state
- $870 million of that goes to things like principal reduction, and refinancing at so-called “low-interest rates”
- $24 million for foreclosure fraud victims, who will each receive a $2,000 lump sum payment (around here that’s not even 2 months rent)
- $60 million goes to state and local governments to clean up the various messes that were made (e.g. tearing down vacant houses, counseling services, legal aid)
- The banks have to make payouts; if they don’t disburse the funds, the settlement value will go up. How much, or when the penalty would occur, he never bothered to mention.
- The Obama Administration is currently working out a side deal with Fannie and Freddie to do another settlement deal. (I imagine this probably won’t end well either)
He praised himself because MD got the 6th most money of all the states. Even though MD was hit disproportionately higher, especially the large African-American communities of Prince George’s County & Baltimore which were hit especially hard by racial biases in subprime lending. He acted like he should have gotten extra credit for this, when in fact it is merely fair (if you can even call it that).
Naturally, he pushed this thing as a great deal. But for all these great things, he was convinced that “we” had to make some concessions as well, for some reason that wasn’t explained.
- The state waived criminal claims against the 5 large banks and other mortgage companies. The reason being they went bankrupt, and the statutes of limitations for the cases are coming due. (Which are both BS reasons)
- Individuals can still sue banks for redress. Which is great, because everyone has tens of thousands of dollars sitting under their mattress for legal fees, as if they could beat Goldman Freakin’ Sachs in court in the first place.
- MERS lawsuits are still on the table, as are some criminal liability issues. But again, good luck w/that.
He then thanked Eric Holder (DOJ) & Shaun Donovan (HUD) for pushing the settlement over the finish line. If it weren’t for them, the deal may not have happened. (Make of that what you will)
There was a brief Q&A afterwards, and one person from Occupy Baltimore asked if there was any way to renegotiate or rework any parts of the deal. The answer was a swift “no.” I wanted to ask Mr. Gansler a question or three, and had my chance as the crowd broke up into groups to work with foreclosure counselors.
jest: Hello, Mr. Gansler, nice to meet you. *shakes his hand* I’m not an accountant, a lawyer, or anything so please forgive me.
But I have a question about the math.
The national settlement is $26 billion, of which Maryland gets $1 billion. However, according to your own Maryland Foreclosure Fraud Task Force Report (see pg. 31), there was a $31 billion dollar economic loss in home values in the state of Maryland alone. Additionally, there was an additional $340 million dollars in lost in state and local tax revenue.
Given this, where did the final settlement numbers come from?
Doug Gansler (Douche-MD): Uh… *stutters, stammers, delays* Uh, give me the name of one person who was involved in a foreclosure or in a robo-signing case.
Douche: Give me the name of one person who was involved in a foreclosure or in a robo-signing case.
jest: I don’t want to give other people’s names or private information out, as it is not appropriate. Either way, it’s beside the point, there has been case after case where fraud has been proven. There are cases right now between AIG, Countrywide, monoline insurers who are all claiming that they all defrauded each other.
Douche: *Gets real loud and talks over me b/c he knows I’m right* We tried to go after Countrywide, but proving fraud is blah, blah, blah, and more douchebaggery
jest: That’s not the issue. I simply want to know how a $31 billion dollar problem can have a $1 billion dollar resolution. Where did that number come from?
Douche: *Uncomfortable laughter* Well, this is the first time people at these workshops have been unhappy to get free money!
jest: I remember past lawsuits where people would get multi-million dollar judgements against McDonald’s because their coffee was too hot. People are getting foreclosed fradulently on by a computer program, MERS, and all they get is a $2,000 check? Where did that number come from?
Douche: OK, well how much of the $31 billion should they have gotten?
jest: A lot more than $1 billion.
Douche: Well, how do you decide that? *goes on about some other unrelated diversionary nonsense about jury trials or something, which sets off the guy from Occupy Frederick, ending Gansler’s lame attempt at an “answer” to my question*
Needless to say, I felt a bit of disappointment and irritation regarding the whole thing. He could have at least given me some bullshit answer that I could at least wipe my ass with. I didn’t even get that, he was so evasive. Though I’m not sure why I was disappointed. I knew this was going to happen.
At any rate, it still disgusts me that there seems to be absolutely no economic reason or justification for these settlement numbers. By his reaction, the numbers may have very well come from the banks themselves: “This is the offer, take it or leave it.” Frankly, that’s probably what did happen.
Gansler even implied that this was “free money” on more than one occasion. The money is not free, it is theirs. It was STOLEN from them, and now they are getting a meaningless pittance back in return; and chances are the banks will find a way to weasel their way out of that, or at least delay it for who knows how many years.
There was a condescending “We’re smarter than you, so just take the scraps and gruel because we know what’s good for you” mentality there. Local council members and state senators were there as if they thought face time while showering people with “free money” was a good photo op. They really seemed in denial about how badly this is hurting people. The people I talked to were hopping mad.
I met a couple who said their bank (BofA I think; can’t remember) was trying to foreclose on them on the grounds that the property was vacant. On multiple occasions, they’ve had people try to break into their home, come to find out it was the bank. The last go around, they heard someone drilling through their back door. They opened it and found a repo person from the bank trying to break in; to her credit, she said she would knock next time, as if that is better… I asked what did the cops do about this, and they said “The cops? Who do you think they are owned by? The banks own the cops.” They never even bothered to call…
The banks were enemy number one, but even Obama resentment was palpable. I had a convo with one guy about globalization and China, and how they own all our debt, mortgage and otherwise.
People are a lot smarter than these politicos seem to give them credit for, but there is so much self-defeatism out there that they just bend over and take it. They know it’s wrong, and it’s best they’re ever going to get. Sad thing is, they’re probably right on both points….
I thought there were free pens to write down notes, but as I was leaving I opened it and found it was an anti-bacteria liquid in spray form. After shaking this sleazeball’s hand, I figured I should keep it to remove & kill whatever Democrat Party diseases, parasites, or cooties he may have rubbed off on me. It was kind of disgusting. And fitting