Yesterday I asked "Why do you obey the law?", and outlined much of the lawlessness in the housing and general banking system.

Today we'll add a few more points to the discussion.

First, to the idea that the banks weren't "intentionally" deceiving the buyers of these securities.  Well, not so fast:

During a little-noticed hearing this week in Sacramento, Calif., a firm hired by Wall Street to analyze mortgages given to borrowers with poor credit, which were then packaged and sold to investors during the boom years, revealed that as much as 28 percent of those loans failed to meet basic underwriting standards -- and Wall Street knew all along.

It's worse than this, however.  This firm only "cooperated" with Cuomo (who has yet to bring any indictments related to it, incidentally) when it was given immunity.  Why's that?  Well, as Naked Capitalism has pointed out....

And they were also hired by the buy side, multiple times and gave no warnings (I have this from a client so this is direct experience plus inference from others who got input from Clayton yet kept investing in subprime). But they are presented as heroes who weren’t listened to. Barf.

Heroes eh?  Uh, maybe not.

Then there's this, of course... again, from a "big bank" - Bank of America, also over on NC:

The Bank of America case is particularly striking since the collection agency violated the Fair Debt Collection Practices Act. Bank of America continued to use the agency after a $1.5 million judgment against the collection agency, which also included Bank of America, and ABC News sent copies of abusive phone calls. It was only after they ambushed the CEO, Michael Moore style, to discuss the problem that the bank dismissed the firm.

But notice - Bank of America was not held responsible.

This is a rather outrageous outcome, but it's common.  In the "real world" (defined as "anything other than a big bank that can cajole lawmakers and thus ignore the law") if you hire someone and they do an illegal thing under your name, you are responsible for it since they're acting as your agent. 

Again, the banks know what they're doing is wrong, but they also know that it works - where "works" is defined as "makes us money", legality be damned.

How long will it be before we have banks that are ordering hits on people outright?  The coroner's report will of course claim that it was suicide - "he shot himself three times in the back and then once in the head."  That's about as plausible as all the scams that have gone on thus far and yet received zero prosecutorial attention. After all, there's no law that applies to "them", right?  They can knowingly sell trash to people and claim it's gold, they can attempt to collect debts using illegal means (and heh, isn't it nice when you hire ex-cons as a collection agency which then make threats against the debtors?  How far-removed from mafia tactics is that?) and they can intentionally destroy documents and fail to make assignments that state law requires, then play "the dog ate my homework" after they intentionally held a bonfire out behind the warehouse.  After all, it's cheaper if we don't actually store all that paper, never mind that the evidence of fraud in the original issue of these notes seems to have been burned up too!

There's a reason that property law in most states require "wet signatures" and unbroken chains of assignment.  It's the same reason that The Statute of Frauds requires (under most state legal codes) that all agreements to be performed over more than a year's time, or in which interest in real property is conveyed, must be in writing and bear an actual signature by the party so bound.

The reason for these requirements is that contracts pertaining to real estate, for large sums of money, or where performance is envisioned to stretch over long periods of time are usually of such import that if someone gets ripped off they are grievously harmed.

No, "electronic records" do not suffice.  No, "the dog ate my homework" does not suffice either when one of the parties intentionally destroyed the originals, or intentionally used an electronic system so as to EVADE the requirements of the statute.

And grievous harm is exactly what has repeatedly occurred here. 

The "conveyances" established by the so-called "electronic" passage of records where such is a part of a contract that falls under these statutes are VOID!

The reality here is that this entire artifice was built up and depended upon neither you or anyone else being able to go back and post-hoc audit all of this mess, for doing so would divine the truth - that the representations and warranties made to the purchasers of these securities, without which there could be no housing bubble, no price appreciation and no boom to go bust were not complied with, and this non-compliance was intentional.  It was necessary as the bubble inflated that the issuers lie because without doing so nobody in their right mind would buy such paper. 

But they did buy it, and the bubble did inflate, and people were cajoled into transactions, both as citizens and as investors, where the party on the other side of the table effectively defrauded them by misrepresenting what they were getting for the money they either paid or agreed to pay in the future.

Yes, some homebuyers did it too.  They lied about incomes, as just one example.  But how many of those people lied, and how many signed a document they didn't read where the broker filled in a number that would permit the automated computer to say "yes", without verification of any sort?  We'll never know, will we - the dog ate the homework.

The States, Counties and Cities here have a real beef too.  By creating and promulgating systems that violate state law regarding The Statute of Frauds when it comes to documents securing real estate indebtedness (and contracts intended to be performed over more than a year) these institutions that blew these bubbles deprived the states and counties of countless recording fees that would otherwise be due to memorialize these transactions.  Yet we don't see lawsuits coming from there either, do we?  Is that because the "bubble" was profitable for the cities and counties who got to rack up more and more property tax revenue - on the back of fraudulent valuations?

In point of fact, are not the citizens due massive refunds for the taxes paid on fictitious valuations that were created as a consequence of these frauds?  I'd argue that they are.

Now we have mortgage servicers arguing that there were "technical problems" with their filings as they scramble to withdraw what look like tens of thousands of fraudulently-filed petitions, pleadings and affidavits from state courts - while in places where non-judicial foreclosures are the law they continue to eject people from their homes predicated on this very same sort of paperwork!

How far does this have to go ladies and gentlemen, before you've had enough?  Before you simply refuse to submit?  How much of your money - both present and future earnings - has to be stolen before you will rise and say "no more"? 

How much?

Do you need to be reduced to living under a freeway overpass?  Eating scraps from a garbage bin?  Is not having your retirement and income security destroyed not once, but twice in ten years enough for you to demand that this crap stop, and for you to refuse to labor and thus create more wealth that these crooks can steal until you obtain effective redress and the people responsible are held to account?

These events were not accidents folks.

They were premeditated and intentional, undertaken with the full knowledge of what would - and did - happen.

The truth has been covered up, whitewashed and papered over by both major political parties, neither of which is willing to stand and demand that all of these void agreements be rescinded, that the funds stolen be returned and that everyone involved in this tawdry mess go straight to prison.

No, instead all you've heard is "irrational exuberance."

There was nothing irrational about it folks.

It was intentional, mendacious theft.