Yes it is true, albeit the story doesn’t stop there. I’ve covered most of this and other trickery on my blog, and frankly it takes too long to explain it properly in a couple of short sentences. One interesting fact about it is that derivates also evolved from this and similar scams. There are about $50-100 trillion “worth” of derivatives out there spread around the globe, with nothing to back them up. Nothing. So when housing and commercial real-estate in the US crashes, and it will, it will have very serious impact everywhere. But, again, it doesn’t stop there. We have money printing into the extreme, Debt Mountains going for the moon, and lots of other fun things. Basically, we’re looking at the Greatest Depression of all time, and there’s absolutely nothing they can do about it. We live in a time when life as we know it is about to change, completely. And remember what happened the last time we had a, in comparison much smaller, depression? Some tips on further reading about this particular problem can be found: http://market-ticker.org/Or: http://watch.bnn.ca/#clip359769
I've wondered for a while now when the other shoe was going to drop. The US banking system 1) failing to adhere to basic chain of title requirements and 2) running document forgery scams to cover this up might just be the final "The emperor has no clothes!" moment for the sclerotic banking system.John Ward at NBY Slog would normally be my go-to guy for this kind of deep mojo, but he's on an indefinite break atm.
It's not deep economics at all. It's a simple choice:We either a) keep bailing out the banks and trying to prop up house prices, which costs taxpayers £3 for every £1 of gain made somewhere else, or b) we let house prices tumble, sort out a bit of social housing for the evicted and let banks sort themselves out via debt for equity swaps.That's a democratic decision to be taken by a majority. So far, the majority is voting firmly for (a).
The mortgage timebomb in the US came about mainly due to the repackaging of mortgages and then selling them on to banks who were stupid enough to buy them. Basically these toxic 'ninja ' mortgage loans ( no job no income no assets) were rushed through so the advisors could make a killing on a market that was 'always rising'.Investors were sold a few good mortgages but thousands of toxic mortgages mixed in with them. All packaged together as a 'mortgage backed security' product.So these products sat in banks as 'assets'. But of course as the homeowners began to default these 'assets' became worthless - hence the crash. Now we get to the crux of the new timebomb. Unfortunately when the mortgages were bundled together the actual owners of the mortgage deeds got lost. The packaging was done by computers rather than the old fashioned visit to the bank and all done slow time with quill pens etc.So the 'homeowners are being allowed to stay in their homes ( after numerous court rulings) and the banks are banned from foreclosing because no one knows who owns the deeds to the house.This makes the mortgage backed securities worthless rather than just half value ( or whatever the house is now worth).Hence new problem :)Oh another minor problem was the type of loan. A 'front end loan'. The homeowner got low interest rates for 3 years then they went skyhigh. Like from $300 a month to $2,000 a month in some cases. The thinking was that the homeowner could just sell the house and repay the loan to the bank. The bank cleverly thinking they could sell it on and then make a bigger killing.
Not deep economics at all. Simply everything fucked up. Prepare for the great write off.
So... if the mortgage company can't produce the paper I signed saying I'd pay, I don't have to pay?That's even more lunatic than this.
Not exactly "deep economics" more like deep fraud, for better insight go read zero hedge blog.I have no idea how scots law works but essentially as I understand it you are correct. In fact if you read back a couple of days ago at zero hedge that is precisely what he was counselling US mortgage holders to do.
" So... if the mortgage company can't produce the paper I signed saying I'd pay, I don't have to pay?"At the moment that's correct in all 50 US states. There has been a break in the chain of ownership of the mortgage loan. This break happened when the mortgage got budled together in an investment package ( mortgage backed security).O'Blimey is dithering over the issue and this is prolonging the agony. The electronic mortgage system has been dumped by most big banks and now we have about $10tr (sic) worth of mortgages that need to be sorted out and tidied up.It might not be sensible to just stop paying the mortgage as govts tend to bring in 'emergeny' measures to fix the problem. That will probably be the case again here. The banksters will walk away scot free and homeowners will be shafted again.
Ponzi schemeFrom Wikipedia, the free encyclopediaJump to: navigation, search1910 police mugshot of Charles Ponzi.A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors from their own money or money paid by subsequent investors, rather than from any actual profit earned. The Ponzi scheme usually entices new investors by offering returns other investments cannot guarantee, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors to keep the scheme going.The system is destined to collapse because the earnings, if any, are less than the payments to investors. Usually, the scheme is interrupted by legal authorities before it collapses because a Ponzi scheme is suspected or because the promoter is selling unregistered securities. As more investors become involved, the likelihood of the scheme coming to the attention of authorities increases. While the system eventually will collapse under its own weight, the example of Bernard Madoff demonstrates the ability of a Ponzi scheme to delude both individual and institutional investors as well as securities authorities for long periods: Madoff's variant of the Ponzi scheme stands as the largest financial investor fraud committed by a single person in history. Prosecutors estimate losses at Madoff's hand totaling roughly $21 billion, as estimated by the money invested by his victims. If the promised returns are added the losses amount to $64.8 billion, but a New York court dismissed this estimation method during the Madoff trial.
Similar schemes * A pyramid scheme is a form of fraud similar in some ways to a Ponzi scheme, relying as it does on a mistaken belief in a nonexistent financial reality, including the hope of an extremely high rate of return. However, several characteristics distinguish these schemes from Ponzi schemes: o In a Ponzi scheme, the schemer acts as a "hub" for the victims, interacting with all of them directly. In a pyramid scheme, those who recruit additional participants benefit directly. (In fact, failure to recruit typically means no investment return.) o A Ponzi scheme claims to rely on some esoteric investment approach (insider connections, etc.) and often attracts well-to-do investors; whereas pyramid schemes explicitly claim that new money will be the source of payout for the initial investments. o A pyramid scheme is bound to collapse much faster because it requires exponential increases in participants to sustain it. By contrast, Ponzi schemes can survive simply by persuading most existing participants to "reinvest" their money, with a relatively small number of new participants. * A bubble: A bubble is similar to a Ponzi scheme in that one participant gets paid by contributions from a subsequent participant (until inevitable collapse), but it is not the same as a Ponzi scheme. A bubble involves ever-rising prices in an open market (for example stock, housing, or tulip bulbs) where prices rise because buyers bid more because prices are rising. Bubbles are often said to be based on the "greater fool" theory. As with the Ponzi scheme, the price exceeds the intrinisic value of the item, but unlike the Ponzi scheme, there is no person misrepresenting the intrinisic value; investors typically know they are in a bubble. * "Robbing Peter to pay Paul": When debts are due and the money to pay them is lacking, whether because of bad luck or deliberate theft, debtors often make their payments by borrowing or stealing from other investors they have. It does not follow that this is a Ponzi scheme, because from the basic facts set out there is no indication that the lenders were promised unrealistically high rates of return via claims of unusual financial investments. Nor (from these basic facts) is there any indication that the borrower (banker) is progressively increasing the amount of borrowing ("investing") to cover payments to initial investors.The scheme is named for Charles Ponzi, who became notorious for using the technique in early 1920. He had emigrated from Italy to the United States in 1903. Ponzi did not invent the scheme (Charles Dickens' 1857 novel Little Dorrit described such a scheme decades before Ponzi was born, for example), but his operation took in so much money that it was the first to become known throughout the United States. His original scheme was in theory based on arbitraging international reply coupons for postage stamps, but soon diverted investors' money to support payments to earlier investors and Ponzi's personal wealth.Knowingly entering a Ponzi scheme, even at the last round of the scheme, can be rational economically if there is a reasonable expectation that government or other deep pockets will bail out those participating in the Ponzi scheme.
The fightback begins. Family take back their home that was taken off them with illegal paperwork..http://www.youtube.com/watch?v=3biQwMTW-1Y&feature=player_embedded
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