Predatory Lending IS THE Cause For Systemic Mortgage Foreclosures

Originally posted by Julie Washington

Originally posted by aew14
reply to post by JR MacBeth

 

I would love to see how a bank could foreclose on a
1. home that has a current mortgage
2. is paid for and owned by a private citizen.

Lets not let the conspiracy nonsense take us out of reality

edit on 21-10-2010 by aew14 because: (no reason given)

I believe I answered the your questions quite pointedly.

Both links establish "how a bank could forclose on a home that has a current mortgage" and "how a back can foreclose on a home owned by a private citizen".

Regardless of the bank coming in "AFTER THE FACT" to rectify the problem.

come on...in both those cases a mistake was made, and was being rectified. Your links do nothing to support your case. You made it seem as if there was malicious intent and since it was being corrected, there obviously was not.

reply to post by aew14


I guess since there was no malicious intent that it is acceptable to foreclose on a someone's home.

Are you serious?

Excellent, excellent post.

What made predatory lending possible? Banking deregulation.

What exacerbated the predatory lending? Securitizing bad loans and selling them off as investments.

S+F

reply to post by Blackmarketeer


Thanks, yes deregulation did us in.

It was the repealing of the Glass Steagall Act in 1999.

"The repeal of the Glass–Steagall Act of 1933 effectively removed the separation that previously existed between Wall Street investment banks and depository banks and has been blamed by some for exacerbating the damage caused by the collapse of the subprime mortgage market that led to the Financial crisis of 2007–2010.

The potential to make enormous profits trading mortgage-backed securities with artificially high ratings encouraged banks to take on otherwise intolerable risk in the form of bad loans.

The ease with which people were obtaining home loans contributed to an artificial housing boom and exacerbated the inevitable decline.

Wiki Link

The only reason their is such a thing as predatory lending is because the banks know most americans are too stupid to do the math before they sign their contract and are more than willing to get into debt over their head... I say the blame lies equally on both sides it's the banks making interest rates so high, and then their are the people too dumb to understand what they're getting into..

Originally posted by Julie Washington
reply to post by aew14

 

I guess since there was no malicious intent that it is acceptable to foreclose on a someone's home.

Are you serious?

accidents can happen, and as long as the problem is rectified....case closed

you are trying to find something that is not there

It was the repealing of the Glass Steagall Act in 1999.

"The repeal of the Glass–Steagall Act of 1933 effectively removed the separation that previously existed between Wall Street investment banks and depository banks and has been blamed by some for exacerbating the damage caused by the collapse of the subprime mortgage market that led to the Financial crisis of 2007–2010.

Also the separation between rating agencies and the banks vanished then too. Nothing like taking a bunch of bad sub-prime loans and packaging them up as a securitized investment and stamping an AAA rating on them, knowing these are going to tank and tank badly. Oh and getting the government to bail you out while you're at it (Goldman Sachs anyone?)

reply to post by aew14
Most mortgage contracts have it written into them,leaving it to them to foreclose for whatever reason they choose to.

Most contracts all of you are unaware you are party to have the same loopholes,you are all just to busy too read the fine print before you sign your lives away.

Your entire existence is just a scam,and you are about to pay up.

reply to post by chiponbothshoulders


I guess generalizing people makes the argument clearer?

I still hold the view the fault lies in social programs and lowering the bar. Government pushing banks to lend to the unqualified, and creating GSEs when the banks didn't or wouldn't without additional backing. Banks are certainly not to blame in adopting a protective stance. That's the macro picture.

The one area which is the fault of the banks, is they sold some of the same mortgages more than once in different securitized packages. There's no 'borrowers wet signature' document that accompanies the securitized mortgage, so there's no one-to-one match of mortgage to securitized package.
www.washingtonsblog.com...

Investors suspected they were not the only holder of the mortgages, and protected their investments with insurance. This means when a mortgage fails, each investor is paid off (more than once if they hold the same mortgage in multiple investments), and the bank comes for the home which mortgage that investors already bought and collected insurance on.
foreclosuredefensenationwide.com...

great post!!
provide most important information regarding Predatory lending...........
Predatory lending is a hot topic in the news and there is a good reason why. Dishonest behavior by many lenders, bankers, brokers and their sales force have caused financial ruin worldwide in the last year or so. As property values fall, energy costs soar, consumers become unable to pay exorbitant mortgage fees. The collapse of the sub-prime market is a direct result of predatory lending.

thanks!!!!
[ removed]

reply to post by Julie Washington


It is impossible to have predatory lending when you have a free market in money.

Interest rates skyrocket as savings are depleted.

It is only through the criminal federal reserve system that interest rates can be suppressed to the point that makes predatory lending possible.

The entire purpose of the criminal federal reserve is to inflate the money supply and depress interest rates so banks can expand their lending operations.

That is the purpose of the federal reserve.

Further the criminal federal reserve acts as a lender of last resort, allowing the banks to reach maximum lending of their phony reserves without worrying about a bank run shutting them down. Which is further bolstered by the FDIC being backed ultimately by the tax payer.

reply to post by aew14


Oh really? You can't get forclosed on if you don't pay? Right now the banks do not even know who owns your mortgage. The simple truth is who you are paying your mortgage to has a very real possibility of not even being your own mortgage.

This link is he best example I can show you of the outright fraud penetrating every level of not only the finance industry on homeowners, but also our court system which is the last system of defence that homeowners have.

Florida Rocket Docket

The rocket docket wasn't created to investigate any of that. It exists to launder the crime and bury the evidence by speeding thousands of fraudulent and predatory loans to the ends of their life cycles, so that the houses attached to them can be sold again with clean paperwork. The judges, in fact, openly admit that their primary mission is not justice but speed. One Jacksonville judge, the Honorable A.C. Soud, even told a local newspaper that his goal is to resolve 25 cases per hour. Given the way the system is rigged, that means His Honor could well be throwing one ass on the street every 2.4 minutes.

Read through that article, you will see these files being submitted to the court have numerous errors and are far from a complete case. In the U.S. court system, if a plaintiff doesn't have a real case (and in property law a real case means ALL the paperwork) the defendant need not even show up (theoretically). I am sorry, but while a few people may have gamed the system, the banks did the vast majority of the damage, and while you can claim that the average person deserves punishment... losing their homes is the punishment (downpayment, loan fees, credit rating, the home itself).

I am sorry, but I have no respect for major U.S. corporations at this point in time. The burden should be on them. The average American consumer is at a disadvantage in every contract we enter into. Try negoiating your insurance contract (trust me I guarantee there are plenty of escape clauses you would want to argue if you actually read it), or the contract to play your xbox 360 online, or this website, or any number of contracts you enter into EVERYDAY. You cannot negoiate. Home loans are no exception, the boilerplate language (the language that every bank puts in every contract whether it actually fits or not) is never up for you to negoiate. The courts recognize this, and I believe any American who does not understand how their fellow citizens can be taken advantage of are either arrogantly idiotic or naive.

There is a class war going on, and the fact we attack each other for not living up to loan paperwork between the consumer and Mega Corp... well either go get a law degree because you will need it sooner or later to save yourself, or you will be screwed over eventually (even those in law get screwed so that's not even full protection).




I just wanted to add a fiancial argument, besides a legal argument on fraud. Even today, I will strongly argue that home values are still very overvalued (they are probably worth only 75% of today's value). While there is legslation that helped create this problem, it is far from the major cost. There is no legislation forcing banks to lend money to people who make 50,000 a year a million dollar mortgage. There never was. The banks have a job to say a loan or home is not worth the value and not give the loan. Would you lend someone a $100 dollars to buy a gumball that you know is from a fifty cent dispenser? I'd wager not. The banks essentially did this very thing. They did not care that they were creating a massive over inflation of property, nor did they care that people would lose money on their mortgage. The banks realized many would foreclose on their property, but between loan fees and a few payments they would get, they gambled they could take over the house and sell it to someone else for the rest of the principal (the remaining loan balance). So essentially, the banks train of thought is as follows:

1. Make as many loans to people as possible
2. Get loans fees and interest for as long as possible
3. Foreclose on property
4. Resell home for the remaining loan amount
5. Rinse and repeat
6. Profit

While this is certainly a legitimate business model, and if you are a pure capitalist this is completely moral. I do think every member and business in a society has some basic expectation of ethics to society. This process of business is not only unethical, but this process total shirks and responsibility to society at large.

The banks gambled on this process and lost. They now point the finger at those they took advantage of. I have no sympathy for the banks. I do have some for the consumers still. I think it is very virtuous for someone even with one of those loans to keep paying and not be foreclosed on, but to give those banks a middle finger I do not feel is wrong at all. If anything, I feel those consumers are amoral. They are doing to the banks what the banks did, and those banks have no right now to cry foul to their own game.

As I posted in the original OP - looks like the Huffington Post has picked up on the truth:

Posted: December 17, 2010 05:42 PM
Mortgage Fraud Summit Reveals Both Systemic Fraud and FBI's Seeming Blind Eye

"At the bottom of the pyramid is the homeowner. That's only a teeny, teeny portion, of the entire mortgage crisis. An immense amount of profits were made on the back of that tiny little point. Because after the loan is made, it's sold, and it's packaged, and it's repackaged, and it's traded, and it's resold."

All the way up this pyramid, at every single layer, the biggest banks are making money -- they're taking a cut. Banks make fees for the home sale, banks make fees on the interest, banks resell that loan to another bank, or to another company. They package it into something that we've come to know as a toxic asset. Pieces of that package are sold to investors, or to pension funds in Iceland, or to asset managers in England. They're trading those pieces back and forth -- repackaging the same loan. Packages of loans were used as collateral for other loans -- until that home is really invisible in this scheme. One house might be backing 30 different securities -- one house.

"[Lenders] start creating false statements, false affidavits. That means a false statement under penalty of perjury. That means a felony. That means tens of thousands of cases every month of Bank of America and other entities like it committing felonies."

When will the insanity stop?

Please explain how a predator forces someone to sign a loan?

You are using a made up term. A buzz word that has no relation to its actual definition.
Its a trick of propaganda.
Please understand this is not a personal attack on you. I do not know you so I am not attempting to slam you.
What I want you to do is separate hype from fact. The term "predatory lending" is rooted in the payday loan industry. It is used by so called civil rights activists and community organizers to attack check cashers who operate in a high risk environment and charge a large interest rate because of that.
It bears no relationship to what actually took place in the mortgage industry.
Deregulation did not cause the mortgage meltdown. What caused the meltdown was the fact that government pressed the lenders to expand their loan programs in exchange for the promise of fully backing the loans. The mortgage companies took complete advantage of this promise and created ever more complicated packages with the full knowledge that if their risky behavior resulted in massive losses that they could then have the government cover them.
It is the entitlement society that has been fostered in this country ever since the 30’s that ultimately led to this collapse. The banksters are getting theirs while they can because they know what is coming down the pipe. You cannot condemn the banking industry laying this mess entirely at their feet and use that as an excuse to demand yet again more government regulations. It is the fault of government that allowed this situation to develop. If the government had removed itself fully from the banking process then this would not have occurred. Granted it would have been harder for the average person to get a loan but that’s not a bad thing. A bank that has no safety net is much more careful with whom it chooses to loan to and rightly so. This is not to say that the banking industry should be let off the hook. They utilized their influence on government to make that deal.
The bottom line however is that the presence of government intervention in the process is what fosters these kinds of situations.

Originally posted by Anon404
reply to post by aew14

 

I just wanted to add a fiancial argument, besides a legal argument on fraud. Even today, I will strongly argue that home values are still very overvalued (they are probably worth only 75% of today's value). While there is legslation that helped create this problem, it is far from the major cost. There is no legislation forcing banks to lend money to people who make 50,000 a year a million dollar mortgage. There never was. The banks have a job to say a loan or home is not worth the value and not give the loan. Would you lend someone a $100 dollars to buy a gumball that you know is from a fifty cent dispenser? I'd wager not. The banks essentially did this very thing. They did not care that they were creating a massive over inflation of property, nor did they care that people would lose money on their mortgage. The banks realized many would foreclose on their property, but between loan fees and a few payments they would get, they gambled they could take over the house and sell it to someone else for the rest of the principal (the remaining loan balance). So essentially, the banks train of thought is as follows:

1. Make as many loans to people as possible
2. Get loans fees and interest for as long as possible
3. Foreclose on property
4. Resell home for the remaining loan amount
5. Rinse and repeat
6. Profit

While this is certainly a legitimate business model, and if you are a pure capitalist this is completely moral. I do think every member and business in a society has some basic expectation of ethics to society. This process of business is not only unethical, but this process total shirks and responsibility to society at large.

The banks gambled on this process and lost. They now point the finger at those they took advantage of. I have no sympathy for the banks. I do have some for the consumers still. I think it is very virtuous for someone even with one of those loans to keep paying and not be foreclosed on, but to give those banks a middle finger I do not feel is wrong at all. If anything, I feel those consumers are amoral. They are doing to the banks what the banks did, and those banks have no right now to cry foul to their own game.

edit on 18-11-2010 by Anon404 because: added fianancial argument

The above is a business model if you want your business to be an epic fail. No lender is making money in the foreclosure process. If that was the case then how do you explain the massive shadow inventory of homes that have been repossesed by banks but have not been completed as a foreclosure and put back on the market?
Currently in my neighborhood we have about 8 homes that have been taken back by the lenders but sit empty with no notice of sale. These homes will continue to sit because to complete the forclosure process will force the lender to show the loan as a loss on its books.there is no profit in foreclosure. Buyers who purchase forclosed homes want them at significantly lower costs than the original loan as in 10 cents on the dollar. You are letting your obvious hatred of corporations cloud simple business logic.

Originally posted by Dragoon01
Please explain how a predator forces someone to sign a loan?

You are using a made up term. A buzz word that has no relation to its actual definition.
Its a trick of propaganda.

You obviously didn't read the OP. This is about massive fraud, not about people who took out loans they couldn't afford. I'm not addressing that segment of the mortgage market in this thread.

The original domino that caused the collapse of the market was started by Ameriquest and Countywide's massive fraud through "altering documents after signing" and "forging documents".

This is not about people who bought homes they couldn't afford - that's a different topic.

"Predatory Lending" is a media buzz word.

Homeowners who are in foreclosure due to adjustable rate mortgages were not taken advantage of. The product was made available at that time and it was a legal product to sell in the US at the time.

Those who fell victim to adjustable rate mortgages are victims of their own greed. Plain and simple.

Every homeowner has the option of reviewing their loan documentation before they sign it. A quick trip to the lawyer would clear any confusion.

Let's face it. A vast majority of the people in the US are idiots, greedy and can't see the big picture. They are motivated by short term satisfaction.

Happy New Years!

A lack of regulation caused the crisis. This is right-wing libertarian philosophy. Ron Paul-style nutjobbery.

It is based on the concept that a free market sorts everything out. We all know that people, when given the chance, will do bad things.

The banks sold unrepayable loans to underpaid Americans, and this caused the crash.

Yet you have right-wing fascists like Ron Paul and Alex Jones saying there was TOO MUCH regulation... The financial collapse is a prime example of why government regulation is needed wherever possible.