Senate Candidate Bets Congress $100 Million That the U.S. Government Cannot Run out of Money
Warren Mosler Offers $100 Million of His Own Money to Pay Down the Federal Deficit If Any Lawmaker Can Prove Him Wrong
WATERBURY, Conn.–(BUSINESS WIRE)–Warren Mosler, Connecticut’s Independent candidate for U.S. Senate today announced that it is an indisputable fact that U.S. Government spending is not operationally constrained by revenue and will give $100 million of his own money to pay down the Federal deficit if any Congressman or Senator can prove him wrong. “I am running for U.S. Senate to see my policies implemented to create the 20 million jobs we need. And to do this it must be understood that there is simply no such thing as the U.S. Federal government running out of money, nor is the Federal government operationally dependent on borrowing from China or anyone else. U.S. states, individuals, and companies can indeed become insolvent, but U.S. government checks will never bounce,” states Mosler. “Yes, large Federal deficits that push the economy beyond the point of full employment can lead to inflation or currency devaluation, but not bankruptcy and not bounced checks. If lawmakers today understood this fact, they would not be looking to cut Social Security and we would not still be mired in this disastrous recession.”
With 37 years of experience as an ‘insider’ in monetary operations, Mosler knows that President Obama is wrong when he says that the U.S. government has ‘run out of money’ and is dependent on borrowing from China in order to spend. As Fed Chairman Bernanke publicly stated in March of 2009, the Fed makes payments by simply marking up numbers in bank accounts with its computer. Mosler explains further; “The Government doesn’t get anything ‘real’ when it taxes and doesn’t give up anything ‘real’ when it spends. There is no gold coin that goes into a bucket at the Fed when you are taxed and the government doesn’t hammer a gold coin into its computer when it spends. It just changes numbers in our bank accounts.” Mosler likens this scenario to a football game; when a touchdown is scored, the number on the scoreboard changes from 0 to 6. No one wonders where the stadium got the 6 points, no one demands that stadiums keep a reserve of points in a “lockbox” and no one is worried about using up all the points and thereby denying our children the chance to play.
Warren Mosler urges his opponents, Linda McMahon and Richard Blumenthal, and the entirety of Congress to recognize how the monetary system actually works and implement a full payroll tax (FICA) holiday and his other proposals to restore full employment and prosperity while not cutting Social Security benefits or eligibility.
About Warren Mosler
Warren Mosler is running as an Independent. His populist economic message features: 1) A full payroll tax (FICA) holiday so that people working for a living can afford to buy the goods and services they produce. 2) $500 per capita Federal revenue distribution for the states 3) An $8/hr federally funded job to anyone willing and able to work to facilitate the transition from unemployment to private sector employment. He has also pledged never to vote for cuts in Social Security payments or benefits. Warren is a native of Manchester, Conn., where his father worked in a small insurance office and his mother was a night-shift nurse. After graduating from the University of Connecticut (BA Economics, 1971), and working on financial trading desks in NYC and Chicago, Warren started his current investment firm in 1982. For the last twenty years, Warren has also been involved in the academic community, publishing numerous journal articles, and giving conference presentations around the globe. Mosler’s new book “The 7 Deadly Innocent Frauds of Economic Policy” is a non-technical guide to the actual workings of the monetary system and exposes the most commonly held misconceptions. He also founded Mosler Automotive, which builds the Mosler MT900, the world’s top performance car that also gets 30 mpg at 55 mph.
Monthly Archives: October 2010
Manufacturing industry, change in payrolls
The more we beat ourselves up with high unemployment, lower wages, and a weak economy, the more manufacturing jobs we’ll get.
Manufacturing industry, change in payrolls:
2008: -904,000
2009: -1,288,000
2010: 136,000
Germany’s Econ Minister Brüderle hits back at French and US criticism
The don’t know the elevated fiscal deficits due to their ‘automatic Keynesian stabilizers’ did the trick, including (temporarily) weakening euro?
So why are they spewing this nonsense?
Class warfare to keep union demands in check and domestic demand suppressed so the well off can optimize their personal real terms of trade?
Expect austerity to continue to work against domestic demand and keep the forces in place that will continue to drive the euro to a level high enough to contain net exports.
Germany hits back at French and US criticism
By Gerrit Wiesmann and Stanley Pignal
October 21 (FT) — “Growing domestic demand shows our recovery is standing on two feet,” said Rainer Brüderle, Germany’s economics minister. Gross domestic product is expected to rise by 3.4 per cent this year, up from a spring forecast of 1.4 per cent, and 1.8 per cent in 2011, up from 1.6 per cent. Mr Brüderle said Germany’s recovery was “a non-Keynesian growth programme” in which fiscal discipline spurred private investment. “It’s a textbook recovery,” Mr Brüderle said, describing how an uptick in foreign demand earlier this year had spurred exports, then investment and finally job creation in Germany itself. Unemployment is expected to fall below 3m this autumn and remain “clearly below” that mark next year. At the start of the year, economists had worried about whether the German upturn would be “V-, W-, L- or U- shaped”, he said. “Now we know that was irrelevant. This has become an XL [extra-large]-recovery.”
Geithner’s Letter to G-20 on ‘External Imbalances’
They’ve always been completely out of paradigm on domestic federal budgets. But this time around their ignorance has already been costly beyond imagination and looks to only get more so.
Geithner is just symptomatic of all that’s wrong with the mainstream’s understanding of monetary operations.
And I haven’t heard a single mainstream economist who’s got it right on the budget issue or the trade issue.
With the hawks and doves agreeing that federal deficits are a long term problem the obvious fundamental that imports are real benefits and exports real costs gets no consideration.
The trade war is a direct result of not understanding that domestic demand can always be continuously sustained by fiscal adjustments to the direct benefit of that economy.
The rest of the world’s desire to net export to us opens the door for unimagined US prosperity. With a full payroll tax (FICA) suspension we’d probably have enough domestic demand to buy all the goods and services we could produce at full employment plus all we wanted to buy from the rest of the world. And, if not, taxes could be lower still.
Geithner’s Letter to G-20 on ‘External Imbalances’: (Full Text)
Oct. 22 (Bloomberg) — The following is a reformatted
letter dated Oct. 20 from U.S. Treasury Secretary Timothy F.
Geithner to other officials in the Group of 20 industrial and
emerging economies. G-20 finance ministers and central bankers
are meeting today and tomorrow in Gyeongju, South Korea.
Dear G-20 Colleagues:
I am writing to offer some suggestions for our meeting later
this week. We are obviously at a moment where the world is
looking to the G-20 to provide a stronger commitment to work
together to address the major challenges to a sustainable global
recovery. I know that some of you will want to reserve any
substantive agreement until the November Leaders’ Summit, but I
think we should take advantage of the presence of the central
bank governors to try to reach agreement on the broad elements
this weekend, and put those in a report to our Leaders.
Building on Pittsburgh’s Framework for Strong, Sustainable, and
Balanced Growth and Toronto’s commitments on addressing
sovereign debt sustainability, here are three specific
suggestions designed to provide a stronger framework of
cooperation on international financial issues:
First, G-20 countries should commit to undertake policies
consistent with reducing external imbalances below a specified
share of GDP over the next few years, recognizing that some
exceptions may be required for countries that are structurally
large exporters of raw materials. This means that G-20 countries
running persistent deficits should boost national savings by
adopting credible medium-term fiscal targets consistent with
sustainable debt levels and by strengthening export performance.
Conversely, G-20 countries with persistent surpluses should
undertake structural, fiscal, and exchange rate policies to
boost domestic sources of growth and support global demand.
Since our current account balances depend on our own policy
choices as well as on the policies pursued by other G-20
countries, these commitments require a cooperative effort.
Second, to facilitate the orderly rebalancing of global demand,
G-20 countries should commit to refrain from exchange rate
policies designed to achieve competitive advantage by either
weakening their currency or preventing appreciation of an
undervalued currency. G-20 emerging market countries with
significantly undervalued currencies and adequate precautionary
reserves need to allow their exchange rates to adjust fully over
time to levels consistent with economic fundamentals. G-20
advanced countries will work to ensure against excessive
volatility and disorderly movements in exchange rates. Together
these actions should reduce the risk of excessive volatility in
capital flows for emerging economies that have flexible exchange
rates.
Third, the G-20 should call on the IMF to assume a special role
in monitoring progress on our commitments. The IMF should
publish a semiannual report assessing G-20 countries’ progress
toward the agreed objectives on external sustainability and the
consistency of countries’ exchange rate, capital account,
structural, and fiscal policies toward meeting those objectives.
With progress on these fronts, we should reach final agreement
on an ambitious package of reforms to strengthen the IMF’s
financial resources and its financial tools, and to reform the
governance structure to increase the voice and representation of
dynamic emerging economies.
Sincerely,
Timothy F. Geithner
Britain to Slash Public Spending in Austerity Gamble
Are they actually going to do this???
Good for us if we realized the right response is to lower our taxes here and letting them export all they want to us.
But we don’t.
Britain to Slash Public Spending in Austerity Gamble
October 20 (AP) — Recession-battered Britain learns the true cost of the global financial crisis Wednesday, as the country’s government outlines the largest cuts to public spending since World War II — slashing benefits and public sector jobs with a five-year austerity plan aimed at clearing the nation’s debts.
After spending billions bailing out indebted banks, and suffering a squeeze on tax revenue and a hike in welfare bills, Treasury chief George Osborne will stake the coalition government’s reputation on fixing the country’s economic ills by the next election in 2015.
In a major address to Parliament, Osborne will announce about 80 billion pounds ($128 billion) in spending cuts, which he claims are necessary alongside tax rises to wipe out Britain’s 156-billion-pound deficit and reduce its huge debt.
It means as many as 500,000 public sector jobs are likely to be lost, while pay for almost all government workers has already been frozen for two years under an initial round of austerity measures announced in June.
Even Queen Elizabeth II has taken a share of the strain, as Osborne froze government funding for her household and staff.
The Treasury chief — seen as a possible future prime minister — has already warned government departments to prepare to cut their budgets by up to 25 percent over four years. While the eventual cuts are likely to be much less severe, they are likely to be the sharpest in about 60 years.
About 1.2 million families will lose child benefit payments beginning in 2013, and tens of thousands more Britons are likely to see their welfare checks trimmed or scrapped.
If the government decides to slash its winter fuel allowance, millions of retirees could lose out on subsidized heating. About 12 million people currently receive the payment.
FDIC Proposes Long-Term DIF-Management Plan
The FDIC taxing banks to cover losses hasn’t been well thought out.
A universal bank tax is functionally equivalent to an interest rate hike for borrowers that doesn’t get passed through to savers.
FDIC Proposes Long-Term DIF-Management Plan
The FDIC board of directors proposed a long-range Deposit Insurance Fund management approach that includes a plan to restore the DIF. The board adopted a notice of proposed rulemaking on its long-term management plan that calls for a lower assessment rate to take effect when the reserve ratio equals 1.15 percent. Progressively lower assessment rate schedules would take effect in lieu of dividends when the reserve ratio reaches 2 percent and 2.5 percent. The DIF reserve ratio also must be at least 2 percent before a period of large fund losses, and average assessment rates over time must be approximately 8.5 basis points. The board said the goal is maintaining a positive fund balance even during periods of large fund losses and steady, predictable assessment rates throughout economic and credit cycles.
The board also adopted a DIF restoration plan to ensure that the fund reserve ratio reaches 1.35 percent by Sept. 30, 2020, as required by the Wall Street Reform Act. The DIF restoration plan would forgo the 3-basis-point increase in assessment rates scheduled for Jan. 1, 2011, and maintain the current rate schedule largely because projected DIF losses for 2010-2014 have dropped from $60 billion to $52 billion. The plan also calls for a new rulemaking next year on how to offset the effect of the Wall Street Reform Act requirement on community banks with less than $10 billion in assets.
Next month, the FDIC is expected to issue proposed regulations implementing the assessment-base change mandated by the Wall Street Reform Act. These new regulations will include proposed changes to the assessment rates necessitated by the change in the assessment base and, according to the FDIC, will ensure that the revenue collected under the new assessment system will approximately equal that under the existing system. Read more.
MERS and the mortgage mess
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> (email exchange)
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> Some weekend reading – important but not urgent…
>
It’s almost a certainty that complaints about foreclosures and requests for repurchases like those filed by The Fed and PIMCO against BoA, here, will increase in the coming year, increasing the likelihood of some form of congressional action to again try and deal with the mortgage foreclosure fallout.
I think we will soon hear a lot about a corporation that is legally involved in the origination of 60% of all mortgage loans in the U.S. yet there is no agreement on what the corporation actually is.
The attached PDF is a paper written by Christopher L. Peterson “Forclosure,Subprime Mortgage Lending, and the Mortgage Electronic Registration System” and is an excellent description of how MERS came to be and the legal controversy regarding it’s standing to file foreclosure notifications.
Some excerpts :
“MERS operates a computer database designed to track servicing and ownership rights of mortgage loans anywhere in the US. Originators and secondary market players pay membership dues and per transaction fees to MErS in exchange for the right to use and access the MERS records.”
“When closing on home mortgages, mortgage lenders now often list MERS as the mortgage of record on the paper mortgage- rather than the lender that is the actual mortgagee … even though MERS does not solicit, fund, service, or actually own any mortgage loans”
MERS was originally set up by mortgage industry insiders to avoid paying the fee charged by counties to cover the cost of maintain property records but its role has evolved.
“… when MERS is listed in county records as the owner of a mortgage, courts have generally made the natural assumption that MERS is the appropriate plaintiff to bring foreclosure action. To move foreclosures along as quickly as possible, MERS has allowed actual mortgagee and loan assignees or their servicers to bring foreclosure actions in MERS’s name, rather than in their own name.”
The contract provision use by mortgage originators in MERS as original mortgagee loan contracts states :
“MERS is a Mortgage Electronic Registration Systems Inc. MERS is a separate corporation that is acting solely as a nominee for Lender and Lender’s successors and assigns. MERS is the mortgagee under this Security Instrument. MERS is organized and existing under the laws of Delaware….”
The second sentence seems to suggest that MERS is some sort of agent – a nominee of the actual mortgage. Yet the third sentence flatly asserts that MERS in the mortgagee.
China Raises Lending, Deposit Rates as Inflation Accelerates
A lot more evidence of an inflation problem here.
Market forces may be at work forcing ‘currency adjustment’ from that angle as China undergoes the transformation from employment growth via export led growth to employment growth via domestic demand as world demand for their exports remains soft.
As previously discussed, their currency has probably been fundamentally weakening for a while, supported by capital flows rather than trade flows.
This is a bubble like process that can ‘burst’ when the capital flows decelerate with a bout of currency weakness, double digit inflation, and political unrest.
And their next gen western educated economists seem to be doing the traditional interest rate hiking response to inflation they learned in school, which only makes it worse through the ‘fiscal channel’ of higher interest payments by the govt. on the demand side, and rising costs of real investment on the supply side.
A lot more evidence of an inflation problem here.
Market forces may be at work forcing ‘currency adjustment’ from that angle as China
undergoes the transformation from employment growth from export led growth to employment growth through domestic demand as world demand for their exports remains soft.
As previously discussed, their currency has probably been fundamentally weakening for a while, supported by capital flows rather than trade flows.
This is a bubble like process that can ‘burst’ when the capital flows decelerate with a bout of currency weakness, double digit inflation, and political unrest.
And their next gen western educated economists seem to be doing the traditional interest rate hiking response to inflation they learned in school, which only makes it worse through the ‘fiscal channel’ of higher interest payments by the govt on the demand side, and rising costs of real investment on the supply side.
Headlines:
China Raises Lending, Deposit Rates as Inflation Accelerates
Investors Should Cut China Property Stake, Gave Says
PBOC’s ‘Vicious Cycle’ Worsened by Fed, Yu Says: China Credit
China to Do More to Manage Inflation Expectations, Zhang Writes
World Bank Cuts East Asia Outlook, Warns on ‘Bubbles’
South Korean central bank looks to gold
China Raises Lending, Deposit Rates as Inflation Accelerates
October 19 (Bloomberg) — China raised its benchmark
lending and deposit rates for the first time since 2007 after
inflation accelerated to the fastest pace in 22 months.The one-year deposit rate will increase to 2.5 percent
from 2.25 percent, effective tomorrow, the People’s Bank of
China said on its website today. The lending rate will
increase to 5.56 percent from 5.31 percent, it said.China’s inflation quickened to 3.5 percent in August,
highlighting overheating risks that have prompted the
government to curb credit and clamp down on the real-estate
market this year. Higher interest rates may encourage inflows
of speculative capital from abroad, complicating management
of the fastest-growing major economy.“Policy makers need to better anchor inflation
expectations by boosting real interest rates,” Liu Li-Gang,
a Hong Kong-based economist at Australia and New Zealand
Banking Group Ltd., said before today’s release.China last raised benchmark rates in December 2007, with
central bank Deputy Governor Zhu Min saying on March 25 that
rates are a “heavy-duty weapon” and alternative measures
were working well.Today’s move came after two surveys showed manufacturing
accelerated in September and input prices jumped, signaling
stabilizing growth and inflation pressures.Global Recovery
“China would be wise to raise rates,” Dariusz
Kowalczyk, a Hong Kong-based senior economist at Credit
Agricole, said ahead of today’s announcement. “It has led
the global recovery and yet is one of only a few emerging
Asian nations that have not begun to reverse the steep rate
cuts orchestrated during the crisis.”Chinese officials are grappling with the risk created by
last year’s record 9.59 trillion yuan ($1.4 trillion) credit
boom that fueled the nation’s comeback from the global
recession. China’s property prices in 70 cities rose 9.1
percent in September from a year earlier, according to the
statistics bureau.China will speed up the introduction of a trial property
tax in some cities and then expand the levy to the whole
country, the government said Sept. 29, without giving a
timetable. The state also told commercial banks to stop
offering loans to buyers of third homes and extended a 30
percent down payment requirement to all first-home buyers.
the mortgage foreclosure mess- just another financial crisis
The latest mortgage foreclosure mess is just another financial crisis.
It’s not a real economic crisis- no houses have been actually destroyed- no fire, hurricane, or earthquake damage, etc.
So the responses aren’t about bulldozers, hammers, concrete pouring, etc.
The question is whether this financial discovery/event spills over into the real economy.
The question is, are the authorities standing by with policy responses as needed to make sure people can still go to work to grow food and eat it, build houses and live in them, make shoes and wear them, go to hospitals and take care of sick people, go to schools and teach classes, maintain the infrastructure, do cancer research, etc. etc. etc?
Of course not. And therefore it all might again needlessly/tragically spill over to the real sector.
Just like in August 2008, we might again let a financial crisis spill over into the real economy and make today’s still very bad economy even worse.
As I said then, yes, it’s critically important to identify and punish the bad guys with a vengeance, alter incentives that support fraud, etc. etc. etc.
And it’s even more important to not let the financial crisis spill over into the real economy by letting aggregate demand fall, sales collapse, and jobs get lost.
And now, as then, interest rate cuts and just about anything else the Fed might do aren’t going to do the trick, and, then as now, will probably just make it worse.
Now, as then, as always, an immediate fiscal adjustment IS the silver bullet that restores demand.
Now, as then, a full payroll tax (FICA) suspension will immediately work to restore private sector aggregate demand, sales, and jobs. For the most part, private sector jobs are a function of sales, directly or indirectly. Capitalism is driven by sales. Businesses large and small compete for consumer dollars. But here has to be consumer dollars to compete for.
Public infrastructure spending works as well, but takes a while, so the answer is to do both. Suspend FICA taxes and put in place desired infrastructure project funding, presumably in a well thought out basis with an eye to efficiency, and not in a blind rush to support aggregate demand.
So why is our government not standing by to suspend FICA taxes?
Why haven’t they already done it?
Especially as It’s a highly regressive punishing tax on the people we need most and the people who are hurting the most- the people actually working for a living who produce all the real goods and services that support our existence.
Yes, it’s the first deadly innocent fraud at work- government thinks it needs those FICA revenues to be able to make Social Security payments.
Our Federal government officials do not understand the function of federal taxes is to regulate the economy, and not to raise revenue.
The don’t understand the function of federal taxes is to take dollars away from us, and not to give them what they need to spend.
Their first clue should be that if we were to pay our taxes with old $20 bills they’d give us a receipt and then shred them. But it isn’t.
(And removing what’s restricting aggregate demand is not getting something for nothing.)
Instead, the deficit terrorists are firmly in control.
The best we can expect is for them not to raise taxes at year end when the tax cuts expire. There is no talk of lowering taxes, under any circumstances.
Even from the media’s ‘deficit doves’ who remain THE problem, agreeing that the ‘long term deficits’ is a problem, pointing to interest rates as evidence markets currently are willing to fund deficit spending, and talking about how austerity now is not the way to bring down deficits longer term- in general, flagrantly violating ‘Lerner’s Law’ and conceding the principle to the deficit hawks.
So will this latest mortgage crisis hurt the real economy?
Probably not, best I can tell. Looks more to me like it’s a potential transfer of dollars from banks and lenders with no propensity to spend to borrowers with high propensity to spend.
But I could easily be wrong. There is the risk that events could result in a further cutback in credit to the real economy.
And while this potential drop in aggregate demand is easily offset by a simple fiscal response, the odds our current gaggle of regulators and elected officials getting it right with an appropriate fiscal response seem slim and none.
from Randy Wray
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> From Professor Randall Wray:
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> Here is one analysis; it will take you less than 5 minutes
> to find many similar reports, many from people with expertise
> on industry practice.
>
Mortgage and Foreclosure Wrongdoing: Road Map for Investigating AGs
By Cynthia Kouril
September 26
Dear states attorneys general in Ohio, Texas, Florida and California (and to the rest of you as well):
Let me make it easy for you. It’s much easier to find the wrongdoing if you know where to look, so let me give you a generic road map:
1) The mortgage originator is the entity that met with homeowner (unless there was a mortgage broker involved) and actually did the mortgage transaction with the homeowner, a.k.a. “the closing.” The originator had the wet ink documents in its hands at some time.
In many cases the wet ink documents never left the originator. This creates a problem down the line because often the originators were small short-lived businesses. When businesses went belly-up holding all those wet ink original documents, where did the documents go? . . .
2) Immediately (by which I mean within a very few days, sometimes a very few hours) after the closing, the originator would resell the mortgage to a bigger bank. This would free up cash for the originator to make more origination next week. The originator would electronically scan a copy of the closing documents and email them to a data bank, most often that data bank was called MERS. In later iterations, some originators would upload the scans directly into the data bank.
3) If an assignment was done at all — and very often it was not — it would often be done in blank. That is to say, John Smith, President of Originating Firm would assign to _______. However, a blank assignment is like a check with the payee left blank; it becomes a bearer instrument (and for this reason a rather dangerous item). When it became known to what entity the mortgage should be assigned, John Smith (or his successor at Originating Firm) would be asked to do the assignment after the fact.
4) However, the originating mortgage company may have gone out of business before any assignments were done; who or what was left with legal authority to assign these mortgages, and where did the wet ink originals end up? I know anecdotally that these wet ink originals sometimes ended up going home with the laid-off workers of the mortgage companies. These people worried often that the documents would be destroyed if not kept safe and the lack of paper trail would cause the homeowners all kind of grief if they tried to sell their homes. In some cases, the laid-off mortgage company workers hoped to hold the documents hostage to collect back wages they were owed when the mortgage company failed.
5) All of this could have been avoided, of course, if the mortgages had been recorded in the county clerk’s office or land office, or in other governmental Torrens title system.
6) Sometimes the wet ink originals really were physically transferred to MERS, but MERS appears to have treated the physical files as unimportant because MERS and other electronic database services like it were intended to allow transfer of documents electronically, avoiding costly and time-consuming handling of paper documentation. When challenged to come up with wet ink originals, the electronic filing system has not always worked so smoothly.
7) The bank that thought it bought the mortgage from the originator (it paid money, but what did it actually get in return?) would enter into a “Pooling and Servicing Agreement” in order to create a Residential Mortgage Backed Security (RMBS). The purchasing bank, or another bank that it thought it sold the mortgage to, would become the “depositing bank” and deposit (or so it thought) the mortgage into a trust fund. Except that it didn’t actually have the mortgage to deposit.
8) The trust fund would have a set period during which it could accept deposits, after which the trust fund was “closed” and no additional mortgages could be deposited into it except as swap-outs for mortgages already in the trust. Any assignment of mortgage into the trust executed after the closing of the deposit period would be a legal nullity unless there was a swap with a mortgage already in the trust.
9) The assignments were rarely actually made in a timely fashion, and now it’s too late to do so. In addition the entities which could have made the assignments don’t necessarily even exist anymore.
10) The trustee assigned or sold the right to collect the payments to the “servicer” and the “investors” thereby splitting the interest in land from the debt (mortgage fractionalization). The servicer collects the money from the homeowner, takes its substantial cut and forwards the remainder to the investors. The investors thought they were getting A or better rated bonds and include municipalities, and pension funds.
11) When the foreclosure tsunami first began and the foreclosing banks had no original wet ink documents to prove that they had standing to foreclose, there was a wave of “lost note affidavits”. Judges at the front end of this crisis had no inkling that anything was amiss and relied upon those affidavits. After seeing reams of lost note affidavits, they began asking for better explanations.
12) That’s when the forgeries and perjuries began. There are all sorts of people signing all sorts of documents claiming to be officers of companies for which they do not work. Contact me and I can email you a list.
There are all sorts of signatures that don’t look at all alike, all with the same person’s name. In at least one instance the name of a person who was in jail at the time and not available to be working at the company appears on documents along with his purported signature.
Color scans of mortgage papers are being passed off as wet ink originals; you can see the color printer dot matrix under magnification. Documents are being backdated, which is really fun when you find out the notary was not yet a notary on the date shown on the documents.
13) Adding to the confusion, a bank may believe that it services or is trustee for, or has a particular mortgage in an RMBS solely because a mortgage is included on an inventory list attached to a pooling and servicing agreement. However, any given mortgage might be on the wrong list, either because there was a typo when preparing a list or because an unscrupulous originator “sold” the same loan twice, or a sloppy originator accidently put the same loan on two different lists. If the original wet ink originals had been physically transferred, we would be able to match up payments from the banks with the originals and figure out who owned what.
14) Lastly, depending on the law in your state, separating the interest in land from the right to receive payment — frationalization—may have extinguished the the right to foreclose and turned the mortgage debt into regular unsecured debt. Check out 55 Am. Jur. 2d, Mortgages § 1002