MORTGAGE FRAUD REVISITED:
Why Did the Fed Pump and Dump US Real Estate Markets?

Author: L. Randall Wray

My colleague, Bill Black, has been entertaining himself by reading through the transcripts of the Fed’s meetings to find discussions of mortgage fraud. As you probably know, Congressman Henry Gonzalez forced the Fed to release these transcripts after he caught Chairman Greenspan in a white lie. Well, maybe it was not so white—just an outright lie trying to claim that transcripts of Fed meetings did not exist. We now know they did. Greenspan then agreed to release them, with a five year lag. So, joy of joys, you can now read the transcripts from FOMC meetings for 2006, right at the end of the biggest real estate boom in human history. And Bill Black is just the sort of guy who would find this fun…

Many of those involved in promoting the fraud have claimed that “no one could have seen it coming”—meaning the collapse. This is, of course, implausible. The FBI had warned of “an epidemic of fraud” back in 2004—long before the worst abuses became normal bank practice. And from the Fed’s transcripts, there is no doubt at all that the Fed “saw it coming”. Let’s look at a particular report from December 12, 2006. Don’t take my word for it. Read this: http://www.federalreserve.gov/monetarypolicy/files/FOMC20061212meeting.pdf

Here is a relevant portion of the transcript, with a bit of added bold: (read more)

An electronic database called MERS has created defects in the chain of title to over half the homes in America. Counties have been cheated out of millions of dollars in recording fees, and their title records are in hopeless disarray. Meanwhile, foreclosed and abandoned homes are blighting neighborhoods. Straightening out the records and restoring the homes to occupancy is clearly in the public interest, and the burden is on local government to do it. But how? New legal developments are presenting some innovative alternatives.

John O’Brien is Register of Deeds for Southern Essex County, Massachusetts. He calls his land registry a “crime scene.” A formal forensic audit of the properties for which he is responsible found that:

Only 16% of the mortgage assignments were valid.
27% of the invalid assignments were fraudulent, 35% were “robo-signed,” and 10% violated the Massachusetts Mortgage Fraud Statute.
The identity of financial institutions that are current owners of the mortgages could be determined for only 287 out of 473 (60%).
There were 683 missing assignments for the 287 traced mortgages, representing approximately $180,000 in lost recording fees per 1,000 mortgages whose current ownership could be traced.

At the root of the problem is that title has been recorded in the name of a private entity called Mortgage Electronic Registration Systems (MERS). MERS is a mere place holder for the true owners, a faceless, changing pool of investors owning indeterminate portions of sliced and diced, securitized properties. Their identities have been so well hidden that their claims to title are now in doubt. According to the auditor:

http://thenewamerican.com/usnews/constitution/10230-feinstein-introduces-due-process-guarantee-act

In December 15, just hours after the Senate had passed the compromise version of the National Defense Authorization Act (NDAA), Senator Diane Feinstein (D-Calif., left)) introduced a bill, supported by several of her colleagues from across the aisle, to extract at least one of the sharpest teeth from the freedom-devouring monster created by the NDAA.

The measure, entitled the Due Process Guarantee Act of 2011, is an attempt by Feinstein and her co-sponsors to prevent American citizens detained under applicable provisions of the NDAA from being denied their constitutional right to the due process of law.

Justice Party – Rocky Anderson
Libertarian Party – Bill Still
Republicans – Ron Paul and Buddy Roemer

Candidates added later:
Green Party – Jill Stein

Of these the only one who is getting any mainstream attention is Ron Paul, though that could change. Paul has a feather in his cap for introducing a bill to “audit the Fed”. Raminfications of that and the Bloomberg News suit resulted in public disclosure of where the Fed money went and a peek into Fed operations. OWS started about two days after Bernie Sanders released the report on his site.

It would be a real coup to get these guys in one room for a discussion. Who could pull that off?

Here is an invitation to Occupy the Treasury by supporting the Need Act

USA Today - New York. – Measured in dollars, the nation is on pace this year to ship more gasoline, diesel, and jet fuel than any other single export, according to U.S. Census data going back to 1990. It will also be the first year in more than 60 that America has been a net exporter of these fuels.

Just how big of a shift is this? A decade ago, fuel wasn’t even among the top 25 exports. And for the last five years, America’s top export was aircraft.

The trend is significant because for decades the U.S. has relied on huge imports of fuel from Europe in order to meet demand. It only reinforced the image of America as an energy hog. And up until a few years ago, whenever gasoline prices climbed, there were complaints in Congress that U.S. refiners were not growing quickly enough to satisfy domestic demand; that controversy would appear to be over.

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Who is paying local property taxes on the foreclosed properties­?

Are the taxes based on the original mortgage value or are the rates marked down to “current values”?

If the banks are not willing to mark down the mortgages why should the counties mark down the property taxes?

If the property taxes are not paid, the county could take ownership through a tax lien and turn the property over to a local housing manager that provides housing for homeless families rather than auctioning them off for the amount of taxes owed. The government would end up with an investment in the community’­s future while supporting the needs of homeless families.
Read the Article at HuffingtonPost

Got your attention? Not sure that debt-free money is the answer, and not sure how Kucinich and Ron Paul feel about this method for taking control of the currency once they wrest it from the Fed, but we should ask.

in  Wall St likes Your Amnesia, Ellen Brown writes,  “To fix the system, the profits need to be returned to the 99%. How that could be done was suggested by radio host and political commentator Thom Hartmann in a recent editorial: Have the central bank owned by the US government and run by the Treasury Department, so all the profits … go directly into the Treasury and you and I pay less in taxes…
For a model on the local level, he pointed to the Bank of North Dakota: The good people of North Dakota … established something very much like this – the Bank of North Dakota – and it’s kept the state in the black, and kept its farmers, manufacturers and students protected from the predations of New York banksters for nearly a century. It’s time for every state to charter their own state bank, just like North Dakota did, and for the Treasury Department to either buy the Fed from the for-profit banks that own it, or simply nationalize it.”

Read more on the debt-dree notes issued by Lincoln and Kennedy.

Exclusive Rights to Apply Marijuana as a Medical Therapeutic

Deadline for Comment: Monday, Dec. 19

LOS ANGELES, CA – Dec. 15, 2011–The Union of Medical Marijuana Patients has just discovered that the U.S. Department of Health and Human Services is about to award an exclusive license to KannaLife Sciences, Inc. of New York to develop medical therapeutics based on the chemistry of cannabis. According to the notice in the Federal Register, public comments will be accepted through Monday, December 19.

“We find it hypocritical and incredible that on the one hand, the U.S. Department of Justice is persecuting medical cannabis patient associations, asserting that the federal government regards marijuana as having absolutely no medical value, despite overwhelming clinical evidence,” said Union director James Shaw. “On the other hand, the Department of Health and Human Services is planning to grant patent rights with possible worldwide application to develop medicines based on cannabis.”

While the Union applauds the U.S. government’s efforts into researching the medical value of cannabis, Shaw said, “they should have affirmatively rescheduled cannabis when they discovered it had medical efficacy and, of course, it makes no sense for the government to provide U.S. Patent 6,630,507, which the government owns, to a single company with exclusive rights.” He urged medical cannabis patient associations and patients using marijuana for medical reasons to protest this giveaway to one pharmaceutical firm.

Comments need to be submitted in writing by next Monday to Betty B. Tong, Ph.D., Senior Licensing and Patenting Manager, Office of Technology Transfer, National Institutes of Health, 6011 Executive Boulevard, Suite 325, Rockville MD 20852-3804, fax (301) 402-0220, or tongb@mail.nih.gov.

More information on this issue can be found at www.Unionmmp.org.

Scott Smith
The Union of Medical Marijuana Patients
Los Angeles, CA
310-254-4051

UNLESS something changes in Washington, American workers will, on New Year’s Day, effectively lose their right to be represented by a union. Two of the five seats on the National Labor Relations Board, which protects collective bargaining, are vacant, and on Dec. 31, the term of Craig Becker, a labor lawyer whom President Obama named to the board last year through a recess appointment, will expire. Without a quorum, the Supreme Court ruled last year, the board cannot decide cases.

(read the rest)