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Democrats: Foreclosure crisis due to banker conspiracy.

By: Moe Lane (Diary)  |  October 13th, 2010 at 03:00 PM  | 

RESIZE: AAA

I really, really wish that I was making this up, actually:

For those without video, it shows Rep. Maxine Waters (D, CA-35) of the House Financial Services Committee… actually, summarizing this piece is almost impossible. The CNBC folks try their best to get some sort of coherent information out of Rep. Waters, and this is what they gleaned:

  • Rep. Waters thinks that you can create a law requiring the banks to use alternatives to foreclosure in defaults and not mandate that somebody loses money in the process.  This caused the first of many pauses in the interview.
  • When asked whether people with underwater mortgages who are paying their mortgages anyway might be bugged at the notion that people who aren’t are going to get consideration, Rep. Waters… I don’t know; my nose started to bleed at that point and I lost consciousness.
  • There is a horde of Attorney Generals just waiting for Rep. Waters to release them upon the bankers!  OK, that one is sorta-kinda not completely and abjectly untrue.
  • And, by the way, this entire foreclosure thing is the result of “massive collusion and fraud” by the banking industry.
  • The CNBC guy – the CNBC woman did her best, but Rep. Waters apparently thinks ‘moral hazard’ is a golf term – made the mistake of pointing out that you can’t actually assume fraud as a default option, and there’s a lack of actual proof.  Waters response? “It’s proven by the fact that you have millions of people in foreclosure who should have never been in foreclosure… This just didn’t happen because there were a lot of irresponsible people. Think about it, this is unprecedented that this many people, all of a sudden, would be in foreclosure.”
  • The use of the term ‘collusion’ is the problematical thing for the Democrats, here.  While fraud doesn’t necessarily require a conspiracy, collusion is the backbone of one.

So.  Instead of the obvious – too obvious! – answer that our current foreclosure crisis was the result of the government foolishly encouraging people to take out mortgages that they couldn’t afford, compounded by a governmental willingness to stomp on any attempts to put the brakes on that policy, and further compounded by the willingness by both the government and the banks to keep kicking the problem down the road… we get a banker conspiracy.  And all those poor government officials and legislators… well, their mistakes were of omission, not commission.

But let us be grateful: in these enlightened times, at least the Democrats aren’t suggesting that it’s a Jewish banker conspiracy*.  Although Rep. Walters certainly was happy to suggest at the very end that there may be foreign money involved in all of this…

Again: this is not some no-name, blink-and-you’ll-miss-them Member of Congress like Grayson or Shea-Porter.  Rep. Waters is on the Financial Services Committee and is one of its subchairs.  She is also on the Judiciary Committee, and she is a Chief Deputy Whip.  SHE SPEAKS FOR THE DEMOCRATIC PARTY.  And apparently the Democratic party is saying “secret banker conspiracy.”  If the Democrats don’t want to be saying that, maybe they should make it clear that Rep. Waters doesn’t get to speak for them…

Moe Lane (crosspost)

*Yet.

PS: Bruce Brown for Congress.

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COMMENTS

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  • http://www.laborunionreport.com LaborUnionReport

  • http://www.ArchitecturalShots.com mdyou

    …let alone govern. Oh wait…

  • http://UnitedConservativesofVirginia Cargosquid

    “Weapons grade stupid”

  • izoneguy

    Who believes the crap coming out of her mouth anymore?

    Roll back the CRA…..

    Let the foreclosures be sold to people with MONEY…..

    And let the chips fall where they may.

    And let’s NEVER, NEVER fall for this social justice scam again……

    Oops -

    EPA Funnels Taxpayer Money to Dozens of Liberal Community Activist Groups

    http://www.cnsnews.com/news/article/epa-funnels-taxpayer-money-dozens-libera

    The Environmental Protection Agency recently listed 76 community groups and government agencies that will share almost 2 million taxpayer dollars in the form of “environmental justice grants.”

    The grants ? around $25,000 each — will fund projects that help people living in poor, minority communities increase recycling, avoid heat stroke, improve indoor air quality, “reduce carbon emissions through weatherization,” and participate in “green jobs” training programs.

    But beyond the EPA’s mission of protecting human health and the environment, the grant money will boost the coffers, and perhaps the influence, of some far-left groups.

    My friends – the dem/socialist/marxist agenda must be ABOLISHED
    & DESTROYED.

  • Common_Cents

    they are too afraid to call her out as a quack.

    Whiskey Tango Foxtrot are the voters of her district even thinking?

    I waffle back and forth on blaming our greedy idiots in DC or the voters who are too stupid and apathetic to vote for them. Maybe we get what we deserve and learn elections do have severe consequences.

  • jederrick

    The STUPID demonstrated here is probably one of the strongest arguments for limited Federal government ever…

    A limited Federal government and stronger local governments limits the effects of this type of stupid to a local area…

    I would say it is like putting drunks in charge of brain surgery, but it really would be an insult to the drunks..

    Just sayin..

  • rblack198

    I mean as a bunch of lenders got together and loaned piles of money and then forced the borrower into foreclosure to get less back than they handed out. Granted a conspiracy of fools is still a conspiracy, but I don’t know how this woman functions. I’d bet velcro shoes are involved in her attire.

  • expatuae

    “Federal Reserve policy makers may want Americans to expect inflation to accelerate in the future so they spend more of their money now.”

    http://www.bloomberg.com/news/2010-10-13/fed-considers-raising-inflation-expectations-to-boost-economy.html

    Apparently, it is no longer the governments role to provide a stable currency, It is the citizens’ role to see their savings stolen in the name of the greater economic good. Assuming one defines that greater good as buying more rubbish from China, paying $100 for a barrel of oil, and going into extreme debt to buy overpriced housing. Savers are treated like parasites on society, told to consume now or else by by unelected Fed officials. All this (primarily) to prop up the artificial profitability of the bubble banks, Fannie Mae now multiplied 10 fold, with a better bonus plan for employees.

    That’s right, the new official policy of the US will be to encourage accelerating inflation- that is keep printing money until we have healthy rate of inflation in excess of 4-5%. This is the new policy, if you didn’t hear in the last week, the current 1-2% inflation is completely unacceptable and requires drastic action. A policy is based on the false premise that inflation creates jobs and economic growth. A group of academics that assumes Americans are idiots who will mistake this inflation for real economic growth? Given how little outrage there is over this policy, maybe they’re right. Looking at Maxine Waters on the finance committee, they’re definitely right.

    This is some of the sickest social engineering going on right now. Market speculation is that QEII is between $500-$1 trillion. That’s as big as the stimulus that is helping sink the Democratic party. It is as at least as big as Tarp, and will cost the taxpayers much more. The Fed’s explicit plan is to buy long term bonds at their all time high price. So when interest rates rise, the taxpayer (via the fed) will be holding a massive loss (bond values go down when interest rates go up).

    QEII is the policy equivalent of curing a hangover with a bottle of vodka. It will be just as effective, ending in some cataclysmic bust up before rehab.

    The Fed will certainly get inflation. In oil, metals, and other hard commodities that America generally imports. How does the American consumer or economy benefit from $100-$150 oil? Please explain Ben.

    But idiots like Maxine Waters are busy trying to find a non-existent scandal. Finding the handful (literally I have heard 2 of people out of some 3 million foreclosures who were actually wronged by shoddy paperwork. Who cares if the notary stamp is out of date? Did the foreclosure happen to someone who wasn’t defaulting on their debt? I have yet to hear any real stories of this. Meanwhile, a trillion dollars is being sucked out of peoples savings accounts.

  • southernilpat

    The current problem with foreclosures has very little to do with prior economic policies, other than the banks are trying to crank out more foreclosures than they can really handle. There are rules of law that apply to affidavits attached to civil complaints, which a foreclosure is. The affiant has to have personal knowledge of the alleged debt, and swears to such. It has been shown that with the number of affidavits each person signs each day, there is no way each one could have been properly researched, and highly unlikely that the affiant had ever personally handled that account. Thus the affidavit is false and the affiant has committed perjury.

    Whether someone is actually behind on their mortgage or not, the plaintiff must prove their case and follow the rules of evidence. Poor banks, being expected to follow the rule of law instead of just showing up and getting their easy default judgments. Not a conspiracy, just industry wide sloppiness.

    Has nothing to do with whatever Waters was jabbering about, though.

  • IJB
  • Xasteius

    now they’ll kill the small benefit that the slow economy gives in terms of limited price growth?

    Incredible!

  • rbdwiggins

    Term limits – no…

    The answer to both is an informed electorate. One which believes that it is a civic responsibility of every citizen to hold elected officials and public servants responsible for their action/inaction and to ensure that all levels of government operate solely within the confines of enumerated powers.

  • unsk

    Sorry Guys, the Republicans are about to get destroyed on this issue if they are not careful. Forget Maxine Waters. The big picture is fraught with danger.

    The truth is that the TBTF banks committed massive fraud on an unbelievable scale. Check out: The MERS edifice quavers at The Market Ticker. http://market-ticker.org/akcs-www?post=168845

    MERS, Inc (Mortgage Electronic Registration Services, Inc) is a mortgage registry corporation the biggest banks set up to avoid local country recording of the transfer of mortgages and the payment of recording fees during the securitization process of mortgages.

    A. Never mind this corporation was never granted this right to set up the Bank’s own recording operation by any State, Local or Federal agency, court or legislature or the right to bypass the local county recording process.
    B. This new mortgage registration operation also turned centuries of English Common Law on it’s head when it allowed the transfer of the ownership of mortgages without a written wet signed document, and without the designation of both the buying and selling parties.

    And that’s just the tip of the iceberg. There were a host of fraudulent practices and problems among them: mortgages that couldn’t qualify for the pools were included in the securitization process, and now many of the mortgage transfers may have not been legal. The Title companies may balk at insuring title on many properties in the coming weeks, causing the whole residential Real Estate Industry to freeze up. And the banks knew from the get go that this was fraud and piled fraud upon fraud upon fraud, without consideration of the consequences.

    It’s a huge mess, and it’s not just a matter of faulty paperwork that easily can be swept away by some new law or bailout. There seems to be no easy way to unravel all these mortgages without clear title without unraveling the big banks as well. As of right now it appears that all the Banks, yes including Fannie and Freddie, that own MERS, Inc. are functionally insolvent by a whole bunch. They cannot be saved. Nor should they be. They sold trillions in fraudulent MBS and now need to pay the piper and those investors back some way. Probably can’t be done.

    So politically, the Pubs quickly must change their tune and stop trying to put on a happy face on this horrendous scandal. Anyone , anything or any Party that is caught trying to protect these lying thieving bastards at the big banks in the near future could very likely be drawn and quartered, strung up and butchered by a frenzied, angry mob at any town in America. And rightfully so. Both parties, including particularly the Dems, but also a lot of establishment Pubs too, have for years run interference for the Bank’s fraudulent schemes. Millions of lives have been ruined, trillions have been lost and sadly, America may never be the same.

  • Mike Ferguson
  • Mike Ferguson

    Cause I am pretty sure I lost a couple of IQ points and maybe my first semester of collage listening to her. Wait, there is hope maybe my new and improved healthcare will pay for the drain bramage, let me go sift through the 2700 page monstrosity that she voted for and see.

  • IJB

    Conservatives who insist upon ignoring human nature get tedious…

  • Finrod

    This is either worth a diary of its own, or it’s pure tinfoil hat territory. I can’t tell which.

  • expatuae

    Not that I agree with your characterization of MERS as extra-legal,

    but how would this work. A 0% down borrower who paid their interest-only loan for a couple of years should just get a house, free and clear of the mortgage? The investors in the mortgage securities are just SOL?

    Meanwhile this defaulting borrower’s neighbor gets stuck with higher mortgage rates, insurance costs, and a tax bill from the bailout. Is that justice? I don’t see too many people buying into your mass bailout idea.

    For the economy, a moratorium will freeze the housing market since buyers can”t be certain of title. And it would delay foreclosures that need to happen for the market to clear. Not to mention, the 5th amendment violation of preventing completely legitimate foreclosures to proceed, just so some pol can simplify their soundbite.

    Not even Obama is buying into this dog of an idea. Only the Maxine Waters wing of the Democratic party has the compination of stupidity, ignorance and malice to promote such an idea.

    I like the idea of breaking up the bubble banks, eliminating their TBTF guarantees, and making them compensate taxpayers for the costs they imposed on us.

    But stop trying to make 0% down borrowers who defaulted into victims. They took a bet and lost. Instead of renting money from the bank, they can rent a house from a landlord. Life goes on.

    The real “victims” here, if you have to deviate into victimology, are taxpayers who are backstopping the bubble banks, and savers who are supporting their recapitalization through the Feds inflationary policy.

  • JSobieski

    A 0% down payment homeowner who stops paying his mortgage will have a terrible credit history. What if they aren’t able to get credit to get a car? Have you no campassion for anyone but the fat cats?

    I think the foreclosure ban needs to be accompanied by a prohibition against negative credit reports. Only positive reports should be allowed. Bad credit reports should be adjusted by taking points away from the good credit scores. Or, they could be randomnly increased using a formula based on NFL and college football scores until everyone had a score above 700.

    And if the economy continues to crater, maybe we should pass a law requiring that everyone do exactly what they did back in 2007–the economy was great then.

    Yes, this is all a snark—and the go back to the past thing is a spoof on an economic plan by the second handers in Atlas Shrugged

  • unsk

    Foreclosures will stop anyway if this mess isn’t cleaned up. The Title insurance companies already are refusing to issue Title insurance on foreclosed property because the MERS system did not reliably convey the mortgage.

    No Title insurance, no sale of foreclosed property. All is gonna stop. Anyway.

    There are several levels of victims,here. Usually the original homeowner who took out the mortgage is not at the top of that list. Top of the list of victims would likely be those who bought the fraudulent MBS from the TBTF banks. It was sold as the most secure investment out there. Many small banks bought this crap. My local bank went under after buying several hundred million of this stuff. What people are not getting is that each successive scheme and bailout, (TARP, Dodd/Frank, etc) put forward by Democrats like Maxine to fix this problem end up rewarding the TBTF banks. The little banks are getting hammered. The big banks are thriving. Why are we rewarding the same banks that created this mess?

    Lending is in the tank. Revolving lines of credit are down over 10% from their peak before the Panic. Small business, the source of most new jobs, is having great difficulty just keeping their existing loans, and we are not even talking about them getting new loans to hire people. Now mortgage lending, whatever was left of it, is going to get hammered even further . The economy cannot recover without new lending. Ain’t gonna happen.

    The only way to cure the lending problem is to break up the big banks, create a firewall between the banks and securities firms, limit banks to just one state and return regulatory oversight to the States. The TBTF banks with their monstrous schemes destroyed both the trust required to do business and the rule of law in lending. It can only be rebuilt on the local level where it is most transparent. Congress, the Feds, and Wall Street have to be kept out of it. They are all incredibly corrupt. The necessary trust that the documents in a any contract actually mean what they say needs to rehabilitated. The rule of law needs to rebuilt. The rule by the TBTF banks and their crony Socialist, crony capitalist buddies must end.

  • unsk

    Expatuae, I applaud your concern over QE II.

    There has been a raging debate at such sites like Zerohedge, Market Ticker and Mish Shedlock’s whether the new Quantitative Easing ( massive printing of money on a trillion dollar scale for the second time) by Helo Ben will cause a full out currency collapse or just suck everyone’s savings away as Bill Gross alleges. A nice polite debate on whether QEII will end the world as we know it or just your world as you know it.

    That said, the ForeclosureGate scandal is just about as big. See this post by Gonazalo Lira at Zerohedge. http://www.zerohedge.com/article/gonzalo-lira-second-leg-down-americas-death-spiral. It seems that the TBTF Bank’s MERS con has”broken the chain of title” on millions of mortgages. You see to foreclose one actually has have a legal claim to the “note”. Oops. MERS didn’t exactly do that. Ergo, Gonzalo worries that millions of people will wake up tomorrow or someday soon and decide ‘ya know what, I ain’t gunna pay that stickin mortgage again, because they can’t foreclose on me”.

    Mighty big problema don’t ya think?

  • http://theminorityreportblog.com Repair_Man_Jack

    The way out of this one is easy for a man with the courage to implement. Upon learning of a situation where a homeowner is delinquent on the mortgage, and the loaner has no clue as to the legal validity of his lien, you give them 30 days to reach some accord and get their defecation in sequence. At the end of 30 days, if peace has not been negotiated, the bulldozer rolls, the house no longer exists, all parties involved are wiped out.