Weariness

Illness - even low-grade, transient things like the common cold - is a morale-buster.

As comrades on the ramparts of a now nearly-terminal culture, I'd bet most of you have felt at times as beaten down as I do tonight.

The magnitude of the issues facing this country and Western Civ in general are more than can be fully comprehended, at least by this all-too-frail human.

I think it was this item from Jim Sinclair's Mineset that hammered the box shut, for today at least:

Dear Jim,
Yesterday you spoke of mortgage payment servicers as if it was something anyone with a mortgage MUST know.
I missed the point of why.
Could you tell me again in simple language that is easily understood why I should be concerned and act to do something.
Respectfully,
CIGA Arlen

Dear Arlen,
1. A service company should be a simple middle man that receives your mortgage payment and pays it to the lender for a modest fee.
2. Yesterday I sent you a list of the bailouts on which a major mortgage service company received one billion dollars.
3. If the servicer was simply a mortgage service company middleman how did it lose so much money as to need a one billion dollar bailout?
4. That smells like financial limburger cheese on a hot sidewalk in NYC.
5. The mortgage servicer is doing some other speculative business.
6. Therefore not only do you have to worry if your lender was paid, but what the dickens is a mortgage servicer doing speculating while your money is moving through that company’s balance sheet.
7. If for any reason the owner of the note is not paid you can be absolutely certain that you are going named in a lawsuit by the lender for payment.
8. The lender has a good chance of prevailing over you.
9. For this reason, every CIGA now has one more reason to be quite concerned about knowing who actually owns your mortgage and ascertaining if they have they been paid fully and up to date.

Regards,

Jim

Dear Jim,

Allow me to chime in here and bolster your comments to CIGA Arlen.

First and foremost, what your readers need to understand is that no one who has a loan secured by a mortgage on his home is safe. Mortgage servicing companies, including Wells Fargo Bank, CitiBank, JPMorgan Chase, and Bank of America, etc. control everything. This is why, as banks, mortgage companies, and hedge funds began to fold, beginning with the Mortgage Meltdown in 2007, the acquisition of mortgage servicing rights was the name of the game.

Regardless of whether Fannie Mae, Freddie Mac or a securitized Trust Fund purportedly “owns” your loan, the Servicer controls your destiny. Back in 1995, I first started seeing Servicers manufacture a default on a current loan and institute a foreclosure action even though the consumer had made every payment on time.

Once this process begins, it is virtually impossible for the consumer to straighten out the problem and get back on track. This is because the Servicer’s policies, procedures and technologies are set up to automatically trigger a series of unstoppable events once there is the slightest deviation e.g., an increase in your interest rate on an Adjustable Rate Note, an increase in escrow items, a late payment, or bankruptcy.

Through the mortgage auditing work that I have been doing since 1991, and particularly with all of the expert report writing I have been doing over the past two years analyzing the securitization of these residential mortgage transactions, I can tell you with certainty that even though the noise has quieted down since the bailout, the house of cards is crashing down at lightning speed.

I subscribe to the Bloomberg Terminal to research whether or not my client’s loan is in a particular securitization trust which is tremendously helpful. For example, an attorney I am working closely with here in Massachusetts has a client who was facing a foreclosure sale date of July 15th. The foreclosing entity was Deutsche Bank National Trust Company as Trustee of the IndyMac INDA 2005-AR1 Mortgage Loan Trust-AR1. Using Bloomberg, I was able to establish that the loan in question is not being tracked as an asset of the Trust. I wrote an expert report laying out the fraud; the foreclosure was canceled; and now the foreclosing law firm is begging the attorney I am working for not to sue them.

There is so much fraud throughout the system that it is unimaginable. We are now living in a criminal culture where the Banksters are running the show with impunity. Virtually every subprime securitization I have audited is suffering default rates between 20% to 57% of the entire portfolio. Each of these securitizations is a Ponzi scheme. There was never going to be enough money in the system to return the investors’ principal. Those in the know (spell that SERVICERS) knew these loans were designed to fail and purchased credit default swaps and other derivatives to short the deals.

This is why Jim says to Arlen below:
2. Yesterday, I sent you a list of the bailouts on which a major mortgage service company received one billion dollars.
3. If the servicer was simply a mortgage service company middle man how did it lose so much money as to need a one billion dollar bailout.

The only credible explanation as to why Deutsche Bank (a Trustee for 1900 securitization Trusts) and mortgage Servicing companies such as those Jim refers to would be receiving bailouts is if they were being paid on their credit default swaps.

It is clear for me to see through my use of the Bloomberg Terminal that the mortgage servicing industry is squeezing the last bit of liquidity out of the market. At these double-digit default rates, with a 50% severity loss rate, most of these Trusts will be wiped out by 2014.

In historical terms, I think of this as The Civil War, and it won’t be long before we see the Carpetbaggers and Scalawags (the debt buyers and junk-yard dogs, etc.) coming around to pick up the pieces.

I can also tell you that 90% of the foreclosures are illegal and fraudulent and could be stopped if consumers had the right analyst and attorney working together. The problem here is that the scheme has stripped homeowners of their cash, savings, and assets in the process.

Well, I could go on but I shall leave you with these thoughts to mull over.

My best advice to CIGAs: follow Jim’s advice and hunker down. Gold is the most stable repository of real wealth that civilized society has ever known. The dollars that have been created through the financialization of our economy via derivatives trading is totally unsustainable. Perception drives the market and when the world learns too late that that super-hyper-inflation of our currency will render it worthless, perhaps this madness will stop.

Kindest regards,

CIGA Marie

Marie McDonnell, CFE
Truth In Lending Audit & Recovery Services, LLC
Mortgage Fraud and Forensic Analyst
Certified Fraud Examiner
Marie.McDonnell@truthinlending.net
P.O. Box 2760, Orleans, MA 02653
Tel. (508) 255-8829 Fax (508) 255-9626

The global war that will arise out of this level of deceit and duplicity will stagger those who survive for generations.

And all we can do in advance of that maelstrom is to make sure our respective tribes are as well-equipped (in all senses) as we can make them before showtime.

Check your mortgages, people.

Make sure that the people you've sent each monthly payment have actually forwarded it to where it belongs.

God be with you.