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More Foreclosures, and a Joke About Larry Summers


1. Foreclosures Surge in Q3

RealtyTrac® (realtytrac.com), the leading online marketplace for foreclosure properties, today released its U.S. Foreclosure Market Report™ for Q3 2009, which shows that foreclosure filings -- default notices, scheduled auctions and bank repossessions -- were reported on 937,840 properties in the third quarter, a 5 percent increase from the previous quarter and an increase of nearly 23 percent from Q3 2008.

Also surging are profits for the financial services industry.

It's obviously lucky for the banks that we elected Barack Obama, but didn't that nauseating hypocrite also promise to do a little something for homeowners in trouble?

2. A Joke About Larry Summers

Someone asked Larry Summers' girlfriend if he really believes that women can't do math, and the girlfriend held up her pinky finger...

"He must believe it, because he told me that this is eight inches."


19 Comments

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Meanwhile banks are apparently re-packaging toxic assets into brand new derivatives, and almost nobody is paying any attention to this disaster-in-the-making, except, of course, Dennis Kucinich...

Congressman Dennis Kucinich (D-OH) today asked Treasury Secretary Timothy Geithner to address the potential threat to the financial system posed by resecuritization of existing residential mortgage backed securities, informally referred to as ‘re-remic.’

Congressman Kucinich recently brought the matter to the attention of the Securities and Exchange Commission and uncovered that only $50 million of a $664 billion market is overseen by the SEC.

The Re-remic process takes previously issued residential mortgage backed securities and collateralized debt obligations whose value has deteriorated considerably, and repackages them into larger, more complex financial instruments in an attempt to create investment-grade products once again. Investors and analysts alike have stated concerns that re-remics could be used to hide toxic assets and manipulate capital requirements.

In the letter, Kucinich called on Secretary Geithner to create a stronger regulatory framework to ensure that financial institutions are not continuing practices that led the financial system to the brink of collapse in 2008.

The full text of Kucinich's letter to Geithner is here.

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Why does Congressman K even bother writing to Geithner? Why doesn't he simply address his suggestions to the man who makes such decisons: the Chairman of Goldman Sachs?

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I say get prepared for crash #2. The fact that Wall St and Washington DC have become disconnected from the real economy is bloody obvious. 39 million people on food stamps. Yeah, that's an economy that's sustainable.

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You got it all wrong. More foreclosures mean that the economy is getting better. Sheesh people, stick to the program!

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I think the Dems' original bill for the use of TARP funds was for $300 billion to be set aside to backstop lenders' renegotiating mortgages and lessening the principal, or 'cram-down.' I think I rememeber that so many lenders freaked out, plus Republicans, it got gutted to where it could only be used for those who looked on paper as thought they really didn't need much help. I read recently that a pretty large percentage of even those qualified to get the reductions are already facing foreclosure again. Should given the $$ directly to them.
I have been storing beans and rice and seeds and spices for the next part of the big W-shaped depression. (Recession! Who are they kidding?)

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The real shape of this "recession" is...\ .....................................................................\ .......................................................................\ .........................................................................\
............................................................................................\

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That looked way better in the preview.

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I think i get your drift, though. "Down and steday-down." yes?

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I disagree COMPLETELY. The real shape of this "recession" is... .....................................................................\ .......................................................................\ .........................................................................\ 50 FOOT CLIFF
............................................................................................\

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Yes, I do recall a measure being discussed early on to put a stopper in the foreclosure situation... but guess who stepped in to tank it... the usual suspects, natch.

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That's the 'down and steady-down', which i, of course, misspelled. It is only the financial numbers that don't include us that matter to the People Who Run Amurrica.
Ya can't get food stamps unless you sell your house. Wow. I tired when i first busted my knees and couldn't work, and the bills were piling up. It was humiliating to even make the call; then to realize at least we had resources, unlike many. But selling your house to eat seems sorta harsh. And counter-productive, in the end.

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It actually looks like the foreclosure figures are understated, as banks delay proceedings in order to avoid the various costs - taxes, etc - of owning the houses, and in order to keep house-prices from falling too much in the short term.

It also seems the judiciary is revolting - bankruptcy courts are wiping out mortgage debt since lenders' paperwork is such a mess they can't prove homeowners actually owe them any money.

HAR

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Har indeed!

One surprising smackdown occurred on Oct. 9 in federal bankruptcy court in the Southern District of New York. Ruling that a lender, PHH Mortgage, hadn’t proved its claim to a delinquent borrower’s home in White Plains, Judge Robert D. Drain wiped out a $461,263 mortgage debt on the property. That’s right: the mortgage debt disappeared, via a court order.

And more Har...

Three plain talking judges, in state courts in Massachusetts and Kansas, and a Federal Court in Ohio, have drilled down to the “straw man” aspect of securitization. The judges’ decisions have raised serious questions as to the legality of hundreds of thousands of foreclosures that have transpired as well as the legal standing of the subsequent purchasers of those homes, who are more and more frequently the Wall Street banks themselves.
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I hope the judiciary is revolting. Here's my new hero, Justice Arthur M. Schack:

Every week, the nation’s mightiest banks come to his court seeking to take the homes of New Yorkers who cannot pay their mortgages. And nearly as often, the judge says, they file foreclosure papers speckled with errors.

He plucks out one motion and leafs through: a Deutsche Bank representative signed an affidavit claiming to be the vice president of two different banks. His office was in Kansas City, Mo., but the signature was notarized in Texas. And the bank did not even own the mortgage when it began to foreclose on the homeowner.

The judge’s lips pucker as if he had inhaled a pickle; he rejected this one.

“I’m a little guy in Brooklyn who doesn’t belong to their country clubs, what can I tell you?” he says, adding a shrug for punctuation. “I won’t accept their comedy of errors.”

The judge, Arthur M. Schack, 64, fashions himself a judicial Don Quixote, tilting at the phalanxes of bankers, foreclosure facilitators and lawyers who file motions by the bale. While national debate focuses on bank bailouts and federal aid for homeowners that has been slow in coming, the hard reckonings of the foreclosure crisis are being made in courts like his, and Justice Schack’s sympathies are clear.

He has tossed out 46 of the 102 foreclosure motions that have come before him in the last two years. And his often scathing decisions, peppered with allusions to the Croesus-like wealth of bank presidents, have attracted the respectful attention of judges and lawyers from Florida to Ohio to California. At recent judicial conferences in Chicago and Arizona, several panelists praised his rulings as a possible national model.

His opinions, too, have been greeted by a cry of affront from a bank official or two, who say this judge stands in the way of what is rightfully theirs. HSBC bank appealed a recent ruling, saying he had set a “dangerous precedent” by acting as “both judge and jury,” throwing out cases even when homeowners had not responded to foreclosure motions.

Justice Schack, like a handful of state and federal judges, has taken a magnifying glass to the mortgage industry. In the gilded haste of the past decade, bankers handed out millions of mortgages — with terms good, bad and exotically ugly — then repackaged those loans for sale to investors from Connecticut to Singapore. Sloppiness reigned. So many papers have been lost, signatures misplaced and documents dated inaccurately that it is often not clear which bank owns the mortgage.

Justice Schack’s take is straightforward, and sends a tremor through some bank suites: If a bank cannot prove ownership, it cannot foreclose.

But Schack is just one little guy in Brooklyn.

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Here's a good take on what seems to be going on.
http://www.calculatedriskblog.com/2009/10/in-re-olga-of-bankruptcy-and.html

If Drain and Schack's methodology starts to get adopted by judges in some of these subprime areas, then we start talking real money...

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One little guy in Brooklyn, but unlike a lot of other little guys in Brooklyn, every decision by Justice Arthur M. Schack is a precedent potentially applicable to every foreclosure in the United States, and likewise serviceable as the basis for class-action by multiple plaintiffs against the banks.

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Seems like any kind of funding or legislation has to be passed by Congress, doesn't it, Jacob/rootie? You're an ass.

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Yes, brantlamb, Congress passes laws, two plus two is four, and that's as far as you go.

David Axelrod designed Obama for people just like you.


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I think there's been murmurs that the repaid TARP money might be redirected to the foreclosure crisis. While this money will most likely end up in JPMorgan and Citibank's pockets, if it prevents a deepening of the crisis, I suppose that's a good thing on some level.

And it would be run by the Fed, thus NOT requiring additonal legislation.

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