Burying the Bone: Paulson's Loan & Securities Fraud Bailout
The Nattering One muses... The problem isn't subprime loans or ARM resets. As reported on July 31st, Alt-A defaults were outpacing subprime.
And on Dec 6th why the Paulson plan won't work and how 45% of all foreclosures to date are from PRIME & FHA/VA loans.
Solutions to the real problems will not be found in frozen loans, Fed rate cuts or SIV bailout funds.
However, these are solutions for a old dog named Hank, that is trying to bury some bones (and skeletons) in his yard.
Remember, HP was the head of Goldman Sachs during the "halycon" days of mortgage fraud 2004-06.
Yes it is a dog eat dog world, but the real problem is: the dogs who bought the bones, may want to give them back... from Sean Olender at the SF Chronicle
(there exists)
And yes, there is lots of fraud. In loan origination docs, applications, appraisals, bond packages, debt ratings and especially the over stated valuation of the assets.
EVERYONE knows about it, from the loan reps all the way up to CEO's at the GSE's, lenders, realtors, title and escrow companies...
And especially at the Wall Street bond houses and debt rating companies that...
repackaged, benedicted and sold this bag of bones (or shit) to an unsuspecting public, insurance co's, pension funds and foreign investors.
More from Olender:
Naybob's, does the House TILA amendment and Paulson's freezing plan now make sense?
Its the only way these fraudulent lenders, rating agencies and the Wall Street bond vendors can sweep the lawsuits under the rug.
Furthermore, doesn't Paulson's involvement with Goldman Sach's, and their subsequent unique success provide a smoking gun for possible bond holder lawsuits?
Very interesting, but stupid?
The very people that created this mess and profited to the tune of trillions, Wall Street, the lenders, and their proxy Ol' Hanky are now the one's "cleaning" it up.
No surprise then, that the proposed "solutions" are wrought with cover ups and "safe habor" for major conflicts of interest, collusion, chicanery and insider trading.
Bottom line: The potential lawsuits are a formidable undercurrent, but should the bondholders seek recourse through forced buybacks...
there won't be enough liquidity or solvency in the universe to stop the resulting tidal wave of financial institution failures.
Some more background info as reported here: Oct 5th, 2005 In the greatest bait and switch of all time, how foreign investors were duped into buying a sub prime MBS pig with glossy red AAA rating lipstick on it.
Oct 11th Wall Street reshuffled the deck to obfuscate their debt losses and misrepresent their earnings.
Oct 30th WaMU (and now Countrywide) are almost completely dependent on the FHLB system (and now add in the Fed discount window) for their operating cash needs.
Nov 7th that son of a Cuomo, is on the verge of indicting some major names in the industry for loan & appraisal fraud. He has been quiet of late, perhaps he was made an "offer he couldn't refuse"?
Dec 7th the house is stealthly trying to pass an amendment to TILA which would give any lender doing a rework, safe habor from lawsuits under ANY LAW.
And on Dec 6th why the Paulson plan won't work and how 45% of all foreclosures to date are from PRIME & FHA/VA loans.
Solutions to the real problems will not be found in frozen loans, Fed rate cuts or SIV bailout funds.
However, these are solutions for a old dog named Hank, that is trying to bury some bones (and skeletons) in his yard.
Remember, HP was the head of Goldman Sachs during the "halycon" days of mortgage fraud 2004-06.
Yes it is a dog eat dog world, but the real problem is: the dogs who bought the bones, may want to give them back... from Sean Olender at the SF Chronicle
(there exists)
the contractual ability of investors in MBS mortgage bonds to require banks to buy back the loans at face value if there was fraud in the origination process.
And yes, there is lots of fraud. In loan origination docs, applications, appraisals, bond packages, debt ratings and especially the over stated valuation of the assets.
EVERYONE knows about it, from the loan reps all the way up to CEO's at the GSE's, lenders, realtors, title and escrow companies...
And especially at the Wall Street bond houses and debt rating companies that...
repackaged, benedicted and sold this bag of bones (or shit) to an unsuspecting public, insurance co's, pension funds and foreign investors.
More from Olender:
The key is to refinance borrowers whose current loans involved fraud in the origination process. And I assure you it was a minority of borrowers whose loans didn't involve fraud..
Ultimately, the people in these secret Paulson meetings were probably less worried about saving the mortgage market than with saving themselves. Some might be looking at prison time.
Goldman Sachs is the only major investment bank in the United States that has emerged as yet unscathed from this debacle.
The success of its strategy must have resulted from fairly substantial bets against housing, mortgage banking and related industries, which also means that Goldman Sachs saw this coming at the same time they were bundling and selling these loans
Naybob's, does the House TILA amendment and Paulson's freezing plan now make sense?
Its the only way these fraudulent lenders, rating agencies and the Wall Street bond vendors can sweep the lawsuits under the rug.
Furthermore, doesn't Paulson's involvement with Goldman Sach's, and their subsequent unique success provide a smoking gun for possible bond holder lawsuits?
Very interesting, but stupid?
The very people that created this mess and profited to the tune of trillions, Wall Street, the lenders, and their proxy Ol' Hanky are now the one's "cleaning" it up.
No surprise then, that the proposed "solutions" are wrought with cover ups and "safe habor" for major conflicts of interest, collusion, chicanery and insider trading.
Bottom line: The potential lawsuits are a formidable undercurrent, but should the bondholders seek recourse through forced buybacks...
there won't be enough liquidity or solvency in the universe to stop the resulting tidal wave of financial institution failures.
Some more background info as reported here: Oct 5th, 2005 In the greatest bait and switch of all time, how foreign investors were duped into buying a sub prime MBS pig with glossy red AAA rating lipstick on it.
Oct 11th Wall Street reshuffled the deck to obfuscate their debt losses and misrepresent their earnings.
Oct 30th WaMU (and now Countrywide) are almost completely dependent on the FHLB system (and now add in the Fed discount window) for their operating cash needs.
Nov 7th that son of a Cuomo, is on the verge of indicting some major names in the industry for loan & appraisal fraud. He has been quiet of late, perhaps he was made an "offer he couldn't refuse"?
Dec 7th the house is stealthly trying to pass an amendment to TILA which would give any lender doing a rework, safe habor from lawsuits under ANY LAW.
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