Will The Real Thief Please Come Forward
This From Livinglies weblog :
Why should people who made a bad deal get out of it? That is rewarding stupid behavior and will just make them do it again, costing us taxpayers even more money. And what about me? I’m underwater or I have paid off my house completely. I paid my mortgage and I honor my debts. Isn’t THAT the way it is supposed to be?
HERE’S WHY THAT’S IS INCORRECT: WHEN YOUR DATA IS WRONG, SO ARE YOUR CONCLUSIONS. Yes it WOULD be unfair if people were getting a handout for making stupid decisions. Like the Banks got $16 trillion for making bad decisions and we would both agree that was wrong and stupid. But what if you knew that the “handout” would cure the economy, make America great again and would raise your income and assure the prospects of your children? Isn’t that the rationale behind justifying all that money given to the Banks. What is the commercial landscape was forced to become fair to consumers as a result of the power of consumers as a whole who were no longer enslaved by debt they were hard sold on taking on? What if the deficit went away as a result of doing a principal reduction to homeowners? Would you still feel the same way?
All that is theoretical to the naysayers so here are some real facts that show quite clearly that the money siphoned out of the U.S. economy (homeowners lost around $10 trillion so far) went to the Banks. And here is how they did it: appraisal and ratings fraud.
- Virtual every person who signed loan papers was seduced by false assurances from “experts” at the closing table that the terms of the loan were fair, that the risk of loss was non-existent, and that the property value would go up so it wasn’t a matter of buying or financing a home for more than you could afford, it was a matter of it being a smart investment, whose rise in value would more than offset any increase in payments or any shortfall in the borrower’s income.
- That is why I say that these were not mortgage loans. They were one part of a larger scheme to issue bogus mortgage securities to investors who were lured by much the same talk PLUS false appraisals on the value of the property (a responsibility of the LENDER, not the borrower) and false ratings on the value and quality of the toxic “bonds” sold to investors (a responsibility of the LENDER, not the borrower who didn’t even know about it).
- So the borrower finances a house worth in actuality $300,000 for $500,000 because the “appraisal comes in at $520,000. He’s been told by realtors, sellers and banks, mortgage bankers, mortgage brokers, loan originators (many of whom (10,000 in Florida alone) were convicted felons having committed economic crimes for which they were fresh out of jail, hos property will appreciate (because real estate “never goes down, a blatant lie) and that in a couple of years it will be worth $650,000, he can refinance, pocket the difference to pay for the mortgage and go on vacation.
- The 10% interest rate contained within the loan doesn’t matter because that $50,000 in interest per year is being accrued — added to the balance he owes, and he only needs to pay $800 per month. With an income of $40,000 per year, he can afford that. SO he does it because he doesn’t know any better or even how to inquire further.
- So the investor gives the investment banker $1 million expecting a return of 5% which turns out to be the same $50,000 per year in interest that our borrower is supposedly going to pay sometime, somewhere, some how. But he investment banker has loaned the borrower only $500,000 in order to get ON PAPER that the interest income from the loan will be the $50,000 per year that the investor wants.
- Wait a minute. The investor gave $1 million and the loan was only half a million. That leaves half of one million dollars of investor money NOT LOANED. It stayed in the investment bankers’ pockets as trading profits and fees because they sold the $500,000 loan for $1 million to the investor.
Did the investor know that? NO. Did the borrower know that? NO. Was the borrower supposed to be advised of that? YES — under the Federal Truth in Lending Act, those disclosures are required to inform the borrower that if the fees and profits are so high he might get a lower interest more affordable loan at a true fair market value on his house and actually live happily ever after.
So right after the closing, neither the borrower nor the investor knows that the property value was actually $300,000 and that when the party is over, THAT is exactly where the price is going or lower. The appraisal was false as were the representations made when the loan was sold to the borrower and the investor. So tell me, do you still think that principal should be CORRECTED to reflect the truth of the matter or do you want to support the banks in their lies to the borrowers, investors and the taxpayers, who are footing the bill in amounts actually exceeding our gross domestic product?
Not enough? How about the fact that the loans was sold multiple times and the intermediaries were taking so much in fees that the total profits and fees, unknown to the investor and borrower, were in the millions of dollars for that half million dollar loan? do you still think borrowers are deadbeats trying to get out of a legitimate debt? Or are you starting think they they like all of us, have been the victims of the largest economic crime in the history of the human race and that when fraud is committed it is up to the fraudsters to make restitution — by lowering the principal balance to (a) the real value of the property (b) less any amounts of money they have already received as creditors.
How about that? Now what do you think is “fair?”
