tag:blogger.com,1999:blog-9430835.post2511367189109720681..comments2024-03-27T18:24:19.683-07:00Comments on Steve Sailer: iSteve: DocumentgateUnknownnoreply@blogger.comBlogger53125tag:blogger.com,1999:blog-9430835.post-51001987975818859142010-10-30T14:37:55.363-07:002010-10-30T14:37:55.363-07:00Go ahead, and my apologies for hinting at that who...Go ahead, and my apologies for hinting at that whole "deliberate disinfo" thing. Uncalled for.<br /><br />That's actually just the beginning. When you give NINJA (No, income, no job or asset) loans at 0% down and 0 payments for a year, you can inflate house prices up to infinity, because the borrower intends to pay zero percent of the loan and get a free house until he gets back to Mexico. Even for honest/foolish borrowers, credit as cheap as this can delude many people into purchasing houses at prices they can't remotely afford.<br /><br />Combine this with the constant propaganda of "house prices always go up" and you can imagine the inflation this would cause in the asset market. Soon, even responsible people, if they want a house, will be *forced* to get into more debt than they can handle because wages do not keep up with the asset inflation. (The asset inflation trickles down to tons of construction and landscaping jobs and Real Estate Brokerages distorting the market.) Inevitably when the bubble bursts and the defaults begin, a much bigger segment suffers than the marginals who were the original marks.<br /><br />For this to work, the big banks had to have rating agencies and regulatory agencies on board, because there was some measure of fraud (at least fraudulent inducement) in every step of the process on a very large percentage of these loans. (And I haven't even gotten to the derivative bubble yet, which, as you investigate it further, is just Maddoff writ large. A lot of people creating worthless securities, inflating their value through fraud, and passing it on through a system that was so lathered with Other People's Money, that no one cared too much as long as they were taken care of.)<br /><br /> If the banks were at all concerned with legitimacy, they wouldn't have gotten Burger King teens to process their foreclosure documents.<br /><br />http://www.businessinsider.com/banks-hired-burger-king-workers-to-sign-foreclosure-documents-2010-10Paul DeRenonoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-1837574005345532962010-10-30T13:24:51.589-07:002010-10-30T13:24:51.589-07:00Paul DeReno says:
"Wow. Steve seems to be wo...Paul DeReno says:<br /><br />"Wow. Steve seems to be woefully ignorant as to what's going on here."<br /><br />Thanks, I like your explanation, a lot. I intend to borrow it in some fashion. Could I sum it up by saying: Bringing a whole bunch of financially marginal and submarginal people into the mortgagesphere, justifying loans to them on the grounds of fighting discrimination, allowed the big financial operators to make "Heads we win, tails the public loses" bets on mortgage-backed securities. To do this, the big boys needed to extend mortgage lending to a lot of people whose attitude paralleled that of the big boys: "Heads we win, tails we don't have much to lose." From Wall Street's perspective, the problem with traditional mortgage borrowers was that they were stick-in-the-muds who though along lines of "Heads we win, tails we lose most of our lifesavings" and thus were less likely to roll the dice.Steve Sailerhttps://www.blogger.com/profile/11920109042402850214noreply@blogger.comtag:blogger.com,1999:blog-9430835.post-81494007595946033612010-10-30T03:32:11.243-07:002010-10-30T03:32:11.243-07:00Wow. Steve seems to be woefully ignorant as to wh...Wow. Steve seems to be woefully ignorant as to what's going on here. <br /><br />As a former regular reader, Steve seems to be on the same horse of blaming blacks and hispanics for our problems. Now, it is true that PC goes against blatantly obvious facts of human nature, including several impolite facts. Of course, once Steve gives you some good PC Chemo, he seems to leave it there. That's fine, perhaps he serves this unique function.<br /><br />But making the argument that Mozillo was a true believer is either stupid or deliberate disinformation. Mozillo got where he is today by giving preferential treatment to all the right players.<br />Mozillo never bought a share in his own company after 1987. He cashed out of his company in 2007. There are people, Mozillo among them, who not only knew that the housing bubble would crash, but knew precisely when it would crash, because they were crashing it.<br /><br />Mozillo was a willing participant in the great housing fraud that was intended, from the beginning, to confiscate the wealth of the country through fraudulent loans and fraudulent derivatives based on those loans.<br /><br />It's simple at the bottom. A big bank can essentially create all the money it wants, but it can't legally just create money and give it to itself to buy everything. It has to be issued as a loan to another party. So they created the money for the loan and loaned the money to counterparties who were certain not to pay it back, using convenient middlemen like Mozillo as fronts to take the heat and the immediate risks. They then claimed all the assets acquired with the loans. Illegal aliens were the pawns in the asset grab.Paul DeRenonoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-36272084933830405702010-10-18T16:53:37.939-07:002010-10-18T16:53:37.939-07:00Soon, the powers that be will have to decide betwe...Soon, the powers that be will have to decide between maintaining the normal legal rules involving property ownership, debt, etc., or another banking crisis. Three guesses which way they'll decide....none of the abovenoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-82463817012780387192010-10-18T06:55:18.015-07:002010-10-18T06:55:18.015-07:00>I have a HELOC on my house. A couple years ago...>I have a HELOC on my house. A couple years ago, the bank admitted to me that it had lost all the documents and asked me to sign new ones. I told them to go to hell.<<br /><br />Good for you. You might get the rest of the house for free if you successfully file for bankruptcy, stop paying the mortgage, and then challenge the consequent foreclosure.<br /><br />If we must observe every jot and tittle or else we're undone, then the same should apply equally to the people on the other side of the table. Otherwise, there is no rule of law whatsoever - only the rule that we should be absolutely servile to our "providers."Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-43516044391220044362010-10-18T06:40:35.435-07:002010-10-18T06:40:35.435-07:00>If China and Japan ever decide to stop hating ...>If China and Japan ever decide to stop hating each other and start hating the US, heaven help our children.<<br /><br />Debt-forgiveness will be necessary to keep the world spinning, with its usual share of individual winners and losers. If the US remains in business per status quo, then plenty of Chinamen will continue to make financial killings. Very similar to the game of musical chairs - not everyone ends up on his ass.<br /><br />And remember, the US has more nuclear weaponry than has most of the rest of the world. So the US holds the "stick" AND the "carrot"; while the pieces of paper that China (and Japan) hold represent the past. Think of those loans as admission fee to the game.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-34771975394767197682010-10-17T23:34:44.378-07:002010-10-17T23:34:44.378-07:00All the parties involved - the vast majority of ho...<i>All the parties involved - the vast majority of homeowners who are not delinquent, the small fraction that is delinquent, etc., are "humans".</i> <br /><br /><br /><br /><br />Not so. There are other parties involved, and they are the most significant parties. They are also non-human. They are called corporations - the banks and other financial institutions which caused the current financial crisis.<br /><br />The "vast majority of homeowners" really don't factor into this at all, except insofar as they are expected to make good the banks foolish behavior.Severnnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-62104189203639984462010-10-17T19:20:47.458-07:002010-10-17T19:20:47.458-07:00Is the USA a country that believes in the rule of ...<i>Is the USA a country that believes in the rule of law or not? If it is, then people who are delinquent need to be subjected to the standard laws regarding delinquency and bankruptcy.</i><br /><br />Right, that's my point. You propose to deny putative debtors the most basic legal process. The "standard laws regarding delinquency and bankruptcy" require the putative creditor to prove that the putative debtor owes it money.ben tillmannoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-3761388183632092632010-10-17T18:54:19.929-07:002010-10-17T18:54:19.929-07:00"Some lenders, especially Wells Fargo, have m..."Some lenders, especially Wells Fargo, have made a practice of fabricating bogus defaults and foreclosing on commercial properties. But let's ignore that, and focus on residential mortgages.<br /><br />How in the hell is it a technicality to require a putative creditor to prove that he is in fact a creditor? Everyone owes somebody something, but if you're going to collect you had better be able to prove that you're that someone. <br /><br />As a bankruptcy lawyer who's been representing secured creditors for almost twenty years, I can't believe your disregard for debtors, a/k/a humans."<br /><br />All the parties involved - the vast majority of homeowners who are not delinquent, the small fraction that is delinquent, etc., are "humans".<br /><br />Is the USA a country that believes in the rule of law or not? If it is, then people who are delinquent need to be subjected to the standard laws regarding delinquency and bankruptcy.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-87793772104594545232010-10-17T16:00:30.306-07:002010-10-17T16:00:30.306-07:00Some lenders, especially Wells Fargo, have made a ...Some lenders, especially Wells Fargo, have made a practice of fabricating bogus defaults and foreclosing on commercial properties. But let's ignore that, and focus on residential mortgages.<br /><br />How in the hell is it a technicality to require a putative creditor to prove that he is in fact a creditor? Everyone owes somebody something, but if you're going to collect you had better be able to prove that you're that someone. <br /><br />As a bankruptcy lawyer who's been representing secured creditors for almost twenty years, I can't believe your disregard for debtors, a/k/a humans.ben tillmannoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-66595306638150570242010-10-17T11:21:35.451-07:002010-10-17T11:21:35.451-07:00"I think Steve is right. How many foreclosure..."I think Steve is right. How many foreclosures involve homeowners who were still current on their mortgage ? <br /><br />How does that make Steve right?"<br /><br />Almost all foreclosures are on people who have stopped making their mortgage payments, and hence are delinquent on their mortgage. Lawyers are using allegations of improper paperwork to halt these foreclosures. A technicality, similar to a criminal getting off because a cop did not properly inform him of his Miranda rights.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-31865027388821361302010-10-16T23:19:22.292-07:002010-10-16T23:19:22.292-07:00I think Steve is right. How many foreclosures invo...<i>I think Steve is right. How many foreclosures involve homeowners who were still current on their mortgage ? </i><br /><br />How does that make Steve right?ben tillmannoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-40167857018277087182010-10-16T22:44:29.248-07:002010-10-16T22:44:29.248-07:00A sane government would put its citizens to work h...A sane government would put its citizens to work hunting down mortgage and securitization fraudsters, evicting deadbeats, and deporting illegal aliens.Tanstaaflhttps://www.blogger.com/profile/10809764986911255031noreply@blogger.comtag:blogger.com,1999:blog-9430835.post-5419163646841442672010-10-16T21:27:53.771-07:002010-10-16T21:27:53.771-07:00"In any complex process, mistakes do sometime..."In any complex process, mistakes do sometimes happen,"<br /><br />I dontknow. I received thousands of paychecks in my lifetime and I never failed to endorse and deposit one of them. No lost paychecks. No affidavits.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-60176242525124161082010-10-16T17:50:15.246-07:002010-10-16T17:50:15.246-07:00I have a HELOC on my house. A couple years ago, t...I have a HELOC on my house. A couple years ago, the bank admitted to me that it had lost all the documents and asked me to sign new ones. I told them to go to hell.<br /><br />Not sure if this is relevant, I just found it amusing.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-81027797918300646492010-10-16T17:40:23.967-07:002010-10-16T17:40:23.967-07:00It is also unfair on those of us who live within o...<i>It is also unfair on those of us who live within our means and pay our debts to have to subsidize who do not.</i> <br /> <br /><br /><br />That's a mistaken way of looking at things. Those of us who live within our means and pay our debts are already subsidizing the wealthy.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-48215121737196199532010-10-16T16:49:35.079-07:002010-10-16T16:49:35.079-07:00So, let's re-state the facts one more time:
(1...So, let's re-state the facts one more time:<br />(1) Banks loaned money to buy houses, secured by mortgages.<br />(2) Banks wanted to resell those mortgages, slice them into securities ("secretization"), etc.<br />(3) For hundreds of years, the law has required that changes in liens be filed with the county recorder. There's a small fee every time.<br />(4) To improve their profits, starting around 2001 banks fraudulently avoided filing those fees. The fraud also helped them hide other things like the really bad risks they were taking.<br />(5) Fraud in a mortgage has always meant that the bank loses its security. It still has a loan, and the buyer still owes it, but it's now an unsecured loan. The principle that defects in a filing will defeat security is as old as the hills, and extends way beyond real estate.<br /><br />There were no surprises here. The banks knew about those fees and documentation requirements; they'd been paying them for decades. They tried to save a few bucks per deal by avoiding them, and now it's time to pay the piper. Unfortunately, since both political parties enthusiastically bail out big banks, we'll be the ones paying.Steve Setzerhttps://www.blogger.com/profile/05569769764170714158noreply@blogger.comtag:blogger.com,1999:blog-9430835.post-23103130098542545002010-10-16T13:29:20.368-07:002010-10-16T13:29:20.368-07:00I think Steve is right. How many foreclosures invo...I think Steve is right. How many foreclosures involve homeowners who were still current on their mortgage ? Is there any data that shows it is a significant fraction ?<br /><br />In any complex process, mistakes do sometimes happen, and banks that commit mistakes should be sanctioned.However, slowing down the foreclosure process will keep distressed inventory around longer, and delay any real recovery in the housing market. It is also unfair on those of us who live within our means and pay our debts to have to subsidize who do not.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-53012030761602617182010-10-16T12:16:44.110-07:002010-10-16T12:16:44.110-07:00The banks have already been the recipients of over...The banks have already been the recipients of over <b>four trillion dollars</b> in government aid.<br /><br /><br /><br />So we already have socialism. We have socialism for the rich. The only question left to debate is whether or not we'll have socialism for everyone else as well.Severnnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-33381228001921484462010-10-16T07:31:43.572-07:002010-10-16T07:31:43.572-07:00I heartily recommend Yves Smith blog Naked Capital...I heartily recommend Yves Smith blog Naked Capitalism and her book, Econned.<br /><br />Thanks for reminding ERM.AmericanGoyhttps://www.blogger.com/profile/00865892490752172185noreply@blogger.comtag:blogger.com,1999:blog-9430835.post-784738855080922032010-10-16T04:21:26.304-07:002010-10-16T04:21:26.304-07:00Here's tasty anecdote:
Todd Phelps and Paul W...Here's tasty anecdote:<br /><br /><i>Todd Phelps and Paul Whitehead bought at a foreclosure auction. It turns out the lender who had seized the house was the second mortgage-holder; unbeknownst to them, the property had a large first mortgage outstanding, which meant it was now their obligation.<br /><br />The buyers had asked their broker to check the records to make sure the title was clear; he appears not to have done so. The auction company would not refund their payment.<br /><br />But the really nasty bit here is…both loans on the house were from the same bank, Wachovia, now part of Wells Fargo. The Times story does not draw out the implication: first, that the bank foreclosed on a second, rather than a first (is that a weird way to provide a data point to justify not writing all seconds down to zero? And the fact that the buyers were saddled with the first says, in effect, that Wells defrauded the first mortgage holders, presuming, as is likely, that the first mortgage was part of a securitization, as opposed to on Wells’ books. The proceeds of the foreclosure sale should have gone to the first lien holder, not the second.</i><br /><br />But, hey, just technicalities, you know?<br /><br />(http://www.nakedcapitalism.com/2010/10/msm-distancing-itself-from-bank-party-line-on-foreclosure-crisis.html)ERMnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-68690867736913223382010-10-15T19:02:38.138-07:002010-10-15T19:02:38.138-07:00Disappointed in you, Steve-o.
Answer me this - wh...Disappointed in you, Steve-o.<br /><br />Answer me this - what happens to the money that a family already paid the bank month after month, before they (pick a tragedy here - sickness, loss of job, economic depression).<br /><br />Do they get any of it back?<br /><br />Hmmmmmmm?<br /><br />And these technicalities - banks were caught blatantly FORGING documents, with fake date stamps... tut tut, pish posh, different rules for us little people, and different ones for the ones on top, eh?AmericanGoyhttps://www.blogger.com/profile/00865892490752172185noreply@blogger.comtag:blogger.com,1999:blog-9430835.post-38348336256587271872010-10-15T15:49:26.889-07:002010-10-15T15:49:26.889-07:00Suppose, Steve, that you get a foreclosure notice ...Suppose, Steve, that you get a foreclosure notice from some bank you've never heard of on your paid-for house. You tell them to take a leap, and they sue you.<br /><br />They arrive in court with no document signed by you saying you owe them a mortgage payment. Instead, they have a notarized document signed by some other guy you never heard of saying "Steve owes us, but we just lost the paperwork, I swear!"<br /><br />The judge says "Don't trouble me with technicalities, pay up you deadbeat!"<br /><br />The fact that the current cases aren't like that is perfectly irrelevant. The rules exist to make it hard for Armenians to steal Steve Sailer's house.Billnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-14743431386454665162010-10-15T13:08:57.382-07:002010-10-15T13:08:57.382-07:00The converse of raising transaction costs on selli...The converse of raising transaction costs on selling houses is that people at the margin will be less likely to sell their house to move across town to be close to work or school or family. They'll waste more of their life commuting. Perhaps not a decision that we should make for them...Rossnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-54013170171687119472010-10-15T12:55:53.675-07:002010-10-15T12:55:53.675-07:00"Raising the fixed costs ... by enforcing cos..."Raising the fixed costs ... by enforcing costly paperwork"<br /><br />Uh, no. One of the few times i disagree with Steve. This is non productive bull shit -- the "new economy" (bureaucracy public of private) -- and exactly what this country needs to do less of, not more of.<br /><br />What we need is simple reliable, low cost chain of ownership and lein documentation. If we want to bump up transaction costs ... just levy a tax, and cut some other more damaging tax (income tax).<br /><br />More importantly what we need is for mortgages to <br /> a) not be securitized so they stay with the lender who is responsible for, has the *incentive* to write only good ones<br /> b) be written not from bank's demand deposits but from several highly capitalized large public corporations. In other words, financed primarily by investment, rather than debt, and subject to the analysis and discipline of the stock market. <br /><br />If housing was financed by a bunch of corporations with Microsoft sized market caps ... we'd have seen no big bubble, because as prices rose investors would have beaten down the stock of any company that was out there writing garbage.<br /><br />The discipline of the market was precisely what was missing. Responsibility was all third hand and everything\everyone government insured.AnotherDadnoreply@blogger.com