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HUFFPOST SUPER USER
Jay Patel
04:00 PM on 09/10/2012
I wonder where they will get the money to pay for all the mortgages and who becomes the new mortgage holder?
Would they borrow at a quarter percent from the Fed to pay of the banks and then offer new mortgages to the homeowners at around 3 percent which is currently possible on a 30 year with good credit?
Actually, California could re structure the mortgages by borrowing from the fed at virtually zero percent, pay off the banks, offer new low interest mortgages to the homeowners and then sell off the mortgages on the secondary markets like any mortgage broker and possibly make money for the state doing it.
Technically the banks could make money too since they would be paid off on all these mortgages that currently are not making them any money at all. It could put a floor under the market.
The flip side is that many people now in foreclosure may not be employed so no matter how low the new mortgage is being offered by the state, they don't qualify due to a lack of income.
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06:39 PM on 09/10/2012
The first thing California should do is FORCE the banks to PROVE they own the loans. And third-party independent control fraud experts will be hired to examine the claims. Watch the fur fly then...
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03:56 PM on 09/10/2012
Hey, Gavin, I have a better idea: Why don't we get some non-corrupt officials, independent third-party auditors and non-corrupt judges to actually investigate and prosecute the REMIC fraud. We will find massive securitization fraud, combined with MERS title fraud, rendering 62+ million properties with clouded title. Oh wait, where are we going to find some non-corrupt officials? And I only know of a few judges who are actually following black letter rule of law regarding MERS fraud.
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HUFFPOST SUPER USER
rtaylor1974
Obama=Austerity at Home..War Abroad
03:49 PM on 09/10/2012
Gavin.... Is asking D.O.J. (Cousin Vinny) to tell the Tony Soprano's (Too Big To Fail Banks) to stop threatening States that want to use eminent domain to seize and restructure the "VIG" on all the crappy loans... Everybody knows the DOJ is just a figure head when it comes to Wall St . They make their own settlements , and instead of going to jail they give out bonuses...
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212 The Real BiPartison
Yes...it's spelled like that on purpose
03:45 PM on 09/10/2012
However, in the New York Post, Charlie Gasparino uses the occasion to remind everyone that the seeds of our current economic malaise were planted during the Clinton years.

Basically, it was under Clinton that Fannie and Freddie really began blowing the housing bubble, issuing epic amounts of mortgage-backed debt.

The story that Gasparino tells is basically: Liberal Bill Clinton thought he could use government to make everyone a homeowner and so naturally this ended in disaster.
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HUFFPOST SUPER USER
Ohioan4truth
An Average, Ordinary Guy - Joe Walsh
03:57 PM on 09/10/2012
I think you have Bill confused with George: http://youtu.be/QYvtvcBKgIQ
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HUFFPOST SUPER USER
itcounts
Reality is an illusion albeit a persistent one
03:59 PM on 09/10/2012
Greenspan was the economic guru for 20 years and Bill listened to him just as congress did.

Congress is the one that turned the bankers loose putting them in competition with Freddie and Fanny without any of the same rules that Freddie and Fanny had to follow.

No one forced the banks to make no document loans (illegal in many states) use predatory contracts, adjustable mortgages or sell junk loans in bundled "Financial Products" that they knew were useless and bet against those that bought them.

No one forced them to steal and gambling is not banking.
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212 The Real BiPartison
Yes...it's spelled like that on purpose
04:09 PM on 09/10/2012
CRA is used to determine whether or not a bank can expand or acquire other banks.  Banks who fail their CRA audit are not allowed to expand. So yes, they do feel pressure to lend, but hey F&F would just buy the debt, so it didn't affect their books, so why not.
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212 The Real BiPartison
Yes...it's spelled like that on purpose
03:43 PM on 09/10/2012
www.businessinsider.com/how-bill-clintons-balanced-budget-destroyed-the-economy-2012-9
-----------------------
Some inconvenient truth about the Clinton years and how they affect us now.
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HUFFPOST SUPER USER
Catch 22
Plan for Mid to Long Term.
03:40 PM on 09/10/2012
Elizabth Warren is right. "The system is rigged."
03:52 PM on 09/10/2012
Welcome to reality. -EVERY- system is rigged.
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HUFFPOST SUPER USER
Catch 22
Plan for Mid to Long Term.
04:06 PM on 09/10/2012
You may be right (no pun intended" Troll, but the question I ask myself is "in whose favor?"
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HUFFPOST SUPER USER
plaidsportcoat
05:04 PM on 09/10/2012
If you are not part of the solution, you are part of the problem, in this case.
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212 The Real BiPartison
Yes...it's spelled like that on purpose
03:38 PM on 09/10/2012
Eminent Domain would be a huge mistake if used as a solution. Let the market reach bottom. That's what's needed, and has yet to happen. That's why we keep limping long with no recovery in sight.
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HUFFPOST SUPER USER
plaidsportcoat
05:05 PM on 09/10/2012
We'd have to go back and take all the money back from the banks. If that had been done in the first place, the market would have gone negative....Now, it's relatively no meaning to "let the marke reach"so-called "bottom". The REAL bottom would have been the closing of ALL those financial institutions that were broke. Now it only hurts the people in the lower classes and the Untouchables On High get away with killing us all.
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212 The Real BiPartison
Yes...it's spelled like that on purpose
10:09 AM on 09/11/2012
Banks are still failing, but not all banks were on the brink of failing.   Many banks were forced to take TARP money regardless if  they needed it or not.  Market corrections hurt for a reason, so you don't make the same mistakes again.
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HUFFPOST SUPER USER
mikehart
03:21 PM on 09/10/2012
Hey Banks, we could just have them all file for Chapter 13, they keep the house and you get paid, just not all theat interest...........
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HUFFPOST SUPER USER
Matt McG
Milk-a-what?
03:08 PM on 09/10/2012
Let's not forget that the banks got their handout from the government. They pocketed that money from the tax payers and now it's business as usual. They are not renegotiating anything. The banks do not believe they should lose a penny in all of this. They are not trying to help struggling homeowners. Those homeowners are being given ultimatums, pay or get out.
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mick719
Obamacare, Best Care Anywhere
03:25 PM on 09/10/2012
there is the matter of 13 trillion dollars of wealth evaporating after bush crashed the economy in 2007. what happened to that money?
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HUFFPOST SUPER USER
Matt McG
Milk-a-what?
03:30 PM on 09/10/2012
That's a good question.
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HUFFPOST SUPER USER
MilesToGo
03:37 PM on 09/10/2012
That money vanished into ethereal zones, having existed previously only on fraudulent and hyped-up books reflecting vacuous values on paper.

The big banks still will not allow any authorities to investigate the nature of the assets they claim. This does not bode well for them or the future economy.
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212 The Real BiPartison
Yes...it's spelled like that on purpose
03:39 PM on 09/10/2012
Actually as part of TARP banks are now required to keep more money to satisfy new stress testing rule established by the Fed. So yes, they kept that money, because they have too.
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HUFFPOST SUPER USER
itcounts
Reality is an illusion albeit a persistent one
04:05 PM on 09/10/2012
Yea, the head of one of our fine institutions was screaming his head off in England the other day because he now has to hold 7% in the bank.

Just how many depositors would that cover in the first hour of a run on the bank?

Leaving the taxpayers on the hook again.
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HUFFPOST SUPER USER
Matt McG
Milk-a-what?
04:10 PM on 09/10/2012
I understand that part of it. However, in order to get the economy running again the idea is that lending must happen. But the banks are not lending the way they should be. I have heard more stories from people who have tried and it's criminal
03:04 PM on 09/10/2012
I guess without the banks being free to steal no influence money for the politicans forced to live off a measly $200,000 a year.
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03:04 PM on 09/10/2012
An interesting aspect of this is that many pension funds such as CalPERS own MBS (Mortgage Backed Securities) as part of their investment porfolios. So now, if San Bernardino County were to invoke eminent domain resulting in a 40% haircut to owners of MBS, CalPERS (among others) would take the loss and the funding government agencies (such as San Bernadino County) would have to contribute more to make up for the pension fund deficiencies.

Kind of a, what goes around, comes around situation
HUFFPOST SUPER USER
ruolivert
03:41 PM on 09/10/2012
Unseen economic consequences are just as important as the readily seen ones.
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HUFFPOST SUPER USER
MilesToGo
03:43 PM on 09/10/2012
Interesting observation, which might explain why mortgage-remedy policies aren't effective. Banks still will not let outside authorities investigate the nature of the assets they claim to hold. We all must be concerned about the real tangible assets being held by pension funds and even mutual funds held by the public at large. "Haircut" will be a mild way of describing the coming potential losses for millions of small investors and the trusted institutions they are relying upon.
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212 The Real BiPartison
Yes...it's spelled like that on purpose
04:27 PM on 09/10/2012
Fed Reserve Auditors live at the banks. Trust me...I work for a bank. They are sitting right down the hallway.
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Consumer99
We need to WIN 2014 and 2016
03:04 PM on 09/10/2012
"Newsom says investors try to prevent use of eminent domain"
Who the Freak gives a damn about Investors? They almost single handily are the source of most of our problems.
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radiojunkie
tune addict
03:00 PM on 09/10/2012
Let me see if I have this straight. Even if my investment is repossessed at distressed value, I'll still make more money versus foreclosure. (Unless I bought a credit-defalt-swap and stand to make bank on the foreclosure itself.)

Making money off losers is one thing but gaming the process to produce more losers is insane greed.
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HUFFPOST SUPER USER
mikehart
03:22 PM on 09/10/2012
The Romney way
HUFFPOST SUPER USER
GetRealSoon
Finding Fraudster
02:57 PM on 09/10/2012
"This move to pick the pockets of investors in the mortgage market will have far-reaching implications ....."

And who was it picking the investors pockets during the bubble?
HUFFPOST SUPER USER
standalonespirit
02:47 PM on 09/10/2012
DO IT! San Bernardino you are my champion!!!! Hey Wall street the pendulum swings both ways you are way over due for getting your just desserts! Crooks!