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19
Jun

The Credit Pushers

   Posted by: chris   in Fish Talk

If some genius had not invented crack cocaine (for his/her own financial gain) then how many peoples lives do you think would be messed up by this particularly nasty drug. The short answer is none.

Continuing on this line of reasoning if the financial geniuses who rule the economy hadn’t dreamt up and made available the mortgage schemes that led to the “Sub Prime Bust” there would quite simply be no sub prime bust.

So Joe Wall street for his/her own financial gain invented the monster that is “MERS” or Mortgage Electronic Registration System which allowed the packaging of financial instruments for sale as mortgage backed securities.

This is the technical part which you can skip if it is threatening a migraine.

A home loan comprises of two distinct documents.

1. A note which is basically an IOU which states that the borrower owes the lender the loan amount to be repaid over a certain period of time at a certain interest rate.
2. A mortgage which lays out the remedies available to the note holder in the event of the terms of the note being defaulted on by the borrower. It is the mortgage which makes foreclosure possible.

The financial crack cocaine is to separate the mortgage from the note. The note is then packaged with many other similar notes and sold to investors as mortgage backed security instruments.

The mortgages are warehoused by MERS and assigned to it’s member banks as service contracts. The bank masquerades as the lender, sends out mortgage statements and collects a percentage of every mortgage payment for its troubles. The fact that some town in Iceland holds the note as part of a mortgage backed security instrument and is therefore in fact the lender is/was never disclosed.

This great plan like all great plans before it however had its own particular Achilles heel. The free flowing funds afforded by the sale of mortgage backed instruments securities reentering an already overheated housing market caused that price of houses to escalate out of control guaranteeing the implosion that we are now experiencing.

But as with crack cocaine, society perceived the guilty as the addicted and the homeowner who were sucked in. The perpetrators with their well lined bank accounts remain free and respected due to our fascination with monetary success and our willingness to raise capital onto a podium to be adored. Truly if there is a god in the realms of capitalism he is green and shaped like a dollar bill.

So the poor suffer at the hands of their fellow poor and the greedy are rewarded by a fawning poor who have elevated them to role model in the pursuit of the American Nightmare.

But will this story have a sting in its tail. If the bankers through bribery, sorry lobbying cannot control your elected official and the judges appointed by your elected officials then there just might be a sting of cataclysmic proportions to follow.

The sting.

In almost every foreclosure prosecuted in the last 10 years the defendant was stated as the homeowner and the plaintiff as the assigned mortgage holder. Remember that the lender or note holder is the Town in Iceland or the Plumbers Union Retirement Fund. The mortgage holder is merely acting as their servicing agent, collection monthly payments and administering tax and insurance escrow funds for a percentage fee.

This would appear to be the correct procedural method until we remove our heads from the dark place where they have resided for such a long time.

But and this is a very large but indeed, the mortgage holder is not, was not, and never will be the note holder. It’s like proclaiming the electrician owner of your house just because he fixed your lights.

Correct procedure is that the injured party, the lender, the note holder, the plumbers union should be named as plaintiff. If justice is to be observed then every foreclosure that was carried out without the note holder being names as plaintiff should be declared fraudulent and the foreclosed homeowner compensated for the injustices committed against him/her.

However as already stated this most probably won’t occur as the folks who administer the laws of the land are totally and completely subservient to capital. Put another way we are all slaves to master dollar, and seeing as the dollar itself hold no prejudice it turns out that we are owned by the few who control the dollar.

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This entry was posted on Friday, June 19th, 2009 at 4:23 pm and is filed under Fish Talk. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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