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Shedding Light on the Shadow Banking System

January 29, 2012

by Ellen Brown

“...Whether massive robo-signing occurred is no longer an issue. The question that needs to be investigated is why it was being done. The alleged justification—that the bankers were so busy that they cut corners—hardly seems credible given the extent of the practice.
The robo-signing largely involved assignments of mortgage notes to mortgage servicers or trusts representing the investors who put up the loan money. Assignment was necessary to give the trusts legal title to the loans. But assignment was delayed until it was necessary to foreclose on the homes, when it had to be done through the forgery and fraud of robo-signing. Why had it been delayed? Why did the banks not assign the mortgages to the trusts when and as required by law?…

Here is a working hypothesis, suggested by Martin Andelman: securitized mortgages are the “pawns” used in the pawn shop known as the “repo market.” “Repos” are overnight sales and repurchases of collateral. (read on)



One Comment leave one →
  1. Sebra Leaves permalink
    February 3, 2012 8:14 pm

    I asked Ellen to clarify the meaning of the folliwng statement:

    “The bankers have engaged in what amounts to a massive fraud, not necessarily because they started out with criminal intent, but because they have been required to in order to come up with the collateral (in this case real estate) to back their loans.”

    She replied, that (I am paraphrasing) The fraud is the concept that “money” is backed by something of value, when it is not. Nor are MERS properties legally attached by clean title to the properties they are foreclosing.


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