Put the kids away before reading.
Herein lies the problem. The FHA’s standard insurance program today is notoriously lax. It backs low downpayment loans, to buyers who often have below-average to poor credit ratings, and with almost no oversight to protect against fraud. Sound familiar? This is called subprime lending—the same financial roulette that busted Fannie, Freddie and large mortgage houses like Countrywide Financial.
The article goes on to note that as of the end of this year FHA and Ginnie will have issued and hold one trillion dollars of mortgages, that the current default rate is now 7%, and the delinquent rate is running some 13%.
Because the same crooks, swindlers and thieves that infested the housing market in 2003, 2004, 2005, 2006 and 2007 in "subprime" and "ALT-A" have now moved into the FHA product.
There is only ONE way to guarantee safety and soundness in mortgage lending. ONE!
That is to require twenty percent down payments, limit the back end ratio, or debt-to-income, to no more than 36%, and fully-underwrite EVERY SINGLE FILE, with CRIMINAL penalties ruthlessly enforced for ANY fraudulent misrepresentation BY ANYONE.
The FHA is now running with leverage equal to that of Bear Stearns and Lehman Brothers. You know, those two "banks" that were underwriting loans without sufficient down payments and on dodgy debt-to-income ratios AND BLEW UP?
We're even doing 125% loan-to-value on FHA NOW!
In some cases, these owners are so overdue in their payments, and housing prices have fallen so dramatically, that the borrowers have a negative 25% equity in the home and they are still eligible for an FHA refi.
Mr. President, Ben Bernanke, Tim Geithner, and Members of Congress:
This afternoon on Blogtalk I strongly recommended that Americans literally "get in the face" of their elected representatives (peacefully) and tell them that they had better lock up ALL the fraudsters, scammers, and thieves, OR THEY WOULD EVENTUALLY BE THE ONES LOCKED UP.
Let me make this crystal-clear: What I said and why I said it so ABSOLUTELY NOBODY can misunderstand.
That was NOT a call for any sort of civil insurrection or any other sort of lawless activity.
IT WAS A DIRECT STATEMENT OF WHERE THIS NATION AND ITS POLITICAL SYSTEM IS GOING TO WIND UP, AND THE CONSEQUENCES THAT WILL INEVITABLY ARRIVE, AND SOON, IF YOU DON'T STOP THE LOOTING OF THE TAXPAYER AND GENERAL POPULATION RIGHT DAMN NOW!
This has gone on FAR too long.
First you (the government, who is supposed to PROTECT people against predatory scams and frauds) let the banksters literally STEAL people's hopes, dreams, and money by preying on them with knowingly-toxic exploding loans that they knew in advance would NEVER lead to those Americans owning their own home free and clear. These loans came in the form of 2/28s and 3/27s for "less fortunate" borrowers, crafted for the singular purpose of turning a free US Citizen into a perpetually enslaved debtor who would never own a damn thing except a payment book.
NEXT, you allowed those very same banksters to create exploding "OptionARM" and other similar exotic loans including "NINJA" liar loans - "No Income, No Job, No Assets Required." Loans with ZERO underwriting, ZERO collateral requirement, ZERO supervision and ZERO truth. A HUD study years ago uncovered the truth and yet it was intentionally ignored within our government.
Finally you let these very same banksters misstate the credit quality of batches of these loans, in active cooperation with the "ratings agencies", thereby deceiving investors worldwide into believing that utter and complete garbage, much of it utterly WORTHLESS, was "AAA" credit paper.
Between #1, 2 and 3 the banksters stole hundreds of billions of dollars from Americans and investors worldwide, ejected millions of Americans from their homes, and bought lots of yachts and mansions in The Hamptons.
You also allowed the banksters to intentionally shuffle transactions for the express purpose of generating the maximum number of overdraft fees, and you not only allowed them to "opt in" all account holders to this program you let the banks refuse to allow people to opt out!
This last singular outrage has ROBBED more than $30 billion dollars from (mostly lower-income, less-advantaged) Americans in the last year alone - the difference between making a profit and not this last quarter.
IT IS THE DIRECT RESPONSIBILITY OF CONGRESS, TREASURY AND ITS DEPARTMENTS INCLUDING THE OTS AND OTC, THE FDIC, AND THE FEDERAL RESERVE TO PREVENT THESE FRAUDS FROM TAKING PLACE AND TO REFER TO THE FBI AND PROSECUTORS THE FRAUDS IT DETECTS DESPITE ITS WARNINGS AND SURVEILLANCE.
ALL OF THESE AGENCIES HAVE INSTEAD TURNED A BLIND EYE AND IN FACT IN SOME CASES (OTS IN PARTICULAR) THEY HAVE ACTIVELY CONSPIRED WITH THE BANKSTERS THEMSELVES!
I have repeatedly, in Tickers, faxes, petitions and letters to all 535 members of Congress, Administration Officials, members of The Press and the general public put forward the mathematical facts that these loans were knowingly unsound, were made with actual and/or constructive knowledge of their lack of soundness, were sold up and down the line to both homeowners and investors under false and misleading pretense and in my opinion constitute securities, banking and just plain-old-fashioned garden-variety FRAUD for which the proper response is an INDICTMENT, not a bailout.
Not one - I repeat - not one executive or other person related to this has gone to prison. Not one person has been indicted. Not one banking charter has been revoked.
Fannie and Freddie have imploded as a direct and proximate consequence of this fraud. Dozens of independent lenders have gone under, throwing thousands of Americans out of work, because of this fraud. Dozens of banks have gone under in the last year with hideous losses to the FDIC's insurance funds as a direct consequence of this fraud, and there are hundreds more to go. Virtually every bank in the nation is currently holding these securities at knowingly-false values in the belief that they will be somehow "bailed out", resulting in the price and values rising, but in the meantime if they sold that paper and those foreclosed homes at the current market price they would be rendered instantly bankrupt - right here, right now.
This fraud continues every single day, yet Sheila Bair bleats about how banks "should" value assets every quarter - instead of saying they MUST and if they do not or if they lie The FDIC will come in and shut them down IMMEDIATELY, which is, under the Prompt Corrective Action LAW (PCA), an enumerated DUTY of her position (along with the OTS and OCC)!
Over $700 billion dollars was allocated by Congress for the express purpose of bailing out those who made and packaged fraudulent loans and another $150 billion was passed through AIG to cover transactions in OTHER securities - credit default swaps - for which it had NO MONEY to back up what it was doing.
These funds ALL went to the people who structured these rip-offs that victimized Americans from coast to coast and investors worldwide.
The very same American people who were robbed blind - literally - are now saddled with TRILLIONS of dollars of new debt taken on for the express purpose of bailing out the scammers, the fraudsters and the thieves who destroyed the hopes and dreams of millions of our citizens, all in the name of "profit."
YOU VOTED FOR AND APPROVED ALL OF THIS AND YOU STILL ARE TO THIS VERY DAY!
We were told that this was "necessary" to save the financial system.
BUT NOTHING HAS CHANGED; WE HAVE IN FACT SAVED NOTHING.
The very same scammers are now hard at work bamboozling MORE Americans and ladling MORE bad paper onto the Federal Government via the FHA and Ginnie, the very same banks are directing their bailout money into speculating in the stock and commodity markets, AND SOME OF THEM ARE EVEN MAKING PAYDAY LOANS AND FINDING EVEN MORE LUCRATIVE WAYS TO FLIM-FLAM AMERICANS:
But it's another scenario that worries regulators, lawmakers, and consumer advocates: that banks once again are making dangerous loans to borrowers who can't repay them and selling toxic investments to investors who don't understand the risks—all of which could cause blowups in the banking sector and weigh on the economy.
THIS HAS GONE TOO DAMN FAR.
We as Americans accept that lobbying for special tax breaks and other "perks" is part of the American political system. It sucks, is filthy, disgusting and outrageous.
But it is uniquely American and has been for our entire national history.
This is something else entirely. This is the wholesale LOOTING of America and EVERY AMERICAN CITIZEN by the BANKSTERS who just months ago cried poverty and demanded public largesse - RIGHT DAMN NOW - lest the entire banking and financial system collapse in a smoking heap.
The American People told you by a 300:1 margin - not just NO but HELL NO!
The American People were WISE.
The American People were willing to accept THE IMMINENT IMPLOSION of the American Banking System and the financial destruction of ALL the robber barons who had ripped them off blind then violated them from the rear once they could no longer see, SO LONG AS THOSE SCAMMERS WERE ALL RUN OUT OF TOWN ON A RAIL, BANKRUPT, WITH NOTHING MORE THAN THEIR UNDERWEAR ON THEIR UGLY, DISGUSTINGLY-FAT BODIES - AFTER THEY GOT OUT OF PRISON.
But NO! You couldn't do that! You couldn't let the PATRONAGE stop! You couldn't be without the billion in campaign contributions over the last decade, the K-street wonders who lobby you on a daily basis, nor could you deal with losing your own special deals like your cut-rate loans for your own properties through "Friends of Angelo."
So you not only bailed them out, forcing the American people to pay for their own financial rape, you knowingly turned a blind eye while the ripoffs and scams continue, guaranteeing that the violations would continue on a daily basis.
Now we hear The Obama Administration, Reps and Senators complain that when the same sort of ramrod politics is attempted with Health Care suddenly "Town Hall" meetings get LOUD? Senators and Representatives don't like loud voices and waved signs after intentionally ignoring the people and treating their constituents like rubes?
Exactly who in the hell do you think you work for? More to the point, what part of the following don't you get?
That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.
You learned this stuff right? You all swore an oath - to uphold The Constitution against all enemies foreign and domestic. You're aware that The Constitution came about as a direct and proximate cause of the document cited above, yes?
Your duty is not to uphold The Robbing, Thieving Bankers - it is to uphold THE CONSTITUTION.
It is pretty damn clear to this commentator that what our "banking industry", by its own words and actions over the last five years, DEMONSTRATED IS THAT IT IS A DOMESTIC ENEMY OF THE NATION AND CONSTITUTION OF THE UNITED STATES!
Do those of you in Washington understand that robbery at this grand scale cannot work and must not be allowed to continue? Do you understand that "Pax Romana" was brought down by this very same sort of corruption? Do you understand that we are absolutely dependent on CHINA and JAPAN to fund our operating credit requirements in The Federal Government, and that should they give us the finger The Federal Budget would implode by 50% overnight?
IF THAT HAPPENS HOW WILL YOU FEED THE PEOPLE?
Do you understand that these frauds and thieves are not the Chinese and Japanese, nor the Saudis? That they have the money, and we need to borrow it? That they have oil, and we need to buy it? That they are not stupid and that eventually they will tire of the lying, thieving and political misdirection, and if they do before you clean up this crap our nation is absolutely, irretrievably and without question SCREWED?
I love my country, but today, I fear for her future.
WAKE UP AMERICA.
STOP THE LOOTING AND START PROSECUTING.
Where We Are, Where We're Heading (2013) - The annual 2013 Ticker
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