Sunday, June 5, 2011

this is supposed to be revenge for the great mortgage swindle?

a couple in naples, florida, after being "foreclosed" on by bank of america -- although there was no mortgage on the property whatsoever -- had their "revenge" on saturday.

after winning a judgement against the bank for expenses related to defense against the wrongful claim, the couple was forced to "foreclose" on BofA to satisfy the judgement. so, with the sheriff in tow, the couple descended on a local branch of the bank, demanding either immediate payment or seizure and sale of the branch's assets at auction to satisfy the debt.

after an hour of haggling, the couple's lawyer had a check for $2,534 in hand.

it makes for a great story, perhaps qualifying for the "weird" news section of the paper, or a man-bites-dog tale for local TV.

in the grand scheme of things, it doesn't amount to a hill of shit.

the great housing bubble during the dubya years was built on the legacy of financial "reform" during the clinton years, and turned staid bankers into financial fraudsters, and turned the mortgage business into a giant ponzi scheme.

BofA's error in foreclosing on a property with no mortgage is simply the tip of a very toxic iceberg. there are untold millions of mortgages out there with no clear title, since the industry created legal fictions in order to facilitate the repackaging of mortgages into securities that could later be sold as investments.

the business became so potentially lucrative that the banks threw caution to the winds, and threw all kinds of crap properties into these supposedly investment-grade securities, before pawning them off on the unwary. the housing bubble was a speculative three-ring circus, with spurious loans made to naive, unqualified buyers on properties whose value had no relationship to the underlying asset.

the banks created a system for bringing suckers into the market, selling them overpriced properties at terms they couldnt' afford, and profited by securitizing the loans and also by foreclosing when the loan went sour. they did this without the slightest restraint until the entire system collapsed -- when it became known that the banks had even bet against their own products, gaining even more obscene profits!

as if this wasn't bad enough, the government, in order to "save" the system, bailed out these fraudsters by buying the toxic assets at 100 percent of face value, and putting the taxpayer on the hook.

don't look now, but there's still tons more crap on the banks' balance sheets -- which they are not required to mark on their books at true market value -- so it appears the institutions are solvent when in reality they are not. it will again fall to the taxpayers -- under the current regime, at least -- to continue to bail out the banks.

when you see stories about the statutory debt limit needing to be increased so that the federal government can continue to borrow money to finance its operations, hopefully it won't stick in your craw too much to learn that a huge chunk of current and future debt comes courtesy of the bank bailouts.

so if you take some small measure of satisfaction out of the story of a couple in florida that foreclosed on a bank, don't be too pleased about "justice" being done. when the banks start coming up with trillions of dollars in compensation to taxpayers for what politicians cravenly gave away in exchange for political contributions, then it will be time to celebrate...

which will be in just about... never. sorry, suckers!

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