Wanna Buy a Government-Foreclosed Home? OK. Just Bring $10,000,000.00
For reasons that should quickly become apparent, this is the most important blog I’ve ever written. Ever. I’m so angry that it’s difficult to write coherently, but I’ll do my best. …
I’ve often expressed my disgust at how Fannie Mae and Freddie Mac frequently pay banks 100% of their judgment amounts in foreclosure cases. It’s an appalling dynamic in foreclosure-world, one where banks often have no incentive to modify mortgages because “our” government will pay the banks in full once the foreclosure is over (and all the banks have to do is convey title to Fannie and Freddie). Incredibly, just when I thought I couldn’t be any more appalled, somehow, my disgust with this dynamic … with “our” government … reached a new level today.
I have it on good information (directly from someone personally involved) that Fannie and Freddie are selling foreclosed homes in bulk to third-party investors. Not one at a time, not several … dozens … at heavily discounted rates. In other words, many of the homes in Florida and elsewhere that have been foreclosed, with lower and middle-class homeowners thrown onto the streets and title transferred to Fannie or Freddie, are being sold to third-party investors in bulk.
If you think that sounds like an interesting investment opportunity, a chance to purchase a new home after you were foreclosed, let me stop you. Fannie and Freddie aren’t making these investments available to just anyone. To qualify … to even get inside the door to the auction room … you must have at least $10,000,000.00 in assets, and you must be able to prove the existence of those assets via bank statements and the like.
Ten million bucks, just to get in the door.
Is this what America has become? Throwing Americans onto the streets so “our” government pays the banks to foreclose and “our” government sells those houses in bulk at discounted rates to third-party investors with an eight-figure net worth?
Apparently so.
Sigh.
You know what’s arguably even worse? Nobody is even talking about this. No news stories. No media coverage. Nothing. I mean, seriously … Would you have known about this if Mark Stopa – basically a nobody in the scope of national news and politics – hadn’t blogged about it?
Why such secrecy? Where is the media coverage? Where’s the outrage? Who is running our government, exactly? This is as big an issue as Obamacare … thousands of homeowners getting foreclosed and their homes being sold in bulk to the mega-wealthy … why is nobody even talking about it? Is America really a land where our government takes houses from the poor and middle class and sells them in bulk at discounted rates to the mega-wealthy … and it does so completely in secret? Does anyone care?
This is why I consider this the biggest post I’ve ever written. This is what is driving the whole foreclosure crisis, and nobody knows about it. Nobody’s even talking about it. Change is not possible without awareness, and right now, all Americans are totally in the dark about this dynamic. Well, all Americans except those who have $10,000,000.00.
May God help us all.
Mark Stopawww.stayinmyhome.com
Posted in Main | 26 Comments »
Mark,
I read this a few days ago and it was as a result of your blog going to a site that had this story line. As you were inflamed so was I, here I was looking into the future and the light I saw was a train coming at me, not the end of the tunnel. GRRRRRRRRRRRRRRRRRRRRRRRRRR.
I deeply appreciate all you do, three years you have helped me to bridge into action and not depression.
Tony Ortiz
Thanks so much, Tony.
Pingback: Fannie Mae Freddie Mac to Sell Foreclosed Homes in Bulk to Hedge Funds | Foreclosure Fraud - Fighting Foreclosure Fraud by Sharing the Knowledge
Pingback: Fannie Mae Freddie Mac to Sell Foreclosed Homes in Bulk to Hedge Funds | Challenge Your Lender
So our government would rather overpay for foreclosed houses and then sell them in bulk at substantial losses that don’t recoup what they have paid to the banks, than write down principals to the distressed homeowners.
Yet one of the reasons Fannie Mae gave that it won’t write down principals for homeowners in distress is that it will create a ‘moral hazard’ to forgive debt for some borrowers that would motivate others to stop paying their mortgages.
Ironically, though, Fannie Mae holds a blind eye to the larger ‘moral hazard’ they have created by paying in full banks for foreclosed properties, which we all see now has led to banks motivated to stop modifying mortgages so they can get paid in full by the government.
I guess our government is okay with waltzing with such ethics problems when it involves faceless banks than the poor and middle class people. Somewhere along the line “We, the people of the United States” turned into “We, the Banks of the United States”. Double sigh.
Very well put, Vivian.
This article is more newsworthy than the article on the Whistle Blower Attorney Lynn Szymoniak,who received 18 million for uncovering mortgage fraud. What do you think this journalistic masterpiece is worth? After learning what I know about our government, if you did get compensated it would be “gag” money…
Peter,
I think it’s more likely I wind up dead under suspicious circumstances.
Should I wait by my mailbox for an award from the government for posting this story?
Mark
I had friends who were working for investors during the Savings and Loan debacle. The same deal was going on then. The ‘bad’ assets were being sold of by the government at very high discounts, %5 to 10% on the dollar, in blocks starting at 10,000,000.00 and going up.
The portfolios were available to the investors before the bid so that they could figure just how good the bundle was and how much profit was to be made. By having a 10 million bundle it prevented individual bids for individual assets, and prevented ordinary people bidding. Some rich men got very very rich, and the government took a loss on the assets.
The vehicle used for bundling the assets and selling them of, but only to very rich investors was called the Resolution Trust Corporation. Another quasi-government-private-corporation used to funnel the assets to wealthy individuals, under the pretense of free market auctions, limited to very wealthy individuals.
Quote “developed by the Bush Administration, it was based on the premise that the faster the assets were unloaded, the better off the Government would be. To achieve quick sales, the Resolution Trust Corporation would often bundle properties and loans into large portfolios to be bought by big investors.” (Bush I)
http://www.nytimes.com/1993/03/22/business/us-shift-on-s-l-asset-sales.html
It is the same old game again. Government acquires troubled assets, which it got conned into insuring in the first place, then claims victory by selling them at 5% on the dollar in massive bundles to very wealthy individualizes and corporations. The difference in value being paid for by the US tax payer.
Try googleing – RTC bundles millions
You get interesting links like this:
http://articles.chicagotribune.com/1991-11-07/news/9104100332_1_patriot-american-investors-hard-to-sell-assets-sale
Where there is a claim that sweet hart deals were made to sell property and mortgages in large multi-million dollar bundles, at significant discount when individual investors would probably pay more for individual assets.
Also, in a strange twist of fate, the government often lent the money for the purchase of the assets from the RTC.
Sometimes this was disguised as a private public partnership, or an ownership interest in future appreciation. Which sounds good, but would not have been necessary if the sale of the bundle was a cash deal. The hidden goverment funding of the bundle sales was trumpeted as modern public-private partnerships. We know what that means, the public provides the capital, takes the risk and the private corp takes the profit.
Very many very rich people got even richer from the multi-million dollar RTC asset bundles. Interestingly, because they were often not simple cash deals, the legal community made a fortune in fees, structuring complex private-public derivative deals so the investors appeared to be buying at 50% on the dollar were only putting in 5% or less. Also, RTC deals were often done behind closed doors.
Pingback: Wanna Buy a Government-Foreclosed Home? OK. Just Bring … | Stopping Foreclosures
This is disgusting. We have lost our way as a nation. Those in charge, our elected elite, have sold us out. No moral conviction, no societal conviction, no conviction whatsoever.
Mark, you are one of the few out there with a voice that gives me some hint of optimism. God bless to you and yours.
Thanks, Bob. Keep helping in the fight. None of us can do it alone, but together we stand a chance.
And on top of it all, our State Government is so heavily invested in mortgage backed securities that the Supreme Court has taken, and continues to take, the Corporate angle to the detriment of our state’s citizenry. Just watch Supreme Court Chief Justice, Charles Canady’s remark at the Roman Pino oral arguments on May 10, 2012 (at 23:13), http://wfsu.org/gavel2gavel/archives/flash/viewcase.php?case=11-697. First he says that the homeowner is just “looking for a gotcha” to get out of the mortgage, then he asks Pino’s attorney if her presence their was authorized by Pino, without any explanation as to what lead him to ask the question. One would think that, especially at the Supreme Court level, a question of Attorney authority would be unnecessary. It is my opinion that Rick Scott, Pam Bondi, Charles Canady, et al, and at least 70% or our state’s legislature are beholden to Corporate interests for one reason or another, and it is past due time for this Fascist control to come to an end. How can we possible control our Federal Government, if we can even control our own?
Pingback: Wanna Buy a Government-Foreclosed Home? OK. Just Bring $10,000,000.00
Why WOULDN’T Fannie and/or Freddie want to get in on the action? In my previous employment as a due diligence coordinator for a Chicago-based outfit, they were purchasing pools from the secondary market for .55, .40, .11 cents/dollar. As part of the deal, the seller would, on occasion, throw in 10-50 notes for literally $1.00 each. The real kicker for me was when I would report back that as much as 70-80% of the pool had note and/or mortgage chain defects – and they didn’t care. They had even identified a company that would supposedly “repair” the chains and the decision that was made was akin to Ford Pinto thinking – “It’s not cost effective to fix ALL of them. We’ll do it on a one-off basis if/when a loan blows up.” In other words, they were purchasing, and the seller was selling, pools of notes that, at least according to MY examination, neither entity had any right to sell or purchase.
But they’d purchase them anyway, knowing that, in the majority of cases, the borrower would be none the wiser with regard to their broken chain of title, and “restructure” or modify the loan down to where the borrower could more afford it. So while they may be keeping unsuspecting (read least sophisticated debtor) borrowers in their homes, if the borrower had the ability to litigate they might very well end up doing better than the offer made.
Of course my BIGGER issue with this is, if note holders can afford to sell these things for even .50/1.00, why not just modify the loan at even .55 and keep the borrower in their home and income stream flowing?
@JamesM – That would explain why Tom Basmajian created Fairbanks Capital Corp (now Credit Suisse-owned Select Portfolio Servicing) in ’89.
Tie this all together and you have the perfect crime.
http://www.youtube.com/watch?v=swkq2E8mswI
http://stopforeclosurefraud.com/2012/03/12/read-the-smoking-hot-banks-intentionally-and-thoroughly-violated-the-law-complaint-usa-vs-foreclosure-fraud/
Between all this and Freddie not recieving the loans all should benull and void.
http://stopforeclosurefraud.com/2012/06/21/freddie-mac-designated-counseltrustee-for-foreclosures-and-bankruptcies-2012/
http://www.mortgage-mod-monster.com/fannie-mae-freddie-mac-refused-assume-title-deed/
http://mandelman.ml-implode.com/2011/12/guest-post-welcome-to-freddie-and-fannies-mortgage-shell-game-by-shawn-t-newman-j-d/
INCLUDING ROB MCKENNA ENABLING THE CRIME.
lOOK AT THE TWO FACED VIDEOS START THE FIRST AT 40.49 (he claims he going to sue multiple banks, and has only flied on RECONTRUST knowing full well RECONTRUST was pulling out of this state, and Rob McKenna was recieving fourteen thousand in champaign support. Which was exposed so he refunded it about ten months later when exposed.
I emailed it out to everyone yesterday and posted it on http://www.propertydefensenetwork.com
http://4closurefraud.org/2011/08/06/exclusive-citizen-warrior-video-of-washington-ag-rob-mckennas-press-conference-aug-5-2010-announcing-lawsuit-against-recontrust-in-washington-v-recontrust/
https://cloudedtitles.com/news/ look at the bottom chart showing Rob McKenna took fourteen thousand in champaign funds from Crabtree, while ousting RECONTRUST, Crabtree taking over for RECONTRUST forclosing on Washington homes.
http://www.heraldnet.com/article/20120215/NEWS03/702159806/-1/News article on McKenna returning fourteen thousand to Crabtree after clouded titles and Shelley Erickson exposed him on the web.,.
Assembly member Weinstein said, “The best way to prevent wrongful foreclosures is with accountability. I’m proud to sponsor Attorney General Schneiderman’s Foreclosure Fraud Prevention Act – it provides a real and necessary deterrent to prevent criminals from unlawfully preying on homeowners. Moving forward, fraud will no longer be tolerated in New York. This bill sends that message loud and clear: if you break the law to take someone’s home, you will go to jail.”
http://www.loansafe.org/new-york-ag-schneiderman-proposes-legislation-to-protect-new-yorkers-from-foreclosure-fraud
Mark,
You have my utmost respect and appreciation for your careful attention to exposing horrible truths about what the banks, investors, and GSEs are doing. I AM outraged, but I have no idea what to do with my outrage. I believe that we homeowners are neglecting something in our fight by not coming together as a HUGE voting block needed in the next close election. It matters not whether we support Obama or Romney or neither, we need to make BOTH of them hear us, as neither hears us now. Obama called us “little people” and “deadbeats,” and Romney said the foreclosures need to be pushed forward as soon as possible to allow the market to stabilize.
We need to come together to make a lot of noise about what our government is doing to perpetuate the profitability of the fraud. The banks are controlling the narrative now, but it is absurd to think that a conglomerate comprised of MILLIONS OF US could not take control of it. How can we unite?
For over a year, I have sought justice in court about this fraud, only prevailing, so far, in endless frustration and dumb judicial rulings before trial. The frustration with the bank started when my husband passed away. Sad to say, I’ve now lost him, my health, my equity, my savings, my confidence in the legal system, and likely will lose my home soon. Now I find out that if the plaintiff succeeds with the foreclosure, my home probably will be sold for hundreds of dollars, despite the fact that I was trying to sell my home and pay off the full amount. My state had not been affected in declining values as much as other states, and I had a lot of equity to protect, now the bank has it all. I needed only a little help to regroup and sell my home after my husband’s death. I was paying every payment as agreed until I was told to stop paying, and I have competent evidence to prove it. I was told to miss payments so I could be considered for a loan mod, so I did–but I even paid that payment as soon as the loan mod application was taken by phone and my documents supporting the application facts had been faxed to the black hole, built to hide and recklessly handle confidential financial documents submitted by homeowners. I even received a letter from the bank thanking me for honoring my commitment and bringing the account current, dated AFTER the date the plaintiff alleges the loan went into default. I kept paying as agreed, but a foreclosure was cooking in the background, while debt collectors drove me crazy with auto dialing and asking for my “missing” documents again and again. It is easy to understand the sad incident in a courtroom a few days of ago where a man in foreclosure popped something into his mouth and died.
Yes, I am outraged. I just don’t know what to do with my outrage.
Zoe,
I hear you.
Unfortunately, our government is littered with “representatives” who don’t know about your plight or don’t care.
We need people who care about these concerns in office. Until then, write your congressmen. Contact the media. Talk to your friends, neighbors, co-workers, and family.
Change will happen because of a massive, grassroots movement – it sure isn’t happening otherwise.
Mark
Dear Stopa.
Last week our legislators gave a multimillion dollars land to our millioner ex governor Romero for free… while there are a lots of families loosing their home. At least, your goverment ask some money for those forecloused houses… We know for sure, that we are living the worst currupted time in our history, after the spanish time were they took all the land and gold from the natives. Is it not a surprise, what is a surprise is that now we have a health care program for free, but not a home to live…
I guess we’ll all need free health care when we don’t have a roof over our heads, eh?
Thanks, PR.
Pingback: Want To Buy Some Foreclosed Homes? Bring $10 Million and You’re In The Door | Foreclosure Nation
This is typical and I am not surprised but is evidence the PREDATOR BANK is in bed with our Govt. Why no one is talking about this in the media is a very good question Mark. How can we get the media to report on this.
Bank of America has just attempted to foreclose on my home using fraudulent documents. I managed to have them file for continuance after contacting the Congresswoman and the Attorney General.
Pam Bondi just got millions to help homeowners and there is no help available !! She just forwarded my contact information to the bank..
I don’t know, Albert. I’ve emailed this story to several of my media contacts and I have yet to receive a bite.
My best guess is that the media is run/financed by big corporations, too, so they might be loathe to go down this path.
Mark
Mark,
Incensed is the operative word, or so we all should be. We used to call these kind of people committing such acts, Grifters.
The swindles involved in the chain of events we have called the securitization process of a home loan are many…the one of which you speak the coup de grace.
The act of selling only to those who have assets of $10M or more is yet another of the cogs in the largest orchestrated and engineered land grab in our history. The players range from government agencies benefitting from crime to the Courts whose retirement funds are tied to MBS’s and more importantly, betting on the failure of MBS’s and winning….
This land grab must be resisted at all costs.
Pingback: Chase is defending 10,000 lawsuits. Find out more and join the party. « Manifest Injustice