The Street Enters the House - Umberto Boccioni
The implications of the Land Scandal keep rippling out to ever more distant shores of political possibility. By now it has sunk into the public consciousness: Your alleged bank may not have the note on your mortgage. It may only be posing as the real owner of your house. It may have no legal right, even according to its own bank-friendly laws, to foreclose if you stop paying the mortgage. Show Me the Note!
People understand that the reason they’re losing their homes is not because of any moral failing on their own part, but because the banks have systematically destroyed America’s jobs through their program of forced globalization, outsourcing, offshoring, downsizing, and consolidation. The main goal of all of these, other than direct looting on the part of banksters, was to destroy all decent American jobs. At the same time the banks undermined the economy and all social protections to the point that losing one’s job or having a medical emergency is likely to trigger a personal mortgage crisis. (As is often pointed out, only in the banksters’ America does losing one’s job mean losing one’s health insurance. This system of a double-hit was intentionally set up by the corporatists as a form of socioeconomic terrorism. It’s meant to quash dissent among the work force.)
The people understand that the same banks who presided over the massive bubble propaganda then willfully burst that bubble, dumping overboard and underwater many of the housedebtors they induced into extravagant mortgages they can now no longer afford, on houses worth far less than they borrowed. These bloated loans were all predatory loans. The bubble was a fabrication, the bloated housing prices were a fabrication, the loans and municipal taxes and bonding based upon them were fabrications. Every lender and every government was guilty of massive, willful fraud. Now that the bubble has burst, prices are seeking their real economic level. So by definition anyone who’s underwater is the victim of lending fraud.
The fraud extended to the federal government. The only priorities of both kleptocratic parties are to reflate the bubble, prop up the zombie banks, and help them continue looting. This has forced the government into all sorts of policy contortions, trying to navigate the contradictions of a situation where everyone wants to keep prices up but also wants to foreclose, which would bring more housing stock onto the already grossly oversupplied market. (And we’re learning about the conflicts of interest between the servicers, who have an incentive to foreclose, and the MBS investors who do not, since the phony “value” of their toxic assets depends upon extending and pretending with everything including the mortgages.)
Facing these paradoxes, the administration launched its HAMP scam. The goal was to lie to distressed housedebtors, telling them if they keep paying for the time being they’ll get a permanent mod. In reality Obama never intended to give anyone mods, but only to string people along, forestalling any ideas they were having about walking away, inducing a few more payments out of them, before the servicer lowered the boom once and for all.
If there were ever any doubt about this, the fact that Obama, as per his normal corporatist procedure, put the servicers themselves in charge of the mod application process, in direct contradiction of their own interest, should dispel it. That proved right from the start what the real plan was.
The people are learning how the banks, in their rush to securitize these fraudulent loans, separated the note from the lien and didn’t convey title along the Rube Goldberg chain of sponsors and depositors and trustees, thereby rendering the trusts themselves illegal, the MBS as nothing but unsecured loans now of zero value (so the banks we already knew were insolvent are now known to be in far worse shape than previously thought), the liens as phony “liens” that are also fraudulently referring to unsecured loans, and the houses themselves in legal limbo.
We know how once people started to wise up the banks simply set up Taylorist conveyor belts to churn out fraudulent affidavits. When judges started getting suspicious of all these lost-note affidavits, the fraud progressed to actual fabrication of documents. One company presented a price list
We know that the banks are worthless, useless, criminal, parasitic, insolvent, obnoxious, and stupid. We know they have no right to exist at all, that every cent they’ve stolen (including the “bonuses”) has to be taken back in restitution, and that what’s supposed to be our government is really an illegitimate rogue kleptocracy which has committed itself not only to refusing to put a stop to the crimes of the banksters, but to helping them continue these crimes. The core policy of Bailout America is to steal taxpayer money and hand it over to the banks, in order to prop up their insolvency and enable them to continue gambling and looting. This is the essence of what this government does, and all other policy is defined by it.
We the people know all this, and when it comes literally to our homes we’re confronted with it in the starkest, most questionable form, and it is indeed causing us to start to ask some hard questions.
The three questions of the relationship of the banks and the land are these:
1. Does your particular bank own your particular mortgage? Or is it just lying about that?
2. Should banks – parasitic, insolvent, criminal, and since the Bailout the property of the people – be allowed or considered to own land at all? Isn’t this illegitimate on its face?
3. Does the very concept of unproductive ownership of land make any sense? Shouldn’t that be done away with as a counterproductive, immoral practice which only breeds the kind of criminal parasitism which so afflicts us today? Weren’t the “American Dream” and the “ownership society” nothing but scams to cover up bank looting? (Let’s recall how “ownership society” was the Bush slogan for his big push to privatize Social Security.)
I know that I’m still an outlier in asking #3. But it seems that the banksters have gratuitously, out of sheer idiotic greed, caused #1 to become a question in the first place, perhaps the central political question of the day. And having voluntarily, in an unforced error put #1 in play, they’ve reinforced the still-small but existing trend toward people starting to ask #2. And if #2 comes widely into play, #3 logically follows.
Just as the pro-bank scum try to keep the debtor-bashing propaganda going, but with less and less success, so they also keep saying, “even if the bank can’t produce the note, you still owe the debt.”
Joseph R. Mason, a finance professor who holds the Louisiana Bankers Association chair at Louisiana State University, said that concerns about proper foreclosure documentation were overblown. At the end of the day, he said, even if the banks botched the paperwork, homeowners who didn’t make their mortgage payments still needed to be held accountable.
“You borrowed money,” he said. “You are obligated to repay it.”
(I think it’s funny that LSU has a “Louisiana Bankers Association chair”. Actually I appreciate the honesty of that. Most of corporate academia is more deceptive about its prostitution.)
I keep asking the same question in response to this and never get an answer. Assuming I granted that “you are obligated to repay” a debt like this, to whom would you owe it?
The banks are criminal organizations. Morally no one should feel the need to owe them anything. Legally there’s also no obligation to pay off a “contract”, written by a loanshark, based on fraud. Granted, the disposition of such a legal claim would depend on how bank-friendly the judge was, but we’ve already seen judges willing to follow the spirit and letter of the law
Similarly, if we think it’s the government, as owner of many of the mortgages through the GSEs, as well as the real owner of the banks themselves, who owns the debt, the answer has to be that this is not the people’s government but a rogue criminal organization serving really as the banks’ flunkey and thug even though it’s actually their owner. So paying the government would be similarly immoral.
No, I think that if the debt exists, its an orphan debt owed to no one in particular, and therefore payable to no one in particular, which is as good as saying it doesn’t exist.
To put it another way: While the debt is not owed to the government, it is owed to the people. And since there’s no direct way to pay it to the people, the right way to discharge it is to stop paying the banks, and stay in the house. That’s the way one practices citizenship under these bank-created conditions. The good citizen resists the banks in any way possible. This is the most direct way of striking at them. Refusal to pay the fraudulent debt not owed to the banks is the way to pay the true debt we owe to ourselves and to one another as citizens.
I’m not the only one thinking this way. Read these
on “the coming middle class anarchy”. Here’s just one of the snowballing anecdotes establishing how the words, Show Me the Note, strike terror in the hearts of the banksters. This is something for which their goon government has no fix. Not if a critical mass of people find the will to do it.
And how fortuitous! We decry how Americans are unwilling to leave the comforts of their homes to get out in the streets to protest, but here the Street has entered the House, the arena of protest has literally come home, and it’s the home itself which is at stake, in a fight to the finish with the banksters.
Compare today to where we were a year ago, when Brent White’s excellent paper on “strategic defaults”
said you have to credibly threaten to walk away in order to get a mod. Now the debtor is in a much stronger position, if he’s willing to take advantage of it. He can credibly threaten to stop paying completely and stay in the house
Nor is it just some radical bloggers saying this. These ideas are percolating closer to the mainstream. Chris Whalen is certainly no firebrand. Yet even he is saying
that as the federal government continues to coddle the banks, state governors may end up calling upon people to “keep paying property taxes, stop paying the mortgage, and stay in your home”.
I don’t agree that Obama is unconscious in the sense Whalen means. I think he’s very intentionally dedicated to serving the banks and consciously doesn’t care if this dooms America to a Second Great Depression (although he probably thinks it won’t be that bad; but he certainly doesn’t care about impoverishment and suffering).
But I love the implication that this will have federalism ramifications, as state governments will have to take up some of the power the federal government has abdicated. Whalen thinks we’ll end up with mortgage moratoria in fifty states, but on a state-by-state basis, and implicitly in defiance of the federal government, at first.
So he sees power devolving in the right direction, downward, as a result of this “cancer” as he calls it. (Of course he thinks that’ll just be a temporary stopgap until “democracy does the right thing”. But we know he’s wrong about that part.)
Every housedebtor, distressed or not, underwater or not, should:
1. Stop paying the mortgage;
2. Stay in the house.
If America jubilated that way, it would be a good start toward our desperately needed Land Recourse. America needs two million small farmers. Feeding ourselves post-Peak Oil will require all land to be put into food production. The elites want to do this on the basis of feudal enslavement, but political freedom and moral integrity require that it be done on a democratic food stewardship basis. A bottom-up mortgager jubilee can be a great first step toward this.
And it can provide the base for a wider, greater debt jubilation. Other system debtors need to consider their positions. Here’s just one example: We have a growing legion of unemployable student debtors, burdened by massive indentures which cannot be discharged even in bankruptcy. These victims of a bank/government/university propaganda scam were swindled into taking out massive undischargeable loans for an “education” meant not to humanistically educate but to provide a credential (a Stamp) certifying that one jumped through a formal hoop and paid an exorbitant toll. This extortion payment, it was promised, would guarantee one a lucrative “career”.
But then those same banks intentionally crashed the economy, unilaterally reneging on the system’s side of the student debt deal. Now those college degrees are worthless. But the debt remains, for as long as the victims of this fraud choose to let it remain. Some are suing their universities for fraud, and that’s a good start.
But here as everywhere else where a debt to the big banks or government (where in a case like this the government simply socialized the exposure to the debt while privatizing the lender profit) exists, the real action is to strike at the senior criminal. That’s always the bankster. In the case of student debt, where the banksters’ rigged law has foreclosed even bankruptcy as an option, where the bank has placed its relationship with the debtor into the state of nature, the debtor has NO system recourse. The only option of student debtors is to form a default union and default as a bloc.
So there’s one example where the problem is harder to solve, but where the spirit of debt revolt can find a way. Ground zero for the spirit of jubilation, and for the general Revolt Against the Banksters, is the mortgage crisis.
Demand to see the note, and resolve not to pay one cent more until they show the note or give you a real modification. A real mod, meaning a principal writedown; the people in Lira’s example still look like they’re going to let Wells Fargo off too easy.
Better yet, demand to see the note, but resolve to stop paying period. If enough people did this, we’d break the banks over our knee. The government’s malice would sputter out in impotent fulminations. This one small step for an individual debtor would collectively be a giant leap toward taking back our country.