January 14, 2016

Adapting the Populist Lecture Series for Today’s Food Sovereignty


Here’s some basic information about 19th century public and farmer education through public lecture programs, as conducted by the Grange and especially the Populist Farmers’ Alliance movement. I’d like to contribute to building a new movement to rebuild community food and agriculture, and abolish corporate agriculture, organized in a way similar to the Populists. We’d have the advantage of trying to build outside the commodity system, rather than being in a race against time to reform it from inside, which is what ultimately undid the Populists.
For a great book on the history and handbook for true democratic organization, see Lawrence Goodwyn’s The Populist Moment.
Once upon a time I thought of adapting this idea to what I called the land scandal involving systematic property fraud on the part of the big banks. Did you know that, strictly speaking, most alleged bank-owned residential real estate is arguably not really owned by the banks at all, but rather their claim is an imposture? In 2009-10 many bloggers and commentators thought this fact, if effectively propagated, could become a major political theme. Well, that never happened, and it seems like the whole idea fizzled out. Probably both too “fringey”-seeming, even though legally it’s true, and too abstruse to boot. I ended up moving on from the idea to the more down-to-earth matter of food. Of course there’s plenty of policy mysticism here as well, such as patents, which I’ll soon be discussing in depth. That’s why I’ve long referred to the FIRES sector, adding “Seeds” (i.e. intellectual property in them) to Finance, Insurance, Real Estate. And of course corporate agriculture is more than the physical phenomena of land-grabbing and poison. Under the neoliberal globalization regime it’s also a sham campaign trying to reify fictive numbers – commodity pricing, profit, GDP, trade balance, “growth” in the biotech, agricultural, food, and finance sectors – and induce worship of these, or at least surrender to their domination. One of the greatest evils of corporate rule (the most mystical, bizarre fiction of all is that of the corporate person) is how it has made our literal bread hostage to the insane rule of these pure fictions and superstitions. We intuitively know a few basic principles for the counterattack – all commodification of food and critical natural resources is illegitimate, there can be no patents on life, and a “corporation” cannot own or control land, especially farmland. My background writing about Wall Street will come in handy for all these elements.

May 20, 2011

Foreclosuregate E-mail Draft

Filed under: Civil Disobedience, Land Reform — Tags: — Russ @ 5:10 am
Although I’ve written extensively about the Land Scandal, up till now I haven’t had the occasion to tell someone I know personally about it. But just last night I learned that a friend is facing foreclosure. I don’t know anything about her situation – whether she was trying to get a mod, whether she’s been the victim of servicer abuses, etc. I have no idea if she knows anything about Foreclosuregate. So I figured I’d drop her a line with a brief rundown, just in case it could be worthwhile to her to know about it and maybe look into whether or not it could help her situation. But I haven’t written about this for novices before, so I figured I’d throw a draft out there and ask what people think of it. Is it a clear enough introduction? Too many links? Does anyone know of better introductory links? (I’ve been lax in keeping my archive orderly, so by now I have >200 Land Scandal links, and I don’t recall which were the best ones. I just selected a few I do remember as being clear to me.)
This is perhaps a worthwhile exercise for all of us, as we should all be ready to be educators on this subject, at least being able to steer others in the right direction.
So here’s the draft. I left out the personal details which will go into the customized version:
I’m writing just to toss something out there. I don’t know if it would interest you or not, but it’s something I’ve read a lot about. Have you heard about the legal problems the banks are having with the foreclosure process? Namely, in their convoluted process of bundling together millions of mortgages to create mortgage-backed securities (MBS), the banks systematically flouted the strict requirements of age-old real estate law where it comes to such basics as keeping the note and lien together, properly recording every change of owner the note goes through, and so on.
Especially where it comes to any mortgage written over the last 10-12 years, and especially those which have anything to do with a registry called MERS (Mortgage Electronic Registry Systems), it’s possible that in the case of any foreclosure, the foreclosing entity may not in fact have legal standing to foreclose. In addition, most foreclosures which are looked at by a knowledgeable attorney display forgery and fraud in the bank documents, for example the illicit use of so-called “robo-signers”, which are servicer employees who fraudulently sign vast numbers of “lost-note affidavits”, in each case illegally claiming personal knowledge of the previous disposition of a now allegedly lost note. (Why the notes weren’t properly conveyed in the first place is another story.)
Many foreclosure victims who have demanded that the foreclosing entity produce the note in order to prove that it has the legal standing to foreclose have been able to delay the proceedings, often indefinitely, as it’s discovered that the alleged owner of the loan cannot prove this ownership, where the note has disappeared and the documents the bank provides to vouch for its ownership of this lost note are riddled with irregularities.
This has been written about extensively in the blogosphere, and has gotten some coverage even in the corporate media. Here’s just a few pieces which have been written on the subject. The blog Naked Capitalism has most extensively documented the whole saga, but the corporate NYT has also written about it.
http://www.nakedcapitalism.com/2011/03/many-foreclosures-in-oregon-halted-due-to-decisions-against-mers.html (This is just one example from one state among many similar examples.)
Specific to NJ, last winter a state supreme court justice ordered a review of all foreclosures in the state by the main entities: OneWest; Ally Financial, formerly GMAC; BAC Home Loan Servicing, a subsidiary of Bank of America; JP Morgan Chase’s Chase Home Finance; Wells Fargo Financial New Jersey and CitiResidential Living, a subsidiary of Citibank.
If their answers to the inquiry Rabner set in motion had been insufficient, the court might have imposed a statewide foreclosure moratorium. So far, however, the banks have been succeeding in derailing this inquiry by getting postponement after postponement. Here’s the most recent development, so far as I can see:
I don’t know anything about your situation, whether or not you feel victimized by servicer abuses, whether a modification could help you, and so on. And if these are true, I also don’t know if you’d have any interest in looking into this stuff and maybe trying to act upon it. But the fact is that homeowners facing foreclosure  who have fought back demanding that the foreclosing entity produce the note have often succeeded in delaying the foreclosure for an indefinite period. Often this tactic convinces the bank to work with them on a modification (which is generally more in the ostensible note-holder’s interest than foreclosing; only the perverse incentives of the way the system is currently set up gives the servicer an incentive to foreclose even though that’s against the interests of everyone else involved). Here’s one example of that:
Well, I don’t know if any of this is relevant to your situation, but I thought I’d let you know about it in case you hadn’t heard of it before. Some people do force the banks to give them mods by gumming up the works with demands to see the proper documentation, demands the banks often cannot meet. So that’s why I sent you this, for whatever it’s worth. I’m no practical expert on it, but here’s some sites to learn more.

March 4, 2011

Newspeak vs. Euphemism


Orwell’s concept of Newspeak was actually relatively naive and unsophisticated compared to the real life practice among the purveyors of euphemism.
If we can say that there’s a roughly finite body of knowledge which is critical for most people to know, then Newspeak sought to artificially diminish the knowledge itself by paring down the number of words which could be used to communicate it.
Capitalist euphemism has gone in the opposite direction. It wants to vastly expand the number of words and terms beyond the extent of the actual content they convey. I’m not referring to similar denotations with different connotations. Connotation is content, and is the lifeblood of literature, philosophy, and all expression which makes us human.
By bloodless euphemism I mean terms which not only do not connote but which attenuate even the denotation.
This thought was sparked when I read this comment at this thread (an excellent blog with good comment threads, although I haven’t commented there yet):

“Spatial deconcentration” Now that’s a bit of Newspeak for you! Your point about the paradoxical double object of urban renewal is well taken. As I recall, when there were plans to build a stadium for the 49ers out at Hunters Point, there were similar plums offered about better housing and shopping amenities for the African Americans who already lived there. It didn’t sound believable then either.

“Spatial deconcentration”. It’s not really meant to convey any content, is it? Rather just a vague sense that something will be done which the good middle class citizen shouldn’t investigate too closely. If one’s social indoctrination is sufficiently intact, such terms are sufficient narcotics. By conveying no content it touches no inherent emotional buttons. It doesn’t generate innate resistance. By sounding innocuous and very boring it also tends to repel interest in its underlying subject, whatever that may be.
By contrast Newspeak has too much brutal honesty to it, and even the earlier generation of euphemism like “urban renewal” was too specific, conveyed too much meaning, promised too much.
That post was also interesting in how it was another manifestation of the liberal collaboration with predator capitalism, like I had just read about at Naked Capitalism regarding the pro-MBS alliance of the banksters, corporate liberals like the CAP, and alleged “progressives” like affordable housing advocates.
Here’s part of my comment there:

Yves: “For reasons I cannot fathom, the traditional affordable housing-banking coalition is still holding together on this issue. It should be clear by now that affordable housing programs and mortgage finance are two separate beasts, and the extent of the sops demanded by the banksters mean affordable housing goals will take a back seat.”

That’s classic liberal behavior, which in turn is part of the neoliberal corporate strategy. Most of them are corrupt and just want a cheap reward for helping with the scam, while the idealist “progressives” are cowards who cling desperately to the few crumbs they can still get through this collaboration, even when it becomes clear that the crumbs themselves will be taken away.

No matter how many times history proves this will always fail, the liberal pathology keeps repeating it, calling themselves “pragmatic” by way of delusional compensation.

This is similar to the argument I keep having with liberals and technophiles over the green energy scam. How under kleptocracy taxpayer subsidy of “green energy”, electric cars, etc. will never result in an egalitarian deployment of solar and wind energy and a People’s Electric Car (if that could work, why wasn’t oil deployed that way?), but will only go to prop up the luxury of the rich and the police state. Therefore any such subsidy is a loss to the people, both in the money stolen from us and in how the result is a further weapon against us. I wrote about this at greater length here, here, and here.
One big difference is that at least where it comes to housing and energy technology we’re at least talking about actual things in the real economy. But the GSE “debate” is over purely fictional, vaporous, parasitic financialization – securitization and mortgage debt. As I said in the first part of my comment there:

The only reason anyone would want to prop up the very existence of MBS is to serve the banksters, since we know securitization serves no social or economic purpose whatsoever, but is purely destructive.

So this entire debate is false and demented, since it’s purely over what’s the best way to continue enslaving humanity to the banks. Assuming the continued existence of mortgages at all, there’s only one rational, moral, and practical answer here: End securitization and restore the old way of local lending, local filing, and local repose of the loan. No one can give an answer which hasn’t been proven to be a lie as to why we need or want anything more than that……

We need to break the bank tyranny completely and abolish all concept of REO and mortgages.

What we really need to do is transcend this antiquated ideology of landed property and debt completely.

It’s clear that we need to abolish both financialization and capitalism itself. Since liberalism inherently supports and seeks to aggrandize both of these, it follows that we need to transcend liberalism. At best it’s a failed ideology and strategy, and by now it’s far worse. It’s intentionally pernicious.
Toward the goal of true political and economic democracy, even Newspeak would be an improvement over the euphemism adored by liberals and other corporatists.

February 22, 2011

Land Scandal Community Education: Ideas Toward An Outline

Filed under: Bailouts Only Propped Up Zombies, Land Reform — Tags: , — Russ @ 3:33 am


A few days ago I broached the idea of community lectures on the Land Scandal, to describe it in detail and placing it in the broad context of Wall Street’s crimes, the Bailout, and the destruction of democracy and the real economy. These lectures could be for the benefit of mortgage holders, the community at large, and local governments.
I haven’t yet worked out the exact details for such a presentation, and since I’m not a tech guy I don’t personally know how to give it the whole powerpoint-type treatment, although I assume that would be more effective.
I’ve compiled hundreds of links on every aspect of the subject, mostly from Naked Capitalism. I’ve been in the process of arranging them by subject and chronology as if into a book. (There’s also the many posts I’ve written on the subject.) My basic idea would be to distill an accessible, popularized presentation from all this material. It should be comprehensive and easy to understand. The lecturer must also master sufficient detail to be able to answer most questions. We’d have to try to anticipate what the most common questions (both sincere and phony/hostile) would be. Looking at comment threads, perhaps at MSM outlets, seems like the obvious place to do such research.
Here’s some of the basic topics to cover:
* How the mortgage holder has a perfect right to challenge his current servicer or anyone who would foreclose.
* How the forecloser probably has no legal right to foreclose.
* How his documents are possibly fraudulent.
* The details of each of these: Servicer fraud, how the servicer seeks to put people into default, robo-signing of lost note affidavits, direct forgery, forged allonges, the fact that MERS has no standing to foreclose, etc.
* How all this violates venerable real estate law, which is a bastion of social stability and local control.
* How the banks and both parties in Congress are conspiring to legalize these crimes and further assault federalism in the process. This would be a key point – any bill you see in Congress will be part of this assault on behalf of the banks. The audience should be ready to swarm their reps like enraged hornets.
This could be placed in the context of:
* The nature of the housing bubble.
* How predatory lending was a premeditated fraud on the part of lenders who knew they were telling lies about a bubble. Also how the federal government collaborated in this. (Although lower-level governments did as well, there it may be better to go more with a “bad apple” approach. After all, we want to work with local governments and if possible take power at that level. So there’s no point in extending the systemic crime accusation to that level.) How all mortgages since the late 90s were fraudulently induced by the same banksters who were systematically destroying the real economy. (From here, to audience taste, one could give a primer on globalization itself, placing the mortgage bubble in that context.)
* How the banks intentionally crashed the economy in 2008.
* The basics of the Bailout. (How the TARP was just a tiny part of the Bailout, and how the Bailout is the ongoing and permanent priority of all federal government policy.)
* How by now the banks and government are indistinguishable.
While the main focus of each presentation would be Foreclosuregate in itself, the description of the broader context could be scaled depending on the context and the receptivity of the audience. I expect people would be interested in it.
Then there’s this basic point:
* Why did the banks blow up the bubble? Securitization. Primer on securitization. What are MBS?
* The reason for the convoluted originator-sponsor-depositor-trust conveyance. How there never was any reason for it which was good for the real economy, only good for the banksters and bad for us.
* How the banks then systematically failed to convey the notes. The reasons they failed to honor their own system (so they could belatedly assign failed loans to tranches; so they could sell the same loan multiple times; so they could engage in massive evasion of recording fees and taxes).
I haven’t figured out yet how to tie together in one simple package for novices the fraud “how” of the foreclosuregate basics with the fraud “why” of the MBS scam. Those are the two essential parts and are intertwined, but also seem like two different threads of presenting the ideas. So we need to figure that out.   
* How many if not all of the MBS are therefore fraudulent, void, null.
* How this means the banks are insolvent. (Even beyond the way the Bailout has always been a Ponzi scheme, the Fed and Treasury simply building a Tower of Babel of debt ever higher.)
In all of this, while it shouldn’t be too hard to find audience agreement on the malevolence of the banks and government, the tricky part is going to be convincing them not to also bash fellow debtors. This needs to be done with tact. The lecturer must not be haughty and broadcast how stupid debtor-bashing is. Presenters need to explain clearly:
* How we’re all victims of this massive fraud which was propagated by our own government and media. (Was it also propagandized in schools? I don’t know, not having been there lately. What were high school personal finance classes saying about asset prices and using one’s house as an investment during the decade starting in the latter 90s?)
* How those who fight foreclosure are not the profligate deadbeats of bankster propaganda, but are overwhelmingly either the victims of servicer fraud, are just flat out being wrongfully foreclosed upon, are trying to protect their home while filing for bankruptcy, or have been faithfully adhering to bank and/or government directives on how to apply for a modification, and are now being betrayed by that scam process.
In everything, the lecture should present the best examples we can find, selecting for clear-cut cases of abuse against what everyone would agree were normal, unassuming middle class types. Where it comes to wrongful foreclosure we have a vast selection available.
In everything, the right tone should be derived from the mood of the audience itself. The presenters should be prepared to be more or less passionate, more or less appealing to emotion, more or less radical in the indictments and prescriptions. For now the default tone should be restrained and matter-of-fact.
Finally, what is to be done?
* How people must be aware of the question, Where’s My Note in the Chain of Conveyance?
And the moment the servicer begins the foreclosure process, or there’s any dispute with the servicer whatsoever: Show Me the Note!
* Walking away (for non-recourse states), how it’s a simple contractual option. How the banks, other corporations, and the rich do it all the time. How the results are not as dire as system propaganda claims. (This should only be discussed sparingly, mostly in response to audience questions. After all, our goal isn’t for communities to continue to disintegrate, but for them to recohere. If people are willing to stop paying, our goal should be to convince them that they can still stay in the house and remain committed to the community, if that’s what they’d prefer to do. They shouldn’t let fear of the banks get in the way of that. Here we truly have nothing to fear but fear itself.)
* The tactics of seeking a mod. How one has to reject bank directives to miss payments and so on (that’s a trap they lay for us). How one has to reply immediately with a credible threat to stop paying permanently, whether one walks away or not.  
* As for the broader idea of mass Jubilation in Place, that a critical mass or any significant number in a community can stop paying the mortgage, stay in the house, keep paying the property tax, and remain committed to the community, I don’t know if many people are receptive to this idea yet. So for the time being it’s probably not a key part of the presentation, but something which could be suggested if a particular audience seemed like it might be receptive.
So there’s some basic ideas on what the presentation could contain, and how it could be laid out. Next I’ll work on a detailed outline. Then each item on the outline could be further fleshed out – basic explanation, talking points, rhetorical points, politically effective examples, recommended links, etc. Does anyone have ideas to add?

January 30, 2011

The MERS Wave Function and Corporatism (Conclusion)

Filed under: Corporatism, Land Reform, Sovereignty and Constitution — Tags: , — Russ @ 5:46 am


Parts one and two.
So what’s the actual mechanism of this MERS wave, and how are the courts finding that this isn’t the metaphorical equivalent of a physics experiment, and MERS and the banks cannot just choose to collapse the wave of potentiality into particulate actuality at a time and place of their choosing?
What does MERS claim to think it is? If we didn’t know better, we might think they were simply confused.

Although critics have provided a number of arguments against MERS, the most fundamental relate to MERS’ claim that it acts as mortgagee of record. While the language it uses to register mortgages in the name of MERS in local courthouses says it is both the nominee for the mortgagee and the mortgagee (a legal impossibility), in depositions its executives have repeatedly said that MERS is the mortgagee.

1. As Yves says, it’s impossible to be both lienholder and nominee for the lienholder. [That reminds me of a sovereignty solecism, but I’ll save that line of thought for another post.]
2. Where pressed, MERS claims to be the actual lienholder, but this is impossible without the note. Plus, MERS itself has admitted that it’s not a creditor nor a servicer, and we know it’s not a trustee, so how can it be a lienholder?
At any rate, in the 45 states where the mortgage is just an appendage of the note, it’s impossible to legally foreclose without holding the note.
Here’s more from Naked Capitalism on why nominee status doesn’t work.

The finesse that MERS has tried to use, when challenged, is that it is a nominee. But in most states, the real party in interest has to be the plaintiff, a mere nominee can’t take legal action without the real party in interest (in this case, the note owner) also joining the action. Moreover, a nominee is a party authorized to act on behalf of another party. But there is no evidence, no paper trail to demonstrate that MERS is authorized to act on behalf of the trust, nothing contemplated in the pooling and servicing agreement that governs the securitization, no fees paid by the trustee to MERS, no agreement, etc.

3. In most states, the nominee can’t be a plaintiff; only the “real party of interest” can be. The nominee cannot take this action on its own. (How can a mere registry be a nominee anyway?)
4. No documentation establishes that MERS even is the actual nominee for the trust. Just as with all the other forms of paperwork, this is mere pseudo-paperwork trumped up after the fact.
I attribute the inconsistency between the two quotes (one saying MERS under pressure calls itself the nominee, the other that it calls itself the lienholder) to the chronology. The latter is from August, prior to when this started snowballing, while the former is from November and refers to subsequent MERS depositions. Evidently MERS decided to change its story about what it really is.

The Supreme Court of Maine:
Mortgage Electronic Registration Systems, Inc. v. Saunders, No. 09-640, 2010 WL 3168374, (Me. August 12, 2010) The Court explains that the only rights conveyed to MERS in either the Saunders’ mortgage or the corresponding promissory note are bare legal title to the property for the sole purpose of recording the mortgage and the corresponding right to record the mortgage with the Registry of Deeds. This comports with the limited role of a nominee. A nominee is a “person designated to act in place of another, usu[ally] in a very limited way,” or a “party who holds bare legal title for the benefit of others or who receives and distributes funds for the benefit of others.” Black’s Law Dictionary 1149 (9th ed. 2009).

Also, according to the PSAs MERS can never hold the note, which is required in at least 45 states. The whole notion that the lienholder (which therefore legally and according to the PSA has to be the trust) can authorize MERS to take the note and act upon it is part of their illegal obfuscation plan. But they sure want the MBS investors to take that BS at face value and not ask questions about it.

The latest of these court decisions came down in California on May 20, 2010, in a bankruptcy case called In re Walker, Case no. 10-21656-E–11. The court held that MERS could not foreclose because it was a mere nominee; and that as a result, plaintiff Citibank could not collect on its claim. The judge opined:

Since no evidence of MERS’ ownership of the underlying note has been offered, and other courts have concluded that MERS does not own the underlying notes, this court is convinced that MERS had no interest it could transfer to Citibank. Since MERS did not own the underlying note, it could not transfer the beneficial interest of the Deed of Trust to another. Any attempt to transfer the beneficial interest of a trust deed without ownership of the underlying note is void under California law.

The nominee doesn’t have the note and therefore cannot foreclose. The trustee legally and contractually has to hold the note. No one can separate the lien from the note. If MERS is nominee for the holders of liens where it doesn’t hold the note, it has no standing. There’s no such thing as nominee for a note holder at all.
For all these reasons MERS can never be the note holder for anything that’s supposed to be in a trust, and therefore also can neither meaningfully hold the lien nor act upon it nor meaningfully be nominee on behalf of the lien holder.
So existentially the MERS wave has to remain merely a set of bogus potentialities. Since they claimed to be everything, we reply that they are nothing. Being nothing, they can do nothing.
Does the actual mechanism of MERS have a different character? Not at all!

We have been advised that the named plaintiff in the foreclosure action should be both the record holder of the mortgage and the owner and holder of the promissory note. This is typically considered to be the servicer because if the promissory note is endorsed in blank and the servicer has physical custody of the note, the servicer will technically be the note holder as well as the record mortgage holder. By virtue of having its employees become certifying officers of MERS, there can be an in-house transfer of possession of the note so that MERS is considered the note holder for purposes of foreclosing the loan. Therefore, MERS is both the mortgage holder and the note holder as nominee for the current servicer. Page 62

That from MERS’ own pseudo-legal gibberish. The gist is that to achieve this omnipotential status they start out with only a smeared out wave of potential “employees” among all the MERS member entities. When they want to collapse the wave somewhere and actually become a lien holder or note holder or nominee or whatnot, the plan was to simply deputize an actual employee at wherever the note was* as a fraudulent “MERS certifying officer”.
[*The fact that the note also wasn’t there but had to be fraudulently vouched for by robosigners was just another layer of the fraud.]
How can Joe Lackey, officer of the servicer, hand over the note to Joe Lackey, officer of MERS?
1. How does this work according to all sorts of contracts and elements of tax status? Can you instantly deputize any random passerby as a corporate officer empowered to exercise responsibility according to pre-existing corporate contracts? Can one person have this bifurcated persona as two completely different officers? What about conflicts of interest? I suppose the MERS boilerplate language purported to cover all this. The “savvy investor” and genius borrower are assumed to have understood every bit of this and fully consented to it.
2. This is meant to obscure the fact that the note was never conveyed to the trust. MERS is supposed to be able to collapse at will into the role of nominee for anyone from servicer to trustee. But presumably the intentionally generated confusion here is supposed to let the MBS seller try to represent to the investors that MERS forecloses on behalf of the trust while in court it may be arguing something different.
3. Often the exact same fictive officer vouches for both the note and the loss of the note. (Never mind that the signatures often don’t match.) That’s so the MBS seller won’t be caught not having properly conveyed the note.
4. The whole MERS concept here is invalid according to the PSAs and REMIC (real estate mortgage investment conduit) tax status, as well as legal foreclosure procedure.

As a practical matter, the incoherence of MERS’ legal position is exacerbated by a corporate structure that is so unorthodox as to arguably be considered fraudulent….MERSCORP simply farms out the MERS, Inc. identity to employees of mortgage servicers, originators, debt collectors, and foreclosure law firms. Instead, MERS invites financial companies to enter names of their own employees into a MERS webpage which then automatically regurgitates boilerplate “corporate resolutions” that purport to name the employees of other companies as “certifying officers” of MERS. These certifying officers also take job titles from MERS stylizing themselves as either assistant secretaries or vice presidents of the MERS, rather than the company that actually employs them. These employees of the servicers, debt collectors, and law firms sign documents pretending to be vice presidents or assistant secretaries of MERS, Inc. even though neither MERSCORP, Inc. nor MERS, Inc. pays any compensation or provides benefits to them… MERS even sells its corporate seal to non-employees on its internet web page for $25.00 each.

It’s simply impersonation. It’s like using a fake ID you manufactured yourself. (And selling them to others.)
(I wrote about other malign implications of this “employment” model here.)
Yet between these fraudulent deputizations and the undocumented electronic handshakes on the registry, MERS thought it had found a way to play an infinite shell game with the notes and the status of parties.

Earlier cases focused on the inability of MERS to produce a promissory note or assignment establishing that it was entitled to relief, but most courts have considered this a mere procedural defect and continue to look the other way on MERS’ technical lack of standing to sue. The more recent cases, however, are looking at something more serious. If MERS is not the title holder of properties held in its name, the chain of title has been broken, and no one may have standing to sue. In MERS v. Nebraska Department of Banking and Finance, MERS insisted that it had no actionable interest in title, and the court agreed.

In my first post I compared all this to the wave function collapse in quantum theory. So let’s review the way these crooks have made waves, and how we must stanch them.
A. The legal fact: A nominee has only limited powers and cannot assign or foreclose.
They say: MERS can be either the nominee or the actual holder, at the scam’s convenience.
We reply, turning this right side up: MERS is neither, and can do nothing.
B. Whether MERS were a nominee or the actual lien holder, only real MERS officers could take action. But MERS has no employees.
They say: Anyone we choose to deputize is momentarily a real corporate officer.
Right side up: MERS has no officers, and therefore no particular person can act as a MERS officer.
C. MERS wants to collapse the wave at the exact point necessary to foreclose, while remaining opaque to the investor and the public.
Right side up: The banksters broke the chain of title, and therefore no one can foreclose.
This one way prerogative to dictate the wave function collapse is universal in corporatism and the globalization organizations. Everywhere, in every detail, the goal is for the corporate actor to have zero responsibility, zero accountability, total rights, total prerogative, and not even an actual existence except at precise times and places of its choosing. At all other times and all other places it’s to be just a smeared out wave of irresponsibility and nothingness. Corporatism wants to achieve a literal Utopia, which means “no place”. Corporate Utopia is to be a no place from which nothing arises but precision assaults. But there’s to be no way to penetrate it, since other than those specific assaults, nothing “exists”.
The Germans have a term of great ambiguity, Vogelfrei. Nietzsche named a set of poems “Songs of Prince Vogelfrei”. It means literally “free as a bird”, and can be used to denote freedom. But it’s also the term that was used for medieval outlawry. The outlaw was free as a bird in the eyes of the law and could be killed on sight.
We can see how the corporations want to be outlaws in all the prerogative senses even as they still claim the protections of the law wherever convenient. And they want to turn the law into an instrument of oppression on their behalf.
So the right and responsibility of the people is clear. We must collapse all these waves at the spot demanded by our constitution and our humanity. That means we must enforce total accountability of all corporations while stripping them of all rights, since corporations never legitimately had any but strictly delimited rights, and they’ve proven they can’t be trusted with those. The corporations have forfeit all right to exist. Meanwhile the criminals who tried to shelter themselves behind these fraudulent pseudo-legal and anti-sovereign structures must be dragged into the light to face human justice for their crimes.
Since they chose to become outlaws, we must consent to their choice. But we can certainly turn this outlawry right side up. They wanted to be the kind of outlaw who retains his rights. But an outlaw has chosen to forfeit all rights. Being civilized, we the people shall overlook this and still give them their rights, most of all their right to justice for all. 
They also chose to forfeit responsibility, as their most profound act. But no one can forfeit responsibility, and here we the people have no choice. We have no choice but to enforce this responsibility, since it’s the same thing as the right to justice. Again, civilization promises to give everyone his rights, and therefore we must force the corporate criminals to live up to their civilized responsibilities.
That’s far more than these barbarians will ever give us to the extent they have the power to destroy civilization.
So the prescription is clear. Corporations are barbaric psychopaths and must be eradicated. As for the Land Scandal itself, since there’s no one who can legitimately foreclose, the mortgages revert to unsecured loans. Whether or not anyone chooses to keep paying some allegedly legitimate servicer is, I suppose, a matter of one’s subjective sense of what’s right. But I’d say that since the banksters are waging war on the country and have already stolen tens of trillions of dollars with no end in sight, and seek to destroy democracy and civil society in themselves; and since none of us even knows if the entity to which we send the payment is the right recipient; and since under the incipient Depression the banks have inflicted upon us none of us can be sure of our financial futures; putting all that together I suggest that people should consider renouncing the mortgages and keeping the houses.
If enough people choose to collapse their particular waves in that way, it would surge to a tsunami which would wash away the banks forever. 

January 29, 2011

The MERS Wave Function (2 of 3)

Filed under: Corporatism, Land Reform, Law, Sovereignty and Constitution — Tags: , — Russ @ 7:28 am


For a long time to come, the curve of protest against the banks is likely to be longer and more ponderous than the exhilarating street protests in Egypt. But protest in the form of subversion and rejection of the land model enforced by the banksters, including relentless educational work and exposure of the Land Scandal, will eventually bring us by strange paths toward the same end goal. The real goal in both cases, however consciously conceived at the outset, has to be economic transformation. Otherwise nothing avails, and we end up right back where we started, having wasted energy and lost time. In the case of the banks, we should be fully aware by now of their worthlessness and incorrigible criminality and will to tyranny. They cannot be rehabilitated. They’re tyrannically insane and can only be eradicated completely and permanently.
In the first part of this post I described an intellectual framework for social counteraction. Just as the banks, through devices like MERS, have set up a process whereby they exercise the prerogative to exist only in whatever time, place, and form they unilaterally choose, so we must turn this right side up and impose existence, and eventually non-existence, upon them in a time, place, and form of our choosing. They want their word to become flesh at whatever point is convenient for the corporate interest. We must declare and then enforce whatever reality achieves the public interest outcome.
What proves that this is the right road? All power resides in the people. All sovereignty resides in the people. The Constitution is derived from We the People. Since the people can never contemplate their own destruction, enslavement, or harm, it follows that the Constitution always seeks the public’s well-being. So if we have formally bizarre entities, dubious at best from the Constitution’s perspective, and often clearly odious; and these entities freely chose to define themselves in an ambiguous way; then it follows that the Constitution always chooses the definition and the perspective which is most beneficial to the people.
If in any case this perspective is the one most harmful to the criminals (and it almost always will be), that’s as it should be. That’s the genius of the sovereign people.
In this case, we have one of history’s most vast and malign criminal scams playing out. To review:
1. The basic con of securitization was to fraudulently sell MBS to gullible investors, advertising them as being of higher grade then they really were.
2. This was combined with the parallel fraud of selling overpriced loans to home buyers under the false pretense that housing prices and wages would permanently rise, so the borrower would definitely be able to afford the mortgage until he decided to sell the house, at which point he’d collect the accrued equity.
3. But right from the start the banksters knew they were systematically destroying American jobs and driving down American wages. The borrowers themselves were the banksters’ targets for this liquidation. And they knew a permanent housing bubble was absurd.
So both of the fundamental premises on which these mortgages were sold were lies. Most or all mortgages that have been sold since the late 90s were fraudulently induced.
That’s in addition to more conventional predatory lending practices. The government and the MSM hyped the scam relentlessly, since they too wanted the bubble to (temporarily) succeed. (I suppose some in the government and media were stupid enough to actually believe the hype.)
4. The plan was then to bundle these mortgages into securities, slice them into tranches of differing nominal quality, pool them in trusts, and sell them to investors.
The notes were supposed to be promptly conveyed to the trusts as per the Pooling and Servicing Agreements (PSAs). The PSAs were set up according to NY state trust law in order to earn favorable tax treatment and reassure investors of how failsafe the process was.
But the sellers never actually intended to convey the notes as promised. When they failed to properly convey the notes, this rendered the securities fraudulent and the trusts null and void. All those toxic assets on the banks’ balance sheets have always actually been worse than fiscally toxic – they’re completely nonexistent, legally. 
The reason the banks failed to convey the notes was because they knew that somewhere down the line the loans would start to default. They wanted to maintain the freedom to assign the mortgages to the trust only as they defaulted. That way they could manage which tranches took the hits, and how well their CDS bets against their own MBS products would pay off.
That’s one example of how they wanted total licence to collapse the wave function at will. The contents of the trusts were smeared out as a wave for as long as the incidence of default was smeared out. As soon as a particular loan defaulted, its loss was then supposed to be assigned to the most expendable tranche of the most expendable trust.
That’s also why, as we saw with the farcical documentation the banks submitted in the Ibanez case, PSA loan schedules are prone to be vague about their actual contents, for example listing only a zip code and town but not a borrower name or street address. The former information is noncommittal enough to let the bank be flexible in retroactively assigning the defaulted loan; the latter would forestall this flexibility.
5. As an ancillary crime, they also wanted to evade all the taxes and recording fees to which they’d be liable as the notes kept changing hands along the chain of title.
6. And since the banksters anticipated that the bubble would burst and it would come time to foreclose on millions of homes, they needed to be able to obscure the fact that the notes were never properly conveyed. They needed to be able to foreclose without it being evident that the notes had never been conveyed to the trusts, and that whoever was foreclosing usually had no legal right to do so at all.
To solve the problems of 4, 5, and 6, the criminals engineered MERS. This electronic registry has been compared variously to EBay, Craigslist, or Wikipedia, but with far less transparency or oversight than these. This chaos was by design. MERS’ purpose was to send all information about the notes and liens down a rabbit hole where no one had any authority or accountability. MERS “members” would simply type in whatever words they chose. They’d conclude “electronic handshakes”, as MERS put it. There was never any requirement or confirmation audit to vouch for the reality of any of the alleged transactions. It was simply an “electronic phone book” which, by some “legal pretzel logic”, was alleged to be authoritative when MERS would appear in court to foreclose. (Fannie and Freddie tried to enshrine this by institutionalizing MERS as Original Mortgagee (MOM) language in their own documents.) Only at this moment of the banks’ choosing was MERS supposed to collapse the wave function and miraculously retrieve the information from its black hole of opacity, that Yes, this trust owns this loan and has the right to foreclose. The fact that no note could be produced, and no chain of title conveyance established according to the law, was supposed to be ignored. Robo-signed “lost note affidavits”, thousands and eventually millions of them, would invade the courts. MERS would lawlessly assert the bank prerogative, hopefully the ignorant and hapless debtor wouldn’t fight back, and the judge would roll over if necessary. Responsibility was to disintegrate completely, while corporate prerogative was to have total license.
That was the plan.
But something went wrong with this perfect crime. Victims of foreclosure, only a few at first, did ask questions. They fought back. And they started finding judges who weren’t so impressed with the banksters’ Galtian grandeur. Sure enough, the first moment a smart and self-respecting homeowner challenged the banks’ foreclosure system and found a conscientious judge to look at the evidence, the whole thing came crashing down.
In the final part I’ll detail how the MERS scam is unravelling. I’ll just leave off for now with one obvious conclusion the courts have come to: Since the MERS registry is nothing but shady characters talking about what they allegedly did or plan to do, usually with no supporting evidence, the California courts have found that testimony from MERS in itself is nothing but hearsay:


This structure also possesses practical evidentiary problems where the party asserting a right to foreclose must be able to show a default. Once again, Judge Bufford has addressed this issue. At In re Vargas, 396 B.R. at 517-19. Judge Bufford made a finding that the witness called to testify as to debt and default was incompetent. All the witness could testify was that he had looked at the MERS computerized records. The witness was unable to satisfy the requirements of the Federal Rules of Evidence, particularly Rule 803, as applied to computerized records in the Ninth Circuit. See id. at 517-20. The low level employee could really only testify that the MERS screen shot he reviewed reflected a default. That really is not much in the way of evidence, and not nearly enough to get around the hearsay rule.

That’s the reality, as different courts in different ways are concluding. We’re beginning to drive MERS from the courts like driving thugs from the streets. And without the MERS fig leaf to conceal them, the banks will find it impossible either to establish any right to foreclose at all, or else to do so without laying bare the fact that the MBS trusts are void and the MBS themselves nothing but fraudulently sold unsecured paper.
If we can force this wave function collapse upon the banks, who knows how devastating it may be to them. It may lead to their destruction. And it may give us the political and even legal pivot point we need to start taking back the land itself.

January 11, 2011

Mortgages and Pensions, Federalism and Class War


Last week the Massachusetts Supreme Court dealt the latest legal blow to the banksters’ fraudulent foreclosure and MBS system. The Ibanez case found that the standard bank practice of vaguely claiming that a set of mortgage transfers took place (e.g. by declaring a loan to be part of a pooling and servicing agreement without establishing the entire chain of title prior to the loan’s reaching the trust) does not establish standing to foreclose. The court, like the Land Court before it, found that US Bancorp and Wells Fargo could not establish ownership of the lien and thus could not foreclose on the properties in question.
The case dealt only with standing to foreclose and did not directly impugn the legitimacy of the MBS trusts or how NY trust law, the law under which almost all securitizations are done (according to Yves Smith of Naked Capitalism), would view these inadequately documented trust assignments.
This is the latest of a string of state and federal decisions finding that wherever homeowners challenge the entities who seek to foreclose, they’re likely to find that they can’t prove they own the note and/or, in this case, the lien. It’s clear that the entire structure of debt-based land ownership is in limbo, and that no one will ever be able to figure out who has the right to foreclose upon whom. This slow but steady flow of court decisions represents the last embers of law and order which still exist anywhere on this desolated civil horizon. Florida’s Rocket Docket is the barbaric, might-makes-right alternative which the system will certainly try to impose wherever it can. In that case, the response of the Noble Savage, if he actually exists, would be to reject the land-debt system completely and take back the land in restitution as from a criminal, and in redemption as from a foreign invader. Neither of those are metaphors.
Meanwhile the banksters’ propaganda outfit, the American Securitization Forum, showed its spirit by directly falsifying the decision. In particular it claimed the ruling affirms PSA declarations as sufficient to confirm transfers, and that it said blank assignments of notes and liens were OK. In fact, the ruling explicitly rejects both of these.
It’s not surprising that the banksters are moving on to flat out public lies, directly contradicting an adverse decision. If this Feudal Conversion is really going to work, everyone involved will have to become more flexible and unembarrassed. It’s already clear that no one in government or the media expects the banks to adhere to any laws whatsoever. The last place which hasn’t been fully subject to the neoliberal version of Gleichschaltung (“coordination”, in Nazi jargon, meaning that one becomes fully instrumental for the totalitarian system) is the courts. When the ASF declares that the decision said the opposite of what it actually did say, they mean for other courts to pretend that the ASF version is the real decision. Perhaps they even expect for other jurists to read the ASF commentary on the decision instead of the decision itself. These communiques are meant to be indoctrinatory, just like the law-and-economics seminars for judges.
(And just in case that’s not sufficient, they keep repeating how Massachusetts law is allegedly “unique”, i.e. a freak to which no one else should pay any attention.)
Meanwhile, I read today of a new proposed tactic for class war. According to this plan, states facing budget crises (pretty much all of them by now) should declare bankruptcy in such a way as to break their public employee pension contracts, but not their obligations to banks and other corporations. On its face this looks like just a political threat to further scare unions who have already morally collapsed. (Well, capitalist unions are inherently corrupt, but even by those standards today’s unions are lumps of jello.) But it’s no less practicable an attack than many already underway.
(The only question I have is, aren’t pension funds the favorite suckers for all these bankster con jobs? If there’s no gullible fund managers to buy garbage like MBS, where’s the securitization racket supposed to go?
If they’re serious about liquidating the pensions, is that a sign that they’re giving up on the Bailout stage of the Feudal Conversion and committing to the Austerity stage? See below for another example of such a sign.
Or, to look at it more optimistically, is this system cannibalism an example of the limits to racketeering?)   
The federalism and constitutionalism of this looks impossible, but as in the case of mortgages, we’re no longer in the realm of law and order, but might makes right. Again we see how the only obstacle would be the extent to which the courts retain any integrity. 
Would federal courts accept a case in the first place which is so clearly outside their jurisdiction? States are sovereign in their finances, and the federal government has no authority to put them into bankruptcy. Maybe Gingrich means they should submit to binding arbitration as a privatized bankruptcy tribunal, sort of like a globalization cadre under the shadow of which a government alienates its sovereignty and submits to a “structural adjustment”. That’s exactly what’s suggested here for the states, right? As I wrote before in the context of food policy, the anti-sovereign globalization bureaucracy is the prototype for total corporate rule.
But if the corporatist SCOTUS took such a case at all, there’s little doubt they’d find it acceptable. This institution, at least, becomes better coordinated every year.
[Digression: In that post I just linked, I mentioned how, among a commentator’s metrics for how pro-corporate a court is, the only one where the Roberts court hadn’t been far more aggressive than the Rehnquist court was in the realm of employment discrimination. But that may change with the looming Walmart case. I argued that if the court steps up its assaults on discrimination protections, that could be a sign that “neoliberalism” is getting ready to dump its corporate liberals as no longer useful.
Another recent sighting is Scalia’s interview where he declared that as a constitutional matter he thinks the 14th amendment was never meant to apply to anyone but ex-slaves; in particular, that it doesn’t apply to gender-based discrimination. He still disclaims any intent to rip up the superprecedent, but it’s still interesting that he brings this up just when the SCOTUS is looking to more intensively scrutinize the whole concept of anti-discrimination as a constitutional principle.
As an aside within my digression, an aside which refers back to the main post, I bet the very fact that Scalia feels the need to claim this bogus “originalist” ideology (which he doesn’t even adhere to) is seen by real corporatists as evidence that he’s not fully reliable. Sure enough, his record, while pro-corporate and pro-statist on the whole, is inferior to that of Roberts and Alito, who represent the truly coordinated model. They’re pragmatic, they’re flexible, they’re instrumental, they’re absolutely cold and ruthless, and therefore feel no need to square things with themselves through the device of a constitutional ideology. As Hannah Arendt describes in Origins of Totalitarianism, true-believer ideologues are considered philistines and buffoons by the true totalitarians, and some point in the movement’s history those ideologues are dumped.
Read here for an example of Alito goofing on Scalia. “What did Madison think of video games?”]
One thing’s for sure. As these examples demonstrate, these criminals despise laws and contracts except as burglary tools, robbery implements, weapons of assault. If anyone wonders, “how can they whine so much about the sanctity of contracts but then turn around and try to break all their own contracts?”, there’s your answer. They believe the non-rich are sub-human, not citizens. Therefore it’s impossible to have valid contracts with them. If a government or a corporation signed a contract incurring a pension obligation, by definition that “contract” was extorted by thugs. It has no more validity than if extorted literally at gunpoint.
That’s really what they believe. I don’t know if they’ve gone so far as to formally elaborate this ideology. As I mentioned above, they’re reaching the point of disdaining formalized ideology. But that is their ideology.
So they think comparing an obligation to a bank with an obligation to workers or citizens is comparing apples and oranges. The former is a valid contract, the latter is not. Simple. (Needless to say, any contract between power and subhumans is valid where the benefit runs upward.)
That’s the essence of class war.
Until we fully understand and fully reciprocate this ideology, for example where it comes to recognizing which agreements are real and which are odious frauds upon us, and acting upon that recognition, we’ll continue to lose.
We must simply turn things right side up.   

December 15, 2010

What Do Wikileaks and Foreclosuregate Have In Common?


Much has been written about Julian Assange’s theory of how aggressive forced transparency can impose a “secrecy tax” on authoritarian conspiracies like the secrecy regime of the US kleptocracy. The ability of a system like this to smoothly function is predicated on its ability to easily disseminate information among the insiders while keeping it secret from outsiders. So the more paranoid the system becomes about its ability to maintain this monopoly, the more it must restrict information flows, police its own members, and devote resources to this maintenance. Like any other illegitimate, parasitic structure, it becomes less and less efficient and resilient as the self-generated resistance to it grows. According to Assange, Wikileaks is dedicated to imposing this secrecy tax upon these criminal organizations. If the tax becomes onerous enough, it can even render the system unable to function.
When I thought about this, it struck me how similar it is to other ramifications of the system crime. Everywhere there are signs of the self-imposed crime tax hindering smooth system function. Probably the best example is Foreclosuregate, where the banks’ systematic refusal to comply with the most basic, stone-carved legal procedures for conveying title and constituting MBS trusts has rendered all “ownership” questionable, and has perhaps in fact rendered most mortgages and most or all MBS trusts unsecured loans. In non-recourse states, the mortgagee may in fact not be able to have recourse even to the house itself. Meanwhile if the scofflaw servicer tried to belatedly (and illicitly) convey the note to the trust, the trust would be revealed as having been fraudulent in the first place, the trustees would incur a severe tax liability, and they’d be exposed to lawsuits from the defrauded investors.
The same would be true if the originator simply foreclosed on his own:

On one hand, the problem is easily cured – the party who is the documented owner of the loan could foreclose (the original lender). The problem with this is that the proceeds of the foreclosed property, including the recoveries intended to reimburse the servicer for advances, would have no mechanism for getting back into the trust.

If the original lender foreclosed, took title and liquidated the loan, accountants would have an issue with how the proceeds could possibly end up back with the trust. The result would be a total loss for the trust for that loan.

The servicer’s attorneys have no desire to go this route – it terrifies them.

Every time I read something like this my first gut thought is to doubt there’s anyone in the system who isn’t willing to break any and every rule and law.
But then I figure that a massive criminal conspiracy within the system must run up against the same inertial obstacles revolutionaries have often complained about – that existing professional cadres, no matter what the professional intent of their members, are still as a group committed to certain ways of doing things. It’s their professional culture, and even as intentional criminals they must still often feel the need to dot the i and cross the t.
And then the system is supposed to be set up to maximize the flow of loot upward and minimize leakage at the lower levels. Having a perverted but still mechanically functional rule of law and process of bureaucracy is supposed to help effect this. This is why the Nazis were always as punctilious as possible about “legality” for their crimes.
So perhaps the half-baked kleptocracy, having run its crimes so far out ahead of its “laws”, will be unable to fix this mess even with its own pseudo-legal contraptions, and will sustain a major blow here.
Just like its hysterical attempts to put out the Wikileaks fire are already demonstrating the validity of Assange’s ideas. Although I’m not a tech expert, from what I gather it would be impossible to shut down Wikileaks short of “shutting down the Internet itself”, which I take to mean rendering it far more slow and inefficient. We can imagine what that would do for the system’s economic “recovery”. That fits into their intensifying “cyber war” rhetoric. Joe Lieberman and others have also been threatening even their own friends in the MSM like the NYT. Government agencies and contractors are imposing all sorts of restrictions on what computers within their purview can be used for. I had one commenter tell me his company is even trying to restrict what employees can do on their own personal computers at home. And funniest of all was the spectacle of universities warning prospective government employees among their students about how intensely all their prior online activity is likely to be scrutinized by this prospective employer. The vision of these Ivy League Hitler Youth scrambling to try to sanitize their past online lives and even more vigilantly self-police their words and actions going forward gives us a prime piece of Schadenfreude.
So it looks like we already are imposing this secrecy tax.
[We can see from all this why we don’t want any sort of “modernized” mortgage registry, which would simply be easier to “legally” game. It would put up less resistance to organized crime. Its very pseudo-efficiency would offer fewer handholds for citizen action.
We’re learning everywhere that so-called inefficiency and redundancy really mean resiliency and at least the potential for accountability.
In this case, there’s nothing wrong with the existing legal procedure. (Not the scofflaw mortgage mill and securitization procedure.) Is this slow when you’re trying to convey and securitize millions of loans? Yes – which is a good thing. Slow is Good. And as we should have learned by now, we never needed or wanted such financialization of mortgages in the first place. They should have stayed with the originator, with what worked perfectly well before these crimes were invented.
There’s no need for shock-doctrine speed and false efficiency, which as we’ve learned to our sorrow is a false economy.]

November 4, 2010

Note on the Banksters, the Land Dispensation, and the Rule of Law

Filed under: Bailouts Only Propped Up Zombies, Land Reform, Law, Reformism Can't Work — Tags: — Russ @ 7:02 am
It’s been a long, long time since the banks were used to dealing with the law, as opposed to “the law”, their own rigged law.
The trouble is that here their crimes aren’t just spread out over society as a whole, but are directly assaulting the very same “middle class” cadre they were counting on to politically support them even as they liquidated that very same cadre.
The very basis of the astroturfing was this “American Dream/ownership society” scam. The banksters are now not only trying to trash their own rigged law, but are doing so in order to lawlessly assault the people literally in their homes. The very same homes, “ownership” of which was supposed to be what the banks themselves delivered and guaranteed, and which are why society was supposed to allow this finance sector to exist at all.
This is looking to be an exercise in Machiavelli’s teaching that the people will put up with any level of economic and political tyranny as long as the tyrant doesn’t cross specific, gratuitous taboos.
Here the people have seemed willing to tolerate the stealing of trillions pre-Bailout, the gutting of the real economy, the Bailout itself, “austerity” (gutting Social Security; it seems like most Americans don’t bother to even be aware this is happening), and their own complete liquidation as a middle class and reduction to debt servitude and worse, if all of that was done in a general, gradual way.
But the banksters got so greedy and impatient that they couldn’t even adhere to their own extend and pretend. They were being allowed to compound all their pre-existing accounting fraud by pretending all these loans were still good, for as long as possible, until the Depression forced housedebtors to stop paying because they could no longer afford it. At that point the banks would’ve had a problem with the “investors”, but that’s the most easily finessed problem. Look at how much power shareholders have (the same shareholders whose weal is the proclaimed ideological/moral basis of corporatism, but who in reality have almost no power and are constantly swindled). Meanwhile they might have continued to get away with telling people having their homes stolen that it’s just a natural process of the economy, and/or it’s the debtor’s own fault.
But instead they chose to rush to foreclose on as many of the zombie debtors as possible, apparently for no reason at all than to drum up short-run fees. In doing so they’ve rendered the entire regime of lawlessness and predation very stark and clear in a way this middle class can viscerally understand. They may not understand suspension of mark-to-market, or how the government has propped up the zombie MBS in the first place, as the main project of the Bailout.
But they sure understand that the system has been intentionally set up so that in theory anyone claiming to represent FIRE sector authority can, with the most flimsy documentation, claim to have a right to seize your house, and have a decent chance of getting a corrupt judge to go along with it. They see how this is exactly what happened in practice, many, many times, and continues to happen.
Now if we can only get them to understand that the imperative rational and moral conclusion to draw from the Bailout is that we could never legitimately owe the big banks anything on the people’s land, under any circumstances.

October 17, 2010

Foreclosure Counterattack: Propaganda, Pseudo-Legality, and Thuggery

Filed under: Land Reform, Law, Mainstream Media, Neo-feudalism — Tags: — Russ @ 1:32 am
(Also posted at Naked Capitalism.)
As Foreclosuregate, the legal crisis, looms ever larger and becomes a major political issue, the banks and government have scrambled to mount a counteroffensive against the consequences of their crimes. We can see how flat-footed they were caught. They seem to have become so comfortable with cutting every legal corner and evading every requirement which was even mildly inconvenient that they’re truly surprised this has escalated with such abruptness and violence. Their plan is to try to bluster and bully their way through by any means possible. They expect lies and lawlessness to prevail as always.
The first line of defense is the propaganda line that this is just a technical glitch, not a fundamental problem with the loan or the security, or any kind of systematic intentional fraud. So far this has been the preferred PR line for the administration and the mainstream media. But the banks are also working the line that no matter what the flaw, it can simply be legalized by legislative brute force.

Rather than deal with the considerable consequences of these abuses, the banks are prepared to bulldoze well settled state laws to give them an easy way out. And I’m not basing my view on this story alone; I had a conversation yesterday with a Congressional staffer who matter-of-factly said (but with little understanding of the underlying issues) that Congress would intervene on behalf of the industry, via its authority over national banks.

Congress took one step in this direction by frantically grabbing and unanimously passing a pre-existing bill which would require all states to accept the weakest state-authorized electronic notarizations. This would be only a minor fix of one of the technical issues, and isn’t very important in itself. But it probably foreshadows the far more expansive legislation we can expect to see after the election. Bolstering all of this, the banks are making extortionate threats against the real economy. They promise to wreck it even further if they aren’t given a clear path on this.
At the same time a concurrent propaganda line, seeming to somewhat contradict the other, is a hectic emphasis on speed.

Federal regulators sought Wednesday to prevent the growing furor over improper foreclosures from escalating, pressing mortgage lenders to replace flawed and fraudulent court documents while insisting that foreclosures continue apace.

It’s unclear why they’re simultaneously trying to downplay the significance of all this but also to drum up a sense of crisis which requires a stampede. You’d think they’d at least pretend to want to slow things down in order to make sure all those alleged “technical glitches” are properly fixed.
Demonstrating that the banks understand the significance of how the blogosphere has driven this story, the PR offensive has descended to the comment thread level, as we’re seeing the biggest surge yet of pro-bank commenters, many repeating the same talking points with suspicious discipline.
As Yves Smith at Naked Capitalism observed,

One regular reader has noticed that every time I put up a foreclosure post, the first comment, suspiciously close to the post time, is always a version of “deadbeat borrower”. He reads enough blogs that he is pretty convinced that NC is being targeted for this sort of message.

Perhaps the most insidious propaganda line, and certainly the most scabrous, is the bashing of alleged “deadbeats”. While the subprime borrower – powerless, often a minority – has long been an easy target, and the contempt has been spreading up the income scale as more people are engulfed in the catastrophe, the fact remains that few people intentionally bought more house than they could afford. Most were induced by the massive propaganda barrage from the banks, government, MSM, and even consumer groups, to see a house as a guaranteed investment which could only appreciate in price. More importantly, the main cause of inability to keep up the mortgage is losing one’s job or suffering a medical disaster. It’s the banks themselves who have presided over the destruction of America’s jobs, especially over the last two years. And it’s the government which refuses to counteract the banks’ campaign of socioeconomic scorched earth. (That’s the same government which also pointedly refused to reform the health care system, choosing instead to further entrench the existing larcenous dysfunction under a facade of lies and misdirection.)
So it’s the banks and government themselves who are overwhelmingly responsible for the wave of defaults. The defaults are the knock-on effects of the bank crimes, and now the banks want to seize the homes by further criminal means. Even after all this, few people fight foreclosures if they can’t afford to pay. The great majority of them say they can pay if they get a promised modification, or claim to be the victims of servicer error. So by any measure – moral, rational, or legal – the “deadbeat borrower” talking point is a sham.
But it’s no surprise, given the scurrilous character of the banks and their functionaries. A good indication of the kind of “legal” recourse they assume they can take are the kangaroo courts of Florida. These are not really courts of law but dedicated foreclosure machines manned by judges pulled out of retirement, apparently selected specifically for their bank-friendliness and/or ignorance of mortgage law and existing programs like the HAMP. These were given the mandate to process foreclosures as fast and lawlessly as possible. That puts the administration rhetoric about the need for speed in a new light. Evidently Florida’s rocket docket is the federal government’s dream solution as well.
But even this is failing to work for them. Political scrutiny and demands for legality are becoming more insistent, and the rocket docket has had to slow down and at least pretend to respect the law.
Underlying all of this, the foreclosures continue in spite of the vaunted moratoria. Perhaps they think they can still fool the judges this way: “We announced our moratorium, so obviously we’re only going ahead with fully legit foreclosures. Here’s the lost note affidavit on this one…” Now that this scam has been exposed, they’re spouting a reprise of the original lies – it’s a mistake, it’s miscommunication, we don’t know what’s happening with those bad apples….(Anyone who actually took anything they said seriously would have to wonder how it’s possible to be such a Master of the Universe, and warrant such a “bonus”, and yet make so many self-admitted mistakes and be so ignorant of everything all the time.)
This preference for lawlessness, this knee-jerk recourse to lies and crimes, is however no joke. At the lower levels, outside the regular media eye, the banks have repeatedly demonstrated their comfort with pure brutality. The examples proliferate of thugs threatening people, breaking and entering, bashing in doors, terrorizing occupants. So long as government at every level is the waterboy of the banks while people on the ground remain unorganized, atomized, and vulnerable, this will only get worse. We hear rhetoric, “joking” of course, about how they need to start burning houses down.

“The question to me is not do you foreclose or do you not foreclose. The question is when and with what philosophy you foreclose,” the man on the bank restructuring team said. “If you want to reduce the amount of leveraged homeowners you have, you need to ultimately kick them out of their homes.” A colleague walked up: His recommendation was to burn houses. It would lower the supply.

Even if that’s still a joke at the moment, how long can it remain so? It’s certainly in the mainstream of the logic.

Look, our hope is is that this moves rapidly and that this gets unwound very, very quickly and that if they can go back, reconstruct their paperwork and what we’ve stressed to them is that they need to expedite that process and work very, very quickly to get it done. we’re going to continue to push for that.

That’s Obama factotum Axelrod. And more from the firebugs:

“The first thing that needs to happen, I think, is to get these people out of their homes,” a man wearing a bespoke blue-striped shirt, a Hermés tie patterned with elephants and Ferragamo loafers said recently. “Correct! I’ll explain,” the veteran member of a bank restructuring and advisory team said.

Right there at Naked Capitalism we saw what may have been pro-bank handiwork, a shot across the bow, as it were. Yves was the target of a Denial of Service attack. Now that’s taking trolling to a whole new level. If it was done on behalf of the banks, it’s part of the logic.
All of this, from the original predatory lending, to flippancy about conveying the titles and legally securing the trusts, to the Bailout dedicated to propping up those toxic MBS, which we now know are probably nothing but unsecured loans, to the government-led propaganda campaign and legislative hankering to cover up and eventually “legalize” this latest revelation, down to the brutish violence and dirty tricks of the gutter, is one coherent whole, one simple train of logic. It’s simply the logic of might makes right, feudal greed, and total nihilism vis the law and democracy. The mortgage debacle reveals so many abdications of the system, and this abdication of the rule of law is one of the most thorough.
Older Posts »