Federal Government Agreement With Institutions Behind Financial Meltdown
In a talk recently, long time public consumer advocate Ralph Nader, who was promoting his new book, “The Seventeen Solutions: Bold Ideas for Our American Future”, spoke on the corporate control of our everyday lives and how it seeps into our very consciousness. He started off by pointing out the fact that during the elections of 2012, not one major media outlet presented to either presidential candidates, Barack Obama or Mitt Romney the question of penalties for corporate crimes; many of which have not only been committed in the open, without apology or repercussions, but have used to justify tax handouts to businesses – or what most of us used to call “corporate welfare”. But if all we knew about the US for the previous 30 years came from our network of choice, we would have no idea about the numerous oil leaks in the late 1980s or the Savings And Loan Scandal under Reagan or the connection of NAFTA and death of the American middle class. In more recent years we can point to the illegal foreclosures of millions of middle class citizens by the big banks as one of the most shocking media whitewashes in our time. Now that the election is over, we are seeing the repercussions of not having a true independent media to cover these corporate crimes in some cases and Federal payouts in others. The following is a look at how those leaning institutions behind the crashing of our economy got away relatively unscathed and how former home owners paid the biggest price.
After an investigation, the Federal Government agreed to a settlement with many of the nation’s biggest banks for questionable foreclosures policies which had lead to millions of citizens losing their homes. The agreement does little for the victims in the case while keeping in place the same business practices which sank our economy 2007/8. The banks will have to payout 3.6 billion dollars to four million borrowers, or $25 billion dollars combined. Among those who can expect to see some payment, 80% will only be rewarded $300 dollars each. The report by Democracy Now’s Amy Goodman went on to state that 53 of those in the case were foreclosed on despite never actually falling behind in their payments. http://www.democracynow.org/2013/4/10/headlines#4106 1000 members of the military were also shown to have been wrongly foreclosed on but they will probably be the lucky ones in the case, they will receive $125,000 each. As part of the settlement the banks do not have to admit to any wrong doing and the federal government has closed down any review of their loan practices. Despite calls from grassroots/good government groups to incarcerate many of these CEOs for fraud it now appears that the same institutions which have been connected to the melt down of our economy will walk away with a slap on the wrist.
So what was behind this rash of illegal foreclosures by lenders such as Bank Of America, Citi Corp, Well’s Fargo, JP Morgan Chase and the Merscorp which operates the “Mortgage Electronic Registration System” (MERS) according to John W. Schoen of NBC News? http://www.nbcnews.com/business/n-y-foreclosure-lawsuit-could-slow-home-seizures-1C7100859 An article by Schoen published in 2011, first examined the lawsuit by the Federal Government, headed by New York State Attorney General Eric Schneiderman, the answer may be that MERS, which was actually set up in the 1990s to track mortgage ownership, is now being used by insurance companies and mortgage providers “along with Freddie Mac and Fannie Mae” to track Government owned companies that provide the bulk of residential mortgages. At the time the NBC article was released 13,000 homes in New York alone were foreclosed, many under questionable circumstances since MERS, the head plaintiff in the case didn’t hold the leases or any other paperwork to many of these properties Schneiderman charged. The company has since denied any wrong doing.
By late 2011 70 million mortgages had been registered in MERS paperless, computer system instead of with local county clerk’s offices. As a result no paper trail was left behind creating great difficulties when tracking property documents in order to investigate the glut of foreclosed cases. Schneiderman has been quoted saying that "The mortgage industry created MERS to allow financial institutions to evade county recording fees, avoid the need to publicly record mortgage transfers and facilitate the rapid sale and securitization of mortgages en masse…” Because the company, as well as others, filed their mortgages with the MERS systems and attempted to bypass local municipalities and quite often avoided paying overdue fees , Merscorp and other lenders has faced multiple lawsuits from several states including Texas, Michigan and Kentucky and Delaware.
By using the MERS system, lenders saved themselves over 2 billion dollars in processing charges and has created an information black hole where homeowners and the public will find it near impossible to track down sales and purchasing of said properties. Furthermore, three of the lenders being sued for the New York forecloses are also involved in the federal settlement. According to Schoen “An estimated 7 million homeowners have lost their homes to foreclosure since the housing bubble burst in 2006. By the end of the third quarter of last year, some 12.6 percent of homeowners with mortgages -- more than 6 million homeowners -- were either delinquent on their payments or in foreclosure, according to the Mortgage Bankers Association.” To counter the lawsuit, the lenders filed in the case have constantly stated that their model has been held up in federal and state courts.
Part two of this series will focus on the Monsanto protection act which forces US judges and the FDA to allow the planting of GMOs, (Genetically Modified organisms) even if authorities have reason to believe they pose a health risk.
Until Next Time…
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