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Poetic Justice strikes Banksters: Judges say, "No tickee, no forclosee."


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2008 Feb 22, 5:08am   25,839 views  146 comments

by HARM   ➕follow (0)   💰tip   ignore  

Judge Smales
Judge Smales: "You'll get nothing and like it!"

Banks Lose to Deadbeat Homeowners as Loans Sold in Bonds Vanish

Some highlights:

Feb. 22 (Bloomberg) -- Joe Lents hasn't made a payment on his $1.5 million mortgage since 2002.

That's when Washington Mutual Inc. first tried to foreclose on his home in Boca Raton, Florida. The Seattle-based lender failed to prove that it owned Lents's mortgage note and dropped attempts to take his house. Subsequent efforts to foreclose have stalled because no one has produced the paperwork.

...Judges in at least five states have stopped foreclosure proceedings because the banks that pool mortgages into securities and the companies that collect monthly payments haven't been able to prove they own the mortgages.

...Each time the mortgages change hands, the sellers are required to sign over the mortgage notes to the buyers. In the rush to originate more loans during the U.S. mortgage boom, from 2003 to 2006, that assignment of ownership wasn't always properly completed, said Alan White, assistant professor at Valparaiso University School of Law in Valparaiso, Indiana.

"Loans were mass produced and short cuts were taken,'' White said. "A lot of the paperwork is done in the name of the original lender and a lot of the original lenders aren't around anymore.''

...When the mortgage servicers and securitizing banks that act as trustees of the securities fail to present proof that they own a mortgage, they sometimes file what's called a lost-note affidavit, said April Charney, a lawyer at Jacksonville Area Legal Aid in Florida.

Nobody knows how widespread the use of lost-note affidavits are, Charney said. She's had foreclosure proceedings for 300 clients dismissed or postponed in the past year, with about 80 percent of them involving lost-note affidavits, she said.

"They raise the issue of whether the trusts own the loans at all,'' Charney said. "Lost-note affidavits are pattern and practice in the industry. They are not exceptions. They are the rule.''

"Lost-note Affidavits". Add that to "Bandos" as a nominee for best new bubble buzzword of the year.
HARM

#housing

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82   Peter P   2008 Feb 25, 3:51am  

Did I mention that I have great respect for Oprah Winfrey?

83   northernvirginiarenter   2008 Feb 25, 4:01am  

Are poor people poor because of the system or because of decisions? I always seem to end up concluding it is due to their own decisions.

I always end up concluding that it is largely due to the system. Agreed that mobility is the key strength of our empire, and without it the entire system crashes. Our education system creates all kinds of barriers to mobility, our corporate culture does the same. Try to imagine how difficult it would be to "escape" out of the barrio if you are a young african american born to a dad in prison and a mother addicted to drugs. I think if Malcolm, Peter P, and myself were born in this state we would currently have lots of tats and neon under the floorboards. Maybe if we were lucky we'd be sitting on a nice pay option arm or two, maybe we'd have turned out to be subprime peddlers. If we were lucky enough to survive.

84   OO   2008 Feb 25, 4:03am  

It doesn't matter who will be the president. Here is the fate that the next President will have to succumb to be it Hillary or Obama or McCain.

1. Raise tax - or pull money out of his ass. If the next President doesn't raise tax, he will charge you more on the inflation tax, just simple as that. This is just the law of gravity that you cannot defy.
2. Massive bailout of the banking system - NO ONE in the oval office can bear to see the collapse of the financial system. All sorts of imaginable programs will be put in place, there is no consideration for moral hazard, because one needs to deal with the hazard right now.
3. Shut the door on illegal and legal immigration - this is a knee-jerk reaction for any country facing recession / depression.

In fact, if you do care about your job, you should welcome illegal immigration but NOT legal immigration. Because illegal immigrants are not those who can compete with you on job offers, legal ones are. Do you want the Congress to import another sharp guy just like you, a younger and healthier version, that can eat your lunch? I frankly don't dislike illegal immigrants, they clean my pool and mow the lawn for such a reasonable cost that I can hardly hate them.

85   FormerAptBroker   2008 Feb 25, 4:06am  

Malcolm Says:

> Are poor people poor because of the system or
> because of decisions?

Most poor people are poor because they are both lazy and stupid. The dirt poor are very lazy and very stupid.

Then HARM Says:

> The problem with being born poor –even if you’re the
> most brilliant, inventive mind on the planet– is, it stunts
> your opportunities and limits your options. Being born
> poor means you do not get to attend the best schools,
> just whatever public school in the neighborhood where
> you live.

If you are born poor it will be very hard to become “rich” but it is not hard to avoid being “poor”. My tree guy and my gutter/sheet metal guy both make over $200K a year and anyone with a basic skill like painting, plumbing or fencing can easily make over $100K a year with just basic smarts and a good work ethic…

86   Peter P   2008 Feb 25, 4:07am  

Our education system creates all kinds of barriers to mobility, our corporate culture does the same.

It is therefore necessary to think beyond what we were told.

Most top billionaires did not finish higher education when they created their own corporate culture.

If one considers making 300K - 1M a year "successful" then perhaps it is sufficient to have a "rich" dad paying for business school.

What is worse? Being born in a poor family or being born into a poor mindset?

87   Peter P   2008 Feb 25, 4:08am  

If the next President doesn’t raise tax, he will charge you more on the inflation tax, just simple as that.

I will take inflation "tax" any day. I want more after-tax money to buy gold.

88   GallopingCheetah   2008 Feb 25, 4:11am  

I like a socialist system. Even a feadal aristocratic system isn't as bad as a plutocracy. In the latter, men who should never procreate try very hard to make money and "succeed" in order to have a better shot at reproduction. Capitalists are ruthless and mean. It's because they were born with low level of testosterone to begin with. Men with high amount of T are dominant, but they are fair.

It's not that I came from a poor and/or uneducated family. But I have to say, "Fuck rich people." They are all greedy cowards. Sooner or later, the military caste in this country will have enough of it and stage a coup to topple the rich and their clowns (Obama that is).

89   FormerAptBroker   2008 Feb 25, 4:11am  

northernvirginiarenter Says:

> Try to imagine how difficult it would be to “escape” out
> of the barrio if you are a young african american born
> to a dad in prison and a mother addicted to drugs.

It will be very hard for a guy like this to get a job at a top 5 VC firm or get in to the Pacific Union Club, but not many people will ask about your Dad or Mom when hiring a painter. If you have a reputation of showing up on time and doing a good job cutting trees or painting apartments you will have plenty of work and make plenty of money…

90   OO   2008 Feb 25, 4:12am  

Unless you are already very well off, you won't benefit much from inflation, because your pay typically lags inflation, and gold has long gone off on a wild run, your after-tax money won't be able to buy much anyway.

Be it deflation or inflation or stagflation, only smart money on the top of the food chain will be able to benefit the most.

91   GallopingCheetah   2008 Feb 25, 4:16am  

please unmoderate my comment.

92   HARM   2008 Feb 25, 4:16am  

My tree guy and my gutter/sheet metal guy both make over $200K a year and anyone with a basic skill like painting, plumbing or fencing can easily make over $100K a year with just basic smarts and a good work ethic

So why isn't the median HH income aover $200k a year then --not even in "rich" Kalifornia? A: it's not really so easy to make that kind of money. Most painters & plumbers don't make that kind of money unless they own an established and profitable business that employs other craftsmen (who earn a lot less $), which is --surprise, surprise -- not so easy.

What is worse? Being born in a poor family or being born into a poor mindset?

A: Being born poor. Mindset can easily be changed with experience. Acquiring wealth from zero (despite FAB's apocryphal "tree guy and "gutter/sheet metal guy" making VP-level salaries), not so easily changed. ;-)

93   Peter P   2008 Feb 25, 4:17am  

and gold has long gone off on a wild run

Time will tell. Gee, I thought homes were expensive in 2000.

Gold is still way off its inflation-adjusted peak. When there is a gold bubble, you will feel it.

94   Peter P   2008 Feb 25, 4:20am  

Mindset can easily be changed with experience.

It is harder than you think. It takes enlightenment and a temporary abandonment of "reality" to change one's mindset.

Many poor people are so bitter that adopting the idea of "abundance" is all but impossible.

95   OO   2008 Feb 25, 4:20am  

Good trades persons are paid on CASH. That tells you why the "median" income is...low.

I have come across a few good contractors who do make quite a bit of money, perhaps not $200K, but certainly over $100K. They all accept cash only.

96   OO   2008 Feb 25, 4:23am  

And all these salons and restaurants that accept cash only...

We go to this hair stylist whose place is always full with customers, her price is very good but accepts cash only. She told me she shows IRS $1K a month in profit, hehe. I don't mind, since she passes on the savings to me.

97   HARM   2008 Feb 25, 4:23am  

Median Salary by Years Experience - Job: Painter, Construction and Maintenance (United States)
10-19 years $45,009

http://www.payscale.com/research/US/Job=Painter,_Construction_and_Maintenance/Salary

98   Peter P   2008 Feb 25, 4:26am  

HARM, 'job' and 'business' are very different concepts.

99   OO   2008 Feb 25, 4:27am  

HARM,

such a payscale survey is valid for all salaried jobs like ours. Not the case with sole proprietors who interact directly with the customers and negotiate price and service.

I know quite a couple restaurant owners who all declare $70-80K income on their return. Let me be frank, no one will work that hard for a mere $80K annual income.

There is a very big underground cash economy in the US that is outside of the IRS system. Salaryman like ourselves are unfortunately trapped.

100   GallopingCheetah   2008 Feb 25, 4:29am  

I like a zosialist system. Even a feudal aristocratic system isn’t as bad as a plutocracy. In the latter, men who should never procreate try very hard to make money and “succeed” in order to have a better shot at reproduction. Kapitalists are ruthless and mean. It’s because they were born with low level of testosterone to begin with. Men with high amount of T are dominant, but they are fair.

It’s not that I came from a poor and/or uneducated family. But I have to say, “Fxxk rich people.” They are all greedy cowards. Sooner or later, the military caste in this country will have enough of it and stage a coup to topple the rich and their clowns (Obama that is).

101   Peter P   2008 Feb 25, 4:31am  

Salaryman like ourselves are unfortunately trapped.

Celerymen ought to be trapped. An economy should incentivize entrepreneurship over employment.

102   HARM   2008 Feb 25, 4:32am  

Many poor people are so bitter that adopting the idea of “abundance” is all but impossible.

The idea of "abundance" may be hard for a person to grasp when all they see around them is scarcity.

RE: cash economy, I agree the median figures may be misleading for some job categories (though interestingly enough, the I.R.S. seems to "know" this and tweaks the income stats accordingly), however, not all tradesmen make $100-200k/year, just the very best. The other thing to consider is that construction is a very cyclic feast/famine industry --in sync with housing. You need to save/invest a substantial portion of your boom-years income in order to survive the bust years.

103   Peter P   2008 Feb 25, 4:36am  

The idea of “abundance” may be hard for a person to grasp when all they see around them is scarcity.

Exactly. I dare to speculate that most poor people stayed poor because of this mindset.

But God created all of us with a Free Mind. We are free to adopt ANY mindset.

104   OO   2008 Feb 25, 4:37am  

IRS of course knows about this, it's just that these fish are too small to trifle with.

A restaurant owner I know went through an IRS audit before, they had to send out an agent to camp out at his restaurant 3 days out of a week, and then went through all his suppliers to triangulate the number. That's a lot of manpower. In the end, since he was careful not to leave trails, he got off clean.

105   DinOR   2008 Feb 25, 4:37am  

In the past I've brought up the Pursuit of Happyness" guy Chris Gardner. I think he's a great example of what you can accomplish.

When they were interviewing Will Smith for the part Chris very specifically wanted to know if he thought the story would be about fast cars and easy money? It wasn't until Chris was comfortable that Will "got it" that they went ahead and made the movie.

For CG it was about "breaking the cycle" and being there for his son. (Unlike his own upbringing) The success he enjoyed later in life wasn't nearly as important to him as having a real relationship w/ his son.

THIS is what we should be striving to do. (Personally I cut-out any and all drinking during the week) So "my" contribution is that I'm "only" a weekend drunk. Something my children only saw when they were pretty much grown-up anyway. My brother-in-law (LA acctg. firm VP) made a promise to himself *not to abuse his wife (the way he grew up).

So it's about incremental changes and making self-improvements where and when you can. Not a pep talk but Rome wasn't built in a day and I definitely do better than my dad did. (I was lucky too) :)

106   HARM   2008 Feb 25, 4:46am  

Hey, don't get me wrong --I never said personal responsibility, PMA and refusing to give up *wasn't* an important component of 'success' (however you choose to define it). It's just that the material type of "success" is not as easy to come by as some here may think.

107   HARM   2008 Feb 25, 4:49am  

I clearly recall being an eager "willing an able" college grad in '91, sending out a mountain of resumes and pounding the pavement daily (this was pre-web), and getting... hardly a single call back.

Willingness to work is no guarantee of success. Willingness + opportunity works much better.

108   Peter P   2008 Feb 25, 4:51am  

Willingness to work is no guarantee of success. Willingness + opportunity works much better.

Don't forget the luck factor. Just go watch The Secret. Seriously.

109   DennisN   2008 Feb 25, 5:02am  

Note that luck needs not be random. It is definitely possible to attract luck.

Even more important is to grab any opportunity (i.e. "good luck") with both hands when you see it.

110   Peter P   2008 Feb 25, 5:05am  

Even more important is to grab any opportunity (i.e. “good luck”) with both hands when you see it.

Yes. One must be ready to receive.

111   DinOR   2008 Feb 25, 5:07am  

I WILL say those options weren't as readily available for our kids. Had it not been for paying off their college loans and... coming up with a down payment for their house they'd be in an apartment and languishing in debt.

I have confidence though they'll do better b/c they spent so much time w/ me being honest about the mistakes "I" made!

There's a lot of practical lessons we can take away from this very blog for instance? It was reassuring for me to see there were others that shared my attitude and values about debt. Without a counter-balance it's all too easy for young people to get very comfortable w/ huge amounts of debt!

112   DinOR   2008 Feb 25, 5:15am  

"One must be ready to receive"

That's .... true but one must also be willing to .... play the hand they're dealt. My way out of lower-middle class was through salesmanship. Yeah, I know, sucks but it was the BEST thing being remotely "offered" to me?

At some point you just have to say, hey, this is it. Fall in love with whatever "it" is and run with "it" as hard as you can. Of course there's no guarantee but look at all the kids that grow up w/ every advantage in the world and STILL manage to f@ck it up? Why... just look at all the "legacy" kids that we're doing better than? (Primarily b/c we're still ALIVE, but you get my drift)

113   northernvirginiarenter   2008 Feb 25, 6:04am  

For every Chris Gardner, there are 100's in not 1000's of rats chasing this dream that never actually get there. It's in the hard statistics, an undeniable fact.

Its useful for corporate interests to hold out this "dream"; to keep the rats running on the treadmills, chasing that carrot in all likelihood that will never be tasted. Microcosm example typical Big 5 consulting firm or high end law firms, churning through people, using them up, all chasing a carrot that maybe only a few percent ever reach.

Bill Gates, Michael Dell, Sergey Brin etal are held out as examples of the mobility that is possible, not unlike the casinos that publicize the million dollar jackpot winner who represents less than .0000015% of gamblers.

Seriously ingrained in our belief system is this uniquely American concept of material achievement and success. IMHO, our society would be better served with a different set of values and priorities. Granite countertops do nothing to further our civilization.

Materialism is a dead end in and of itself, it will prove our undoing.

114   HARM   2008 Feb 25, 6:40am  

Greenspan's Latest: Oil Boom Will Likely 'Go on Forever'

I am reconsidering my position re: Peak Oil. If AG's convinced it's real, then it must be wrong.

115   Peter P   2008 Feb 25, 6:49am  

What Peak Oil?

At $100/b, economically-feasible oil is abundant in many places.

116   Peter P   2008 Feb 25, 6:50am  

On the other hand, oil prices can also collapse through demand destruction.

I have more faith in the food boom.

117   Malcolm   2008 Feb 25, 6:56am  

HARM Says:
February 25th, 2008 at 11:22 am
"As someone who grew up dirt poor (something Randy H and I have in common), I can attest that it’s a little of both. Bad personal choices may or may not have gotten your parents where they are, but children of poor parents must surmount incredible odds in order to rise above the muck of their upbringing –unlike their privileged elite peers, for whom success is all but guaranteed (think the Hiltons & Trumps)."

Harm, you deserved a response but I had to step out. Without even reading the other posts which followed I wanted to thank you for reminding me of that perspective, and I totally agree that starting out poor does stunt people's start in life. Although I never went without, my parents struggled and I can relate somewhat. I further think there is a nature/nurture angle to this as well. Thanks man.

118   DennisN   2008 Feb 25, 6:58am  

So when are the US, Canada, and other such worthy contries going to form "OFEC": the organization of food exporting countries? Dirt-bag countries that piss us off will have their food supply curtailed. ;)

119   Peter P   2008 Feb 25, 7:02am  

Dirt-bag countries that piss us off will have their food supply curtailed.

No pork bellies for them!

Oops.

120   EBGuy   2008 Feb 25, 7:22am  

Dirt-bag countries that piss us off will have their food supply curtailed.
Last I checked, we became net importers of food a couple of years back.

At $100/b, economically-feasible oil is abundant in many places.
Yeah, as long as you have a deep-water platform. We are already past peak EROEI for oil.
Speaking of energy, I am looking at a natural gas hedge. Anyboy want to sing the praises of tankless (NG) water heaters? Old reliable is starting to run out of hot water on occcasions...

121   Malcolm   2008 Feb 25, 7:24am  

My next water heater will be tankless unless someone here convinces me that it is a bad idea.

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