Matt Taibbi blows the door off the entire Foreclosuregate scam with yet another article.....
In one case handled by Jacksonville Area Legal Aid, a homeowner refinanced her house in 2005 but almost immediately got into trouble, going into default in December of that year. Yet somehow, this woman's loan was placed into a trust called Home Equity Loan Trust Series AE 2005-HE5 in January 2006 — five months after the deadline for that particular trust. The loan was not only late, it was already in foreclosure — which means that, by definition, whoever the investors were in AE 2005-HE5 were getting shafted.
Why does stuff like this matter? Because when the banks put these pools together, they were telling their investors that they were putting their money into tidy collections of real, performing home loans. But frequently, the loans in the trust were complete ****. Or sometimes, the banks didn't even have all the loans they said they had. But the banks sold the securities based on these pools of mortgages as AAA-rated gold anyway.
Right. So what's the bottom line?
In short, all of this was a scam — and that's why so many of these mortgages lack a true paper trail. Had these transfers been done legally, the actual mortgage note and detailed information about all of these transactions would have been passed from entity to entity each time the mortgage was sold. But in actual practice, the banks were often committing securities fraud (because many of the mortgages did not match the information in the prospectuses given to investors) and tax fraud (because the way the mortgages were collected and serviced often violated the strict procedures governing such investments). Having unloaded this diseased cargo onto their unsuspecting customers, the banks had no incentive to waste money keeping "proper" documentation of all these dubious transactions.
The entire thing was and is a scam. I've been blowing the whistle on this for more than three years. There's no interest in stopping it, and most people's eyes glaze over.
But the essence of the scam is this: you were asset-stripped, your money stolen, you were sold an overinflated house, and all of it was an intentional scam.
What's sad is that most Americans who have an opinion about the foreclosure crisis don't give a **** about all the fraud involved. They don't care that these mortgages wouldn't have been available in the first place if the banks hadn't found a way to sell oregano as weed to pension funds and insurance companies.
That's one of the larger uglies in all of this. Not only were you ripped off but worse, the banks who did it not only robbed you once on your house, but robbed your pension fund on the back end!
There's a cynical argument to be made that the entire purpose of TARP and all the other BS pulled by both Obama and Bush was to run the statute of limitations - that is, intentionally delay recognition of the harm until you can't sue to recover any more.
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