I can answer all that, but you might want to go to sleep, its going to take me awhile. But I'll add it to this post and keep editing it into this post as I go, okay?
I guess I just wonder how that qualifies you to assert that the banking crisis came from fictitious loans and not from real loans that were defaulted on en masse. I mean, I saw what you said about how there's still the property for the banks to foreclose on (if they can establish clear ownership--the WSJ says the prosecutions in New York are about banks foreclosing on the basis of fraudulent documents, not, as you seem to suggest, banks defrauding buyers of mortgages). But even so, if meanwhile the real estate market has plummeted, couldn't the banks still lose billions?
Ok, maybe the mafia and corrupt bankers did swindle other bankers and ultimately taxpayers. But I don't understand how you could "know" that because you were someone borrowers went to to get mortgages.
okay, what I said was both are happening, but the outright fictious loans were doing the heavy hitting. If you have a $200,000 refi loan go belly up on a $250,000 property, how much does the bank lose? Nothing. If you have a fake identity operation with broker and title knocking out 100 jumbo loans in two months time; how much damage does that cause? (roughly $100 million)
robo signing title documents during the foreclosure process was the only way the banks could handle the glut of foreclosures. That's a very big sin, legally, the foreclosure unit is supposed to check out those loans with duress during the foreclosure; but this was our first foreclosure epidemic and the process is supposed to be slow. That's title fraud; not that the titles were fraudulent, no one was really questioning that, it was that the process was not satisfied legally, but that whole affair was brought to court by AG's in multiple states over a year ago... some writer confused those cases with this latest case by the NY AG; which is purely about the securities being knowingly resold with bad mortgages... it was the part about the banks
knowing they were peddling securities with bad mortgages that constituted fraud. the robo-signing is like a misdemeanor compared to the defrauding of the planet's financial institutions... the state is representing mankind. (or at least all of his money)
Make no mistake, everyone lost money. The banks got pounded. However, it was only money... and money is the easiest thing to replace for Wall Street banks because they create our currency. So, during the financial crisis, the FED opened a special discount window for the very purpose of replacing all this lost money, and replace it they did, to the tune of 7.7 trillion in positions taken during the two years that window was open. So the Wall Street banks were made whole. Not so for the smaller banks they peddled this junk. The New York attorney general has filed a civil suit on behalf of all the investors, governments and banks that were harmed. It is probably the biggest civil suit ever filed by any state, ever.
As for having been in the industry, I knew what was going down. I worked for a Broker/Banker in Wheaton, IL that caught onto a small time scam attempting to use our brokerage. what that was, a group of LOs posed as fall-out from a collapsed brokerage... they had licenses, they knew how to do loans, and they came to our brokerage looking for a new home. But they tossed about 50 fake loans at our processors, and the processors caught it. But most of what I learned about the big scams came from talking with Lenders. I had fellow LOs who moved up to Lenders, I was privy to conversations with owners of Title, I had worked with the industry for quite awhile and was well liked. I was approached to become a recruiter (recruit fellow LOs to work for a brokerage)... so I was thick in the industry. I was the kind of LO who could walk onto the floor at Countrywide's 3rd largest branch in the nation and say merry Christmas to everyone, or walk into the manager's office at any Lender... my best friend was the highest rated appraiser in the Chicago area; I ran down stamps for Title, all kinds of stuff. So yeah, I was privy to what was happening. But remember, I started in 2000, I had years in it before the sh*t hit the fan.
Okay, what I've posted about this over and over and am getting tired of explaining it goes like this...
initially, it was large scale of fraud, legit broker and title start-ups using identity theft and the new, insecure MERS to punch through multiple jumbo loans and do heavy damage to whoever opened the bundles... whoever bought the re-packaged product from Goldman Sachs and Bear Stearns. (JPMorgan bought Bear Stearns, that's who is being sued). this pounded the jumbo market. FNMA didn't do jumbos, so this is 100% Wall Street and they 100% shut it down. Which is why jumbos lost enormous market value; what happens to price when demand goes to zero? (remember... "demand" is actually how much credit is available) That was the meltdown. Then the market crashed... Fall of 2008. Now, when the market crashed, it resulted in millions of job losses. That was what created the foreclosure tsunami. Foreclosures were already at record levels from the housing bubble popping, all the bad loans could not get redone... 2006-2007-2008. But after the market crashed, good loans went into foreclosure, because jobs were lost. The foreclosure rate tripled. that was the tsunami.
meanwhile, just about everything to be read in the news media distorted the real picture. why? Because none of those journalists were loan originators. Want to get the straight dope? Read it from LOs.
The Mortgage lender Implode-O-Meter
