THE GREATEST FINANCIAL FRAUD IN HISTORY?

The mainstream press is not talking about an unbelievable foreclosure fraud crisis that could affect 60 million properties in the United States. The big banks have lost the documents for 60 million mortgages. That's right, you read what I wrote correctly. They have lost track of promissory notes signed by the homeowners. Apparently, after physical paperwork was filled out and signed by the borrowers, the banks electronically filed the paperwork into a computerized system called the “Mortgage Electronic Registry System” (MERS). The banks lost track of the original paperwork, the note signed by the borrowers. In other words, these are the documents that actually prove the bank owns the properties. This means that in almost all of the states they lack the legal right to foreclose. So they have simply created a system where servicers hire foreclosure mill law firms whose business is to forge documents showing or purporting to show they have a legal right to foreclose.

Try to come to grips with the enormity of the problem the banks face.
There are 60 million homes which banks loaned money on, and now they might not be able to legally get the properties back if the homeowners default. But that's just the tip of the iceberg. Remember, the banks bundled these mortgages into trillions of dollars worth of securities otherwise known as over-the-counter derivatives. The bottom line is that there are now trillions of dollars in mortgage backed securities that could have NO backing!

This leaves a number of vital questions? Would you like to be the pension fund manager who bought that security? Do you think this just might cause an accounting problem for the banks? Do you think this could push some of the big banks into bankruptcy? Will there be another financial meltdown and government rescue?

While this "problem" could cause what might be the worst economic meltdown in history, it probably won't because the truth will be covered up. The banks are halting all foreclosures as they conduct a so-called "document review." I would call it by a different name. How about fraud, forgery and theft by deception. The Press won't be able to hide the crisis much longer, as two large class-action suits are pending.

October 7, 2010