It is both extraordinary and amusing to see how fast Washington and the Wall Street lapdogs that presently pass for our financial media have been forced to turn on a dime by the exposure of pervasive criminal activity on the part of mortgage-backed security sellers. The summer-long collusion of the Republican and Democratic Parties in passing H.R.3808 on an off-the-record voice vote, which would have permitted some of the financial institutions that committed loan title fraud to retroactively hide their misdeeds, was shut down by a furious reaction across the blogosphere that sparked the Obama administration to act in a single day.
And the initial response to the fraud by the market cheerleaders that the whole story was essentially a great big “nothingburger” has rapidly subsided into desperate attempts to change the focus from the widespread fraud committed by the security-selling banks to the possibility that defaulting homeowners might inadvertently profit from this pervasive criminal activity on the part of the banks that offered them mortgages. But it’s not about the foreclosures. The foreclosures are merely the deadly tip of a four-part iceberg that involves mortgage-writing fraud, mortgage-backed security-selling fraud, title-transfer fraud and finally, in a futile attempt to cover up the preceding three frauds, the much-discussed foreclosure fraud.
The column continues at WND
ADDENDUM: As further evidence that the foreclosures are merely a consequent issue rather than the central one in the great mortgage fraud, here is a copy of a letter reportedly sent to Bank of America from the Association of Financial Guaranty Insurers asserting that BOA must repurchase as much as $20 billion in mortgages due to its fraudulent representations and warranties and that “well more than half” of the securitizations from 2005 through 2007 “qualify for repurchase by BOA.
ADDENDUM II: Just so we’re all clear, “clerical mistakes” and “the real issue is deadbeat borrowers” is Wall Street’s official propaganda line: “”Don’t you think, out of 10 million data points, there will be 500 unbelievably screwy examples? It’s a little bit so what. I don’t get it. It doesn’t feel like this is fraud. Maybe there is sloppiness, but at the end of the day, people took out mortgages they can’t pay back. Now I worry that if anything, the government is making something that is just a clerical error into something that would be nefarious or whatever.”
But the government isn’t inventing anything, in fact, all the federal government has done to date is play enabler and incompetent defense attorney. Now ask yourself one question. Does Wall Street’s interpretation of the current situation explain in any way why the GSEs, pension funds, and bond insurers are filing very large financial claims against the mortgage-securitizing banks?